3 Airlines End Tough Year With Deep Losses

Three big airlines — Continental, JetBlue and US Airways — each reported deeper fourth-quarter losses on Thursday amid pessimism over the near-term outlook for air travel.

The results essentially completed a dismal set of fourth-quarter reports for the industry, which has suffered whiplash in the last year, first from record fuel prices that peaked during the summer, then from the sour economy.

Airlines began cutting flights, routes and aircraft in the fourth quarter, in reaction to jet fuel prices that at one point in 2008 were nearly double what they paid in 2007. Carriers thought the retrenchment, which is expected to continue this year, would allow them to charge higher ticket prices.

But passengers balked at paying more, and companies pulled back on business travel in the wake of the economic slump. Now, lots of carriers are instituting fare sales in hopes of winning back travelers.

“You have an operating backdrop that rivals any we’ve seen in our industry for the past few years,” Lawrence W. Kellner, the chief executive of Continental Airlines, told analysts during a conference call.

Continental lost $266 million, or $2.33 a share, compared with $32 million, or 33 cents a share, in the 2007 quarter. The 2008 result included a one-time charge of $169 million to pay for retirement costs for pilots, and to reflect losses on fuel hedging contracts, an issue that also has affected other airlines.

Many carriers lock in the price of fuel in advance, a strategy that can protect them when prices rise. But when the cost of jet fuel drops, airlines have to take charges to account for the difference between the hedge price and the going rate.

Revenue at Continental was $3.5 billion, down 1.5 percent.

Continental noted a significant shift in its international flights from first-class to coach travel. Several companies have banned first-class business travel as a cost-cutting move. “Our international business is pretty solid,” Mr. Kellner said. “It’s just not as profitable as it used to be.”

Continental shares dropped 10.6 percent, to $14.51.

US Airways, which was in the news earlier this month when one of its planes made an emergency landing in the Hudson River, said it lost $541 million, or $4.74 a share, compared with a $79 million loss, or 87 cents a share in the 2007 quarter.

Revenue at US Airways was $2.76 billion, essentially flat with 2007. The airline took a special charge of $234 million that included its impact from fuel hedging contracts.

US Airways shares fell 11.37 percent, to $6.47.

JetBlue Airways said it lost $49 million, before taxes, in the fourth quarter compared with a pretax loss of $3 million in 2007. The 2008 results included a one-time charge of $53 million to revalue auction-rate securities.

JetBlue said its results were preliminary and would be completed after it determined the tax implications of its special charge. Its revenue was $811 million, up nearly 10 percent.

It shares fell 2.74 percent, or 18 cents, to $6.38.

JetBlue, which has grown rapidly since it began flying in 2000, said it expected to reduce its flights by 2 percent in 2009. But the airline announced plans to start service from Kennedy International Airport to Los Angeles International Airport, and said it would add service to Jamaica.

David Barger, the chief executive of JetBlue, told analysts that voting among its pilots would end Tuesday on whether they would join a new union, the JetBlue Pilots Association.

The group is independent of the nation’s biggest pilots’ union, the Air Line Pilots Association.