American Airline Seeks Direct Flights to Nigeria
By Ndubuisi Francis
American carrier, Continental Airlines has begun moves to begin direct flights between the United States and Nigeria several months after a similar effort by another US airline, World Airways went awry.
Officials of Continental Airlines which on Tuesday sank into a quarterly loss burdened by high fuel prices and lower fares against a year-ago profit boosted by a hefty U.S. government payment were guests of Aviation Minister, Mallam Isa Yuguda in Abuja last week.
THISDAY gathered that the four-member team led by the airline's vice president included two ladies and and two men. The vice president, a lady was accompanied on the visit by the airline's legal adviser, a security chief and another official from corporate affairs.
A ministry source told THISDAY that they flew into the country aboard a Virgin Atlantic Airways on july 10 and met with Yuguda on July 11 and were reportedly given a red carpet reception by the minister.
THISDAY gathered that the minister assured the team from Continental Airlines that their quest to fly into the country would not only be given positive but accelerated consideration.
While in Nigeria, the team was said to have interviewed Pathfinder International (an airport security outfit), John Adebanjo whose organisation also provides airport security and another security company.
The team, according to the source also came with an official of the International Security Defence Systems(ISDS based in Texas.
The Houston-based airline posted a loss of $17 million, or 26 cents per share, compared with a profit of $79 million, or $1.10 a share, last year. In second-quarter 2003, Continental received a one-time government payment of $111 million, after taxes, for security costs.
The company said it had an expense of $19 million, after taxes, in the latest quarter due to the retirement of leased MD-80 aircraft. Excluding the aircraft retirement charge, Continental reported a profit of $2 million, or three cents a share.
"These results remain disappointing in a year where we hoped to break even," said Gordon Bethune, Continental's chief executive.
The airline said revenue in the quarter was up 15.1 per cent to $2.3 billion from the same period in 2003. But due to intense competition with low-cost carriers, yields were weak, dropping 1.6 percent from the year-ago quarter.
Its costs rose by 8.7 percent in the quarter due to record high fuel prices that are expected to increase the airline's fuel expense by several hundred million dollars this year.
The average price per gallon it paid for jet fuel, one of the larger expenses for any airline, increased by about 30 percent in the quarter from what it paid a year ago.
The airline ended the second quarter with $1.9 billion in cash and short-term investments.
Also in the quarter, it took delivery of one Boeing 757-300 aircraft and three Boeing 737-800s. It expects to take delivery of five additional Boeing 737-800s in the second half of 2004.
The airline said it may reduce pension contributions due in 2004. It said it expects to make a decision regarding the funding by mid-September of this year.
Jeff Misner, Continental's chief financial officer said cost-cutting remains a top priority for the airline.
"While we are making good progress on our initiatives, it is clear that we have much more work to do to become profitable in this weak domestic fare environment," Misner said.
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