Continental Airlines Chairman : Struggling Airlines Look To Serve Airports With Low Fees

Continental Airlines Chairman and CEO Larry Kellner said yesterday that while the airline industry has seen slight economic improvement this year as fuel costs have lowered and credit markets have loosened, “we’re still bouncing along the bottom.”

Speaking at the Airports Council International-North America Conference and Exhibition in Austin, Kellner stressed the importance of the relationship between airlines and airports, acknowledging that each makes operational decisions from its own perspective: Airlines focus on the next quarter’s revenue while airports look 3-5 years into the future. Regardless of that difference in outlook, he told airport executives attending the conference that airports wanting to attract and retain carriers need to be cognizant of airlines’ concern about the bottom line. “The lower your cost per passenger, the likelier we will go there,” he said. “Capacity develops around cost. We are very focused on cost.”

He noted that over the past 12-18 months airlines went from dealing with high fuel prices to weak demand: “So we were having lousy year last year because of what our fuel costs were. We’ve ended up with a lousy year this year based on what the economy is.”

Given the economic environment, Kellner added that it would be a mistake for the US government to increase passenger facility charges: “We have huge stress on our system. We support the PFC but we want to make sure they are used to the best advantage of the airline and the airport.”