Continental Airlines Swings to Profit

Continental Airlines Inc. posted third-quarter net income of $61 million after the airline raised fares to compensate for higher fuel prices.

The profit of 80 cents a share contrasted with a loss of $18 million, or 29 cents, a year earlier, the Houston-based carrier said. Sales rose 15% to $3 billion.

The airline, which has the lowest unit costs of the five biggest U.S. carriers, said revenue for every seat flown one mile rose at least 5% in the quarter.

Earnings were hurt in September by the evacuation of Houston for Hurricane Rita, which led Continental and its commuter partner ExpressJet Holdings Inc. to cancel about 1,900 flights. Rita, along with Hurricane Katrina a month earlier, raised costs for the carrier by causing the price of jet fuel to surge 25% from already record highs. The hurricane disruption cost the carrier $25 million.

The airline said that fuel was now its single largest expense, after jumping 65% for the quarter over last year to $684 million. Continental shares closed up 16 cents at $11.89.