UPDATE 1-Continental sees $44 mln special charge in Q2

Tue Jul 14, 2009 5:06pm EDT

* Charges relate to retirement of 737-300s, 737-500s

* Reflects further reduction in fair value of the planes

NEW YORK, July 14 (Reuters) - Continental Airlines CAL.N said on Tuesday it expects to record $44 million in special charges in the second quarter largely due to its decision last year to retire all its Boeing 737-300s and many 737-500s.

The capacity reductions account for $43 million of the charges, the Houston-based company said, while $1 million is related to other expenses.

In June 2008, Continental decided to retire all its 737-300 models and a "significant portion" of its 737-500 planes by January 2010. The carrier first posted charges related to this decision during the second quarter of 2008.

"The additional write down in the second quarter of 2009 reflects further reduction in the fair value of these fleet types in the current economic environment," the world's fifth-largest airline said in a statement.

The charges include $31 million of noncash impairments on owned Boeing 737-300 and 737-500 aircraft and related assets, the company wrote.

The charges also include $8 million related to the disposition of three 737-300 aircraft and a $4 million write-down of obsolete parts. (Reporting by Deepa Seetharaman; Editing by Tim Dobbyn)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.