DALLAS — Continental Airlines Inc. is pressing its corporate customers to step up their travel because business traffic holds the key to recovery in the slumping airline industry, Chief Executive Larry Kellner said Thursday.
Business travel slumped several months ago as turbulence rocked the financial industry, and that led to problems for airlines.
For starters, business travelers are airlines’ most profitable customers, often buying first-class seats. When those people stopped traveling, airlines cut fares to fill seats with leisure travelers, meaning that side of the business also became less lucrative, Kellner said.
The good news, Kellner said, is that business travel turns on and off quickly.
“We’re working our business (traveler) side very hard because clearly this is where we could also see a recovery much more quicker if we could get the business traffic back on the airplanes,” he said.
Kellner made the comments during a wide-ranging discussion at an investor conference in New York. He also said the current systems of airline regulation isn’t working — but offered few tips for improvement — and said Continental would consider consolidation with other carriers if industry leader Delta Air Lines Inc. seemed to be growing too strong.
Continental was considering combining with United Airlines last year but broke off talks when United’s financial condition worsened. Meanwhile, Delta became the world’s No. 1 airline operator by buying Northwest.
Houston-based Continental, the nation’s fourth-largest airline company, has always said it would prefer to stay independent, viewing airline mergers as risky.
“But if we see either others in the marketplace getting ahead of us — for instance, Delta because of its consolidation — we’ll clearly step back,” Kellner said.
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