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Continental To Grow

Wed Sep 27, 2006 11:14 pm

Recasts with comments from president)

NEW YORK, Sept 26 (Reuters) - Continental Airlines Inc. (CAL.N: Quote, Profile, Research) said on Tuesday it plans to grow fleet capacity in the coming years by 5 percent to 7 percent a year on average, but is prepared to accelerate the growth to respond to competition.

This year, the company expects capacity to grow by 8.7 percent. The faster-than-expected growth stems from competitors moving into Continental's hubs, especially Newark.

The company responded, and will always respond to incursions at its hubs, with lower prices and more flights, said Continental President Jeff Smisek.

"We will never lose customers at our hubs on price," Smisek said at a company conference for investors that was available by Webcast.

The U.S. airline industry is emerging from a long-term slump brought on by excess capacity when demand collapsed after the Sept. 11, 2001, attacks.

The No. 4 U.S. carrier said its long-term capacity growth plans could also be adjusted lower in the event of an industry downturn.

"We've got that flexibility to maintain a flat fleet," said Continental Chief Executive Larry Kellner
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