The ratings on Houston, Texas-based Continental Airlines Inc. reflect its participation in the high-risk airline industry and a heavy debt and lease burden, but also a better-than-average operating performance among its peer large U.S. hub-and-spoke airlines. Continental posted a net loss of $146 million in first-quarter 2010, approximating its $136 million loss in the same period last year. As at other airlines, revenues were higher (+7%), but so was fuel expense (16%). However, underlying revenue trends are positive, and Standard&Poor's Ratings Services expects the company to post profits in the seasonally strong second and third quarters, and for the year as a whole. We do not expect the effects of the Iceland volcano eruption to materially affect Continental's
