Tough times for American airlines

Continental, America's fifth largest airline, lost $124m (�70m) in the three months to March, down from $221m in the same period in 2003.

Southwest, meanwhile, scored a profit of $26m for its first quarter, a slight increase on $24m a year earlier.

But both said that they would have done better if not for the high fuel prices.

Challenging times

Sales at Southwest, one of the original low-cost carriers, were also rising, up 9.8% to $1.48bn.

For Continental, revenues improved by 11% to $2.27bn, and both its turnover and reduced losses beat market expectations.

Continental Chairman and Chief Executive Gordon Bethune said the airline was continuing to make "tremendous progress" to turn itself around.

But he blamed the "outrageously high cost of fuel" for the delayed return to profitability.

The group's fuel bill for the three-month period, he said, would have been $102m lower if if aviation fuel had remained at its five-year average price.

Southwest said its fuel costs had risen by 6.4% over the quarter.

Industry wide

James Parker, Southwest chief executive, said the company was "grateful" to report its 52nd straight profitable quarter, at a time of "record high energy costs".

On Wednesday Delta Airlines reported that its first quarter loss had narrowed from $466m to $383m.

It too complained of the current high price of aviation fuel.