updated 3/18/2005 8:35:58 AM ET 2005-03-18T13:35:58

Continental Airlines Inc. on Friday said it expects to post a loss for the first quarter and end the three-month period with unrestricted cash and short-term investments of $1.3 billion to $1.4 billion.

That would be down a bit from $1.46 billion in unrestricted cash and short-term investments the No. 5 U.S. carrier had on hand at the end of 2004.

Cash on hand is closely watched by investors in Continental and other U.S. airlines, which have been hammered by rising fuel prices and increasingly fierce competition.

The Houston-based airline, which also reiterated that it expected to post a substantial full-year loss, said it would spend an estimated $110 million in the first quarter on debt principal and capital lease payments.

Continental said domestic bookings were strong through the end of March and it expected its load factor, or percentage of available seats filled, to be up more than 6 points year-over-year for the quarter.

But domestic yields, or average revenue per passenger per mile flown, are seen down 5 to 6 percent, the airline said.

Transatlantic bookings are seen about flat, but transatlantic yields will probably rise 4 to 5 percent in the first quarter, it said.

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