Although Continental's March numbers look generally good, first-quarter domestic yields are forecast to be down 5%-6%, and the airline says it will again post a loss in the quarter.

Domestic bookings are strong through March, and load factor for the month is expected to increase by more than six percentage points, Continental said in a Securities and Exchange Commission filing Friday. Domestic bookings for April are running slightly behind last year's as Easter falls in March, rather than April, this year.

Transatlantic bookings for March are about the same as last year. Bookings for April are down several points, although April's transatlantic load factor is forecast to be flat. Transatlantic yields will be up 4%-5% for the quarter, Continental said.

Latin American bookings are also up in March but flat for April, load factor will be up 2-3 points and yields will be down 1%-2%. In Pacific markets, April bookings are up, and yield is forecast to increase by several points on flat load factor.

Consolidated capacity is likely to be up 4% in the first quarter, with a 3.5% drop in mainline domestic capacity, balanced by 14% growth in regional capacity and 17.5% growth in transatlantic capacity. Full-year consolidated capacity will grow 6.2%, with domestic mainline capacity up 0.3%.

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U.S. airline industry unit revenue in August jumped 7%, according to the latest Air Transport Association data, thanks to a yield increase during the month.

The RASM increase represents data from the eight major network carriers. Total mainline passengers fell 0.7% and traffic rose 2% on a slight 0.5% capacity increase. Yield improved 5.5% while loads increased 1.2 points to 82.4%. On the domestic front, mainline unit revenue increased 8.1% as yield improved 5.8% and load factor increased 1.7 points to 82.1%. Domestic mainline revenue increased 4.8% on a 3.1% decrease in capacity.

Outside the U.S., "the industry's revenue performance continued to be strong," said Merrill Lynch analyst Michael Linenberg. Atlantic passenger RASM led all regions, rising 7%, driven by a 7.7% increase in yield offset slightly by a 0.6-point drop in load factor. "We believe the successful attempts by the carriers at raising fares are helping to mitigate some of the sting of high fuel prices," he said. "We could see this positive revenue trend continue into the fall" as several airlines plan to cut capacity.

JP Morgan analyst Jamie Baker was "modestly" disappointed with the August numbers. He notes that August mainline system revenue fell 6.6% sequentially from July's revenue, which represents the sharpest sequential drop in at least 10 years.