Merrill narrowed its loss estimates on Continental Air (CAL

).

The airline now estimates a 9%-11% increase in December systemwide mainline jet passenger revenue per available seat mile (RASM) vs. a year ago.

Analyst Michael Linenberg says the 9%-11% increase is well above his 2%-3% RASM growth estimate. Further, he notes RASM results for both December and November improved from October.

Also, Linenberg says, while he's not ready to start popping champagne corks, he's encouraged by stronger than expected results on the revenue front. As a result, he narrowed the $2.35 fourth quarter loss estimate to a $1.95 loss, and cut the $5.30 2002 loss estimate to a $4.90 loss.

He maintains his neutral rating, citing the possible downside risk to 2003 estimates, and uncertainty with respect to the U.S.'s plans in Middle East.