----

|                                                                                                              |
|-------------------------------------------------------------------------------------------------------------------|
| UNITED      STATES SECURITIES AND EXCHANGE COMMISSION                                                             |
|  WASHINGTON,      D.C.  20549                                                                      |
|  FORM      10-K                                                                                              |
|  (Mark      One)                                                                                             |
| [X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF                                                         |
| THE      SECURITIES EXCHANGE ACT OF 1934                                                                          |
| FOR      THE FISCAL YEAR ENDED DECEMBER 31, 2008                                                                  |
|  OR                                                                                                          |
|  [  ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)      OF      |
| THE      SECURITIES EXCHANGE ACT OF 1934                                                                          |
| FOR      THE TRANSITION PERIOD FROM __________ TO __________                                                      |
|  Commission      File Number 1-10323                                                                         |
|  CONTINENTAL      AIRLINES, INC.                                                                             |
| (Exact      name of registrant as specified in its charter)                                                       |
| Delaware                                                                                                          | 74-2099724 |
| (State      or other jurisdiction of incorporation or organization)                                               | (I.R.S.      Employer Identification No.) |
|                                                                                                              |   |
| 1600      Smith Street, Dept. HQSEO, Houston, Texas                                                               | 77002 |
| (Address      of principal executive offices)                                                                     | (Zip      Code) |
|  Registrant's      telephone number, including area    code:  713-324-2950                         |
|  Securities      registered pursuant to Section 12(b) of the Act:                                            |
|  Title of Each Class                                                                                         | Name      of Each ExchangeOn Which Registered |
|                                                                                                              |   |
| Class      B Common Stock, par value $.01 per share                                                               | New      York Stock Exchange |
|  Securities      registered pursuant to Section 12(g) of the      Act:    None           |

| Class                                               | Outstanding at February 13,      2009 |
|-----------------------------------------------------|---------------------------------------|
| Class      B Common Stock, $.01 par value per share | 123,531,252      shares               |

| DOCUMENTS      INCORPORATED BY REFERENCE                                                                      |
|---------------------------------------------------------------------------------------------------------------|
| Proxy      Statement for Annual Meeting of Stockholders to be held on June 10,      2009:  PART III |

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|          |                                                                                                                   | PAGE                                                              |
|---------------|------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------|
|          |                                                                                                                   |                                                              |
| PART      I   |                                                                                                                   |                                                              |
| Item      1.  | Business                                                                                                               | 5                                                            |
|          |                                                                                                                   | Overview                                                          | 5  |
|          |                                                                                                                   | Forward-Looking Statements                                        | 5  |
|          |                                                                                                                   | Domestic      Operations                                          | 6  |
|          |                                                                                                                   | International Operations                                          | 6  |
|          |                                                                                                                   | Alliances                                                         | 7  |
|          |                                                                                                                   | Regional      Operations                                          | 9  |
|          |                                                                                                                   | Marketing                                                         | 10  |
|          |                                                                                                                   | Competition                                                       | 11  |
|          |                                                                                                                   | Frequent Flyer      Program and EliteAccess                       | 12  |
|          |                                                                                                                   | Employees                                                         | 13  |
|          |                                                                                                                   | Industry      Regulation and Airport Access                       | 14  |
| Item      1A. | Risk      Factors                                                                                                      | 17                                                           |
|          |                                                                                                                   | Risk Factors      Relating to the Company                         | 17  |
|          |                                                                                                                   | Risk Factors      Relating to the Airline Industry                | 22  |
| Item      1B. | Unresolved Staff      Comments                                                                                         | 26                                                           |
| Item      2.  | Properties                                                                                                             | 27                                                           |
|          |                                                                                                                   | Flight      Equipment                                             | 27  |
|          |                                                                                                                   | Facilities                                                        | 29  |
| Item      3.  | Legal      Proceedings                                                                                                 | 29                                                           |
|          |                                                                                                                   | Legal      Proceedings                                            | 29  |
|          |                                                                                                                   | Environmental    Proceedings                                      | 30  |
|          |                                                                                                                   | General                                                           | 31  |
| Item      4.  | Submission of      Matters to a Vote of Security Holders                                                               | 31                                                           |
|          |                                                                                                                   |                                                              |
| PART      II  |                                                                                                                   |                                                              |
| Item      5.  | Market for Registrant's Common Equity,      Related Stockholder Matters and Issuer Purchases of      Equity Securities | 32                                                           |
|          |                                                                                                                   | Common Stock      Information                                     | 32  |
|          |                                                                                                                   | Equity      Compensation Plans                                    | 32  |
|          |                                                                                                                   | Issuer Purchases of      Equity Securities                        | 32  |
| Item      6.  | Selected      Financial Data                                                                                           | 33                                                           |
| Item      7.  | Management's      Discussion and Analysis of Financial Condition      andResults of      Operations                    |  37                                                     |
|          |                                                                                                                   | Overview                                                          | 37  |
|          |                                                                                                                   | Results of      Operations                                        | 41  |
|          |                                                                                                                   | Liquidity and Capital      Resources                              | 54  |
|          |                                                                                                                   | Off-Balance      Sheet Arrangements                               | 67  |
|          |                                                                                                                   | Critical      Accounting Policies and      Estimates              | 67  |
|          |                                                                                                                   | Related Party      Transactions                                   | 74  |
| Item      7A. | Quantitative and Qualitative      Disclosures About Market      Risk                                                   | 75                                                           |
| Item      8.  | Financial Statements and Supplementary      Data                                                                       | 79                                                           |
|          |                                                                                                                   | Report      of Independent Registered Public AccountingFirm       | 80  |
|          |                                                                                                                   | Consolidated      Statements of      Operations                   | 81  |
|          |                                                                                                                   | Consolidated      Balance Sheets                                  | 83  |
|          |                                                                                                                   |     Assets                                    | 83  |
|          |                                                                                                                   |     Liabilities      and Stockholders' Equity | 84  |
|          |                                                                                                                   | Consolidated Statements of      Cash Flows                        | 85  |
|          |                                                                                                                   | Consolidated Statements of      Common Stockholders' Equity       | 87  |
|          |                                                                                                                   | Notes to Consolidated Financial      Statements                   | 89  |
| Item      9.  | Changes in and Disagreements with Accountants on      Accounting and Financial Disclosure                              | 140                                                          |
| Item      9A. | Controls and      Procedures                                                                                           | 140                                                          |
| Item      9B. | Other      Information                                                                                                 | 144                                                          |
|          |                                                                                                                   |                                                              |
| PART      III |                                                                                                                   |                                                              |
| Item      10. | Directors, Executive Officers and Corporate      Governance                                                            | 145                                                          |
| Item      11. | Executive      Compensation                                                                                            | 145                                                          |
| Item      12. | Security Ownership of      Certain Beneficial Owners and Management and      Related Stockholder Matters          | 145                                                          |
| Item      13. | Certain Relationships and Related      Transactions, and Director      Independence                                    | 145                                                          |
| Item      14. | Principal Accountant Fees      and Services                                                                            | 145                                                          |
|          |                                                                                                                   |                                                              |
| PART      IV  |                                                                                                                   | 146                                                          |
| Item      15. | Exhibits and      Financial Statement Schedules                                                                        | 146                                                          |
|          | Signatures                                                                                                             | 147                                                          |
|          | Index to      Exhibits                                                                                                 | 149                                                          |

----

Business.

Overview

Forward-Looking Statements

Domestic Operations

International Operations

Alliances

           Inaddition to our current participation in SkyTeam, we have domestic codesharingagreements with Hawaiian Airlines, Alaska Airlines and Horizon Airlines andinternational codesharing agreements with Emirates (the flag carrier of theUnited Arab Emirates), EVA Airways Corporation (an airline based in Taiwan),Virgin Atlantic Airways and French rail operator SNCF.  Additionally,we have codeshare agreements with Gulfstream International Airlines, Hyannis AirService, Inc. ("Cape Air"), Colgan Air, Inc. ("Colgan"), Hawaii Island Air, Inc.("Island Air") and American Eagle Airlines, who provide us with commuter feedtraffic.  We also have a train-to-plane alliance with Amtrak and acodeshare agreement with US Helicopter Corporation, which provides eight-minuteshuttle service between Manhattan and our New York Liberty hub.

Marketing

Competition

Frequent Flyer Program andEliteAccess

Employees

|   Employee Group                         | Approximate      Numberof      Full-timeEquivalent Employees |   Representing Union |  ContractAmendable Date                                                       |
|----------------------------------------------------|--------------------------------------------------------------|--------------------------------|------------------------------------------------------------------------------------|
|                                               |                                                         |                           |                                                                               |
| Continental      FlightAttendants                  | 8,395                                                        |                           | International      Association ofMachinists      and AerospaceWorkers      ("IAM") | December      2009 |
|                                               |                                                         |                           |                                                                               |   |
| Continental      Pilots                            | 4,385                                                        |                           | Air      Line Pilots AssociationInternational      ("ALPA")                        | December      2008 |
|                                               |                                                         |                           |                                                                               |   |
| Continental      Mechanics                         | 3,975                                                        |                           | International      Brotherhood ofTeamsters      ("Teamsters")                      | December      2008  |
|                                               |                                                         |                           |                                                                               |   |
| CMI      Fleet and PassengerService      Employees | 430                                                          |                           | Teamsters                                                                          | November      2011 |
|                                               |                                                         |                           |                                                                               |   |
| CMI      Flight Attendants                         | 290                                                          |                           | IAM                                                                                | December      2010 |
|                                               |                                                         |                           |                                                                               |   |
| Continental      Dispatchers                       | 120                                                          |                           | Transport      Workers Union("TWU")                                                | December      2008 |
|                                               |                                                         |                           |                                                                               |   |
| CMI      Mechanics                                 | 120                                                          |                           | Teamsters                                                                          | December      2009 |
|                                               |                                                         |                           |                                                                               |   |
| Continental      FlightSimulator      Technicians  | 40                                                           |                           | TWU                                                                                | December      2008 |

----

----

           Thereare many factors that continue to threaten our operations, financial condition,results of operations and liquidity.  These factors are discussedbelow.

| ·  | our      inability to terminate our existing agreements with individual SkyTeam      members and to commence participation in Star Alliance in the transition      period we have anticipated;                                                                                                                   |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·  | significant      revenue dilution as we wind down our participation in SkyTeam and/or      insufficient or delay in receipt of revenue from our participation in Star      Alliance, including an inability to maintain our key customer and business      relationships as we transition to Star Alliance;      |
| ·  | our      incurrence, as a result of the wind down of our SkyTeam relationships, of      costs in excess of our expectations and/or costs of an unanticipated      nature, the amount and timing of which cannot be estimated at this time,      but which could be material individually or in the    aggregate; |
| ·  | an      inability to join or a delay in joining Star Alliance due to lack of      applicable approvals or difficulty in satisfying entrance requirements,      including the requirement that we enter into certain bilateral agreements      with each member of Star Alliance; and                             |
| ·  | difficulties      integrating our technology processes with Star Alliance      members.                                                                                                                                                                                                                          |

Risk Factors Relating to the AirlineIndustry

Properties.

Flight Equipment

|                                                                                                                                                                                                                      |                 |   |                            |        | Seats      in                         | Average          |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------|--------|---------------------------------|-------------|---------------------------------------|------------------|
|                                                                                                                                                                                                                      |                 |   |                            | Third-Party | Standard                              | Age              |
| Aircraft Type                                                                                                                                                                                                             | Total                | Owned  | Leased                          | Aircraft    | Configuration                         |  (In Years) |
|                                                                                                                                                                                                                      |                 |   |                            |        |                                  |             |
| Mainline      (a):                                                                                                                                                                                                        |                 |   |                            |        |                                  |             |
|   777-200ER                                          | 20              |   | 8                          |        | 12                               |             | -  |   | 285 |   | 8.6 |   |
|   767-400ER                                          | 16              |   | 14                         |        | 2                                |             | -  |   | 235 |   | 7.3 |   |
|   767-200ER                                          | 10              |   | 9                          |        | 1                                |             | -  |   | 174 |   | 7.8 |   |
|   757-300                                            | 17              |   | 9                          |        | 8                                |             | -  |   | 216 |   | 6.3 |   |
|   757-200                                            | 41              |   | 15                         |        | 26                               |             | -  |   | 175 |   | 11.9 |   |
|   737-900ER                                          | 17              |   | 17                         |        | -                                |             | -  |   | 173 |   | 0.6 |   |
|   737-900                                            | 12              |   | 8                          |        | 4                                |             | -  |   | 169 |   | 7.3 |   |
|   737-800                                            | 116             |   | 43                         |        | 73                               |             | -  |   | 157 |   | 6.8 |   |
|   737-700                                            | 36              |   | 12                         |        | 24                               |             | -  |   | 124 |   | 10.0 |   |
|   737-500                                            | 42              |   | -                          |        | 42                               |             | -  |   | 114 |   | 13.1 |   |
|   737-300                                            |   23  |   |    14       |        |      9  |             |    -  |   | 124 |   | 22.6 |   |
|   Total      mainline                                | 350             |   |  149                  |        |  201                        |             |    -  |   |   |   | 9.4 |   |
|                                                                                                                                                                                                                      |                 |   |                            |        |                                  |             |   |   |   |   |   |   |
| Regional      (b):                                                                                                                                                                                                        |                 |   |                            |        |                                  |             |   |   |   |   |   |   |
|   ERJ-145XR                                          | 89              |   | -                          |        | 89                               |             | -   |   | 50 |   |   |   |
|   ERJ-145                                            | 145             |   | 18                         |        | 107                              |             | 20  | (c) | 50 |   |   |   |
|   CRJ200LR                                           | 17              |   | -                          |        | -                                |             | 17  | (c) | 50 |   |   |   |
|   Q200                                               | 16              |   | -                          |        | -                                |             | 16  | (d) | 37 |   |   |   |
|   Q400                                               |   15  |   |     -  |        |      -  |             |  15  | (e) | 74 |   |   |   |
|   Total      regional                                | 282             |   |   18             |        |  196                        |             |  68  |   |   |   |   |   |
|                                                                                                                                                                                                                      |                 |   |                            |        |                                  |             |   |   |   |   |   |   |
| Total                                                          | 632             |   | 167                        |        | 397                              |             |    68  |   |   |   |   |   |

| (a) | Excludes      seven grounded Boeing 737-500 aircraft, 12 grounded Boeing 737-300      aircraft and one Boeing 737-800 aircraft delivered but not yet placed into      service at December 31, 2008. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Excludes      30 temporarily grounded ERJ-135 aircraft and 30 ERJ-145 aircraft that are      subleased to ExpressJet.                                                                               |
| (c) | Operated      by Chautauqua under a capacity purchase agreement.                                                                                                                                    |
| (d) | Operated      by CommutAir under a capacity purchase agreement.                                                                                                                                     |
| (e) | Operated      by Colgan under a capacity purchaseagreement.                                                                                                                                         |

Facilities

Legal Proceedings.

Legal Proceedings

Environmental Proceedings

           In1999, we purchased property located near our New York Liberty hub in Elizabeth,New Jersey from Honeywell International, Inc. ("Honeywell") with certainenvironmental indemnification obligations by us to Honeywell.  We didnot operate the facility located on or make any improvements to theproperty.  In 2005, we sold the property to Catellus Commercial Group,LLC ("Catellus") and, in connection with the sale, Catellus assumed certainenvironmental indemnification obligations in favor of us.  On October9, 2006, Honeywell provided us with a notice seeking indemnification from us inconnection with a U.S. Environmental Protection Agency ("EPA") potentiallyresponsible party notice to Honeywell involving the Newark Bay Study Area of theDiamond Alkali Superfund Site alleging hazardous substance releases from theproperty and seeking study costs.  In addition, on May 7, 2007,Honeywell provided us with a notice seeking indemnification from us inconnection with a possible lawsuit by Tierra Solutions, Inc. ("TierraSolutions") against Honeywell relating to alleged discharges from the propertyinto Newark Bay and seeking cleanup of Newark Bay waters and sediments under theResource Conservation and Recovery Act.  We have notified Honeywellthat, at this time, we have not agreed that we are required to indemnifyHoneywell with respect to the EPA and Tierra Solutions claims and Honeywell hasinvoked arbitration procedures under its sale and purchase agreement withus.  Catellus has agreed to indemnify and defend us in connection withthe EPA and Tierra Solutions claims, including any arbitration withHoneywell.

General

Submission of Matters to a Vote ofSecurity Holders.

----

Market for Registrant'sCommon Equity, Related Stockholder Matters and Issuer Purchases of EquitySecurities.

Common Stock Information

|   |   |                                                                                                                                                                                                                                                          | Class      BCommon Stock |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------|
|   |   |                                                                                                                                                                                                                                                          | High                     | Low |
|   |   |                                                                                                                                                                                                                                                          |                     |   |
|   | 2008   | Fourth      Quarter                                        | $20.89                   |   | $9.49 |   |
|   |   | Third      Quarter                                         | $21.40                   |   | $5.91 |   |
|   |   | Second      Quarter                                        | $23.42                   |   | $9.70 |   |
|   |   | First      Quarter                                         | $31.25                   |   | $17.19 |   |
|   |   |                                                                                                                                                                                                                                                          |                     |   |   |   |
|   | 2007   | Fourth      Quarter                                        | $37.79                   |   | $21.59 |   |
|   |   | Third      Quarter                                         | $38.79                   |   | $26.21 |   |
|   |   | Second      Quarter                                        | $44.10                   |   | $32.00 |   |
|   |   | First      Quarter                                         | $52.40                   |   | $35.22 |   |

Equity Compensation Plans

Issuer Purchases of Equity Securities

----

Selected FinancialData.

| Statement      of Operations Data (in millions except pershare data) (1):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                              |                                              |                    |                                              |                                              |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|---------------------------------------------------|-------------------------|---------------------------------------------------|---------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Year      Ended December 31,                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 2008                                              | 2007                                              | 2006                    | 2005                                              | 2004                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                              |                                              |                    |                                              |                                              |
| Operating      revenue                                                                                                                                                                                                 | $15,241                                      | $14,232                                      | $13,128            | $11,208                                      | $9,899                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                              |                                              |                    |                                              |                                              |
| Operating      expenses                                                                                                                                                                                                | 15,555                                       | 13,545                                       | 12,660             | 11,247                                       | 10,137                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                              |                                              |                    |                                              |                                              |
| Operating      income      (loss)                                                                                                                                                                                      | (314)                                        | 687                                          | 468                | (39)                                              | (238)                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                              |                                              |                    |                                              |                                              |
| Income      (loss) before cumulative effect of change  in      accounting      principle                                                                                                                     |  (585)                                  |  459                                    |  369          |  (68)                                        |  (409)                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                              |                                              |                    |                                              |                                              |
| Cumulative      effect of change in accounting principle                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | -                                            | -                                            | (26)                    | -                                            | -                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                              |                                              |                    |                                              |                                              |
| Net      income      (loss)                                                                                                                                                                                            | (585)                                        | 459                                          | 343                | (68)                                              | (409)                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                              |                                              |                    |                                              |                                              |
| Earnings      (loss) per share:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                              |                                              |                    |                                              |                                              |
|   Basic:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                              |                                              |                    |                                              |                                              |
|     Income      (loss) before cumulative effect of change      in      accounting      principle                                                                     |  $(5.54)                                     |  $ 4.73                            |  $ 4.15  |  $(0.96)                                     |  $(6.19)                                     |
|     Cumulative      effect of change in accounting principle                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |        -  |        -  | (0.29)                  |        -  |        -  |
|     Net      income      (loss)                                                                                                                                                                    | $(5.54)                                           | $ 4.73                                  | $ 3.86        | $(0.96)                                           | $(6.19)                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                              |                                              |                    |                                              |                                              |
|   Diluted:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                              |                                              |                    |                                              |                                              |
|     Income      (loss) before cumulative effect of change      in      accounting      principle                                                                     |  $(5.54)                                     |  $ 4.18                            |  $ 3.53  |  $(0.97)                                     |  $(6.25)                                     |
|     Cumulative      effect of change in accounting principle                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |        -  |        -  | (0.23)                  |        -  |        -  |
|     Net      income      (loss)                                                                                                                                                                    | $(5.54)                                           | $ 4.18                                  | $ 3.30        | $(0.97)                                           | $(6.25)                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                              |                                              |                    |                                              |                                              |

| (1)   | Includes      the following special income (expense) items for year ended December 31      (in millions): |
|-----------------|-----------------------------------------------------------------------------------------------------------|

|   | 2008                                                                                                                                                          | 2007           | 2006   | 2005           | 2004   |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|--------|----------------|--------|
|   |                                                                                                                                                          |           |   |           |   |
|   | Operating      (expense) income:                                                                                                                              |           |   |           |   |   |   |   |   |   |   |
|   | Pension      settlement/curtailment charges                                                                                                                   | $(52)          |   | $(31)          |   | $(59) |   | $(83) |   | $   -  |   |
|   | Aircraft-related      charges, net of gains on sales  of      aircraft                                                                              |  (40)     |   |  22  |   |  18  |   |  16  |   |  (87) |   |
|   | Severance                                                                                                                                                     | (34)           |   | -         |   | -  |   | -  |   | -  |   |
|   | Route      impairment and other                                                                                                                               | (55)           |   | (4)            |   | 14  |   | -  |   | (52) |   |
|   |                                                                                                                                                          |           |   |           |   |   |   |   |   |   |   |
|   | Nonoperating      (expense) income:                                                                                                                           |           |   |           |   |   |   |   |   |   |   |
|   |       Gains      on sale of investments                                                                                         | 78        |   | 37        |   | 92  |   | 204  |   | -  |   |
|   |       Loss      on fuel hedge contracts with Lehman        Brothers                     |  (125)    |   |  -   |   |  -  |   |  -  |   |  -  |   |
|   |       Write-down      of auction rate securities, net of        put      right received |  (34)     |   |  -   |   |  -  |   |  -  |   |  -  |   |
|   |                                                                                                                                                          |           |   |           |   |   |   |   |   |   |   |
|   | Income      tax credit (expense) related to NOL  utilization                                                                                        |  28  |   |  (104)    |   |  -  |   |  -  |   |  -  |   |
|   |                                                                                                                                                          |           |   |           |   |   |   |   |   |   |   |
|   | Cumulative      effect of change in accounting  principal                                                                                           |  -   |   |  -   |   |  (26) |   |  -  |   |  -  |   |

| Balance      Sheet Data (in millions):                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                    |               |               |                     |                     |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------|--------------------|--------------------|--------------------------|--------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | As      of December 31, |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 2008                    | 2007               | 2006               | 2005                     | 2004                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                    |               |               |                     |                     |
| Unrestricted      cash, cash equivalents and short-term  investments                                                                     |  $2,643       |  $2,803  |  $2,484  |  $ 1,957  |  $ 1,458  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                    |               |               |                     |                     |
| Total      assets                                                                                                                                  | 12,686             | 12,105        | 11,308        | 10,529              | 10,511              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                    |               |               |                     |                     |
| Long-term      debt and capital lease obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 5,371              | 4,366         | 4,859         | 5,057               | 5,167               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                    |               |               |                     |                     |
| Stockholders'      equity                                                                                                                          | 105                | 1,550         | 347           | 226                 | 155                 |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Year      Ended December 31, |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 2008                         | 2007 | 2006 | 2005 | 2004 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                         |   |   |   |   |
| Mainline      Operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                         |   |   |   |   |
| Passengers      (thousands)      (1)                                                                                                                                | 48,682                       | 50,960 | 48,788 | 44,939 | 42,743 |
| Revenue      passenger miles (millions)      (2)                                                                                                                                                                                                                                                                                                                            | 82,806                       | 84,309 | 79,192 | 71,261 | 65,734 |
| Available      seat miles (millions) (3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 102,527                      | 103,139 | 97,667 | 89,647 | 84,672 |
| Cargo      ton miles      (millions)                                                                                                                                | 1,005                        | 1,037 | 1,075 | 1,018 | 1,026 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                         |   |   |   |   |
| Passenger      load factor (4):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                         |   |   |   |   |
|   Mainline                                                                                                                                                | 80.8%                        | 81.7% | 81.1% | 79.5% | 77.6% |
|   Domestic                                                                                                                                                | 83.3%                        | 83.9% | 83.6% | 81.2% | 77.4% |
|   International                                                                                                                                           | 78.2%                        | 79.4% | 78.2% | 77.5% | 77.9% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                         |   |   |   |   |
| Passenger      revenue per available seat mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 11.10                        | 10.47 | 9.96 | 9.32 | 8.82 |
| Total      revenue per available seat mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 12.51                        | 11.65 | 11.17 | 10.46 | 9.83 |
| Average      yield per revenue passenger mile (cents) (5)                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 13.75                        | 12.80 | 12.29 | 11.73 | 11.37 |
| Average      fare                                                                                                                                                   | $232.26                      | $214.06 | $201.81 | $188.67 | $177.90 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                         |   |   |   |   |
| Cost      per available seat mile, including special    charges      (cents)                                                                    |  12.44                  |  10.83 |  10.56 |  10.22 |  9.84 |
| Special      charges per available seat miles (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 0.15                         | 0.01 | 0.03 | 0.07 | 0.16 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                         |   |   |   |   |
| Average      price per gallon of fuel, including fuel taxes                                                                                                                                                                                                                                                                                                                                                                                                                                    | $3.27                        | $2.18 | $2.06 | $1.78 | $1.19 |
| Fuel      gallons consumed      (millions)                                                                                                                                                                                                                                                                                                                                                                                                             | 1,498                        | 1,542 | 1,471 | 1,376 | 1,333 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                         |   |   |   |   |
| Aircraft      in fleet at end of period (6)                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 350                          | 365 | 366 | 356 | 349 |
| Average      length of aircraft flight (miles)                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 1,494                        | 1,450 | 1,431 | 1,388 | 1,325 |
| Average      daily utilization of each aircraft (hours) (7)                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 11:06                        | 11:34 | 11:07 | 10:31 | 9:55 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                         |   |   |   |   |
| Regional      Operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                         |   |   |   |   |
| Passengers      (thousands)      (1)                                                                                                                                | 18,010                       | 17,970 | 18,331 | 16,076 | 13,739 |
| Revenue      passenger miles (millions) (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 9,880                        | 9,856 | 10,325 | 8,938 | 7,417 |
| Available      seat miles (millions) (3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 12,984                       | 12,599 | 13,251 | 11,973 | 10,410 |
| Passenger      load factor      (4)                                                                                                                                 | 76.1%                        | 78.2% | 77.9% | 74.7% | 71.3% |
| Passenger      revenue per available seat mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 18.14                        | 17.47 | 17.15 | 15.67 | 15.09 |
| Average      yield per revenue passenger mile (cents) (5)                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 23.83                        | 22.33 | 22.01 | 20.99 | 21.18 |
| Aircraft      in fleet at end of period (6)                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 282                          | 263 | 282 | 266 | 245 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                         |   |   |   |   |

| Consolidated      Operations:                                                                                                                                                                                                                                                                                                                                                                                                                          |    |    |    |    |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|---------|---------|---------|--------|
| Passengers      (thousands)      (1)                                                                    | 66,692  | 68,930  | 67,119  | 61,015  | 56,482 |
| Revenue      passenger miles (millions) (2)                                                                                                                                                                                                                                                                                                                                                                                                  | 92,686  | 94,165  | 89,517  | 80,199  | 73,151 |
| Available      seat miles (millions) (3)                                                                                                                                                                                                                                                                                                                                                                                                | 115,511 | 115,738 | 110,918 | 101,620 | 95,082 |
| Passenger      load factor      (4)                                                                     | 80.2%   | 81.4%   | 80.7%   | 78.9%   | 76.9%  |
| Passenger      revenue per available seat mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                 | 11.89   | 11.23   | 10.82   | 10.07   | 9.51   |
| Average      yield per revenue passenger mile (cents) (5)                                                                                                                                                                                                                                                                                                                                                                                              | 14.82   | 13.80   | 13.41   | 12.76   | 12.36  |

| (1) | The      number of revenue passengers measured by each flight segment      flown.                                                                                                                                                                                         |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | The      number of scheduled miles flown by revenue passengers.                                                                                                                                                                                                           |
| (3) | The      number of seats available for passengers multiplied by the number of      scheduled miles those seats are flown.                                                                                                                                                 |
| (4) | Revenue      passenger miles divided by available seat miles.                                                                                                                                                                                                             |
| (5) | The      average passenger revenue received for each revenue passenger mile      flown.                                                                                                                                                                                   |
| (6) | Excludes      aircraft that were removed from service.  Regional aircraft      include aircraft operated by all carriers under capacity purchase      agreements, but exclude any aircraft operated by ExpressJet outside the      scope of the ExpressJet CPA. |
| (7) | The      average number of hours per day that an aircraft flown in revenue service      is operated (from gate departure to gate  arrival).                                                                                                                               |

----

Management's Discussion and Analysis ofFinancial Condition and Results of Operations.

| ·  | Total      revenue grew 7.1% during 2008 as compared to 2007 due to increased fares,      international growth and new ancillary fees.                                                        |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                          |
| ·  | Operating      income (loss), a key measure of our performance, decreased $1.0 billion to      a $314 million loss during 2008 as compared to 2007, due primarily to      higher fuel prices. |
|         |                                                                                                                                                                                          |
| ·  | We      raised approximately $1.2 billion in cash through new financings, the      issuance of common stock and the sale of our remaining equity interest in      Copa.                       |
|         |                                                                                                                                                                                          |
| ·  | Unrestricted      cash, cash equivalents and short-term investments totaled $2.6 billion at      December 31, 2008.                                                                           |

| ·  | Consolidated      traffic decreased 1.6% and capacity decreased 0.2% during 2008 as compared      to 2007, resulting in a consolidated load factor of 80.2%, 1.2 points      below the prior year consolidated load factor.                                                  |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                         |
| ·  | We      inaugurated service between New York Liberty and Houston Bush to London's      Heathrow airport.                                                                                                                                                                     |
|         |                                                                                                                                                                                                                                                                         |
| ·  | We      recorded a DOT on-time arrival rate of 74.0% for Continental mainline      flights and a mainline segment completion factor of 98.9% for 2008,      compared to a DOT on-time arrival rate of 74.3% and a mainline segment      completion factor of 99.2% for 2007. |
|         |                                                                                                                                                                                                                                                                         |
| ·  | We      took delivery of 17 Boeing 737-900ER and 12 Boeing 737-800 aircraft and      removed 18 Boeing 737-500 and 25 Boeing 737-300 aircraft from our mainline      fleet.                                                                                                  |
|         |                                                                                                                                                                                                                                                                         |
| ·  | Sales      on continental.com, our lowest cost distribution channel, totaled $3.9      billion, an increase of 11% over2007.                                                                                                                                                 |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Income (Expense)                                  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 2008                                              | 2007 | 2006 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                              |   |   |
| Pension      settlement charges      (1)                                                                                                                | $   (52)                           | $(31) | $(59) |
| Aircraft-related      charges, net of gains on sales of aircraft (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | (40)                                              | 22  | 18  |
| Severance      (2)                                                                                                                                      | (34)                                              | -  | -   |
| Route      impairment and other      (2)                                                                                                                |   (55)                                  |    (4) |   14  |
|   Total      special operating      items                                                                                                     | (181)                                             |  (13) | (27) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                              |   |   |
| Gains      on sales of investments      (3)                                                                                                             | 78                                           | 37  | 92  |
| Loss      on fuel hedge contracts with Lehman Brothers (4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | (125)                                             |       -  |      -  |
| Write-down      of auction rate securities, net of put right received (5)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   (34)                                  |      -  |      -  |
|   Total      special non-operating      items                                                                                                 |   (81)                                  |    37  |   92  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                              |   |   |
| Income      tax credit (expense) related to NOL utilization (6)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |    28                         | (104) |     -  |
| Cumulative      effect of change in accounting principle (SFAS 123R) (7)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |        -  |       -  | (26) |

| (1) | See      Note 11 to our consolidated financial statements included in Item      8. |
|-----|------------------------------------------------------------------------------------|
| (2) | See      Note 13 to our consolidated financial statements included in Item      8. |
| (3) | See      Note 14 to our consolidated financial statements included in Item      8. |
| (4) | See      Note 7 to our consolidated financial statements included in Item      8.  |
| (5) | See      Note 6 to our consolidated financial statements included in Item      8.  |
| (6) | See      Note 12 to our consolidated financial statements included in Item      8. |
| (7) | See      Note 9 to our consolidated financial statements included in Item      8.  |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                   | Increase | %      Increase              |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------|----------|------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                | 2008                                   | 2007     | (Decrease)                   | (Decrease) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                   |     |                         |   |
| Operating      revenue                                                                               | $15,241                           |     | $14,232                 |   | $ 1,009  |   | 7.1% |   |
| Operating      expenses                                                                              | 15,555                            |     | 13,545                  |   |  2,010  |   | 14.8% |   |
| Operating      income      (loss)                                                                    | (314)                                  |     | 687                     |   | (1,001) |   | NM     |   |
| Nonoperating      income (expense)                                                                                                                                                                                                                                                                                                                                                                                                                  | (370)                                  |     | (121)                        |   | 249  |   | NM     |   |
| Income      tax benefit (expense)                                                                                                                                                                                                                                                                                                                                                                                                                   |      99  |     |   (107)            |   |     206  |   | NM     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                   |     |                         |   |   |   |   |   |
| Net      income      (loss)                                                                          | $  (585)                     |     | $   459  |   | $(1,044) |   | NM     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                   |     |                         |   |   |   |   |   |
| NM      - Not meaningful                                                                                                                                                                                                                                                                                                                                                                                                                            |                                   |     |                         |   |   |   |   |   |

|                                                                                                                                                                                                                                                                      |             Revenue          |                   %      Increase      (Decrease)                           in  2008 vs      2007                                  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                      |       (in      millions)                                                  | Revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | RASM | ASMs |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |
| Passenger      revenue:                                                                                                                                                                                                                                                   |                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |
|   Domestic                                                   | $  5,633                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 1.2 % |   | 6.4 % | (4.9)% |
|   Trans-Atlantic                                             | 2,983                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 11.6 % |   | 2.5 % | 8.9 % |
|   Latin      America                                         | 1,750                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 12.1 % |   | 9.4 % | 2.5 % |
|   Pacific                                                    |   1,016                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 2.3 % |   | 8.5 % | (5.6)% |
|   Total      Mainline                                        | 11,382                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 5.4 % |   | 6.0 % | (0.6)% |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |
|   Regional                                                   |  2,355                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 7.0 % |   | 3.8 % | 3.1 % |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |
|     Total                                          | 13,737                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 5.7 % |   | 5.9 % | (0.2)% |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |
| Cargo                                                                  | 497                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 9.7 % |   |   |   |
| Other                                                                  |   1,007                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 28.4 % |   |   |   |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |
| Operating      revenue                                                 | $15,241                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 7.1 % |   |   |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                 |    2008 |    2007 | Increase(Decrease)                     | %      Increase(Decrease) |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|------------------------|----------------------------------------|---------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                 |                   |                   |                                   |                      |
| Aircraft fuel and related      taxes                                                                 | $ 4,905           | $ 3,354           | $1,551                            |                      | 46.2 % |   |
| Wages, salaries and related      costs                                                                                                                                                                                                                                                                                                                                                                                               | 2,957                  | 3,127                  | (170)                                  |                      | (5.4)% |   |
| Regional capacity purchase,      net                                                                                                                                                                                                                                                                                                                                                                                                 | 2,073                  | 1,793                  | 280                               |                      | 15.6 % |   |
| Aircraft      rentals                                                                                | 976                    | 994                    | (18)                                   |                      | (1.8)% |   |
| Landing fees and other      rentals                                                                  | 853                    | 790                    | 63                                |                      | 8.0 % |   |
| Distribution      costs                                                                              | 717                    | 682                    | 35                                |                      | 5.1 % |   |
| Maintenance, materials and      repairs                                                                                                                                                                                                                                                                                                                                                                                              | 612                    | 621                    | (9)                                    |                      | (1.4)% |   |
| Depreciation and      amortization                                                                   | 438                    | 413                    | 25                                |                      | 6.1 % |   |
| Passenger      services                                                                              | 406                    | 389                    | 17                                |                      | 4.4 % |   |
| Special      charges                                                                                 | 181                    | 13                     | 168                               |                      | NM    |   |
| Other                                                                                                |   1,437      |   1,369      |      68  |                      | 5.0 % |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                 | $15,555                | $13,545                | $2,010                            |                      | 14.8 % |   |

| ·  | Aircraft fuel and related taxes increased      due to a 50.5% increase in jet fuel prices.  Our average jet      fuel price per gallon including related taxes increased to $3.27 in 2008      from $2.18 in 2007.  Our average jet fuel price includes losses      related to our fuel hedging program of $0.10 per gallon in 2008, compared      to gains of $0.02 per gallon in 2007.                                                                                                                                                                                                                                                                                                                                             |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| ·  | Wages, salaries and related costs decreased      primarily due to a $172 million decrease in profit sharing      expenses.  Although the average number of full time equivalent      employees decreased approximately 1% in 2008, the impact on expenses was      offset by wage increases.                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| ·  | Regional capacity purchase, net includes      expenses related to our capacity purchase agreements.  Our most      significant capacity purchase agreement is with      ExpressJet.  Regional capacity purchase, net includes all fuel      expense on flights operated for us under capacity purchase agreements and      is net of our rental income on aircraft leased to ExpressJet and flown for      us in 2007 and the first six months of 2008.  Under the Amended      ExpressJet CPA, ExpressJet no longer pays sublease rent for aircraft      operated on our behalf.  The net amounts consisted of the      following for the year ended December 31 (in millions, except percentage      changes): |

|   |                                 |              | Increase   | %      Increase   |
|--------|--------------------------------------|-------------------|------------|-------------------|
|   | 2008                                 | 2007              | (Decrease) | (Decrease)        |
|   |                                 |              |       |              |
|   | Capacity      purchase expenses      | $1,181       |       | $1,379       |   | $(198) |   | (14.4)% |   |
|   | Fuel      and fuel taxes             | 1,014        |       | 680          |   | 334  |   | 49.1      % |   |
|   | Aircraft      sublease income        |   (122) |       |   (266) |   | (144) |   | (54.1)% |   |
|   |                                 |              |       |              |   |   |   |   |
|   | Regional      capacity purchase, net | $2,073       |       | $1,793       |   | $ 280  |   | 15.6 % |   |

|         | The      net expense was higher in 2008 than in 2007 primarily due to higher fuel      expense.  Fuel expense increased 49.1% over the 2007 expense as      a result of higher fuel prices.  Fuel expense includes a      proportionate share of gains and losses related to our fuel hedging      program.  Netting together capacity purchase expenses and      aircraft sublease income in 2008 for comparison to 2007, the net expense      did not change significantly.  Sublease income of $76 million      and $79 million on aircraft operated by ExpressJet outside the scope of      our capacity purchase agreement for 2008 and 2007, respectively, is      recorded as other revenue.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ·  | Aircraft rentals decreased due to the      retirement of several Boeing 737 aircraft.  New aircraft      delivered in 2008 were all purchased, with the related expense being      reflected in depreciation and amortization.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ·  | Landing fees and other rentals increased      primarily due to a higher number of international flights and rate      increases.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ·  | Distribution costs, which consist primarily      of reservation booking fees, credit card fees and commissions, increased      due to a 5.7% increase in passenger revenue.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ·  | Other operating expenses increased      primarily due to a greater number of international flights, which resulted      in increased air navigation fees and ground handling, security and related      expenses, changes in how certain costs are handled under the new Amended      ExpressJet CPA and higher OnePass reward expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ·  | Special charges in 2008 included $52      million of non-cash settlement charges related to lump sum distributions      from our pilot-only defined benefit pension plan to pilots who retired,      $40 million of aircraft-related charges, net of gains on sales of      aircraft, $34 million in severance and $55 million of route impairment and      other charges. Aircraft-related      charges, net of gains on sales of aircraft, of $40 million include      non-cash impairments on owned Boeing 737-300 and 737-500 aircraft and      related assets.  Following the decision in June 2008 to retire      all of our Boeing 737-300 aircraft and a significant portion of our Boeing      737-500 fleet by the end of 2009, we evaluated the ongoing value of the      assets associated with these fleets.  Fleet assets include owned      aircraft, improvements on leased aircraft, spare parts, spare engines and      simulators.  Based on our evaluation, we determined that the      carrying amounts of these fleets were impaired and wrote them down to      their estimated fair value.  We estimated the fair values based      on current market quotes and our expected proceeds from the sale of the      assets.  Aircraft-related charges, net of gains on sales of      aircraft in 2008 also includes charges for future lease costs on      permanently grounded 737-300 aircraft and gains on the sale of ten Boeing      737-500 aircraft. In      conjunction with the capacity reductions, we incurred $34 million for      severance and continuing medical coverage for employees accepting early      retirement packages or company-offered leaves of absence during      2008.  Approximately 3,000 positions were eliminated as a result      of the capacity reductions, the majority of which were implemented in      September 2008. Route      impairment and other special charges in 2008 of $55 million includes an      $18 million non-cash charge to write off an intangible route asset as a      result of our decision to move all of our flights between New York Liberty      and London from London Gatwick Airport to London Heathrow Airport and $37      million of charges related to contract settlements with regional carriers      and unused facilities. Special      charges in 2007 consisted of a $31 million non-cash settlement charge      related to lump sum distributions from our pilot-only defined benefit      pension plan to pilots who retired and $22 million of gains on the sale of      three Boeing 737-500 aircraft.  Additionally, we recorded a $4      million increase to the liability for the long-term disability plan for      our pilots related to a change in the mandatory retirement age for our      pilots from age 60 to 65.  This change was signed into law on      December 13,2007. |

| ·  | Net interest expense increased $71 million      primarily due to lower interest income resulting from lower interest rates      on investments and lower cash, cash equivalents and short-term investments      balances.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| ·  | Gain on sale of investments of $78 million      in 2008 related to the sale of our remaining interests in Copa.  Gain on      sale of investments in 2007 consisted of $30 million related to the sale      of our interest in ARINC, Inc. ("ARINC") and $7 million related to the      sale of our remaining interest in Holdings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| ·  | Other nonoperating income (expense)      included $125 million expense related to changes in the fair value of fuel      derivative contracts with Lehman Brothers that were deemed ineffective      after Lehman Brothers declared bankruptcy in      2008.  Additionally, we recorded a loss of $34 million in 2008      to reflect the decline in the value of our student loan-related auction      rate securities, net of the value of a put right we received permitting us      to sell certain of the auction rate securities.  This account      also includes other fuel hedge ineffectiveness gains of $26 million and      $14 million in 2008 and 2007, respectively, caused by our non-jet fuel      derivatives experiencing a higher relative change in value than the jet      fuel being hedged. Other      variances in other nonoperating income (expense) include $37 million of      foreign currency exchange losses in 2008 compared to gains of $2 million      in 2007, a $16 million mark-to-market loss on investments supporting      company owned life insurance policies in 2008 compared to a $3 million      gain in 2007 and $6 million less equity in earnings of other companies in      2008 compared to 2007 resulting from our decreased ownership of Copa and      Holdings. |

|                                                                                                                                                                                                                                                                                                                                                                                                                |    2008                  |    2007 | Increase  (Decrease) | %      Increase(Decrease) |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------|------------------------|--------------------------------|---------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                |                                    |                   |                           |                      |
| Operating      revenue                                                                                            | $12,827                                 |                   | $12,019                        |                      | $   808  |   | 6.7 % |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                |                                    |                   |                           |                      |   |   |   |   |
| Operating      expenses:                                                                                                                                                                                                                                                                                                                                                                                            |                                    |                   |                           |                      |   |   |   |   |
|   Aircraft      fuel and related      taxes                                                             | 4,905                                   |                   | 3,354                          |                      | 1,551  |   | 46.2 % |   |
|   Wages,      salaries and related      costs                                                           | 2,850                                   |                   | 3,073                          |                      | (223) |   | (7.3)% |   |
|   Aircraft      rentals                                                                                 | 662                                     |                   | 680                            |                      | (18) |   | (2.6)% |   |
|   Landing      fees and other      rentals                                                              | 782                                     |                   | 738                            |                      | 44  |   | 6.0 % |   |
|   Distribution      costs                                                                               | 611                                     |                   | 583                            |                      | 28  |   | 4.8 % |   |
|   Maintenance,      materials and repairs                                                                                                                                                                                                                                                                                                                                                                 | 612                                     |                   | 621                            |                      | (9) |   | (1.4)% |   |
|   Depreciation      and      amortization                                                               | 427                                     |                   | 400                            |                      | 27  |   | 6.8 % |   |
|   Passenger      services                                                                               | 384                                     |                   | 374                            |                      | 10  |   | 2.7 % |   |
|   Special      charges                                                                                  | 155                                     |                   | 13                             |                      | 142  |   | NM    |   |
|   Other                                                                                                 |   1,365                       |                   |   1,335              |                      |      30  |   | 2.2 % |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                | 12,753                                  |                   | 11,171                         |                      | 1,582  |   | 14.2 % |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                |                                    |                   |                           |                      |   |   |   |   |
| Operating      income                                                                                             | $      74 |                   | $   848         |                      | $(774) |   | (91.3)% |   |

|                                                                                                                                                                                                                                                                                                                                                                                            |                                   | Increase | %      Increase                        |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------|----------|----------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                            | 2008                                   | 2007     | (Decrease)                             | (Decrease) |
|                                                                                                                                                                                                                                                                                                                                                                                            |                                   |     |                                   |   |
| Operating      revenue                                                                        | $2,414                            |     | $2,213                            |   | $  201  |   | 9.1 % |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |                                   |     |                                   |   |   |   |   |   |
| Operating      expenses:                                                                                                                                                                                                                                                                                                                                                                        |                                   |     |                                   |   |   |   |   |   |
|   Wages,      salaries and related costs                                                                                                                                                                                                                                                                                                                                              | 107                               |     | 54                                |   | 53  |   | 98.1 % |   |
|   Regional      capacity purchase, net                                                                                                                                                                                                                                                                                                                                           | 2,073                             |     | 1,793                             |   | 280  |   | 15.6 % |   |
|   Aircraft      rentals                                                             | 314                               |     | 314                               |   | -  |   | -      |   |
|   Landing      fees and other rentals                                                                                                                                                                                                                                                                                                                                                 | 71                                |     | 52                                |   | 19  |   | 36.5      % |   |
|   Distribution      costs                                                           | 106                               |     | 99                                |   | 7  |   | 7.1 % |   |
|   Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                  | 11                                |     | 13                                |   | (2) |   | (15.4)% |   |
|   Passenger      services                                                           | 22                                |     | 15                                |   | 7  |   | 46.7 % |   |
|   Special      charges                                                              | 26                                |     | -                                 |   | 26  |   | NM     |   |
|   Other                                                                             |      72  |     |      34  |   |     38  |   | NM     |   |
|                                                                                                                                                                                                                                                                                                                                                                                            | 2,802                             |     | 2,374                             |   |   428  |   | 18.0 % |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |                                   |     |                                   |   |   |   |   |   |
| Operating      loss                                                                           | $(388)                                 |     | $(161)                                 |   | $(227) |   | NM     |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                    | Increase | %      Increase                   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------|----------|-----------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                      | 2007                                                    | 2006     | (Decrease)                        | (Decrease) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                    |     |                              |   |
| Operating      revenue                                                                     | $14,232                                            |     | $13,128                      |   | $1,104  |   | 8.4% |   |
| Operating      expenses                                                                    | 13,545                                             |     | 12,660                       |   |    885  |   | 7.0% |   |
| Operating      income                                                                      |     687                        |     |     468  |   | 219  |   | 46.8% |   |
| Nonoperating      income (expense)                                                                                                                                                                                                                                                                                                                                                                                                        |    (121)                                 |     |    (99)            |   | 22  |   | 22.2% |   |
| Income      taxes                                                                          | (107)                                                   |     | -                            |   | (107) |   | NM     |   |
| Cumulative      effect of change in accounting principle                                                                                                                                                                                                                                                                                                                                                                                  |         -  |     |   (26)                  |   |     26   |   | NM     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                    |     |                              |   |   |   |   |   |
| Net      income                                                                            | $  459                                   |     | $  343             |   | $  116  |   | 33.8% |   |

|                                                                                                                                                                                                                                                                      |  Revenue                     | %      Increase (Decrease)                     in       2007 vs      2006                      |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                      | (in millions)                     | Revenue                                                                                                                                                                                                                                                                                                                    | RASM | ASMs |
|                                                                                                                                                                                                                                                                      |                              |                                                                                                                                                                                                                                                                                                                       |   |   |
| Passenger      revenue:                                                                                                                                                                                                                                                   |                              |                                                                                                                                                                                                                                                                                                                       |   |   |
|   Domestic                                                   | $ 5,567                      |                                                                                                                                                                                                                                                                                                                       | 5.9 % |   | 1.3 % | 4.5 % |
|   Trans-Atlantic                                             | 2,673                             |                                                                                                                                                                                                                                                                                                                       | 23.1 % |   | 10.0 % | 11.9 % |
|   Latin      America                                         | 1,561                             |                                                                                                                                                                                                                                                                                                                       | 12.0 % |   | 9.4 % | 2.4 % |
|   Pacific                                                    |      992 |                                                                                                                                                                                                                                                                                                                       | 9.4 % |   | 8.2 % | 1.1 % |
|   Total      Mainline                                        | 10,793                            |                                                                                                                                                                                                                                                                                                                       | 10.9 % |   | 5.0 % | 5.6 % |
|                                                                                                                                                                                                                                                                      |                              |                                                                                                                                                                                                                                                                                                                       |   |   |   |   |
|   Regional                                                   |  2,202                       |                                                                                                                                                                                                                                                                                                                       | (3.2)% |   | 1.9 % | (4.9)% |
|                                                                                                                                                                                                                                                                      |                              |                                                                                                                                                                                                                                                                                                                       |   |   |   |   |
|     Total                                          | 12,995                            |                                                                                                                                                                                                                                                                                                                       | 8.3% |   | 3.8 % | 4.3 % |
|                                                                                                                                                                                                                                                                      |                              |                                                                                                                                                                                                                                                                                                                       |   |   |   |   |
| Cargo                                                                  | 453                               |                                                                                                                                                                                                                                                                                                                       | (0.9)% |   |   |   |
| Other                                                                  |    784             |                                                                                                                                                                                                                                                                                                                       | 17.4      % |   |   |   |
|                                                                                                                                                                                                                                                                      |                              |                                                                                                                                                                                                                                                                                                                       |   |   |   |   |
| Operating      revenue                                                 | $14,232                           |                                                                                                                                                                                                                                                                                                                       | 8.4 % |   |   |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                 |   2007        |    2006  | Increase  (Decrease)                                       | %      Increase(Decrease) |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------|-------------------------|----------------------------------------------------------------------|---------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                 |                    |                    |                                                                 |                      |
| Aircraft fuel and related      taxes                                                                 | $3,354                  | $3,034                  | $  320                                                |                      | 10.5% |   |
| Wages, salaries and related      costs                                                                                                                                                                                                                                                                                                                                                                                     | 3,127                   | 2,875                   | 252                                                             |                      | 8.8% |   |
| Regional capacity purchase,      net                                                                                                                                                                                                                                                                                                                                                                                                 | 1,793                   | 1,791                   | 2                                                               |                      | 0.1% |   |
| Aircraft      rentals                                                                                | 994                     | 990                     | 4                                                               |                      | 0.4% |   |
| Landing fees and other      rentals                                                                  | 790                     | 764                     | 26                                                              |                      | 3.4% |   |
| Distribution      costs                                                                              | 682                     | 650                     |           32  |                      | 4.9% |   |
| Maintenance, materials and      repairs                                                                                                                                                                                                                                                                                                                                                                                              | 621                     | 547                     | 74                                                              |                      | 13.5% |   |
| Depreciation and      amortization                                                                   | 413                     | 391                     | 22                                                              |                      | 5.6% |   |
| Passenger      services                                                                              | 389                     | 356                     | 33                                                              |                      | 9.3% |   |
| Special      charges                                                                                 | 13                      | 27                      |     (14)                                    |                      | NM    |   |
| Other                                                                                                |    1,369 |    1,235 |   134                                                 |                      | 10.9% |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                 | $13,545                 | $12,660                 | $  885                                                |                      |     7.0% |   |

| ·  | Aircraft and related taxes increased due to      higher fuel prices and a 5.6% increase in mainline      capacity.  Our average jet fuel price per gallon including      related taxes increased to $2.18 in 2007 from $2.06 in      2006.  Our average jet fuel price includes gains related to our      fuel hedging program of $0.02 per gallon in 2007, compared to losses      of  $0.03 per gallon in 2006.                                                                                                                         |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ·  | Wages, salaries and related costs increased      primarily due to a 3.7% increase in the average number of full time      equivalent employees necessary to support our growth and an increase of      $72 million for profit sharing and on-time performance incentive      expenses.                                                                                                                                                                                                                                                                                  |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ·  | Regional capacity purchase, net includes      expenses related to our capacity purchase agreements.  Our most      significant capacity purchase agreement is with      ExpressJet.  Regional capacity purchase, net includes all fuel      expense on flights operated for us under capacity purchase agreements and      is net of our rental income on aircraft leased to ExpressJet and flown for      us.  The net amounts consisted of the following for the year      ended December 31 (in millions, except percentage  changes): |

|   |                                 |                    | Increase   | %      Increase         |
|--------|--------------------------------------|-------------------------|------------|-------------------------|
|   | 2007                                 | 2006                    | (Decrease) | (Decrease)              |
|   |                                 |                    |       |                    |
|   | Capacity      purchase expenses      | $1,379             |       | $1,461             |   | $(82) |   | (5.6)% |   |
|   | Fuel      and fuel taxes             | 680                |       | 663                |   | 17  |   | 2.6 % |   |
|   | Aircraft      sublease income        |    (266) |       |    (333) |   | (67) |   | (20.1)% |   |
|   |                                 |                    |       |                    |   |   |   |   |
|   | Regional      capacity purchase, net | $1,793             |       | $1,791             |   | $  2  |   | 0.1 % |   |

|         | The      net expense was higher in 2007 than in 2006 due to higher fuel      expense.  Fuel expense increased 2.6% over the 2006 expense as a      result of higher fuel prices.  Sublease income was lower in 2007      as 67 aircraft were removed from our service.  Sublease income      of $79 million on aircraft operated by ExpressJet outside the scope of the      ExpressJet CPA is recorded as other revenue.  These factors were      offset by a decrease in regional capacity, which was attributable to      reduced flying by ExpressJet, partially offset by new capacity provided by      Chautauqua.                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| ·  | Maintenance, materials and repairs      increased primarily due to higher engine maintenance costs, driven by      increased flight activity and the timing of engine      overhauls.  In addition, contractual engine repair rates      escalated in accordance with their contracts due to the aging of our      fleet.  The costs of component repairs and expendable materials      increased primarily due to the aging of our fleet and the timing of      overhauls for more costly components, including landing    gears.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| ·  | Other operating expenses increased      primarily due to a greater number of international flights, which resulted      in increased air navigation fees and ground handling, security and related      expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| ·  | Special charges in 2007 consisted of a $31      million non-cash settlement charge related to lump sum distributions from      our pilot-only defined benefit pension plan to pilots who retired and $22      million of gains on the sale of three Boeing 737-500      aircraft.  Additionally, we recorded a $4 million increase to      the liability for the long-term disability plan for our pilots related to      a change in the mandatory retirement age for our pilots from age 60 to      65.  This change was signed into law on December 13,      2007.  Special charges in 2006 consisted of $59 million of      similar non-cash pension settlement charges, an $18 million credit      attributable to a reduction of our accruals for future lease payments and      return conditions related to  permanently grounded MD-80      aircraft following negotiated settlements with aircraft lessors and a $14      million credit related to our officers' voluntary surrender of stock price      based restricted stock unit ("RSU")awards. |

| ·  | Net interest expense decreased $18 million      primarily as a result of increased interest income on our higher cash      balances.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| ·  | Other nonoperating income (expense)      includes hedge ineffectiveness gains related to our fuel hedges that      totaled $14 million during      2007.  This ineffectiveness arose because our heating oil      collars experienced a higher increase in value than the jet fuel being      hedged.  Hedge ineffectiveness was not material in      2006.  Other nonoperating income (expense) also includes our      equity in the earnings of Copa and Holdings and income related to our tax      sharing agreement with Holdings in 2006.  These amounts      were $23      million lower in 2007 as compared to 2006 as a result of our reduced      ownership interests in Holdings and Copa and a decrease in income      recognized from our tax sharing agreement withHoldings. |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| ·  | Gain on sale of investments in 2007      consisted of $30 million related to the sale of our interest in ARINC,      Inc. and $7 million related to the sale of all of our remaining interest      in Holdings.  In 2006, we recognized a gain of $92 million      related to the sale of 7.5 million shares of Copa's Class A common      stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

|                                                                                                                                                                                                                                                                                                                                                                                            |    2007       |    2006 | Increase  (Decrease) | %      Increase(Decrease) |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|------------------------|--------------------------------|---------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                            |                         |                   |                           |                      |
| Operating      revenue                                                                        | $12,019                      |                   | $10,907                        |                      | $1,112  |   | 10.2 % |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |                         |                   |                           |                      |   |   |   |   |
| Operating      expenses:                                                                                                                                                                                                                                                                                                                                                                        |                         |                   |                           |                      |   |   |   |   |
|   Aircraft      fuel and related taxes                                                                                                                                                                                                                                                                                                                                                | 3,354                        |                   | 3,034                          |                      | 320  |   | 10.5 % |   |
|   Wages,      salaries and related costs                                                                                                                                                                                                                                                                                                                                              | 3,073                        |                   | 2,830                          |                      | 243  |   | 8.6 % |   |
|   Aircraft      rentals                                                             | 680                          |                   | 678                            |                      | 2  |   | 0.3 % |   |
|   Landing      fees and other rentals                                                                                                                                                                                                                                                                                                                                                 | 738                          |                   | 720                            |                      | 18  |   | 2.5 % |   |
|   Distribution      costs                                                           | 583                          |                   | 541                            |                      | 42  |   | 7.8 % |   |
|   Maintenance,      materials and repairs                                                                                                                                                                                                                                                                                                                                             | 621                          |                   | 547                            |                      | 74  |   | 13.5 % |   |
|   Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                  | 400                          |                   | 378                            |                      | 22  |   | 5.8 % |   |
|   Passenger      services                                                           | 374                          |                   | 341                            |                      | 33  |   | 9.7 % |   |
|   Special      charges                                                              | 13                           |                   | 27                             |                      | (14) |   | NM    |   |
|   Other                                                                             |    1,335      |                   |   1,218              |                      |    117  |   | 9.6 % |   |
|                                                                                                                                                                                                                                                                                                                                                                                            | 11,171                       |                   | 10,314                         |                      |    857  |   | 8.3 % |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |                         |                   |                           |                      |   |   |   |   |
| Operating      income                                                                         | $    848 |                   | $    593   |                      | $  255  |   | 43.0 % |   |

|                                                                                                                                                                                                                                                                                                                                                                                            |                                   | Increase | %      Increase                        |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------|----------|----------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                            | 2007                                   | 2006     | (Decrease)                             | (Decrease) |
|                                                                                                                                                                                                                                                                                                                                                                                            |                                   |     |                                   |   |
| Operating      revenue                                                                        | $2,213                            |     | $2,221                            |   | $   (8) |   | (0.4)% |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |                                   |     |                                   |   |   |   |   |   |
| Operating      expenses:                                                                                                                                                                                                                                                                                                                                                                        |                                   |     |                                   |   |   |   |   |   |
|   Wages,      salaries and related costs                                                                                                                                                                                                                                                                                                                                              | 54                                |     | 45                                |   | 9  |   | 20.0 % |   |
|   Regional      capacity purchase, net                                                                                                                                                                                                                                                                                                                                           | 1,793                             |     | 1,791                             |   | 2  |   | 0.1 % |   |
|   Aircraft      rentals                                                             | 314                               |     | 312                               |   | 2  |   | 0.6 % |   |
|   Landing      fees and other rentals                                                                                                                                                                                                                                                                                                                                                 | 52                                |     | 44                                |   | 8  |   | 18.2 % |   |
|   Distribution      costs                                                           | 99                                |     | 109                               |   | (10) |   | (9.2)% |   |
|   Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                  | 13                                |     | 13                                |   | -  |   | -       |   |
|   Passenger      services                                                           | 15                                |     | 15                                |   | -  |   | -       |   |
|   Other                                                                             |      34  |     |      17  |   |    17  |   | 100.0 % |   |
|                                                                                                                                                                                                                                                                                                                                                                                            | 2,374                             |     | 2,346                             |   |    28  |   | 1.2 % |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |                                   |     |                                   |   |   |   |   |   |
| Operating      loss                                                                           | $ (161)                           |     | $ (125)                           |   | $  36  |   | 28.8 % |   |

Sources and Uses of Cash

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |              | Cash     |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------|----------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |              | Increase |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 2008              | 2007     | (Decrease) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |              |     |   |
| Capital      expenditures                                                                                                                                                          | $(504)            |     | $(445) |   | $   (59)  |   |
| Purchase      deposits refunded (paid) in connection with  future      aircraft deliveries,      net                                                                     |  102    |     |  (219) |   |  321  |   |
| Proceeds      (purchase) of short-term and long-term  investments,      net                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  137    |     |  (314) |   |  451  |   |
| Proceeds      from sales of investments, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 149          |     | 65  |   | 84  |   |
| Proceeds      from sales of property and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 113          |     | 67  |   | 46  |   |
| Decrease      (increase) in restricted cash, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  (13)        |     |    86  |   |  (99) |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $  (16) |     | $(760) |   | $744  |   |

| Fleet      related (excluding aircraft to be acquired through  the      issuance of      debt)                                                                   |  $190            |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|
| Non-fleet                                                                                                                                                                  | 210                   |
| Spare      parts and capitalized      interest                                                                                                                             |    55  |
|   Total                                                                                                                                                          | $455                  |
| Aircraft      purchase      deposits                                                                                                                                       |   40        |
|   Projected      net capital      expenditures                                                                                                                   | $495                  |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                       | Cash     |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|----------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                       | Increase |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 2008                       | 2007     | (Decrease) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                       |     |   |
| Payments      on long-term debt and capital lease obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | $(641)                     |     | $ (429) |   | $(212) |   |
| Proceeds      from issuance of long-term      debt                                                                                      | 642                   |     | 26  |   | 616  |   |
| Proceeds      from public offering of common stock, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 358                   |     | -  |   | 358  |   |
| Proceeds      from issuance of common stock pursuant to stock plans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |    18  |     |    35  |   |  (17) |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | $ 377            |     | $(368) |   | $ 745  |   |

| · | a      total of $72 million if our      unrestricted cash, cash equivalents and short-term investments balance      falls below $2.0 billion;                                                                                                                                                                                  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | a      total of $229 million if we fail to maintain the minimum unsecured debt      ratings specified above;                                                                                                                                                                                                                        |
| · | a      total of $437 million if our unrestricted cash, cash equivalents and      short-term investments balance (plus any collateral posted at Chase) falls      below $1.4 billion or if our ratio of unrestricted cash, cash equivalents      and short-term investments to current liabilities falls below 0.25 to 1.0;      and |
| · | a      total of $958 million if our unrestricted cash, cash equivalents and      short-term investments balance (plus any collateral posted at Chase) falls      below $1.0 billion or if our ratio of unrestricted cash, cash equivalents      and short-term investments to current liabilities falls below 0.22 to      1.0.     |

|  Contractual Obligations | Payments Due                                                                                                                                                                                                                                                                     | Later   Years  |
|-------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------|
| Total                    |  2009                                                                                                                                                                                                                                                                  |  2010                    |  2011  |  2012  |  2013  |
|                          |                                                                                                                                                                                                                                                                             |                               |   |   |   |   |   |
| Debt      and leases:         |                                                                                                                                                                                                                                                                             |                               |   |   |   |   |   |
|                          | Long-term      debt (1)                                                                                                                                                                                                                                                          | $       7,372                 | $  832 | $ 1,045 | $ 1,344 | $   690 | $   732 | $2,729 |
|                          | Capital      lease obligations (1)                                                                                                                                                                                                                                          | 482                                | 17 | 17 | 16 | 16 | 16 | 400 |
|                          | Aircraft      operating leases (2)                                                                                                                                                                                                                                               | 8,722                              | 1,019 | 998 | 939 | 894 | 871 | 4,001 |
|                          | Nonaircraft      operating leases (3)                                                                                                                                                                                                                                            | 6,147                              | 456 | 418 | 402 | 494 | 355 | 4,022 |
|                          |                                                                                                                                                                                                                                                                             |                               |   |   |   |   |   |   |
| Other:                        |                                                                                                                                                                                                                                                                             |                               |   |   |   |   |   |
|                          | Capacity      purchase agreements (4)                                                                                                                                                                                                                                            | 4,703                              | 767 | 674 | 660 | 675 | 671 | 1,256 |
|                          | Aircraft      and other purchase  commitments      (5)                                                                                                                                                                                                                 |  5,902                        |  551 |  809 |  955 |  696 |  1,092 |  1,799 |
|                          | Projected      pension contributions (6)                                                                                                                                                                                                                                         |   1,657                  |     125 |     148 |     155 |     183 |     174 |        872 |
|                          |                                                                                                                                                                                                                                                                             |                               |   |   |   |   |   |   |
|                          | Total      (7)                                            | $34,985                            | $3,767 | $4,109 | $4,471 | $3,648 | $3,911 | $15,079 |

| (1) | Represents      contractual amounts due, including interest.  Interest on      floating rate debt was estimated using rates in effect at December 31,      2008.                                                                                                                                                                                                                                                                                                                                                                                                  |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Represents      contractual amounts due and excludes $248 million of projected sublease      income to be received from ExpressJet.                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (3) | Represents      minimum contractual amounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (4) | Represents      our estimates of future minimum noncancelable commitments under our      capacity purchase agreements and does not include the portion of the      underlying obligations for aircraft leased to ExpressJet or deemed to be      leased from Chautauqua, CommutAir or Colgan and facility rent that is      disclosed as part of aircraft and nonaircraft operating      leases.  See Note 16 to our consolidated financial statements      included in Item 8 of this report for the significant assumptions used to      estimate the payments. |
| (5) | Represents      contractual commitments for firm order aircraft only, net of previously      paid purchase deposits, and noncancelable commitments to purchase goods      and services, primarily information technology support.  See      Note 19 to our consolidated financial statements included in Item 8 of      this report for a discussion of our purchase  commitments.                                                                                                                                                                                |
| (6) | Represents      our estimate of the minimum funding requirements as determined by      government regulations.  Amounts are subject to change based on      numerous assumptions, including the performance of the assets in the plan      and bond rates.  See "Critical Accounting Policies and      Estimates" in this Item for a discussion of our assumptions regarding our      pension plans.                                                                                                                                                    |
| (7) |    Total      contractual obligations do not include long-term contracts where the      commitment is variable in nature, such as credit card processing      agreements and cost-per-hour    engine maintenance      agreements, or where short-term cancellation provisions    exist.                                                                                                                                                                                                                                                       |

Off-Balance Sheet Arrangements

Critical Accounting Policies andEstimates

|   |  Percent of Total                                                                                                                                                                                                   | Expected      Long-Term      Rate of      Return      |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                     |                                                                                                         |
|   | U.S.      equities                                  | 47%                                                                                                          |   | 9% |   |
|   | International      equities                                                                                                                                                                                              | 21                                                                                            |   | 9    |   |
|   | Fixed      income                                   | 20                                                                                            |   | 5    |   |
|   | Other                                               |    12                                                                          |   | 12    |   |

|   | Risk-free      interest      rate                                                                                               | 3.1%                  |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------|
|   | Dividend      yield                                                                                                             | 0%                    |
|   | Expected      market price volatility of our common stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 62%                   |
|   | Expected      life of options (years)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 3.9    |

|   | Level      1: | Observable      inputs such as quoted prices for identical assets or liabilities in active      markets                                                                                                |
|--------|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Level      2: | Other      inputs that are observable directly or indirectly, such as quoted prices      for similar assets or liabilities or market-corroborated      inputs                                          |
|   | Level      3: | Unobservable      inputs for which there is little or no market data and which require us to      develop our own assumptions about how market participants would price the      assets or liabilities |

----

Quantitative andQualitative Disclosures about Market Risk

|                                                                                                                                                                                                                                                                                                        | Maximum Price                   | Minimum Price                          |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|----------------------------------------|
|                                                                                                                                                                                                                                                                                                        | %      ofExpectedConsumption    | WeightedAverage      Price(per gallon) | %      ofExpectedConsumption | WeightedAverage      Price(per gallon) |
|                                                                                                                                                                                                                                                                                                        |                            |                                   |   |   |
| 2009                                                                                                                                                                                                                                                                                                        |                            |                                   |   |   |   |   |   |   |
| WTI      crude oil      collars                                                 | 14%                             |                                   | $3.40 |   | 14% |   | $2.53 |   |
| WTI      crude oil call options                                                                                                                                                                                                                                                                             | 6                |                                   | 2.54 |   | N/A    |   | N/A |   |
| WTI      crude oil      swaps                                                   |   3    |                                   | 1.33 |   |   3    |   | 1.33 |   |
|      Total                                             | 23%                             |                                   |   |   | 17% |   |   |   |

| · | 36%      of our projected Japanese yen-denominated cash inflows in    2009 |
|--------|----------------------------------------------------------------------------|
| · | 6%      of our projected euro-denominated cash inflows in  2009            |

|                                                                                                                                                                                                  | Increase      inFair Value | Increase      inUnderlying Exposure | ResultingNet Loss |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|-------------------------------------|-------------------|
|                                                                                                                                                                                                  |                       |                                |              |
| Japanese      yen                               | $14                        |                                | $(40)             |   | $(26) |   |
| Euro                                            | 3                          |                                | (49)              |   | (46) |   |

| · | Approximately      25% of our projected British pound-denominated cash flows in      2008   |
|--------|---------------------------------------------------------------------------------------------|
| · | Approximately      39% of our projected Canadian dollar-denominated cash flows in      2008 |
| · | Approximately      43% of our projected Japanese yen-denominated cash flows in      2008    |

----

FinancialStatements and Supplementary Data.

|                                                                                                                              | PAGE           |
|-----------------------------------------------------------------------------------------------------------------------------------|----------------|
|                                                                                                                              |           |
| Report      of Independent Registered Public Accounting Firm                                                                      | 80        |
|                                                                                                                              |           |
| Consolidated      Statements of Operations for each of the Three Years in thePeriod Ended December 31,      2008                  |  81  |
|                                                                                                                              |           |
| Consolidated      Balance Sheets as of December 31, 2008 and 2007                                                                 | 83        |
|                                                                                                                              |           |
| Consolidated      Statements of Cash Flows for each of the Three Years in thePeriod Ended December 31,      2008                  |  85  |
|                                                                                                                              |           |
| Consolidated      Statements of Common Stockholders' Equity for each of theThree Years in the Period Ended      December 31, 2008 |  87  |
|                                                                                                                              |           |
| Notes      to Consolidated Financial Statements                                                                                   | 89        |

----

REPORT OF INDEPENDENT REGISTERED PUBLICACCOUNTING FIRM

----

CONSOLIDATED STATEMENTS OFOPERATIONS

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Year      Ended December 31,                      |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 2008                                              | 2007 | 2006 |
| Operating      Revenue:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                              |   |   |
| Passenger (excluding fees and      taxes of $1,531, $1,499 and $1,369,       respectively)                                                                                                                                 |  $13,737                                |  $12,995  |  $12,003  |
| Cargo                                                                                                                                                                                                                                          | 497                                          | 453  | 457  |
| Other                                                                                                                                                                                                                                          | 1,007                                        |      784  |      668  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 15,241                                       | 14,232  | 13,128  |
| Operating      Expenses:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                              |   |   |
| Aircraft fuel and related      taxes                                                                                                                                                                                                           | 4,905                                        | 3,354  | 3,034  |
| Wages, salaries and related      costs                                                                                                                                                                                                         | 2,957                                        | 3,127  | 2,875  |
| Regional capacity purchase,      net                                                                                                                                                                                                           | 2,073                                        | 1,793  | 1,791  |
| Aircraft      rentals                                                                                                                                                                                                                          | 976                                          | 994  | 990  |
| Landing fees and other      rentals                                                                                                                                                                                                            | 853                                          | 790  | 764  |
| Distribution      costs                                                                                                                                                                                                                        | 717                                          | 682  | 650  |
| Maintenance, materials and      repairs                                                                                                                                                                                                        | 612                                          | 621  | 547  |
| Depreciation and      amortization                                                                                                                                                                                                             |  438                                    | 413  | 391  |
| Passenger      services                                                                                                                                                                                                                        | 406                                          | 389  | 356  |
| Special      charges                                                                                                                                                                                                                           | 181                                          | 13  | 27  |
| Other                                                                                                                                                                                                                                          |   1,437                            |   1,369  |   1,235  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 15,555                                       | 13,545  | 12,660  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                              |   |   |
| Operating      Income      (Loss)                                                                                                                                                                                          |   (314)                                 |     687  |     468  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                              |   |   |
| Nonoperating      Income (Expense):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                              |   |   |
| Interest      expense                                                                                                                                                                                                                          | (365)                                             | (383) | (401) |
| Interest      capitalized                                                                                                                                                                                                                      | 33                                           | 27  | 18  |
| Interest      income                                                                                                                                                                                                                           | 65                                           | 160  | 131  |
| Gains on sale of      investments                                                                                                                                                                                                              | 78                                           | 37  | 92  |
| Other,      net                                                                                                                                                                                                                                |  (181)                                       |      38  |      61  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  (370)                                       |   (121) |    (99) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                              |   |   |
| Income      (Loss) before Income Taxes and Cumulative Effect of Change in    Accounting      Principle                                                                                                 |  (684)                                       |  566  |  369  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                              |   |   |
| Income      Tax Benefit      (Expense)                                                                                                                                                                                     |           99             |  (107) |         -  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                              |   |   |
| Income      (Loss) before Cumulative Effect of Change in Accounting      Principle                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (585)                                             |    459  | 369  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                              |   |   |
| Cumulative      Effect of Change in Accounting Principle                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |             -  |        -  |    (26) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                              |   |   |
| Net      Income      (Loss)                                                                                                                                                                                                | $ (585)                                      | $  459  | $  343  |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Year      Ended December 31,                      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 2008                                              | 2007 | 2006 |
| Earnings      (Loss) per Share:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                              |   |   |
|   Basic:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                              |   |   |
|     Income      (Loss) before Cumulative Effect of Change in Accounting      Principle                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | $(5.54)                                           | $4.73  | $ 4.15  |
|     Cumulative      Effect of Change in Accounting Principle                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |        -  |       -  | (0.29) |
|     Net      Income      (Loss)                                                                                                 | $(5.54)                                           | $4.73  | $ 3.86  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                              |   |   |
|   Diluted:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                              |   |   |
|     Income      (Loss) before Cumulative Effect of Change in Accounting      Principle                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | $(5.54)                                           | $4.18  | $ 3.53  |
|     Cumulative      Effect of Change in Accounting Principle                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |        -  |        -  | (0.23) |
|     Net      Income      (Loss)                                                                                                 | $(5.54)                                           | $4.18  | $ 3.30  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                              |   |   |
| Shares      Used for Computation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                              |   |   |
| Basic                                                                                                                                                                   | 106                                          | 97  | 89 |
| Diluted                                                                                                                                                                 | 106                                          | 114  | 111 |

----

CONSOLIDATED BALANCESHEETS

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | December      31,                            |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|
| ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 2008                                         | 2007 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                         |   |
| Current      Assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                         |   |
| Cash and cash      equivalents                                                                                                                                           | $ 2,165                                 |   | $ 2,128 |   |
| Short-term      investments                                                                                                                                              |     478                  |   |    675 |   |
| Total unrestricted cash, cash      equivalents and short-term investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 2,643                                        |   | 2,803 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                         |   |   |   |
| Restricted cash, cash equivalents      and short-term investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 190                                          |   | 179 |   |
| Accounts receivable, net of      allowance for doubtful receivables of $7 and $7                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 453                                          |   | 606 |   |
| Spare parts and supplies, net of      allowance for obsolescence of $102 and $80                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 235                                          |   | 271 |   |
| Deferred income      taxes                                                                                                                                               | 216                                          |   | 259 |   |
| Prepayments and      other                                                                                                                                               |      610            |   |     443 |   |
| Total current      assets                                                                                                                                                               |   4,347                            |   |  4,561 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                         |   |   |   |
| Property      and Equipment:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                         |   |   |   |
| Owned property and      equipment:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                         |   |   |   |
| Flight      equipment                                                                                                                                                                   | 8,446                                        |   | 7,182 |   |
| Other                                                                                                                                                                                   |   1,694                            |   |  1,548 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 10,140                                       |   | 8,730 |   |
| Less:  Accumulated      depreciation                                                                                                                                          |   3,229                            |   |  2,790 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   6,911                            |   |  5,940 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                         |   |   |   |
| Purchase deposits for flight      equipment                                                                                                                              |      275            |   |    414 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                         |   |   |   |
| Capital      leases                                                                                                                                                      | 194                                          |   | 297 |   |
| Less:  Accumulated      amortization                                                                                                                                          |        53 |   |       93 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |      141            |   |     204 |   |
|   Total property and      equipment,      net                                                                                                                                 |   7,327                            |   |  6,558 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                         |   |   |   |
| Routes      and airport operating rights, net of accumulated amortization of      $375  and      $362                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  804                                    |   |  706 |   |
| Investment      in other      companies                                                                                                                   | -                                            |   | 63 |   |
| Other      assets,      net                                                                                                                               |    208                        |   |      217 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                         |   |   |   |
|       Total      Assets                                                                                                     | $12,686                                      |   | $12,105 |   |

----

CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | December      31,                       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------|
| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 2008                                    | 2007 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                    |   |
| Current      Liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                    |   |
| Current maturities of long-term      debt and capital leases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | $   519             |   | $   652  |   |
| Accounts      payable                                                                                                                      | 1,021                              |   | 1,013  |   |
| Air traffic and frequent flyer      liability                                                                                              | 1,881                              |   | 1,967  |   |
| Accrued      payroll                                                                                                                       | 345                                |   | 545  |   |
| Accrued other      liabilities                                                                                                             |     708        |   |     272  |   |
| Total current      liabilities                                                                                                                            |  4,474                        |   |  4,449  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                    |   |   |   |
| Long-Term      Debt and Capital      Leases                                                                                      |  5,371                        |   |  4,366  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                    |   |   |   |
| Deferred      Income      Taxes                                                                                                  | 216                                |   |    359  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                    |   |   |   |
| Accrued      Pension      Liability                                                                                              |    1,417            |   |    534  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                    |   |   |   |
| Accrued      Retiree Medical      Benefits                                                                                       |    234              |   |    235  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                    |   |   |   |
| Other                                                                                                                            |    869              |   |    612  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                    |   |   |   |
| Commitments      and Contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                    |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                    |   |   |   |
| Stockholders'      Equity:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                    |   |   |   |
| Preferred stock - $.01 par,      10,000,000 shares authorized; zero andone share of Series B issued and      outstanding, stated at par value                                                                                                                                                                                                                                                                                                                                                                                                                             |  -                            |   |  -  |   |
| Class B common stock - $.01 par,      400,000,000 shares authorized;123,264,534 and 98,208,888 shares      issued and outstanding                                                                                                                                                                                                                                                                                                                                                                                                                                         |  1                            |   |  1  |   |
| Additional paid-in      capital                                                                                                            | 1,997                              |   | 1,606  |   |
| Retained earnings (accumulated      deficit)                                                                                               | (137)                                   |   | 448  |   |
| Accumulated other comprehensive      loss                                                                                                  |  (1,756)                           |   |     (505) |   |
|   Total stockholders'      equity                                                                                                               |      105  |   |    1,550  |   |
|          Total      Liabilities and Stockholders' Equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | $12,686                            |   | $12,105  |   |

----

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Year      Ended December 31,                   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 2008                                           | 2007 | 2006 |
| Cash      Flows from Operating Activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                           |   |   |
| Net income      (loss)                                                                                                                                            | $ (585)                                   | $  459  | $  343  |
| Adjustments to reconcile net      income (loss) to net cash provided by  operating      activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                           |   |   |
| Depreciation and      amortization                                                                                                                                               | 438                                       | 413  | 391  |
| Special      charges                                                                                                                                                             | 181                                       | 13  | 27  |
| Deferred income tax (benefit)      expense                                                                                                                                       | (101)                                          | 101  | -  |
| Gains on sale of      investments                                                                                                                                                | (78)                                           | (37) | (92) |
| Loss on fuel hedge contracts      with Lehman Brothers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 125                                       | -  | -  |
| Write-down in value of auction      rate securities, net of put right received                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 34                                        | -  | -  |
| Undistributed equity in income      of other companies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (9)                                            | (18) | (36) |
| Cumulative effect of change in      accounting principle                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | -                                         | -  | 26  |
| Stock-based compensation      related to equity awards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 16                                        | 27  | 34  |
| Other,      net                                                                                                                                                                  | 20                                        | 48  | 26  |
| Changes in operating assets and      liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                           |   |   |
| (Increase) decrease in accounts      receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 147                                       | (29) | (70) |
| (Increase) decrease in spare      parts and supplies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 5                                         | (66) | (26) |
| (Increase) decrease in      prepayments and other assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (167)                                          | 16  | (56) |
| Increase (decrease) in accounts      payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | (10)                                           | 71  | 104  |
| Increase (decrease) in air      traffic and frequent flyer liability                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (86)                                           | 255  | 237  |
| Increase (decrease) in accrued      payroll, pension liability and other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  (254)                                    |  (120) |    150  |
| Net cash (used in) provided by      operating      activities                                                                                                                                                                                                                                                                          |  (324)                                    | 1,133  | 1,058  |
| Cash      Flows from Investing Activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                           |   |   |
| Capital      expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                      | (504)                                          | (445) | (300) |
| Aircraft purchase deposits      refunded (paid), net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 102                                       | (219) | (81) |
| (Purchase) sale of short-term      investments, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 137                                       | (314) | (127) |
| Proceeds from sales of      investments, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 149                                       | 65  | 156  |
| Proceeds from sales of property      and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 113                                       | 67  | 10  |
| Decrease (increase) in      restricted cash, cash equivalents and short-terminvestments                                                                                          |        (13) |       86  |      (24) |
| Net cash used in investing      activities                                                                                                                                       |    (16)                         |   (760) |   (366) |
| Cash      Flows from Financing Activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                           |   |   |
| Payments on long-term debt and      capital lease obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | (641)                                          | (429) | (948) |
| Proceeds from issuance of      long-term      debt                                                                                                                                                                                                                                                                                                                                                                                    | 642                                       | 26  | 574  |
| Proceeds from public offering      of common stock, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 358                                       | -  | -  |
| Proceeds from issuance of      common stock pursuant to stock plans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |      18          |     35  |     82  |
| Net cash provided by (used in)      financing      activities                                                                                                                                                                                                                                       |    377                     |   (368) |   (292) |
| Net      Increase in Cash and Cash      Equivalents                                                                                                                                                                                                                   | 37                                        | 5  | 400  |
| Cash      and Cash Equivalents - Beginning of Period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 2,128                                     | 2,123  | 1,723  |
| Cash      and Cash Equivalents - End of Period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $2,165                                    | $2,128  | $2,123  |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Year      Ended December 31,                             |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 2008                                                     | 2007 | 2006 |
| Supplemental      Cash Flows Information:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                     |   |   |
| Interest      paid                                                                                                            | $   365                              | $  383  | $  382  |
| Income taxes paid      (refunded)                                                                                             | $       5        | $      2  | $    (1) |
| Investing and Financing      Activities Not Affecting Cash:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                     |   |   |
| Property and equipment acquired      through the issuance of debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | $1,014                                              | $ 190  | $ 192  |
| Capital lease obligations      incurred                                                                                                                | $       4        | $     -  | $      -  |
| Reduction of debt in exchange      for sale of frequent flyer miles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | $    (38)                            | $  (37) | $      -  |
| Transfer of auction rate      securities from available-for-sale to trading                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $     97                   | $     -  | $      -  |
| Common stock issued upon      conversion of 4.5% Convertible Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | $        -  | $ 170  | $      -  |

----

CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS'EQUITY

|                                                                                                                                                                                                                                                                                                                                      |                                                                                             |                                  |                       | Retained                                     | Accumulated                                      |                |                                                          |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|---------------------------------------|----------------------------|-------------------------------------------------------------|------------------------------------------------------------|---------------------|---------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                      | Class      B               | Additional                            | Earnings    | Other          | Treasury                                                   |                |
|                                                                                                                                                                                                                                                                                                                                      | Common      Stock                                        | Paid-In                     | (Accumulated               | Comprehensive                                               | Stock,                                                     |                |
|                                                                                                                                                                                                                                                                                                                                      | Shares                                                                                           | Amount                                | Capital     | Deficit)                                     | Loss          |  At Cost  | Total                                               |
|                                                                                                                                                                                                                                                                                                                                      |                                                                                             |                                  |                       |                                                        |                                                       |                |                                                          |
| December      31, 2005                                                                                                                                                                                                                                                                                                                    | 86                                                                                               | $ 1                         |                       | $1,635                                                 | $  406                                      |                | $(675)                                                        |   | $(1,141) | $226  |
|                                                                                                                                                                                                                                                                                                                                      |                                                                                             |                                  |                       |                                                        |                                                       |                |                                                          |   |   |   |
| Net      Income                                                                                                                   | -                                                                                                | -                                     |                       | -                                                      | 343                                                   |                | -                                                        |   | -  | 343  |
| Other      Comprehensive Income:                                                                                                                                                                                                                                                                                                          |                                                                                             |                                  |                       |                                                        |                                                       |                |                                                          |   |   |   |
|   Decrease      in additional   minimum      pension liability                                                                                                                                                                                                                                              |  -                                                                                          |  -                               |                       |  -                                                |  -                                               |                |  68                                                 |   |  -  |  68  |
|   Net      change in unrealized gain   (loss)      on derivative instruments                                                                                                                                                                                                                                     |       -                                                            |       - |                       |       -                  |       -                 |                |     (21)                                  |   |     -  |     (21) |
|     Total      Comprehensive Income                                                                                                                                                                                                                                                                                   |                                                                                             |                                  |                       |                                                        |                                                       |                |                                                          |   |   | 390  |
|                                                                                                                                                                                                                                                                                                                                      |                                                                                             |                                  |                       |                                                        |                                                       |                |                                                          |   |   |   |
| Issuance      of common stock   pursuant      to stock plans                                                                                                                                                                                                                                                          |  6                                                                                          |  -                               |                       |  82                                               |  -                                               |                |  -                                                  |   |  -  |  82  |
| Stock-based      compensation                                                                                                                                                                                                                                                                                                             | -                                                                                                | -                                     |                       | 34                                                     | -                                                     |                | -                                                        |   | -  | 34  |
| Retirement      of treasury stock                                                                                                                                                                                                                                                                                                         |       -                                                            |     -             |                       | (381)                                                       | (760)                                                      |                |     -                                |   | 1,141  |         -  |
| Impact      of adoption of SFAS 158                                                                                                                                                                                                                                                                                                       |    -                                                                              |    -                   |                       |         -      |     -                             |                |    (385)                                       |   |         -  |   (385) |
| December      31, 2006                                                                                                                                                                                                                                                                                                                    | 92                                                                                               |   1                         |                       | 1,370                                                  |  (11)                                                 |                | (1,013)                                                       |   |         -  |    347  |
|                                                                                                                                                                                                                                                                                                                                      |                                                                                             |                                  |                       |                                                        |                                                       |                |                                                          |
| Net      income                                                                                                                   | -                                                                                                | -                                     |                       | -                                                      | 459                                                   |                | -                                                        |   | -  | 459  |
| Other      comprehensive income:                                                                                                                                                                                                                                                                                                          |                                                                                             |                                  |                       |                                                        |                                                       |                |                                                          |   |   |   |
|   Net      change in unrealized gain   (loss)      on derivative instruments                                                                                                                                                                                                                                     |      -                                                                  |       - |                       |      -                        |       -                 |                |  45                                                 |   |     -  |    45  |
|   Net      change related to employee    benefit      plans                                         |  -                                                                                          |  -                               |                       |  -                                                |  -                                               |                |  463                                                |   |  - |    463  |
|       Total      Comprehensive Income                                                                                                                                                                                                                                                                       |                                                                                             |                                  |                       |                                                        |                                                       |                |                                                          |   |   | 967  |
|                                                                                                                                                                                                                                                                                                                                      |                                                                                             |                                  |                       |                                                        |                                                       |                |                                                          |   |   |   |
| Conversion      of 4.5%  convertible      notes                                                                                                                                                                                                                                                                                 |    4                                                                              |    -                   |                       |     174                            |        -           |                |          -  |   |          -  |     174  |
| Issuance      of common stock   pursuant      to stock plans                                                                                                                                                                                                                                                          |  2                                                                                          |  -                               |                       |  35                                               |  -                                               |                |  -                                                  |   |  -  |  35  |
| Stock-based      compensation                                                                                                                                                                                                                                                                                                             |   -                                                                                    |    -                   |                       |     27                             |       -                 |                |         -        |   |         -  |     27  |
| December      31, 2007                                                                                                                                                                                                                                                                                                                    | 98                                                                                               |   1                         |                       | 1,606                                                  |  448                                             |                |  (505)                                                   |   |         -  | 1,550  |

----

|                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                       |                                        |                       | Retained                                     | Accumulated                                      |                |                                                          |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------|---------------------------------------------|----------------------------|-------------------------------------------------------------|------------------------------------------------------------|---------------------|---------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                        | Class      B              | Additional                                  | Earnings    | Other          | Treasury                                                   |                |
|                                                                                                                                                                                                                                                                                                                                                                                        | Common      Stock                                  | Paid-In                           | (Accumulated               | Comprehensive                                               | Stock,                                                     |                |
|                                                                                                                                                                                                                                                                                                                                                                                        | Shares                                                                                     | Amount                                      | Capital     | Deficit)                                     | Loss          |  At Cost  | Total                                               |
|                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                       |                                        |                       |                                                        |                                                       |                |                                                          |
| Net      loss                                                                                                                                                                       | -                                                                                          | -                                           |                       | -                                                      | (585)                                                      |                | -                                                        |   | -  | (585) |
| Other      comprehensive income:                                                                                                                                                                                                                                                                                                                                                            |                                                                                       |                                        |                       |                                                        |                                                       |                |                                                          |   |   |   |
|   Net      change in unrealized gain   (loss)      on derivative instruments    and      other                                         |       -                                                      |        - |                       |       -                  |        -           |                |   (441)                                             |   |      -  |     (441) |
|   Net      change related to employee    benefit      plans                                                                                           |  -                                                                                    |  -                                     |                       |  -                                                |  -                                               |                |  (810)                                                   |   |  - |     (810) |
|       Total      Comprehensive Loss                                                                                                                                                                                                                                                                                                                           |                                                                                       |                                        |                       |                                                        |                                                       |                |                                                          |   |   | (1,836) |
|                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                       |                                        |                       |                                                        |                                                       |                |                                                          |   |   |   |
| Issuance      of common stock   pursuant      to stock plans                                                                                                                                                                                                                                                                                                            |  1                                                                                    |  -                                     |                       |  19                                               |  -                                               |                |  -                                                  |   |  -  |  19  |
| Issuance      of common stock    pursuant      to stock offerings                                                                                                                                                                                                                                                                                                       |  24                                                                                   |  -                                     |                       |  358                                              |  -                                               |                |  -                                                  |   |  -  |  358  |
| Stock-based      compensation                                                                                                                                                                                                                                                                                                                                                               |     -                                                                  |    -                         |                       |     14                             |       -                 |                |          -  |   |         -  |       14  |
| December      31, 2008                                                                                                                                                                                                                                                                                                                                                                      | 123                                                                                        | $  1                              |                       | $1,997                                                 | $(137)                                                     |                | $(1,756)                                                      |   | $        -  | $    105  |

----

NOTES TO CONSOLIDATED FINANCIALSTATEMENTS

| (a)    | Principles of Consolidation.  Our      consolidated financial statements include the accounts of Continental and      all wholly-owned subsidiaries.  All intercompany accounts and      transactions have been eliminated in consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (b)    | Use of Estimates.  The      preparation of financial statements in conformity with accounting      principles generally accepted in the United States requires management to      make estimates and assumptions that affect the amounts reported in the      financial statements and accompanying notes.  Actual results      could differ from those estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (c)    | Cash and Cash Equivalents.  We      classify short-term, highly liquid investments which are readily      convertible into cash and have a maturity of three months or less when      purchased as cash and cash equivalents.  Restricted cash, cash      equivalents and short-term investments is primarily collateral for      estimated future workers' compensation claims, credit card processing      contracts, letters of credit and performance bonds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (d)    | Short-term      Investments.  Short-term investments primarily include      certificates of deposit placed through an account registry service      ("CDARS"), auction rate securities and automobile loan-related asset      backed securities.  The CDARS we hold have original maturities      of 91 days and are insured by the Federal Deposit Insurance      Corporation.  Short-term investments are classified as      available-for-sale or trading securities and are stated at fair      value.  Trading securities consist of student loan-related      auction rate securities for which we have received an option to put the      securities back to the broker, discussed in Note 6.  Realized      gains and losses on specific investments are reflected in non-operating      income (expense) in our consolidated statements of      operations.  Unrealized gains and losses on available-for-sale      and trading securities are reflected as a component of accumulated other      comprehensive loss and non-operating income (expense) in our consolidated      statements of operations, respectively. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (e)    | Spare Parts and      Supplies.  Inventories, expendable parts and supplies      related to flight equipment are carried at average acquisition cost and      are expensed when consumed in operations.  An allowance for      obsolescence is provided over the remaining lease term or the estimated      useful life of the related aircraft, as well as to reduce the carrying      cost of spare parts currently identified as excess to the lower of      amortized cost or net realizable value.  We recorded additions      to this allowance for expense of $26 million, $11 million and $7 million      in the years ended December 31, 2008, 2007 and 2006,      respectively.  The allowance was reduced by $1 million and $32      million in the years ended December 31, 2007 and 2006, respectively,      related primarily to the consignment of surplus spare parts and      supplies.  Spare parts and supplies are assumed to have an      estimated residual value of 10% of original cost.  These      allowances are based on management estimates, which are subject to      change.                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (f)    | Property and Equipment.  Property      and equipment are recorded at cost and are depreciated to estimated      residual values over their estimated useful lives using the straight-line      method.  Jet aircraft and rotable spare parts are assumed to      have residual values of 15% and 10%, respectively, of original cost; other      categories of property and equipment are assumed to have no residual      value.  The estimated useful lives of our property and equipment      are asfollows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Estimated Useful Life                                           |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                            |
|   | Jet      aircraft and      simulators                                                                                    | 25      to 30 years                                             |
|   | Rotable      spare      parts                                                                                            | Average      lease term oruseful      life for related aircraft |
|   | Buildings      and      improvements                                                                                     | 10      to 30 years                                             |
|   | Vehicles      and      equipment                                                                                         | 5      to 10 years                                              |
|   | Computer      software                                                                                                   | 3      to 5 years                                               |
|   | Capital      leases                                                                                                      | Shorter      of leaseterm      or useful life                   |
|   | Leasehold      improvements                                                                                              | Shorter      of leaseterm      or useful life                   |

|   | Amortization      of assets recorded under capital leases is included in depreciation      expense in our consolidated statement of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | The      carrying amount of computer software was $80 million and $77 million at      December 31, 2008 and 2007, respectively.  Depreciation expense      related to computer software was $27 million, $28 million and $28 million      in the years ended December 31, 2008, 2007 and 2006,      respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (g)    | Routes and Airport Operating      Rights.  Routes represent the right to fly between cities      in different countries.  Routes are indefinite-lived intangible      assets and are not amortized.  Routes totaled $466 million and      $484 million at December 31, 2008 and 2007, respectively.  We      perform a test for impairment of our routes in the fourth quarter of each      year.  In 2008, we recorded an $18 million non-cash charge to      write off an intangible route asset as a result of our decision to move      all of our flights between Newark Liberty International Airport ("New York      Liberty") and London from London Gatwick Airport to London Heathrow      Airport.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Airport      operating rights represent gate space and slots (the right to schedule an      arrival or departure within designated hours at a particular      airport).  Airport operating rights at domestic airports totaled      $91 million and $106 million at December 31, 2008 and 2007,      respectively.  These assets are amortized over the stated term      of the related lease (for gates) or 20 years (for      slots).  Amortization expense related to domestic airport      operating rights was $14 million for each of the years ended December 31,      2008, 2007 and 2006.  We expect annual amortization expense      related to domestic airport operating rights to be approximately $14      million in each of the next four years and $9 million in    2013.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Our      international slots are indefinite-lived intangible assets and are not      amortized.  International slots totaled $247 million and $116      million at December 31, 2008 and 2007, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (h)    | Measurement of Impairment of Long-Lived      Assets.  We record impairment losses on long-lived      assets, consisting principally of property and equipment and domestic      airport operating rights, when events or changes in circumstances      indicate, in management's judgment, that the assets might be impaired and      the undiscounted cash flows estimated to be generated by those assets are      less than the carrying amount of those assets.  The net carrying      value of assets not recoverable is reduced to fair value if lower than the      carrying value.  In determining the fair market value of the      assets, we consider market trends, recent transactions involving sales of      similar assets and, if necessary, estimates of future discounted cash      flows.  See Note 13 for a discussion of aircraft impairment      charges during 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (i)    | Revenue/Air Traffic      Liability.  Passenger revenue is recognized either when      transportation is provided or when the ticket expires unused, rather than      when a ticket is sold.  Revenue is recognized for unused      non-refundable tickets on the date of the intended flight if the passenger      did not notify us of his or her intention to change the      itinerary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | We      are required to charge certain taxes and fees on our passenger      tickets.  These taxes and fees include U.S. federal      transportation taxes, federal security charges, airport passenger facility      charges and foreign arrival and departure taxes.  These taxes      and fees are legal assessments on the customer.  As we have a      legal obligation to act as a collection agent with respect to these taxes      and fees, we do not include such amounts in passenger      revenue.   We record a liability when the amounts are      collected and relieve the liability when payments are made to the      applicable government agency.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Under      our capacity purchase agreements with regional carriers, we purchase all      of the capacity related to aircraft covered by the contracts and are      responsible for selling all of the related seat inventory.  We      record the related passenger revenue and related expenses, with payments      under the capacity purchase agreements reflected as a separate operating      expense in our consolidated statement of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | The      amount of passenger ticket sales not yet recognized as revenue is included      in our consolidated balance sheets as air traffic and frequent flyer      liability.  We perform periodic evaluations of the estimated      liability for passenger ticket sales and any adjustments, which can be      significant, are included in results of operations for the periods in      which the evaluations are completed. These adjustments relate primarily to      differences between our statistical estimation of certain revenue      transactions and the related sales price, as well as refunds, exchanges,      interline transactions and other items for which final settlement occurs      in periods subsequent to the sale of the related tickets at amounts other      than the original sales price.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Revenue      from the shipment of cargo and mail is recognized when transportation is      provided.  Other revenue includes revenue from the sale of      frequent flyer miles (see (k) below), ticket change fees, baggage fees,      charter services, sublease income on aircraft leased to Holdings but not      operated for us and other incidental services.  Ticket change      fees relate to non-refundable tickets, but are considered a separate      transaction from the air transportation because they represent a charge      for our additional service to modify a previous order.  Ticket      change fees are recognized as other revenue in our consolidated statement      of operations at the time the fees are assessed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (j)    | Frequent Flyer Program.  For      those OnePass accounts that have sufficient mileage credits to claim the      lowest level of free travel, we record a liability for either the      estimated incremental cost of providing travel awards that are expected to      be redeemed with us or the contractual rate of expected redemption on      alliance carriers.  Incremental cost includes the cost of fuel,      meals, insurance and miscellaneous supplies, but does not include any      costs for aircraft ownership, maintenance, labor or overhead      allocation.  Beginning in 2008, we also include in our      determination of incremental cost the impact of fees charged to certain      passengers redeeming frequent flyer rewards for travel, which partially      offsets the incremental cost associated with providing flights for      frequent flyer travel rewards.  We recorded an adjustment of $27      million ($0.24 per basic and diluted share) to increase passenger revenue      and reduce our frequent flyer liability during 2008 for the impact of      these fees, which had not been significant in prior periods, after we      increased them during 2008.  A change to these cost estimates,      the actual redemption activity, the amount of redemptions on alliance      carriers or the minimum award level could have a significant impact on our      liability in the period of change as well as future years.  The      liability is adjusted periodically based on awards earned, awards      redeemed, changes in the incremental costs and changes in the OnePass      program, and is included in the accompanying consolidated balance sheets      as air traffic and frequent flyer liability.  Changes in the      liability are recognized as passenger revenue in the period of      change. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | We      also sell mileage credits in our frequent flyer program to participating      entities, such as credit/debit card companies, alliance carriers, hotels,      car rental agencies, utilities and various shopping and gift      merchants.  Revenue from the sale of mileage credits is deferred      and recognized as passenger revenue over the period when transportation is      expected to be provided, based on estimates of its fair      value.  Amounts received in excess of the expected      transportation's fair value are recognized in income currently and      classified as other revenue.  A change to the time period over      which the mileage credits are used (currently six to 28 months), the      actual redemption activity or our estimate of the amount or fair value of      expected transportation could have a significant impact on our revenue in      the year of change as well as future years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | At      December 31, 2008, we estimated that approximately 2.4 million free travel      awards outstanding were expected to be redeemed for free travel on      Continental, Continental Express, Continental Connection, CMI or alliance      airlines.  Our total liability for future OnePass award      redemptions for free travel and unrecognized revenue from sales of OnePass      miles to other companies was approximately $324 million at December 31,      2008.  This liability is recognized as a component of air      traffic and frequent flyer liability in our consolidated balance      sheets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (k)    | Maintenance and Repair      Costs.  Maintenance and repair costs for owned and leased      flight equipment, including the overhaul of aircraft components, are      charged to operating expense as incurred.  Maintenance and      repair costs also include engine overhaul costs covered by cost-per-hour      agreements, a majority of which are expensed on the basis of hours      flown.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (l)    | Advertising Costs.  We expense      the costs of advertising as incurred.  Advertising expense was      $93 million, $106 million and $95 million for the years ended December 31,      2008, 2007 and 2006, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (m)    | Regional Capacity Purchase,      Net.  Payments made to regional carriers under capacity      purchase agreements are reported in regional capacity purchase, net, in      our consolidated statement of operations.  Regional capacity      purchase, net, includes all fuel expense on flights operated for us under      capacity purchase agreements and is net of our rental income on aircraft      leased to ExpressJet and flown for us through June 30,      2008.  Beginning July 1, 2008, ExpressJet no longer pays us      sublease rent for aircraft operated on our behalf.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (n)    | Foreign Currency Gains      (Losses).  Foreign currency gains (losses) are recorded      as part of other, net non-operating income (expense) in our consolidated      statements of operations.  Foreign currency gains (losses) were      $(37) million, $2 million and $3 million for the years ended December 31,      2008, 2007 and 2006, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (o)    | Reclassifications.  Certain      reclassifications have been made in the prior years' consolidated      financial statements and related note disclosures to conform to the      current year'spresentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 2008                                        | 2007   | 2006                                  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------|--------|---------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                        |   |                                  |
| Numerator:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                        |   |                                  |
|   Numerator      for basic earnings (loss) per share - net income (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $(585)                                      |   | $459                             |   | $343  |   |
|   Effect      of dilutive securities - interest expense on:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                        |   |                                  |   |   |   |
|     5%      Convertible      Notes                                                                                                                                                                                                                                                           | -                                      |   | 7                                |   | 7  |   |
|     6%      Convertible Junior Subordinated Debentures      held      by subsidiary      trust                                                                                                                                                                 |  -                                |   |  12                         |   |  11  |   |
|     4.5%      Convertible      Notes                                                                                                                                                                                                                                                         | -                                      |   | -                                |   | 7  |   |
|   Other                                                                                                                                                                                                                                                                                                |       -  |   |      -  |   |   (1) |   |
|   Numerator      for diluted earnings (loss) per share - net    income      (loss) after assumed conversions and effect    of      dilutive securities of equity      investee                                                                                 |   $(585)                          |   |   $478                 |   |   $367  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                        |   |                                  |   |   |   |
| Denominator:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                        |   |                                  |   |   |   |
|   Denominator      for basic earnings (loss) per share -    weighted      average      shares                                                                                                                                                                                      |  106                              |   |  97                         |   |  89  |   |
|   Effect      of dilutive securities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                        |   |                                  |   |   |   |
|     5%      Convertible      Notes                                                                                                                                                                                                                                                           | -                                      |   | 9                                |   | 9  |   |
|     6%      Convertible Junior Subordinated Debentures      held      by subsidiary      trust                                                                                                                                                                 |  -                                |   |  4                          |   |  4  |   |
|     4.5%      Convertible      Notes                                                                                                                                                                                                                                                         |     -              |   |     -        |   |     5  |   |
|     Employee      stock      options                                                                                                                                                                                                                                                         |       -  |   |     4        |   |     4  |   |
|   Dilutive      potential common      shares                                                                                                                                                                                                                                                           |       -  |   |   17                   |   |   22  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                        |   |                                  |   |   |   |
|   Denominator      for diluted earnings (loss) per share -    weighted-average      shares after assumed conversions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   106                        |   |  114                        |   |  111  |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 2008                                              | 2007   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                              |   |
| Secured                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                              |   |
| Notes      payable, interest rates of 5.4% to 8.4% (weighted average rate      of  6.9%      as of December 31, 2008), payable through      2022                                                                                                |  $2,862                                      |   |  $2,226 |   |
| Floating      rate notes, with indicated interest rates:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                              |   |   |   |
|   LIBOR      (1.425% on December 31, 2008) plus 0.35% to 1.95%, payable    through      2020                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  1,345                                       |   |  1,095 |   |
|   LIBOR      plus 3.375%, payable in      2011                                                                                                                                                                                                  | 350                                               |   | 350 |   |
|   LIBOR      plus 3.125% to 3.25%, payable through 2014                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 192                                               |   | 196 |   |
|   LIBOR      plus 2.5% to 4.5%, payable through 2016                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 157                                               |   | 174 |   |
| Advance      purchase of mileage credits, implicit interest rate of    6.18%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 148                                               |   | - |   |
| Other                                                                                                                                                                                                                                                          | 15                                                |   | 38 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                              |   |   |   |
| Unsecured                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                              |   |   |   |
| Convertible      junior subordinated debentures, interest rate of 6.0%,  payable      in      2030                                                                                                                                                   |  248                                         |   |  248 |   |
| Note      payable, interest rate of 8.75%, payable in 2011                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 200                                               |   | 200 |   |
| Convertible      notes, interest rate of 5.0%, callable beginning in 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 175                                               |   | 175 |   |
| Note      payable, interest rate of 8.125%, payable in 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |         - |   |       89 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 5,692                                             |   | 4,791 |   |
| Less:  current      maturities                                                                                                                                                                                                                       |    516                             |   |    620 |   |
| Total                                                                                                                                                                                                                                                          | $5,176                                            |   | $4,171 |   |

| Year      ending December 31, |                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|-------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                          | 2009                                                                          | $  516 |
|                          | 2010                                                                          | 770 |
|                          | 2011                                                                          | 1,128 |
|                          | 2012                                                                          | 533 |
|                          | 2013                                                                          | 600 |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                   | CapitalLeases | Operating Leases |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|------------------|
| Aircraft                                                                                                                                                                                                                                                                                                                                                                                                                                             | Non-aircraft                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                   |          |             |   |
| Year      ending December 31,                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                   |          |             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 2009                                                                      | $ 17     |             | $  1,019 |   | $   456 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 2010                                                                      | 17            |             | 998 |   | 418 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 2011                                                                      | 16            |             | 939 |   | 402 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 2012                                                                      | 16            |             | 894 |   | 494 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 2013                                                                      | 16            |             | 871 |   | 355 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Later      years                                                          |  400     |             |  4,001 |   | 4,022 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                   |          |             |   |   |   |   |
| Total      minimum lease payments                                                                                                                                                                                                                                                                                                                                                                                                                    | 482                                                                                                                                                                                                                                                                                                                                                                    |          | $8,722           |   | $6,147 |   |
| Less:  amount      representing interest                                                                                                                                                                                                                                                                                                                                                                                              |  284                                                                                                                                                                                                                                                                                                                                                              |          |             |   |   |   |
| Present      value of capital leases                                                                                                                                                                                                                                                                                                                                                                                                                 | 198                                                                                                                                                                                                                                                                                                                                                                    |          |             |   |   |   |
| Less:  current      maturities of capital leases                                                                                                                                                                                                                                                                                                                                                                                           |     3                                                                                                                                                                                                                                                                                                                                              |          |             |   |   |   |
| Long-term      capital      leases                                                                    | $195                                                                                                                                                                                                                                                                                                                                                                   |          |             |   |   |   |

|   | Level      1: | Observable      inputs such as quoted prices for identical assets or liabilities in active      markets                                                                                                |
|--------|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Level      2: | Other      inputs that are observable directly or indirectly, such as quoted prices      for similar assets or liabilities or market-corroborated      inputs                                          |
|   | Level      3: | Unobservable      inputs for which there is little or no market data and which require us to      develop our own assumptions about how market participants would price the      assets or liabilities |

|   | The      valuation techniques that may be used to measure fair value are as      follows: |
|--------|-------------------------------------------------------------------------------------------|

|   | (A) | Market      approach - Uses prices and other relevant information generated by market      transactions involving identical or comparable assets or      liabilities                                                                                                       |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (B) | Income      approach - Uses valuation techniques to convert future amounts to a single      present amount based on current market expectations about those future      amounts, including present value techniques, option-pricing models and      excess earnings method |
|   | (C) | Cost      approach - Based on the amount that currently would be required to replace      the service capacity of an asset (replacement  cost)                                                                                                                             |

|                                                                                                                                                                                                                                                                                                                                   | Carrying      Amount as ofDecember 31, 2008 |  Level 1 |  Level 2 |  Level 3 | ValuationTechnique |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------|---------------|---------------|---------------|--------------------|
|                                                                                                                                                                                                                                                                                                                                   |                                        |          |          |          |               |
| Cash      and cash equivalents                                                                                                                                                                                                                                                                                                         | $2,165                                 |          | $2,165        |          |               | (A) |
| Short-term      investments:                                                                                                                                                                                                                                                                                                           |                                        |          |          |          |               |   |
|   Auction      rate securities                                                                                                                                                                                                                                                                                               | 201                                    |          |          |          | $201               | (B) |
|   Other                                                                                                                                                                                                                                                                                                                      | 277                                    |          | 277           |          |               | (A) |
| Restricted      cash, cash equivalents and  short-term      investments:                                                                                                                                                                                                                                                     |                                        |          |          |          |               |   |
|     Auction      rate securities                                                                                                                                                                                                                                                                                   | 28                                     |          |          |          | 28            | (B) |
|     Other                                                               | 162                                    |          | 162      |          |               | (A) |
| Auction      rate securities put right                                                                                                                                                                                                                                                                                                 | 26                                     |          |          |          | 26            | (B) |
| Fuel      derivatives                                                                       | (415)                                       |          |          |          | (415)              | (A) |
| Foreign      currency  derivatives                                                |  (8)                                   |          |          |  $(8)    |               |  (A) |

|                                                                                                                                                                                                                                                                                                                                                                              | Fair Value           | Par Value |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------|-----------|
|                                                                                                                                                                                                                                                                                                                                                                              |                 |      |
| Short-term      investments:                                                                                                                                                                                                                                                                                                                                                      |                 |      |
|   Available-for-sale                                                                                                    | $105                 |      | $133 |   |
|   Trading                                                                                                               |   96       |      | 125 |   |
|     Total                                                                                                     | 201                  |      | 258 |   |
|                                                                                                                                                                                                                                                                                                                                                                              |                 |      |   |   |
| Restricted      cash, cash equivalents and  short-term      investments                                                 |    28 |      |    33 |   |
|                                                                                                                                                                                                                                                                                                                                                                              |                 |      |   |   |
| Total                                                                                                                             | $229                 |      | $291 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                     | Student      Loan-RelatedAuction Rate Securities | Auction      RateSecurities Put Right | FuelDerivatives           |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------|---------------------------------------|---------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                     |                                             |                                  |                      |
| Balance      at beginning of period                                                                                                                                                                                                                                                                                                                                                                      | $    -                  |                                  | $  -            |   | $  24  |   |
| Transfers      to Level      3                                                               | 314                                         |                                  | -                         |   | -  |   |
| Additions                                                                                    | -                                           |                                  | -                         |   | 74  |   |
| Dispositions                                                                                 | (23)                                             |                                  | -                         |   | -  |   |
| Gains      and losses:                                                                                                                                                                                                                                                                                                                                                                                   |                                             |                                  |                      |   |   |   |
| Settlement (gains) losses      reported in earnings                                                                                                                                                                                                                                                                                                                                                      | -                                           |                                  | -                         |   | 172  |   |
| Unrealized gains (losses)      reported in earnings                                                                                                                                                                                                                                                                                                                                                      | (60)                                             |                                  | 26                        |   | (99) |   |
| Unrealized gains (losses)      reported in other        comprehensive      income                                                                                                                                                                                                                                                                      |   (2)                                  |                                  |     - |   |  (586) |   |
| Balance      at end of      year                                                             | $229                                        |                                  | $26                       |   | $(415) |   |

| · | Debt.  The fair value of our debt      with a carrying value of $5.0 billion at December 31, 2008 and $3.8      billion at December 31, 2007 was approximately $4.2 billion and $3.8      billion, respectively.  These estimates were based on either the      discounted amount of future cash flows using our current incremental rate      of borrowing for similar liabilities or market      prices.  Estimating the fair value of the remaining debt at      December 31, 2008 and 2007, with a carrying value of $683 million and $929      million, respectively, was not practicable due to the large number of      remaining debt instruments with relatively small carrying      amounts. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| · | Investment in COLI Products.  In      connection with certain of our supplemental retirement plans, we have      company owned life insurance policies on certain of our      employees.  As of December 31, 2008 and 2007, the carrying value      of the underlying investments was $26 million and $45 million,      respectively, which approximated fair value.                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| · | Accounts Receivable and Accounts      Payable.  The fair values of accounts receivable and      accounts payable approximated carrying value due to their short-term      maturity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

|                                                                                                                                                                                                                                                                                                        | Maximum Price                   | Minimum Price                          |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|----------------------------------------|
|                                                                                                                                                                                                                                                                                                        | %      ofExpectedConsumption    | WeightedAverage      Price(per gallon) | %      ofExpectedConsumption | WeightedAverage      Price(per gallon) |
|                                                                                                                                                                                                                                                                                                        |                            |                                   |   |   |
| 2009                                                                                                                                                                                                                                                                                                        |                            |                                   |   |   |   |   |   |   |
| WTI      crude oil      collars                                                 | 14%                             |                                   | $3.40 |   | 14% |   | $2.53 |   |
| WTI      crude oil call options                                                                                                                                                                                                                                                                             |   6    |                                   | 2.54 |   | N/A    |   | N/A |   |
| WTI      crude oil      swaps                                                   |   3    |                                   | 1.33 |   |    3    |   | 1.33 |   |
|      Total                                             | 23%                             |                                   |   |   |   17% |   |   |   |

|                                                                                                                                                                                                                                                                                                                                                                                      | 2008             | 2007   | 2006      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|--------|-----------|
|                                                                                                                                                                                                                                                                                                                                                                                      |             |   |      |
| Aircraft      fuel and related      taxes                                                         | $(144)           |   | $31  |   | $(40) |   |
| Regional      capacity purchase,      net                                                         | (28)             |   | 6    |   | (8) |   |
| Nonoperating      income      (expense)                                                           |   (99) |   | 14   |   |     -  |   |
| Total                                                                                             | $(271)           |   | $51  |   | $(48) |   |

|                                                                                                                                                                                                       |                   2008                    |                   2007                    |                   2006                    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                       |   Options                                                                                                                                                                                                                | Weighted-AverageExercise Price                                                                                                                                                                                                     |   Options                                                                                                                                                                                                                | Weighted-AverageExercise Price |   Options | Weighted-AverageExercise Price |
|                                                                                                                                                                                                       |                                                                                                                                                                                                                               |                                                                                                                                                                                                                               |                                                                                                                                                                                                                               |   |   |   |
| Outstanding      at  beginning      of  year                        |   7,817                                                                                                                                                                                                             |   $17.36                                                                                                                                                                                                                 |                                                                                                                                                                                                                               |   8,991  |   $15.12 |   |   12,710  |   $13.57 |   |
| Granted                                                                                 | 752                                                                                                                                                                                                                           | $10.84                                                                                                                                                                                                                             |                                                                                                                                                                                                                               | 728  | $35.72 |   | 1,853  | $24.11 |   |
| Exercised                                                                               | (375)                                                                                                                                                                                                                              | $12.49                                                                                                                                                                                                                             |                                                                                                                                                                                                                               | (1,699) | $13.39 |   | (5,118) | $14.33 |   |
| Cancelled                                                                               |    (222)                                                                                                                                                                                                            | $29.14                                                                                                                                                                                                                             |                                                                                                                                                                                                                               |    (203) | $17.29 |   |    (454) | $17.15 |   |
| Outstanding      at  end      of year                                                                                                                                                            |   7,972                                                                                                                                                                                                             |  $16.65                                                                                                                                                                                                                       |                                                                                                                                                                                                                               |   7,817  |  $17.36 |   |   8,991  |  $15.12 |   |
| Exercisable      at  end      of year                                                                                                                                                            |   6,212                                                                                                                                                                                                             |  $15.08                                                                                                                                                                                                                       |                                                                                                                                                                                                                               |   3,393  |  $15.45 |   |   1,764  |  $15.95 |   |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 2008        | 2007         | 2006                     |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|--------------|--------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |        |         |                     |
|   | Risk-free      interest      rate                                                                                          | 3.1%        | 4.9%         | 4.7%                     |
|   | Dividend      yield                                                                                                        | 0%          | 0%           | 0%                       |
|   | Expected      market price volatility of our common stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 62%         | 57%          | 63%                      |
|   | Expected      life of options      (years)                                                                                 | 3.9    | 3.9     | 3.4       |
|   | Fair      value of options      granted                                                                                    | $5.32  | $16.95  | $11.52    |

| Options Outstanding                |
|------------------------------------|
|                               |   |   |   |
|  Range      ofExercise Prices |   Number | WeightedAverage      RemainingContractual Life (Years) |  Weighted      Average   Exercise      Price    |
|                               |   |   |   |
| $8.85-$11.87                       |   | 857 |   | 3.4 |   | $10.45 |   |
| $11.89                             |   | 4,519 |   | 2.9 |   | $11.89 |   |
| $11.96-$20.31                      |   |   1,132 |   | 3.4 |   | $19.13 |   |
| $20.97-$49.80                      |   |  1,464 |   | 3.2 |   | $33.05 |   |
|                               |   |   |   |   |   |   |   |
| $8.85-$49.80                       |   |  7,972 |   | 3.1 |   | $16.65 |   |

| Options Exercisable          |
|------------------------------|
|                         |   |   |   |
| Range      ofExercise Prices |  Number | Weighted      Average   Exercise      Price     |
|                         |   |   |
| $8.85-$11.87                 |   | 241 |   | $11.70 |   |
| $11.89                       |   | 4,519 |   | $11.89 |   |
| $11.96-$20.31                |   | 763 |   | $18.85 |   |
| $20.97-$49.80                |   |    689 |   | $33.00 |   |
|                         |   |   |   |   |   |
| $8.85-$49.80                 |   | 6,212 |   | $15.08 |   |

|                                                                                                                                                                                                                                                                                                                                                                              | 2008 Grant                                  | 2007 Grant                                  | 2006 Grant                                |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------|---------------------------------------------|-------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                              |                                        |                                        |                                      |
| Initial      grant      date                                                                        | February      2008                          | February      2007                          | June      2006                            |
|                                                                                                                                                                                                                                                                                                                                                                              |                                        |                                        |                                      |
| Number      of awards outstanding                                                                                                                                                                                                                                                                                                                                                 | 0.9      million                            | 0.5      million                            | 1.5      million                          |
|                                                                                                                                                                                                                                                                                                                                                                              |                                        |                                        |                                      |
| Performance      period                                                                             | January      1, 2008-December      31, 2010 | January      1, 2007-December      31, 2009 | April      1, 2006-December      31, 2009 |
|                                                                                                                                                                                                                                                                                                                                                                              |                                        |                                        |                                      |
| Cumulative      profit sharing targets (range)                                                                                                                                                                                                                                                                                                                                    | $0-$275      million                        | $0-$350      million                        | $0-$225      million                      |
|                                                                                                                                                                                                                                                                                                                                                                              |                                        |                                        |                                      |
| Cumulative      profit sharing achieved for  applicable      performance period                                                                                                                                                                                                                                                                                         |  $0                                    |  $158      million                     |  $262      million                   |
|                                                                                                                                                                                                                                                                                                                                                                              |                                        |                                        |                                      |
| Payment      percentages (range)                                                                                                                                                                                                                                                                                                                                                  | 0%-200%                                     | 0%-200%                                     | 0%-337.5%                                 |
|                                                                                                                                                                                                                                                                                                                                                                              |                                        |                                        |                                      |
| Probable      payment percentage:                                                                                                                                                                                                                                                                                                                                                 |                                        |                                        |                                      |
|   As      of December 31,      2008                                                       | 100%                                        | 100%                                        | 337.5%                                    |
|   As      of December 31,      2007                                                       | N/A                                         | 100%                                        | 337.5%                                    |
|   As      of December 31,      2006                                                       | N/A                                         | N/A                                         | 150.0%                                    |
|                                                                                                                                                                                                                                                                                                                                                                              |                                        |                                        |                                      |
| Unrestricted      cash, cash equivalents and  short-term      investments hurdle                                                                                                                                                                                                                                                                                        |  $2.2      billion                     |  $2.0      billion                     |  $1.125      billion                 |

|                                                                                                                                                                                                                                                                                                   | Defined      Benefit Pension andRetiree Medical Benefits    Plans | UnrealizedGain      (Loss)on      DerivativeInstruments      andOther |                                               |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------|-----------------------------------------------------------------------|----------------------------------------------------|
|                                                                                                                                                                                                                                                                                                   | MinimumPensionLiability                                           | UnrecognizedPrior ServiceCost                                    | UnrecognizedActuarial      Gains(Losses)           |   Total |
| Balance      at December 31, 2005                                                                                                                                                                                                                                                                      | $(680)                                                            | $    -                                       | $       -  |   | $   5  |   | $  (675) |
| Net      change in accumulated other   comprehensive      loss                                                                                                                                                                                                                          |    68                                         |  -                                                          |  -                                       |   |   (21) |   |     47  |
| Impact      of adoption of SFAS 158                                                                                                                                                                                                                                                                    |    612                                        | (237)                                                                 | (760)                                              |   |       -  |   |    (385) |
| Balance      at December 31, 2006                                                                                                                                                                                                                                                                      | -                                                            | (237)                                                                 | (760)                                              |   |  (16) |   | (1,013) |
| Derivative      financial instruments:                                                                                                                                                                                                                                                                 |                                                              |                                                                  |                                               |   |   |   |   |
|   Reclassification      into earnings                                                                                                                                                                                                                                                        | -                                                            | -                                                                | -                                             |   | 18  |   | 18  |
|   Change      in fair      value                                           | -                                                            | -                                                                | -                                             |   | 27  |   | 27  |
| Employee      benefit plans:                                                                                                                                                                                                                                                                           |                                                              |                                                                  |                                               |   |   |   |   |
|  Reclassification      of unrecognized    net      actuarial loss into    earnings                                                                                                                                                                        |   -                                                |   -                                                    |   97                                |   |   -  |   |   97  |
|   Reclassification      of prior service    cost      into earnings                                                                                                                                                                                                      |  -                                                      |  30                                                         |  -                                       |   |  -  |   |  30  |
|   Current      year prior service cost                                                                                                                                                                                                                                                       | -                                                            | (18)                                                                  | -                                             |   | -  |   | (18) |
|   Current      year actuarial gain                                                                                                                                                                                                                                                           |       -                        |        -                      |      354             |   |       -  |   |     354  |
| Balance      at December 31, 2007                                                                                                                                                                                                                                                                      | -                                                            | (225)                                                                 | (309)                                              |   | 29  |   | (505) |
| Derivative      financial instruments:                                                                                                                                                                                                                                                                 |                                                              |                                                                  |                                               |   |   |   |   |
|   Reclassification      into earnings                                                                                                                                                                                                                                                        | -                                                            | -                                                                | -                                             |   | (26) |   | (26) |
|   Change      in fair value                                                                                                                                                                                                                                                                  | -                                                            | -                                                                | -                                             |   | (415) |   | (415) |
| Employee      benefit plans:                                                                                                                                                                                                                                                                           |                                                              |                                                                  |                                               |   |   |   |   |
|  Reclassification      of unrecognized    net      actuarial loss into    earnings                                                                                                                                                                        |   -                                                |   -                                                    |   85                                |   |   -  |   |   85  |
|   Reclassification      of prior service    cost      into earnings                                                                                                                                                                                                      |  -                                                      |  31                                                         |  -                                       |   |  -  |   |  31  |
|   Current      year actuarial loss                                                                                                                                                                                                                                                           |       -                        |        -                      |    (926)                            |   |       -  |   |    (926) |
| Balance      at December 31, 2008                                                                                                                                                                                                                                                                      | $      -                       | $(194)                                                                | $(1,150)                                           |   | $(412) |   | $(1,756) |

|                                                                                                                                                                                                                                                                                                                                                                                                                         | DefinedBenefit Pension | RetireeMedical Benefits |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|-------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                         | 2008                   | 2007                    | 2008 | 2007 |
|                                                                                                                                                                                                                                                                                                                                                                                                                         |                   |                    |   |   |
| Accumulated      benefit obligation                                                                                                                                                                                                                                                                                                                                                                                          | $2,273            |                    | $2,180  |   | N/A  |   | N/A  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                         |                   |                    |   |   |   |   |   |   |
| Benefit      obligation at beginning of year                                                                                                                                                                                                                                                                                                                                                                                 | $2,353            |                    | $2,697  |   | $252  |   | $216  |   |
| Service      cost                                                                                 | 59                |                    | 61  |   | 12  |   | 11  |   |
| Interest      cost                                                                                | 149               |                    | 158  |   | 16  |   | 14  |   |
| Plan      amendments                                                                              | -                 |                    | -  |   | -  |   | 18  |   |
| Actuarial      (gains)      losses                                                                | 168               |                    | (347) |   | (17) |   | 8  |   |
| Participant      contributions                                                                    | -                 |                    | -  |   | 2  |   | 1  |   |
| Benefits      paid                                                                                | (118)                  |                    | (59) |   | (16) |   | (16) |   |
| Settlements                                                                                       |   (129)      |                    |   (157) |   |      -  |   |      -  |   |
| Benefit      obligation at end of year                                                                                                                                                                                                                                                                                                                                                                                       | $2,482            |                    | $2,353  |   | $249  |   | $252  |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 2008              | 2007   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |              |   |
| Fair      value of plan assets at beginning of year                                                                                                                                                                                                                                                                                                                                                                                                                                                              | $1,817       |   | $1,545  |   |
| Actual      gains (losses) on plan      assets                                                                                                                    | (618)             |   | 150  |   |
| Employer      contributions, including benefits  paid      under unfunded      plans                                                                    |  105    |   |  338  |   |
| Benefits      paid                                                                                                                                                |   (118) |   |   (59) |   |
| Lump      sum      settlements                                                                                                                                    |   (129) |   |   (157) |   |
| Fair      value of plan assets at end of      year                                                                                                                | $1,057       |   | $1,817  |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                      | DefinedBenefit Pension                            | RetireeMedical Benefits |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|-------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                      | 2008                                              | 2007                    | 2008 | 2007 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                              |                    |   |   |
| Accrued      payroll                                                                                                                                                                                                                                                                                                                                                                                                                      | $      8       |                    | $    2  |   | $   15  |   | $   17  |   |
| Accrued      pension      liability                                                                  | 1,417                                        |                    | 534  |   | -  |   | -  |   |
| Accrued      retiree medical benefits                                                                                                                                                                                                                                                                                                                                                                                                     |        -  |                    |       -  |   | 234  |   | 235  |   |
| Funded      status of the plans - net underfunded                                                                                                                                                                                                                                                                                                                                                                                         | $1,425                                       |                    | $536  |   | $249  |   | $252  |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | DefinedBenefit Pension            | RetireeMedical Benefits |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|-------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                              |                    |
| Unrecognized      prior service      cost                                                                            | $     32 |                    | $187  |   |
| Unrecognized      actuarial (gains) losses                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $1,423                            |                    | $(62) |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                           | Defined  Benefit Pension | RetireeMedical Benefits |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------|-------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                           |                               |                    |
| Prior      service      cost                                                                         | $  10                    |                    | $21  |   |
| Actuarial      (gains)      losses                                                                   | $111                               |                    | $(3) |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                      | DefinedBenefit Pension                | RetireeMedical Benefits |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------|-------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                      | 2008                                  | 2007                    | 2008 | 2007 |
|                                                                                                                                                                                                                                                                                                                                                                                                                      |                                  |                    |   |   |   |
| Weighted      average assumed  discount      rate                                                                                                                                                                                                                                                                                                                                                               |  6.13%                           |                    |  6.31% |   |  6.03% |   |  6.02% |   |   |
| Weighted      average rate of  compensation      increase                                                                                                                                                                                                                                                                                                                                                       |  2.30%                           |                    |  2.30% |   |  -      |   |  -      |   |   |
| Health      care cost trend      rate                                                               | -       |                    | -      |   | 7.50% |   | 8.00% |   |   |

|                                                                                                                                                                                                                                                                                                  | Defined Benefit Pension                | Retiree Medical Benefits         |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------|----------------------------------|
|                                                                                                                                                                                                                                                                                                  | 2008                                   | 2007                             | 2006 | 2008 | 2007 | 2006 |
|                                                                                                                                                                                                                                                                                                  |                                   |                             |   |   |   |   |
| Service      cost                                                         | $  59                   | $  61             | $  59  | $12  | $11  | $12  |
| Interest      cost                                                        | 149                               | 158                         | 146  | 15  | 14  | 14  |
| Expected      return on plan assets                                                                                                                                                                                                                                                                   | (157)                                  | (137)                            | (122) | -  | -  | -  |
| Amortization      of unrecognized  net      actuarial (gain) loss                                                                                                                                                                                                                           |     34        |     68  |     68  |     (1) |     (2) |     -  |
| Amortization      of prior service cost                                                                                                                                                                                                                                                               |    10              |    10        |      9  | 21  | 20  | 20  |
| Net      periodic benefit expense                                                                                                                                                                                                                                                                     | 95                                | 160                         | 160  | 47  | 43  | 46  |
| Settlement      charges (included in  special      charges)                                                                                                                                                                                                                                 |      52  |     31  |    59  |     -  |     -  |     -  |
| Net      benefit      expense                                             | $ 147                        | $ 191                  | $ 219  | $47  | $43  | $46  |

|                                                                  | Defined Benefit Pension               | Retiree Medical Benefits        |
|-----------------------------------------------------------------------|---------------------------------------|---------------------------------|
|                                                                  | 2008                                  | 2007                            | 2006 | 2008 | 2007 | 2006 |
|                                                                  |                                  |                            |   |   |   |   |
| Weighted      average assumed  discount      rate           |  6.27%                           |  5.95%                     |  5.78% |  6.02% |  5.76% |  5.57% |
| Expected      long-term rate of return  on      plan assets |  8.50%                           |  8.26%                     |  8.50% |  -      |  -      |  -      |
| Weighted      average rate of       compensation increase        |  2.30%                           |  2.30%                     |  2.25% |  -      |  -      |  -      |
| Health      care cost trend rate                                      | -       | -      | -     | 8.00% | 8.00% | 9.00% |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | One      PercentIncrease | One      PercentDecrease |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------|--------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                     |                     |
| Impact      on 2008 retiree medical benefits expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $  3           |                     | $ (2) |   |
| Impact      on accrued retiree medical benefits as of  December      31,      2008                                                                        |  $24                |                     |  $(21) |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 2008                             | 2007   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                             |   |
| U.S.      equities                                                                                      | 47%                              |   | 49% |   |
| International      equities                                                                             | 21                |   | 22    |   |
| Fixed      income                                                                                       | 20                |   | 22    |   |
| Other                                                                                                   |   12    |   |     7    |   |
| Total                                                                                                   | 100%                             |   | 100% |   |

|                                                                                                                                                                                                                                       |  Percent of Total       | Expected      Long-TermRate of Return |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|---------------------------------------|
|                                                                                                                                                                                                                                       |                         |                                  |
| U.S.      equities                                     | 35-55%                       |                                  | 9% |   |
| International      equities                                                                                                                                                                                                                | 15-25         |                                  | 9    |   |
| Fixed      income                                      | 15-25         |                                  | 5    |   |
| Other                                                  |  0-15    |                                  | 12    |   |

|   |                                                                                                                                                                                                                                                                                                      | DefinedBenefit Pension | RetireeMedical Benefits |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|-------------------------|
|   |                                                                                                                                                                                                                                                                                                      |                   |                    |
|   | 2009                                                                     | $  108       |                    | $ 15 |   |
|   | 2010                                                                     | 130                    |                    | 16 |   |
|   | 2011                                                                     | 151                    |                    | 17 |   |
|   | 2012                                                                     | 165                    |                    | 18 |   |
|   | 2013                                                                     | 195                    |                    | 19 |   |
|   | 2014      through      2018                                              | 992                    |                    | 117 |   |

|                                                                                                                                                                                                                                                                                                                                                   | 2008                              | 2007   | 2006                   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|--------|------------------------|
|                                                                                                                                                                                                                                                                                                                                                   |                              |   |                   |
| Federal:                                                                                                                                                                                                                                                                                                                                               |                              |   |                   |
| Current                                                                                                          | $   (2)            |   | $   (3) |   | $   (1) |   |
| Deferred                                                                                                         | 229                          |   | (198)                  |   | (132) |   |
| State:                                                                                                                                                                                                                                                                                                                                                 |                              |   |                   |   |   |   |
| Current                                                                                                          | -                            |   | (2)                    |   | 2  |   |
| Deferred                                                                                                         | 20                           |   | (17)                   |   | (10) |   |
| Foreign:                                                                                                                                                                                                                                                                                                                                               |                              |   |                   |   |   |   |
| Current                                                                                                          | -                            |   | (1)                    |   | (1) |   |
| Valuation      allowance                                                      |  (148)                       |   |   114   |   |  142  |   |
| Total      income tax benefit (expense)                                                                                                                                                                                                                                                                                                                | $    99  |   | $(107)                 |   | $      -  |   |

|                                                                                                                                                                                                                                                                                                  | Amount                      | Percentage            |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------|-----------------------|
|                                                                                                                                                                                                                                                                                                  | 2008                        | 2007                  | 2006 | 2008 | 2007 | 2006 |
|                                                                                                                                                                                                                                                                                                  |                        |                  |   |   |   |   |
| Income      tax benefit (expense)  at      United States statutory rates                                                                                                                                                                                                                    |  $239             |  $(198)          |  $(129) |  35.0% |  35.0% |  35.0% |
| State      income tax benefit (expense),  net      of federal benefit                                                                                                                                                                                                                       |  14               |  (12)            |  (4) |  2.0     |  2.1    |  1.1    |
| Meals      and entertainment disallowance                                                                                                                                                                                                                                                             | (5)                         | (6)                   | (6) | (0.7)   | 1.1    | 1.6    |
| Valuation      allowance                                                                                                                                                                                                                                                                              | (148)                       | 114              | 142  | (21.7)   | (20.1)   | (38.4)   |
| Other                                                 |    (1)       |    (5) |    (3) |   (0.2)   |    0.7    |   0.7    |
| Income      tax benefit (expense)                                                                                                                                                                                                                                                                     | $   99  | $(107)                | $     -  | 14.4% | 18.8% |   0.0% |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 2008                                              | 2007   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                              |   |
| Fixed      assets, intangibles and spare parts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $1,767                                       |   | $1,789  |   |
| Other,      net                                                                                                                            |        -  |   |        3  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                              |   |   |   |
| Gross      deferred tax      liabilities                                                                                                   | 1,767                                        |   | 1,792  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                              |   |   |   |
| Net      operating loss      carryforwards                                                                                                 | (1,355)                                           |   | (1,384) |   |
| Pension      liability                                                                                                                     | (481)                                             |   | (151) |   |
| Accrued      liabilities                                                                                                                   |    (558)                           |   |   (349) |   |
| Other,      net                                                                                                                            |    (167)                           |   |          -  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                              |   |   |   |
| Gross      deferred tax      assets                                                                                                        | (2,561)                                           |   | (1,884) |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                              |   |   |   |
| Valuation      allowance                                                                                                                   |     794                  |   |     192  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                              |   |   |   |
| Net      deferred tax      liability                                                                                                       | -                                            |   | 100  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                              |   |   |   |
| Less:  current      deferred tax      asset                                                                                      |   (216)                                 |   |   (259) |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                              |   |   |   |
| Non-current      deferred tax      liability                                                                                               | $  216                             |   | $  359  |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 2008                              | 2007                                  | 2006                  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|---------------------------------------|-----------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                              |                                  |                  |
| Balance      at beginning of      year                                                                                                                                                                                            | $ 192                   | $ 487                       | $ 496       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                              |                                  |                  |
| Valuation      allowance (utilized) provided for taxes related to:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                              |                                  |                  |
|     Income      (loss) before cumulative effect of change in      accounting      principle                                                                                     |  148                    |  (114)                           |  (142)           |
|     Cumulative      effect of change in accounting principle                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | -                            | -                                | 10               |
|     Items      recorded directly to accumulated other      comprehensive      loss                                                                                              |  462                    |  (187)                           |  (18)            |
|     Adoption      of SFAS      158                                                                                                                                                                            | -                            | -                                | 142              |
|     Other                                                                                                                                                                                                     |      (8) |      6  |    (1) |
| Balance      at end of      year                                                                                                                                                                                                  | $ 794                   | $ 192                       | $ 487       |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 2008                                         | 2007                                  | 2006            |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|---------------------------------------|-----------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                         |                                  |            |
| Pension      settlement charges (see Note 11)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $   52                   | $  31                  | $ 59  |
| Aircraft-related      charges, net of gains on sales of aircraft                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 40                                      | (22)                                  | (18)            |
| Severance                                                                                                                            | 34                                      | -                                | -     |
| Route      impairment and      other                                                                                                 |       55  |      4  | (14)            |
| Total      special      charges                                                                                                      | $ 181                              | $  13                  | $ 27  |

|                                                                                                                                                                                                                                                                                     | Balance,December 31, 2007 |  Accrual |  Payments | Balance,December 31, 2008 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------|---------------|----------------|---------------------------|
|                                                                                                                                                                                                                                                                                     |                      |          |           |                      |
| Severance/medical      costs                                                                                                                                                                                                                                                             | $ -                  |          | $ 34      |                      | $(6) |   | $28 |   |
| Permanently      grounded aircraft                                                                                                                                                                                                                                                       | -                         |          | 14             |                      | (4) |   | 10 |   |
| Unused      facilities                                            | 8                         |          | 14             |                      | (2) |   | 20 |   |

| Year      ending December 31, |                                                                                                                                                                                                                                                                                                                                                                   |
|-------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                          | 2009                                                                      | $  767 |   |
|                          | 2010                                                                      | 674 |   |
|                          | 2011                                                                      | 660 |   |
|                          | 2012                                                                      | 675 |   |
|                          | 2013                                                                      | 671 |   |
|                          | Later      years                                                          | 1,256 |   |
|                          | Total                                                                     | $4,703 |   |

|                                        | 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 2007                                              | 2006   |
|---------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|--------|
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                              |   |
| Operating      Revenue:                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                              |   |
|                                        | Mainline                                                                                            | $12,827                                      |   | $12,019  |   | $10,907  |   |
|                                        | Regional                                                                                            |   2,414                            |   |   2,213  |   |   2,221  |   |
|                                        | Total      Consolidated                                                                             | $15,241                                      |   | $14,232  |   | $13,128  |   |
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                              |   |   |   |   |
| Depreciation      and amortization expense: |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                              |   |   |   |   |
|                                        | Mainline                                                                                            | $    427                 |   | $    400  |   | $    378  |   |
|                                        | Regional                                                                                            |       11       |   |       13  |   |       13  |   |
|                                        | Total      Consolidated                                                                             | $    438                 |   | $    413  |   | $    391  |   |
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                              |   |   |   |   |
| Special      Charges (Note 13):             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                              |   |   |   |   |
|                                        | Mainline                                                                                            | $    155                 |   | $     13  |   | $     27  |   |
|                                        | Regional                                                                                            |       26       |   |         -  |   |         -  |   |
|                                        | Total      Consolidated                                                                             | $     181           |   | $     13  |   | $     27  |   |
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                              |   |   |   |   |
| Operating      Income (Loss):               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                              |   |   |   |   |
|                                        | Mainline                                                                                            | $     74            |   | $   848  |   | $   593  |   |
|                                        | Regional                                                                                            |   (388)                                 |   |   (161) |   |   (125) |   |
|                                        | Total      Consolidated                                                                             | $  (314)                                |   | $   687  |   | $   468  |   |
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                              |   |   |   |   |
| Interest      Expense:                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                              |   |   |   |   |
|                                        | Mainline                                                                                            | $  352                             |   | $  369  |   | $  385  |   |
|                                        | Regional                                                                                            |     13                   |   |     14  |   |     16  |   |
|                                        | Total      Consolidated                                                                             | $  365                             |   | $  383  |   | $  401  |   |
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                              |   |   |   |   |
| Interest      Income:                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                              |   |   |   |   |
|                                        | Mainline                                                                                            | $    65                  |   | $ 160  |   | $ 131  |   |
|                                        | Regional                                                                                            |        -  |   |       -  |   |       -  |   |
|                                        | Total      Consolidated                                                                             | $     65            |   | $ 160  |   | $ 131  |   |
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                              |   |   |   |   |
| Income      Tax Expense:                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                              |   |   |   |   |
|                                        | Mainline                                                                                            | $    41                  |   | $(140) |   | $      -  |   |
|                                        | Regional                                                                                            |      58             |   |     33  |   |       -  |   |
|                                        | Total      Consolidated                                                                             | $    99                  |   | $(107) |   | $      -  |   |
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                              |   |   |   |   |   |
| Net      Income (Loss):                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                              |   |   |   |   |
|                                        | Mainline                                                                                            | $ (242)                                      |   | $  601  |   | $ 476  |   |
|                                        | Regional                                                                                            | (343)                                             |   | (142) |   | (133) |   |
|                                        | Total      Consolidated                                                                             | $(585)                                            |   | $  459  |   | $  343  |   |

|                                                                                                                                                                                                         | 2008              | 2007   | 2006              |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------|--------|-------------------|
|                                                                                                                                                                                                         |              |   |              |
| Domestic                                          | $8,327            |   | $8,053            |   | $ 7,742 |   |
| Trans-Atlantic                                    | 3,448             |   | 3,065             |   | 2,531 |   |
| Latin      America                                | 2,283             |   | 1,981             |   | 1,806 |   |
| Pacific                                           |   1,183 |   |   1,133 |   |   1,049 |   |
|                                                                                                                                                                                                         |              |   |              |   |   |   |
|                                                                                                                                                                                                         | $15,241           |   | $14,232           |   | $13,128 |   |

| ·  | a      total of $72 million if our unrestricted cash, cash equivalents and      short-term investments balance falls below $2.0billion;                                                                                                                                                                                             |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·  | a total      of $229 million if we fail to maintain the minimum unsecured debt ratings      specified above;                                                                                                                                                                                                                   |
| ·  | a      total of $437 million if our unrestricted cash, cash equivalents and      short-term investments balance (plus any collateral posted at Chase) falls      below $1.4 billion or if our ratio of unrestricted cash, cash equivalents      and short-term investments to current liabilities falls below 0.25 to 1.0;      and |
| ·  | a      total of $958 million if our unrestricted cash, cash equivalents and      short-term investments balance (plus any collateral posted at Chase) falls      below $1.0 billion or if our ratio of unrestricted cash, cash equivalents      and short-term investments to current liabilities falls below 0.22 to      1.0.     |

|                                                                                                                                                                                                                                                                                                                                                                  | Three      Months Ended |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------|
|                                                                                                                                                                                                                                                                                                                                                                  | March 31                | June 30 | September 30 | December 31 |
|                                                                                                                                                                                                                                                                                                                                                                  |                    |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                  |                    |   |   |   |   |   |   |   |
| 2008                                                                                                                                                                                                                                                                                                                                                                  |                    |   |   |   |   |   |   |
| Operating      revenue                                                             | $3,570             |   | $4,044  |   | $4,156  |   | $3,471  |   |
| Operating      loss                                                                | (66)                    |   | (71) |   | (152) |   | (25) |   |
| Nonoperating      income (expense),  net                                                                                                                                                                                                                                                                                                                         | (58)                    |   | 25  |   | (96) |   | (239) |   |
| Net      loss                                                                      | (80)                    |   | (3) |   | (236) |   | (266) |   |
|                                                                                                                                                                                                                                                                                                                                                                  |                    |   |   |   |   |   |   |   |
| Loss      per share:                                                                                                                                                                                                                                                                                                                                                  |                    |   |   |   |   |   |   |   |
|   Basic                                                                  | $(0.81)                 |   | $(0.03) |   | $(2.14) |   | $(2.33) |   |
|   Diluted                                                                | $(0.81)                 |   | $(0.03) |   | $(2.14) |   | $(2.33) |   |
|                                                                                                                                                                                                                                                                                                                                                                  |                    |   |   |   |   |   |   |   |
| 2007                                                                                                                                                                                                                                                                                                                                                                  |                    |   |   |   |   |   |   |
| Operating      revenue                                                             | $3,179             |   | $3,710  |   | $3,820  |   | $3,523  |   |
| Operating      income                                                              | 64                 |   | 263  |   | 280  |   | 80  |   |
| Nonoperating      expense,  net                                                                                                                                                                                                                                                                                                                                  | (42)                    |   | (31) |   | (39) |   | (9) |   |
| Net      income      (loss)                                                        | 22                 |   | 228  |   | 241  |   | (32) |   |
|                                                                                                                                                                                                                                                                                                                                                                  |                    |   |   |   |   |   |   |   |
| Earnings      (loss) per share:                                                                                                                                                                                                                                                                                                                                       |                    |   |   |   |   |   |   |   |
|   Basic                                                                  | $ 0.23        |   | $2.35  |   | $2.47  |   | $(0.33) |   |
|   Diluted                                                                | $ 0.21        |   | $2.03  |   | $2.15  |   | $(0.33) |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Three      Months Ended          |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | March 31                         | June 30 | September 30 | December 31 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                             |   |   |   |
| 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                             |   |   |   |
| Operating      earnings:                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                             |   |   |   |
|   Pension      settlement charges                                                                                                                                                                                                                                                                                                                                                                                                                              | $    -  |   | $   -  |   | $  (8) |   | $   (44) |   |
|   Aircraft-related      charges, net of gains on sales    of      aircraft                                                                    |  8                     |   |  (41) |   |  (12) |   |  5  |   |
|   Severance                                                                                                                                                       | -                           |   | -  |   | (33) |   | (1) |   |
|   Route      impairment and other                                                                                                                                                                                                                                                                                                                                                                                                                              |     -   |   | (17) |   |  (38) |   |       -  |   |
|   Total      special charges in operating earnings                                                                                                                                                                                                                                                                                                                                                                                                             | $   8        |   | $(58) |   | $(91) |   | $  (40) |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                             |   |   |   |   |   |   |   |
| Additional      special items:                                                                                                                                                                                                                                                                                                                                                                                                                                           |                             |   |   |   |   |   |   |   |
|   Gains      on sales of investments                                                                                                                                                                                                                                                                                                                                                                                                                           | $   -        |   | $ 78  |   | $   -  |   | $      -  |   |
|   Loss      on fuel hedge contracts with      Lehman      Brothers                                                                  |  -                     |   |  -  |   |  -  |   |  (125) |   |
|   Write-down      of auction rate securities, net    of      put right      received                                                          |  -                     |   |  (29) |   |  -  |   |  (5) |   |
|   Income      tax credit related to NOL utilization                                                                                                                                                                                                                                                                                                                                                                                                            | -                           |   | 28  |   | -  |   | -  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                             |   |   |   |   |   |   |   |
| 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                             |   |   |   |
| Operating      earnings:                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                             |   |   |   |
|   Pension      settlement charges                                                                                                                                                                                                                                                                                                                                                                                                                         | $ (5)                       |   | $ (7) |   | $(12) |   | $   (7) |   |
|   Aircraft-related      charges, net of gains on sales    of      aircraft                                                                    |  (6)                        |   |    -  |   |     -  |   |  28  |   |
|   Pilot      long-term disability charge                                                                                                                                                                                                                                                                                                                                                                                                                  |     -   |   |    -  |   |     -  |   |   (4) |   |
|   Total      special charges in operating earnings                                                                                                                                                                                                                                                                                                                                                                                                             | $(11)                            |   | $ (7) |   | $(12) |   | $  17  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                             |   |   |   |   |   |   |   |
| Additional      special items:                                                                                                                                                                                                                                                                                                                                                                                                                                           |                             |   |   |   |   |   |   |   |
|     Gains      on sales of investments                                                                                                                                                                                                                                                                                                                                                                                                               | $  7              |   | $  -  |   | $   -  |   | $  30  |   |
|     Income      tax expense related to NOL      utilization                                                               |  -                     |   |  -  |   |  -  |   |  (104) |   |

----

Changes in andDisagreements with Accountants on Accounting and FinancialDisclosure.

Item 9A.  Controls andProcedures.

----

----

Directors,Executive Officers and Corporate Governance.

ExecutiveCompensation.

Security Ownership ofCertain Beneficial Owners and Management and Related

Certain Relationshipsand Related Transactions, and Director Independence.

Item 14.  Principal AccountantFees and Services.

Exhibits and Financial StatementSchedules.

| (a)   | The      following financial statements are included in Item      8.  "Financial Statements and Supplementary    Data": |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Financial      Statement Schedules: |
|-----------------|-------------------------------------|

| (c)   | See      accompanying Index to Exhibits. |
|-----------------|------------------------------------------|

----

SIGNATURES

|   | CONTINENTAL      AIRLINES, INC.                                                                                                                                               |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                          |
|   | By      /s/ ZANE C.      ROWE                         |
|   | Zane C. Rowe                                                                                                                                                                  |
|   | Executive Vice President      and                                                                                                                                             |
|   | Chief Financial      Officer                                                                                                                                                  |
|   | (On behalf of      Registrant)                                                                                                                                                |

|                      Signature                      |                         Capacity                          |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                           |
| /s/ LAWRENCE W.      KELLNER                                                                                                                                                                                                                      | Chairman      and Chief Executive Officer                                                                                                                                                                                                                                                                      |
| Lawrence      W. Kellner                                                                                                                                                                                                                                              | (Principal      Executive Officer)                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                           |
| /s/ ZANE C.      ROWE                                                                                                                              | Executive      Vice President and                                                                                                                                                                                                                                                                              |
| Zane      C. Rowe                                                                                                                                                                                                                                                     | Chief      Financial Officer                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                  | (Principal      Financial Officer)                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                           |
| /s/ CHRIS      KENNY                                                                                                                          | Vice      President and Controller                                                                                                                                                                                                                                                                             |
| Chris      Kenny                                                                                                                                                                                                                                                      | (Principal      Accounting Officer)                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                           |
| KIRBYJON H.      CALDWELL*                                                                                                                                                                                               | Director                                                                                                                                                                                                                                                                                                       |
| Kirbyjon      H. Caldwell                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                           |
| DOUGLAS H.    McCORKINDALE*                                                                                                                                                                                                                                      | Director                                                                                                                                                                                                                                                                                                       |
| Douglas      H. McCorkindale                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                           |
| HENRY L. MEYER      III*                                                                                                                                                         | Director                                                                                                                                                                                                                                                                                                       |
| Henry      L. Meyer III                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                           |

|                                                                                                                                                                          |     |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| OSCAR      MUNOZ*                           | Director |
| Oscar      Munoz                                                                                                                                                              |     |
|                                                                                                                                                                          |     |
| GEORGE G. C.      PARKER*                                                                                              | Director |
| George      G. C. Parker                                                                                                                                                      |     |
|                                                                                                                                                                          |     |
| /s/ JEFFERY A.      SMISEK                                                                         | Director |
| Jeffery      A. Smisek                                                                                                                                                        |     |
|                                                                                                                                                                          |     |
| KAREN HASTIE      WILLIAMS*                                                                                                                          | Director |
| Karen      Hastie Williams                                                                                                                                                    |     |
|                                                                                                                                                                          |     |
| RONALD B.      WOODARD*                                                                                           | Director |
| Ronald      B. Woodard                                                                                                                                                        |     |
|                                                                                                                                                                          |     |
| CHARLES A.      YAMARONE*                                                                                                                  | Director |
| Charles      A. Yamarone                                                                                                                                                      |     |

| *By    | /s/ Jennifer L.  Vogel |
|--------|-----------------------------|
|   | Jennifer      L. Vogel      |
|   | Attorney-in-fact            |
|   | February      18, 2009      |

----

INDEX TO EXHIBITSOF

| 3.1       | Amended      and Restated Certificate of Incorporation of Continental, as amended      through June 6, 2006 - incorporated by reference to Exhibit 3.1 to      Continental's Annual Report on Form 10-K for the year ended December 31,      2006 (File no. 1-10323) (the "2006 10-K").                                                                                                                                |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.1(a)    | Certificate      of Designation of Series A Junior Participating Preferred Stock, included      as Exhibit A to Exhibit 3.1.                                                                                                                                                                                                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.1(a)(i) | Certificate      of Amendment of Certificate of Designation of Series A Junior      Participating Preferred Stock - incorporated by reference to Exhibit      3.1(b) to Continental's Annual Report on Form 10-K for the year ended      December 31, 2001 (File no. 1-10323) (the "2001 10-K").                                                                                                                       |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.2       | Amended      and Restated Bylaws of Continental, effective as of November 20, 2008 -      incorporated by reference to Exhibit 3.2 to Continental's Current Report      on Form 8-K dated November 20, 2008 (File no. 1-10323).                                                                                                                                                                                        |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.1       | Specimen      Class B Common Stock Certificate of Continental - incorporated by      reference to Exhibit 4.1 to Continental's Registration Statement on Form      8-A/A filed November 21, 2008.                                                                                                                                                                                                                      |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.2       | Warrant      Agreement dated as of April 27, 1993, between Continental and Continental      as warrant agent - incorporated by reference to Exhibit 4.7 to      Continental's Current Report on Form 8-K, dated April 16, 1993 (File no.      1-10323).  (No warrants remain outstanding under the agreement,      but some of its terms are incorporated into Continental's stock option      agreements.)  |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.3       | Continental      hereby agrees to furnish to the Commission, upon request, copies of      certain instruments defining the rights of holders of long-term debt of      the kind described in Item 601(b)(4)(iii)(A) of Regulation      S-K.                                                                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1      | Agreement      of Lease dated as of January 11, 1985, between the Port Authority of New      York and New Jersey and People Express, Inc., regarding Terminal C (the      "Terminal C Lease") - incorporated by reference to Exhibit 10.61 to the      Annual Report on Form 10-K (File no. 0-9781) of People Express, Inc. for      the year ended December 31, 1984.                                                 |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1(a)   | Assignment      of Lease with Assumption and Consent dated as of August 15, 1987, among      the Port Authority of New York and New Jersey, People Express Airlines,      Inc. and Continental - incorporated by reference to Exhibit 10.2 to      Continental's Annual Report on Form 10-K (File no. 1-8475) for the year      ended December 31, 1987 (the "1987 10-K").                                             |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1(b)   | Supplemental      Agreement Nos. 1 through 6 to the Terminal C Lease - incorporated by      reference to Exhibit 10.3 to the 1987 10-K.                                                                                                                                                                                                                                                                                |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1(c)   | Supplemental      Agreement No. 7 to the Terminal C Lease - incorporated by reference to      Exhibit 10.4 to Continental's Annual Report on Form 10-K (File no.      1-10323) for the year ended December 31, 1988 (the "1988      10-K").                                                                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1(d)   | Supplemental      Agreements No. 8 through 11 to the Terminal C Lease - incorporated by      reference to Exhibit 10.10 to Continental's Form S-1 Registration      Statement (No. 33-68870).                                                                                                                                                                                                                          |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1(e)   | Supplemental      Agreements No. 12 through 15 to the Terminal C Lease - incorporated by      reference to Exhibit 10.2(d) to Continental's Annual Report on Form 10-K      (File no. 1-10323) for the year ended December 31,1995.                                                                                                                                                                                    |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1(f)   | Supplemental      Agreement No. 16 to the Terminal C Lease - incorporated by reference to      Exhibit 10.1(e) to Continental's Annual Report on Form 10-K for the year      ended December 31, 1997 (File no. 1-10323) (the "1997    10-K").                                                                                                                                                                          |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1(g)   | Supplemental      Agreement No. 17 to the Terminal C Lease - incorporated by reference to      Exhibit 10.1(f) to Continental's Annual Report on Form 10-K for the year      ended December 31, 1999 (File no. 1-10323) (the "1999    10-K").                                                                                                                                                                          |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1(h)   | Supplemental      Agreement No. 18 to the Terminal C Lease - as incorporated by reference to      Exhibit 10.5 to the 2003 Q-1 10-Q.                                                                                                                                                                                                                                                                                   |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1(i)   | Supplemental      Agreement No. 19 to the Terminal C Lease - incorporated by reference to      Exhibit 10.4 to Continental's Quarterly Report on Form 10-Q for the      quarter ended June 30, 2003 (File no. 1-10323).                                                                                                                                                                                                |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1(j)   | Supplemental      Agreement No. 20 - to the Terminal C Lease - incorporated by reference to      Exhibit 10.1 to Continental's Quarterly Report on Form 10-Q for quarter      ended September 30, 2003 (File no. 1-10323) (the "2003 Q-3      10-Q").                                                                                                                                                                  |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1(k)   | Supplemental      Agreement No. 21 dated as of June 1, 2003 to Agreement of Lease between      the Company and the Port Authority of New York and New Jersey regarding      Terminal C at Newark Liberty International Airport - incorporated by      reference to Exhibit 10.1 to Continental's Quarterly Report on Form 10-Q      for the quarter ended June 30, 2005 (File no. 1-10323) (the "2005 Q-2      10-Q"). |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1(l)   | Supplemental      Agreement No. 22 - to the Terminal C Lease - incorporated by reference to      Exhibit 10.1 to Continental's Quarterly Report on Form 10-Q for the      quarter ended March 31, 2004 (File no. 1-10323) (the "2004 Q-1      10-Q").                                                                                                                                                                  |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1(m)   | Supplemental      Agreement No. 23 - to the Terminal C Lease - incorporated by reference to      Exhibit 10.1(m) to Continental's Annual Report on Form 10-K for the year      ended December 31, 2005 (File no. 1-10323) (the "2005    10-K").                                                                                                                                                                        |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1(n)   | Supplemental      Agreement No. 24 - to the Terminal C Lease - incorporated by reference to      Exhibit 10.1(n) to the 2005 10-K.                                                                                                                                                                                                                                                                                     |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.2      | Airport      Use and Lease Agreement dated as of January 1, 1998 between Continental      and the City of Houston, Texas ("Houston") regarding George Bush      Intercontinental Airport - incorporated by reference to Exhibit 10.30 to      Continental's Annual Report on Form 10-K for the year ended December 31,      1998 (File no. 1-10323) (the "1998 10-K").                                                 |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.2(a)   | Special      Facilities Lease Agreement dated as of March 1, 1997 between Continental      and Houston regarding an automated people mover project at Bush      Intercontinental - incorporated by reference to Exhibit 10.30(a) to the      1998 10-K.                                                                                                                                                                |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.2(b)   | Amended      and Restated Special Facilities Lease Agreement dated as of December 1,      1998 by and between Continental and Houston regarding certain terminal      improvements projects at Bush Intercontinental - incorporated by reference      to Exhibit 10.30(b) to the 1998 10-K.                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.2(c)   | Amended      and Restated Special Facilities Lease Agreement dated December 1, 1998 by      and between Continental and Houston regarding certain airport improvement      projects at Bush Intercontinental - incorporated by reference to Exhibit      10.30(c) to the 1998 10-K.                                                                                                                                    |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.2(d)   | Terminal      E Lease and Special Facilities Lease Agreement dated as of August 1, 2001      between Continental and Houston regarding Bush Intercontinental -      incorporated by reference to Exhibit 10.8 to Continental's Quarterly      Report on Form 10-Q for the quarter ended September 30, 2001 (File no.      1-10323) (the "2001 Q-3 10-Q").                                                              |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.2(e)   | Supplement      to Terminal E Lease and Special Facilities Lease Agreement dated as of      August 1, 2001 - incorporated by reference to Exhibit 10.2(e) to      Continental's Annual Report on Form 10-K for the year ended December 31,      2002 (File no. 1-10323) (the "2002 10-K").                                                                                                                             |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.3      | Agreement      and Lease dated as of May 1987, as supplemented, between Continental and      the City of Cleveland, Ohio ("Cleveland") regarding Hopkins International      Airport - incorporated by reference to Exhibit 10.6 to Continental's      Quarterly Report on Form 10-Q for the quarter ended September 30, 1993      (File no. 1-10323).                                                                  |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.3(a)   | Special      Facilities Lease Agreement dated as of October 24, 1997 by and between      Continental and Cleveland regarding certain concourse expansion projects      at Hopkins International (the "1997 SFLA") - incorporated by reference to      Exhibit 10.31(a) to the 1998 10-K.                                                                                                                               |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.3(b)   | First      Supplemental Special Facilities Lease Agreement dated as of March 1, 1998,      and relating to the 1997 SFLA - incorporated by reference to Exhibit 10.1      to Continental's Quarterly Report on Form 10-Q for the quarter ended March      31, 1999 (File no. 1-10323) (the "1999 Q-1 10-Q").                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.3(c)   | Special      Facilities Lease Agreement dated as of December 1, 1989 by and between      Continental and Cleveland regarding Hopkins International (the "1989      SFLA") - incorporated by reference to Exhibit 10.1 to Continental's      Quarterly Report on Form 10-Q for the quarter ended September 30, 1999      (File no. 1-10323) (the "1999 Q-3 10-Q").                                                      |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.3(d)   | First      Supplemental Special Facilities Lease Agreement dated as of March 1, 1998,      and relating to the 1989 SFLA - incorporated by reference to Exhibit      10.1(a) to the 1999 Q-3 10-Q.                                                                                                                                                                                                                     |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.3(e)   | Second      Supplemental Special Facilities Lease Agreement dated as of March 1, 1998,      and relating to the 1989 SFLA - incorporated by reference to Exhibit      10.1(b) to the 1999 Q-3 10-Q.                                                                                                                                                                                                                    |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.3(f)   | Amendment      No. 1, dated January 1, 2006, to Agreement and Lease dated as of May 1987,      as supplemented, between Continental and Cleveland regarding Hopkins      International Airport - incorporated by reference to Exhibit 10.3(f) to      the 2005 10-K.                                                                                                                                                   |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.4*     | Employment      Agreement dated as of October 15, 2007 between Continental and Lawrence W.      Kellner - incorporated by reference to Exhibit 10.2 to Continental's Form      10-Q for the quarter ended September 30, 2007 (File no. 1-10323) (the      "2007 Q-3 10-Q").                                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.4(a)*  | Compensation      Reduction Agreement for Lawrence W. Kellner dated December 22, 2004 -      incorporated by reference to Exhibit 99.1 to Continental's Current Report      on Form 8-K dated December 22, 2004 (File no. 1-10323) (the "12/04      8-K").                                                                                                                                                             |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.4(b)*  | Amendment      to Compensation Reduction Agreement for Lawrence W. Kellner dated February      15, 2005 - incorporated by reference to Exhibit 10.1 to Continental's      Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (File      no. 1-10323) (the "2005 Q-1 10-Q").                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.4(c)*  | Letter      Agreement dated as of May 30, 2008 between Continental and Larry Kellner -      incorporated by reference to Exhibit 99.2 to Continental's Current Report      on Form 8-K dated June 5, 2008 (the "06/08 8-K").                                                                                                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.5*     | Employment      Agreement dated as of October 15, 2007 between Continental and Jeffery A.      Smisek - incorporated by reference to Exhibit 10.3 to the 2007 Q-3      10-Q.                                                                                                                                                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.5(a)*  | Compensation      Reduction Agreement for Jeffery A. Smisek dated December 22, 2004 -      incorporated by reference to Exhibit 99.2 to the 12/04  8-K.                                                                                                                                                                                                                                                                |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.5(b)*  | Amendment      to Compensation Reduction Agreement for Jeffery A. Smisek dated February      15, 2005 - incorporated by reference to Exhibit 10.2 to the 2005 Q-1      10-Q.                                                                                                                                                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.5(c)*  | Letter      Agreement dated as of May 30, 2008 between Continental and Jeffery Smisek      - incorporated by reference to Exhibit 99.3 to the 06/08    8-K.                                                                                                                                                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.6*     | Employment      Agreement dated as of August 31, 2008 between Continental and Zane Rowe -      incorporated by reference to Exhibit 10.2 to Continental's Form 10-Q for      the quarter ended September 30, 2008 (File no. 1-10323) (the "2008 Q-3      10-Q").                                                                                                                                                       |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.7*     | Employment      Agreement dated as of October 15, 2007 between Continental and Mark J.      Moran - incorporated by reference to Exhibit 10.6 to the 2007 Q-3      10-Q.                                                                                                                                                                                                                                               |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.7(a)*  | Compensation      Reduction Agreement for Mark J. Moran dated December 22, 2004 -      incorporated by reference to Exhibit 10.7(a) to the 2005    10-K.                                                                                                                                                                                                                                                               |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.7(b)*  | Amendment      to Compensation Reduction Agreement for Mark J. Moran dated February 15,      2005 - incorporated by reference to Exhibit 10.7(b) to the 2005      10-K.                                                                                                                                                                                                                                                |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.8*     | Employment      Agreement dated as of October 15, 2007 between Continental and James E.      Compton - incorporated by reference to Exhibit 10.4 to the 2007 Q-3      10-Q.                                                                                                                                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.8(a)*  | Compensation      Reduction Agreement for James E. Compton dated December 22, 2004 - incorporated by      reference to Exhibit 10.8(a) to Continental's Annual Report on Form 10-K      for the year ended December 31, 2004 (File no. 1-10323) (the "2004      10-K").                                                                                                                                                |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.8(b)*  | Amendment      to Compensation Reduction Agreement for James E. Compton dated February      15, 2005 - incorporated by reference to Exhibit 10.4 to the 2005 Q-1      10-Q.                                                                                                                                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.9*     | Continental      Airlines, Inc. 1997 Stock Incentive Plan ("1997 Incentive Plan") -      incorporated by reference to Exhibit 4.3 to Continental's Form S-8      Registration Statement (No. 333-23165).                                                                                                                                                                                                               |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.9(a)*  | Form      of Outside Director Stock Option Grant pursuant to the 1997 Incentive Plan      - incorporated by reference to Exhibit 10.11(c) to the 1997      10-K.                                                                                                                                                                                                                                                       |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.10*    | Amendment      and Restatement of the 1994 Incentive Plan and the 1997 Incentive Plan -      incorporated by reference to Exhibit 10.19 to the 1998    10-K.                                                                                                                                                                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.11*    | Continental      Airlines, Inc. 1998 Stock Incentive Plan ("1998 Incentive Plan") -      incorporated by reference to Exhibit 4.3 to Continental's Form S-8      Registration Statement (No. 333-57297).                                                                                                                                                                                                               |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.11(a)* | Amendment      No. 1 to 1998 Incentive Plan, 1997 Incentive Plan and 1994 Incentive Plan      - incorporated by reference to Exhibit 10.2 to      Continental's  Quarterly Report on Form 10-Q for the quarter      ended June 30, 2001 (File no. 1-10323) (the "2001 Q-2    10-Q").                                                                                                                         |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.11(b)* | Form      of Outside Director Stock Option Grant pursuant to the 1998 Incentive Plan      - incorporated by reference to Exhibit 10.12(c) to the 2006      10-K.                                                                                                                                                                                                                                                       |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.11(c)* | Amendment      to 1998 Incentive Plan, 1997 Incentive Plan and 1994 Incentive Plan -      incorporated by reference to Exhibit 10.5 to the 2004 Q-1      10-Q.                                                                                                                                                                                                                                                         |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.12*    | Continental      Airlines, Inc. Incentive Plan 2000, as amended and restated ("Incentive      Plan 2000") - incorporated by reference to Exhibit 10.1 to      Continental's  Quarterly Report on Form 10-Q for the quarter ended      March 31, 2002 (File no.  1-10323) (the "2002 Q-1    10-Q").                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.12(a)* | Form      of Employee Stock Option Agreement pursuant to the Incentive Plan 2000 -      incorporated by reference to Exhibit 10.3 to the 2001 Q-3      10-Q.                                                                                                                                                                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.12(b)* | Form      of Outside Director Stock Option Agreement pursuant to the Incentive Plan      2000 - incorporated by reference to Exhibit 10.14(b) to the 2000      10-K.                                                                                                                                                                                                                                                   |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.12(c)* | Form      of Outside Director Stock Option Grant pursuant to the Incentive Plan 2000      (updated form to facilitate electronic delivery) - incorporated by      reference to Exhibit 10.1 to Continental's Quarterly Report on Form 10-Q      for the quarter ended March 31, 2008 (File no. 1-10323) (the "2008 Q-1      10-Q").                                                                                    |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.12(d)* | Form      of Restricted Stock Agreement pursuant to the Incentive Plan 2000 -      incorporated by reference to Exhibit 10.4 to the 2001 Q-3      10-Q.                                                                                                                                                                                                                                                                |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.12(e)* | Amendment      to the Incentive Plan 2000, dated March 12, 2004 - incorporated by      reference to Exhibit 10.6 to the 2004 Q-1 10-Q.                                                                                                                                                                                                                                                                                 |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.12(f)* | Second      Amendment to Incentive Plan 2000, dated June 6, 2006 - incorporated by      reference to Exhibit 10.1 to Continental's Quarterly Report on Form 10-Q      for the quarter ended June 30, 2006 (File no.  1-10323) (the "2006      Q-2 10-Q").                                                                                                                                                         |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.12(g)* | Third      Amendment to Incentive Plan 2000, dated September 14, 2006 - incorporated      by reference to Exhibit 10.1 to Continental's Quarterly Report on Form      10-Q for the quarter ended September 30, 2006 (File no.  1-10323)      (the "2006 Q-3 10-Q").                                                                                                                                               |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.13*    | Amended      and Restated Annual Executive Bonus Program - incorporated by reference to      Exhibit 10.15 to the 2005 10-K.                                                                                                                                                                                                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.13(a)* | Form      of Award Notice pursuant to Continental Airlines, Inc. Amended and      Restated Annual Executive Bonus Program - incorporated by reference to      Exhibit 10.15(a) to the 2005 10-K.                                                                                                                                                                                                                       |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.13(b)* | First      Amendment, dated as of October 15, 2007, to the Amended and Restated      Annual Executive Bonus Program - incorporated by reference to Exhibit 10.7      to the 2007 Q-3 10-Q.                                                                                                                                                                                                                             |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.14*    | Continental      Airlines, Inc. Long-Term Incentive and RSU Program (as amended and      restated through February 18, 2009).  (3)                                                                                                                                                                                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.14(a)* | Form      of Award Notice pursuant to Continental Airlines, Inc. Long-Term Incentive      and RSU Program (Profit Based RSU  Awards).  (3)                                                                                                                                                                                                                                                                   |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.14(b)* | Form      of Award Notice pursuant to Continental Airlines, Inc. Long-Term Incentive      and RSU Program (NLTIP Award) - incorporated by reference to Exhibit      10.16(b) to the 2005 10-K.                                                                                                                                                                                                                         |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.15*    | Continental      Airlines, Inc. 2005 Broad Based Employee Stock Option Plan - incorporated      by reference to Exhibit 10.8 to the 2005 Q-1 10-Q.                                                                                                                                                                                                                                                                     |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.16*    | Continental      Airlines, Inc. 2005 Pilot Supplemental Option Plan - incorporated by      reference to Exhibit 10.9 to the 2005 Q-1 10-Q.                                                                                                                                                                                                                                                                             |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.17*    | Continental      Airlines, Inc. Enhanced Profit Sharing Plan, (as amended through February      23, 2007)  - incorporated by reference to Exhibit 10.19 to the      2006 10-K.                                                                                                                                                                                                                               |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.18*    | Summary      of Non-Employee Director compensation. (3)                                                                                                                                                                                                                                                                                                                                                                |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.19*    | Form      of Letter Agreement relating to certain flight benefits between      Continental and each of its non-employee directors.                                                                                                                                                                                                                                                                                     |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.20     | Amended      and Restated Credit and Guaranty Agreement, dated as of August 3, 2006,      among Continental and Continental Micronesia, Inc., as borrowers and      guarantors, Air Micronesia, Inc., as a guarantor, Merrill Lynch Mortgage      Capital, Inc., as administrative agent, and the lenders party thereto -      incorporated by reference to Exhibit 10.3 to the 2006 Q-3 10-Q.      (1)                |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21     | Purchase      Agreement No. 1951, including exhibits and side letters thereto, between      the Company and Boeing, dated July 23, 1996, relating to the purchase of      Boeing 737 aircraft ("P.A. 1951") - incorporated by reference to Exhibit      10.8 to Continental's Quarterly Report on Form 10-Q for the quarter ended      June 30, 1996 (File no. 1-10323).  (1)                                |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(a)  | Supplemental      Agreement No. 1 to P.A. 1951, dated October 10, 1996 - incorporated by      reference to Exhibit 10.14(a) to Continental's Annual Report on Form 10-K      for the year ended December 31, 1996 (File no.      1-1-323).  (1)                                                                                                                                                              |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(b)  | Supplemental      Agreement No. 2 to P.A. 1951, dated March 5, 1997 - incorporated by      reference to Exhibit 10.3 to Continental's Quarterly Report on Form 10-Q      for the quarter ending March 31, 1997 (File no.      1-10323).  (1)                                                                                                                                                                 |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(c)  | Supplemental      Agreement No. 3, including exhibit and side letter, to P.A. 1951, dated      July 17, 1997 - incorporated by reference to Exhibit 10.14(c) to the 1997      10-K.  (1)                                                                                                                                                                                                                     |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(d)  | Supplemental      Agreement No. 4, including exhibits and side letters, to P.A. 1951, dated      October 10, 1997 - incorporated by reference to Exhibit 10.14(d) to the      1997 10-K.  (1)                                                                                                                                                                                                                |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(e)  | Supplemental      Agreement No. 5, including exhibits and side letters, to P.A. 1951, dated      October 10, 1997 - incorporated by reference to Exhibit 10.1 to      Continental's Quarterly Report on Form 10-Q for the quarter ended June 30,      1998 (File no. 1-10323).  (1)                                                                                                                          |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(f)  | Supplemental      Agreement No. 6, including exhibits and side letters, to P.A. 1951, dated      July 30, 1998 - incorporated by reference to Exhibit 10.1 to Continental's      Quarterly Report on Form 10-Q for the quarter ended September 30, 1998      (File no. 1-10323).  (1)                                                                                                                        |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(g)  | Supplemental      Agreement No. 7, including side letters, to P.A. 1951, dated November 12,      1998 - incorporated by reference to Exhibit 10.24(g) to the 1998      10-K.  (1)                                                                                                                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(h)  | Supplemental      Agreement No. 8, including side letters, to P.A. 1951, dated December 7,      1998 - incorporated by reference to Exhibit 10.24(h) to the 1998      10-K.  (1)                                                                                                                                                                                                                             |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(i)  | Letter      Agreement No. 6-1162-GOC-131R1 to P.A. 1951, dated March 26, 1998 -      incorporated by reference to Exhibit 10.1 to Continental's Quarterly      Report on Form 10-Q for the quarter ended March 31, 1998 (File no.      1-10323).   (1)                                                                                                                                                  |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(j)  | Supplemental      Agreement No. 9, including side letters, to P.A. 1951, dated February 18,      1999 - incorporated by reference to Exhibit 10.4 to the 1999 Q-1      10-Q.  (1)                                                                                                                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(k)  | Supplemental      Agreement No. 10, including side letters, to P.A. 1951, dated March 19,      1999 - incorporated by reference to Exhibit 10.4(a) to the 1999 Q-1      10-Q.  (1)                                                                                                                                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(l)  | Supplemental      Agreement No. 11, including side letters, to P.A. 1951, dated March 14,      1999 - incorporated by reference to Exhibit 10.4(a) to Continental's      Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File      no. 1-10323).  (1)                                                                                                                                     |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(m)  | Supplemental      Agreement No. 12, including side letters, to P.A. 1951, dated July 2, 1999      - incorporated by reference to Exhibit 10.8 to the 1999 Q-3      10-Q.  (1)                                                                                                                                                                                                                                |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(n)  | Supplemental      Agreement No. 13 to P.A. 1951, dated October 13, 1999 - incorporated by      reference to Exhibit 10.25(n) to the 1999    10-K.  (1)                                                                                                                                                                                                                                                       |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(o)  | Supplemental      Agreement No. 14 to P.A. 1951, dated December 13, 1999 - incorporated by      reference to Exhibit 10.25(o) to the 1999    10-K.  (1)                                                                                                                                                                                                                                                      |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(p)  | Supplemental      Agreement No. 15, including side letters, to P.A. 1951, dated January 13,      2000 - incorporated by reference to Exhibit 10.1 to Continental's      Quarterly Report on Form 10-Q for the quarter ended March 31, 2000 (File      no. 1-10323) (the "2000 Q-1 10-Q").  (1)                                                                                                               |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(q)  | Supplemental      Agreement No. 16, including side letters, to P.A. 1951, dated March 17,      2000 - incorporated by reference to the 2000 Q-1      10-Q.  (1)                                                                                                                                                                                                                                              |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(r)  | Supplemental      Agreement No. 17, including side letters, to P.A. 1951, dated May 16, 2000      - incorporated by reference to Exhibit 10.2 to Continental's Quarterly      Report on Form 10-Q for the quarter ended June 30, 2000 (File no.      1-10323).  (1)                                                                                                                                          |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(s)  | Supplemental      Agreement No. 18, including side letters, to P.A. 1951, dated September      11, 2000 - incorporated by reference to Exhibit 10.6 to Continental's      Quarterly Report on Form 10-Q for the quarter ended September 30, 2000      (File no. 1-10323).  (1)                                                                                                                               |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(t)  | Supplemental      Agreement No. 19, including side letters, to P.A. 1951, dated October 31,      2000 - incorporated by reference to Exhibit 10.20(t) to the 2000      10-K.  (1)                                                                                                                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(u)  | Supplemental      Agreement No. 20, including side letters, to P.A. 1951, dated December 21,      2000 - incorporated by reference to Exhibit 10.20(u) to the 2000      10-K.  (1)                                                                                                                                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(v)  | Supplemental      Agreement No. 21, including side letters, to P.A. 1951, dated March 30,      2001 - incorporated by reference to Exhibit 10.1 to Continental's      Quarterly Report on Form 10-Q for the quarter ended March 31, 2001 (File      no. 1-10323).  (1)                                                                                                                                       |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(w)  | Supplemental      Agreement No. 22, including side letters, to P.A. 1951, dated May 23,      2001  -  incorporated by reference to Exhibit 10.3 to      the 2001 Q-2 10-Q.  (1)                                                                                                                                                                                                          |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(x)  | Supplemental      Agreement No. 23, including side letters, to P.A. 1951, dated June 29,      2001  -  incorporated by reference to Exhibit 10.4 to      the 2001 Q-2  10-Q.  (1)                                                                                                                                                                                              |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(y)  | Supplemental      Agreement No. 24, including side letters, to P.A. 1951, dated August 31,      2001 - incorporated by reference to Exhibit 10.11 to the 2001 Q-3      10-Q.  (1)                                                                                                                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(z)  | Supplemental      Agreement No. 25, including side letters, to P.A. 1951, dated December 31,      2001 - incorporated by reference to Exhibit 10.22(z) to the 2001      10-K.  (1)                                                                                                                                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(aa) | Supplemental      Agreement No. 26, including side letters, to P.A. 1951, dated March 29,      2002 - incorporated by reference to Exhibit 10.4 to the 2002 Q-1      10-Q.  (1)                                                                                                                                                                                                                              |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(ab) | Supplemental      Agreement No. 27, including side letters, to P.A. 1951, dated November 6,      2002 - incorporated by reference to Exhibit 10.4 to the 2002 Q-1      10-Q.  (1)                                                                                                                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(ac) | Supplemental      Agreement No. 28, including side letters, to P.A. 1951, dated April 1,      2003 - incorporated by reference to Exhibit 10.2 to the 2003 Q-1      10-Q.  (1)                                                                                                                                                                                                                               |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(ad) | Supplemental      Agreement No. 29, including side letters, to P.A. 1951, dated August 19,      2003 - incorporated by reference to Exhibit 10.2 to the 2003 Q-3 10-Q.      (1)                                                                                                                                                                                                                                        |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(ae) | Supplemental      Agreement No. 30 to P.A. 1951, dated as of November 4, 2003 - incorporated      by reference to Exhibit 10.23(ae) to Continental's Annual Report on Form      10-K for the year ended December 31, 2003 (File no. 1-10323) (the "2003      10-K"). (1)                                                                                                                                               |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(af) | Supplemental      Agreement No. 31 to P.A. 1951, dated as of August 20, 2004 - incorporated      by reference to Exhibit 10.4 to Continental's Quarterly Report on Form      10-Q for the quarter ended September 30, 2004 (File no. 1-10323) (the      "2004 Q-3 10-Q"). (1)                                                                                                                                          |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(ag) | Supplemental      Agreement No. 32 to P.A. 1951, including side letters, dated as of      December 29, 2004 - incorporated by reference to Exhibit 10.21(ag) to the      2004 10-K. (1)                                                                                                                                                                                                                                |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(ah) | Supplemental      Agreement No. 33 to P.A. 1951, including side letters, dated as of      December 29, 2004 - incorporated by reference to Exhibit 10.21(ah) to the      2004 10-K. (1)                                                                                                                                                                                                                                |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(ai) | Supplemental      Agreement No. 34 dated June 22, 2005 to P.A. 1951 - incorporated by      reference to Exhibit 10.3 to the 2005 Q-2 10-Q. (1)                                                                                                                                                                                                                                                                         |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(aj) | Supplemental      Agreement No. 35 dated June 30, 2005 to P.A. 1951 - incorporated by      reference to Exhibit 10.4 to the 2005 Q-2 10-Q. (1)                                                                                                                                                                                                                                                                         |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(ak) | Supplemental      Agreement No. 36 dated July 28, 2005 to P.A. 1951 - incorporated by      reference to Exhibit 10.1 to Continental's Quarterly Report on Form 10-Q      for the quarter ended September 30, 2005 (File no. 1-10323) (the "2005 Q-3      10-Q").  (1)                                                                                                                                        |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(al) | Supplemental      Agreement No. 37 dated March 30, 2006, to P.A. 1951 - incorporated by      reference to Exhibit 10.2 to Continental's Quarterly Report on Form 10-Q      for the quarter ended March 31, 2006 (File no. 1-10323) (the "2006 Q-1      10-Q").  (1)                                                                                                                                          |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(am) | Supplemental      Agreement No. 38, dated June 6, 2006, to P.A. 1951 - incorporated by      reference to Exhibit 10.3 to the 2006 Q-2    10-Q.  (1)                                                                                                                                                                                                                                                          |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(an) | Supplemental      Agreement No. 39, dated August 3, 2006, to P.A. 1951 - incorporated by      reference to Exhibit 10.4 to the 2006 Q-3 10-Q. (1)                                                                                                                                                                                                                                                                 |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(ao) | Supplemental      Agreement No. 40, dated December 5, 2006, to P.A. 1951  -      incorporated by reference to Exhibit 10.23(ao) to the 2006      10-K.  (1)                                                                                                                                                                                                                                        |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(ap) | Supplemental      Agreement No. 41, dated June 1, 2007, to P.A. 1951 - incorporated by      reference to Exhibit 10.1 to Continental's Quarterly Report on Form 10-Q      for the quarter ended June 30, 2007 (File no. 1-10323) (the "2007 Q-2      10-Q").  (1)                                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(aq) | Supplemental      Agreement No. 42, dated June 12, 2007, to P.A. 1951 - incorporated by      reference to Exhibit 10.2 to the 2007 Q-2 10-Q.  (1)                                                                                                                                                                                                                                                                 |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(ar) | Supplemental      Agreement No. 43, dated July 18, 2007 to P.A. 1951 - incorporated by      reference to Exhibit 10.1 to the 2007 Q-3    10-Q.  (1)                                                                                                                                                                                                                                                          |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(as) | Supplemental      Agreement No. 44, dated December 7, 2007, to P.A. 1951 - incorporated by      reference to Exhibit 10.21(as) to Continental's Annual Report on Form 10-K      for the year ended December 31, 2007 (File no. 1-10323) (the "2007      10-K").  (1)                                                                                                                                         |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(at) | Supplemental      Agreement No. 45, dated February 20, 2008, to P.A. 1951 - incorporated by      reference to Exhibit 10.2 to the 2008 Q-1    10-Q.  (1)                                                                                                                                                                                                                                                     |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(au) | Supplemental      Agreement No. 46, dated June 25, 2008, to P.A. 1951 - incorporated by      reference to Exhibit 10.5 to the 2008 Q-2    10-Q.  (1)                                                                                                                                                                                                                                                         |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21(av) | Supplemental      Agreement No. 47, dated October 30, 2008, to P.A.      1951.  (2)(3)                                                                                                                                                                                                                                                                                                                       |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.22     | Aircraft      General Terms Agreement between the Company and Boeing, dated October 10,      1997 - incorporated by reference to Exhibit 10.15 to the 1997      10-K.  (1)                                                                                                                                                                                                                                   |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.22(a)  | Letter      Agreement No. 6-1162-GOC-136 between the Company and Boeing, dated October      10, 1997, relating to certain long-term aircraft purchase commitments of      the Company - incorporated by reference to Exhibit 10.15(a) to the 1997      10-K.  (1)                                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.23     | Purchase      Agreement No. 2061, including exhibits and side letters, between the      Company and Boeing, dated October 10, 1997, relating to the purchase of      Boeing 777 aircraft ("P.A. 2061") - incorporated by reference to Exhibit      10.17 to the 1997 10-K.  (1)                                                                                                                              |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.23(a)  | Supplemental      Agreement No. 1 to P.A. 2061 dated December 18, 1997 - incorporated by      reference to Exhibit 10.17(a) as to the 1997      10-K.  (1)                                                                                                                                                                                                                                                   |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.23(b)  | Supplemental      Agreement No. 2, including side letter, to P.A. 2061, dated July 30, 1998      - incorporated by reference to Exhibit 10.27(b) to the 1998      10-K.  (1)                                                                                                                                                                                                                                 |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.23(c)  | Supplemental      Agreement No. 3, including side letter, to P.A. 2061, dated September 25,      1998 - incorporated by reference to Exhibit 10.27(c) to the 1998      10-K.  (1)                                                                                                                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.23(d)  | Supplemental      Agreement No. 4, including side letter, to P.A. 2061, dated February 3,      1999 - incorporated by reference to Exhibit 10.5 to the 1999 Q-1      10-Q.  (1)                                                                                                                                                                                                                              |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.23(e)  | Supplemental      Agreement No. 5, including side letter, to P.A. 2061, dated March 26, 1999      - incorporated by reference to Exhibit 10.5(a) to the 1999 Q-1      10-Q.  (1)                                                                                                                                                                                                                             |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.23(f)  | Supplemental      Agreement No. 6 to P.A. 2061, dated June 25, 2002 - incorporated by      reference to Exhibit 10.12 to Continental's Quarterly Report on Form 10-Q      for the quarter ended June 30, 2002 (File no. 1-10323) (the "2002 Q-2      10-Q").  (1)                                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.23(g)  | Supplemental      Agreement No. 7, including side letter, to P.A. 2061, dated October 31,      2000 - incorporated by reference to Exhibit 10.23(g) to the 2000      10-K.  (1)                                                                                                                                                                                                                              |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.23(h)  | Supplemental      Agreement No. 8, including a side letter, to P.A. 2061, dated June 29,      2001 - incorporated by reference to Exhibit 10.5 to the 2001 Q-2      10-Q.  (1)                                                                                                                                                                                                                               |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.23(i)  | Supplemental      Agreement No. 9 to P.A. 2061, dated June 25, 2002 - incorporated by      reference to Exhibit 10.12 to the 2002 Q-2      10-Q.  (1)                                                                                                                                                                                                                                                        |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.23(j)  | Supplemental      Agreement No. 10 to P.A. 2061, dated November 4, 2003 - incorporated by      reference to Exhibit 10.26(j) to the 2003 10-K. (1)                                                                                                                                                                                                                                                                     |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.23(k)  | Supplemental      Agreement No. 11 to P.A. 2061, dated July 28, 2005 - incorporated by      reference to Exhibit 10.2 to the 2005 Q-3 10-Q. (1)                                                                                                                                                                                                                                                                        |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.23(l)  | Supplemental      Agreement No. 12 to P.A. 2061, dated March 17, 2006 - incorporated by      reference to Exhibit 10.3 to the 2006 Q-1    10-Q.  (1)                                                                                                                                                                                                                                                         |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.23(m)  | Supplemental      Agreement No. 13, dated December 3, 2007, to P.A. 2061 - incorporated by      reference to Exhibit 10.23(m) to the 2007    10-K.  (1)                                                                                                                                                                                                                                                      |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.23(n)  | Supplemental      Agreement No. 14 to P.A. 2061, dated February 20, 2008 - incorporated by      reference to Exhibit 10.3 to the 2008 Q-1    10-Q.  (1)                                                                                                                                                                                                                                                      |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.24     | Letter      Agreement 6-1162-CHL-048 between the Company and Boeing, dated February 8,      2002, amending P.A. 1951, 2333, 2211, 2060 and 2061 - incorporated by      reference to Exhibit 10.44 to the 2001  10-K.  (1)                                                                                                                                                                                    |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.25     | Purchase      Agreement No. 2484, including exhibits and side letters, between the      Company and Boeing, dated December 29, 2004, relating to the purchase of      Boeing 7E7 aircraft (now known as 787 aircraft) ("P.A. 2484") - incorporated by      reference to Exhibit 10.27 to the 2004 10-K. (1)                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.25(a)  | Supplemental      Agreement No. 1 to P.A. 2484, dated June 30, 2005 - incorporated by      reference to Exhibit 10.5 to the 2005 Q-2 10-Q. (1)                                                                                                                                                                                                                                                                         |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.25(b)  | Supplemental      Agreement No. 2, including exhibits and side letters, to P.A. 2484, dated      January 20, 2006 - incorporated by reference to Exhibit 10.27(b) to the      2005 10-K. (1)                                                                                                                                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.25(c)  | Supplemental      Agreement No. 3, dated May 3, 2006, to P.A. 2484 - incorporated by      reference to Exhibit 10.4 to the 2006 Q-2 10-Q.  (1)                                                                                                                                                                                                                                                                    |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.25(d)  | Supplemental      Agreement No. 4, dated July 14, 2006, to P.A. 2484 - incorporated by      reference to Exhibit 10.5 to the 2006 Q-3    10-Q.  (1)                                                                                                                                                                                                                                                          |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.25(e)  | Supplemental      Agreement No. 5, dated March 12, 2007, to P.A. 2484 - incorporated by      reference to Exhibit 10.1 to Continental's Quarterly Report on Form 10-Q      for the quarter ended March 31, 2007 (File no.      1-10323).   (1)                                                                                                                                                          |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.25(f)  | Supplemental      Agreement No. 6, dated October 22, 2008, to P.A.      2484.  (2)(3)                                                                                                                                                                                                                                                                                                                        |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.26     | Amended      and Restated Letter Agreement No. 11 between Continental and General      Electric Company, dated August 8, 2005, relating to certain long-term      engine purchase commitments of Continental - incorporated by reference to      Exhibit 10.3 to the 2005 Q-3 10-Q.  (1)                                                                                                                          |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.27     | Standstill      Agreement dated as of November 15, 2000 among the Company, Northwest      Airlines Holdings Corporation, Northwest Airlines Corporation and      Northwest Airlines, Inc. - incorporated by reference to Exhibit 99.8 to      the 11/00 8-K.                                                                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.28     | Second      Amended and Restated Capacity Purchase Agreement ("XJT Capacity Purchase      Agreement") among Continental, ExpressJet Holdings, Inc., XJT Holdings,      Inc. and ExpressJet Airlines, Inc. dated June 5, 2008 - incorporated by      reference to Exhibit 10.4 to the 2008 Q-2 10-Q. (1)                                                                                                                |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.28(a)  | First      Amendment to the XJT Capacity Purchase Agreement, dated as of August 29,      2008 - incorporated by reference to Exhibit 10.1 to the 2008 Q-3      10-Q.                                                                                                                                                                                                                                                   |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.28(b)  | Second      Amendment to the XJT Capacity Purchase Agreement, dated as of December 23,      2008.  (2)(3)                                                                                                                                                                                                                                                                                                    |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.29     | Agreement      between the Company and the United States of America, acting through the      Transportation Security Administration, dated May 7, 2003 - incorporated      by reference to Exhibit 10.1 to Continental's Quarterly Report on Form      10-Q for the quarter ended June 30, 2003 (File no.    1-10323).                                                                                                 |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 21.1      | List      of Subsidiaries of Continental.  (3)                                                                                                                                                                                                                                                                                                                                                               |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 23.1      | Consent      of Ernst & Young LLP.  (3)                                                                                                                                                                                                                                                                                                                                                                  |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 24.1      | Powers      of attorney executed by certain directors and officers of      Continental.  (3)                                                                                                                                                                                                                                                                                                                 |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 31.1      | Rule      13a-14(a)/15d-14(a) Certification of Chief Executive      Officer.  (3)                                                                                                                                                                                                                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 31.2      | Rule      13a-14(a)/15d-14(a) Certification of Chief Financial      Officer.  (3)                                                                                                                                                                                                                                                                                                                            |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 32.1      | Section      1350 Certifications.  (4)                                                                                                                                                                                                                                                                                                                                                                       |

| (1)   | The      Commission has granted confidential treatment for a portion of this      exhibit. |
|-----------------|--------------------------------------------------------------------------------------------|

| (2)   | Continental      has applied to the Commission for confidential treatment of a portion of      this exhibit. |
|-----------------|--------------------------------------------------------------------------------------------------------------|

| (3)   | Filed      herewith. |
|-----------------|----------------------|

| (4)   | Furnished      herewith. |
|-----------------|--------------------------|