----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| UNITED      STATES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| SECURITIES      AND EXCHANGE COMMISSION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| WASHINGTON,      D.C.  20549                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|  FORM      10-Q                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|  (Mark      One)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|  [X]     QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|      THE      SECURITIES EXCHANGE ACT OF 1934                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|  FOR      THE QUARTERLY PERIOD ENDED JUNE 30, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|  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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (I.R.S.      Employer |   |
| of      incorporation or organization)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Identification      No.) |   |
|  1600      Smith Street, Dept. HQSEO                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| Houston,      Texas  77002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (Address      of principal executive offices)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (Zip      Code)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|  713-324-2950                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (Registrant's      telephone number, including area code)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|  Indicate by check mark whether      registrant (1) has filed all reports required to be filed by Section 13 or      15(d) of the Securities Exchange Act of 1934 during the preceding 12      months (or for such shorter period that the registrant was required to      file such reports), and (2) has been subject to such filing requirements      for the past 90 days.  Yes    X     No      _____ Indicate by check mark whether      the registrant has submitted electronically and posted on its corporate      Web site, if any, every Interactive Data File required to be submitted and      posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this      chapter) during the preceding 12 months (or for such shorter period that      the registrant was required to submit and post such      files).    Yes          No      _____       Indicate by check mark whether      the registrant is a large accelerated filer, an accelerated filer, a      non-accelerated filer or a smaller reporting company.  See the      definitions of “large accelerated filer,” “accelerated filer” and “smaller      reporting company” in Rule 12b-2 of the Exchange Act.  Large      accelerated filer   X     Accelerated      filer ___   Non-accelerated filer      ___   Smaller reporting company ___(Do not check if a      smaller reporting      company) Indicate by check mark whether      the registrant is a shell company (as defined in Rule 12b-2 of the      Exchange Act).  Yes           No        X   |

----

|          |                                                                                            | PAGE     |
|---------------|-------------------------------------------------------------------------------------------------|----------|
|          |                                                                                            |     |
| PART      I   | FINANCIAL      INFORMATION                                                                      |     |
|          |                                                                                            |     |
| Item      1.  | Financial      Statements      -                                                                |     |
|          |                                                                                            |     |
|          | Consolidated      Statements of Operations                                                 | 4        |
|          |                                                                                            |     |
|          | Consolidated      Balance Sheets      -                                                         |     |
|          | Assets                                                                                          | 5        |
|          | Liabilities and      Stockholders'      Equity                                                  | 6        |
|          |                                                                                            |     |
|          | Condensed      Consolidated Statements of Cash      Flows                                       | 7        |
|          |                                                                                            |     |
|          | Notes to      Consolidated Financial Statements                                            | 8        |
|          |                                                                                            |     |
| Item      2.  | Management's Discussion and Analysis of Financial      Condition and Results      of Operations |  31 |
|          |                                                                                            |     |
| Item      3.  | Quantitative and      Qualitative Disclosures about Market Risk                                 | 52       |
|          |                                                                                            |     |
| Item      4.  | Controls and Procedures                                                                         | 53       |
|          |                                                                                            |     |
| PART      II  | OTHER      INFORMATION                                                                          |     |
|          |                                                                                            |     |
| Item      1.  | Legal Proceedings                                                                               | 54       |
|          |                                                                                            |     |
| Item      1A. | Risk      Factors                                                                               | 54       |
|          |                                                                                            |     |
| Item      2.  | Unregistered Sales of      Equity Securities and Use of      Proceeds                           | 57       |
|          |                                                                                            |     |
| Item      3.  | Defaults Upon Senior      Securities                                                            | 57       |
|          |                                                                                            |     |
| Item      4.  | Submission of Matters to      a Vote of Security      Holders                                   | 57       |
|          |                                                                                            |     |
| Item      5.  | Other Information                                                                               | 58       |
|          |                                                                                            |     |
| Item      6.  | Exhibits                                                                                        | 58       |
|          |                                                                                            |     |
|          | Signatures                                                                                      | 60       |
|          |                                                                                            |     |
|          | Index to      Exhibits                                                                          | 61       |

----

Item 1.  FinancialStatements.

CONSOLIDATED STATEMENTS OFOPERATIONS

|   | Three      Months             Ended June      30,             | Six      Months             Ended June      30,           |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   2009                                                                                                                                                                 |                                                                                                                                                                         |   2008   |   |   2009   |   |   2008   |   |   |
|   |                                                                                                                                                                                       |                                                                                                                                                                         |   |   |   |   |   |   |   |
|   | Operating      Revenue:                                                                                                                                                                    |                                                                                                                                                                         |   |   |
|   |    Passenger      (excluding fees and taxes of $379,      $408,      $725, and $784, respectively)                                            |  $2,767                                                                                                                                                            |   |  $3,650  |   |  $5,384  |   |  $6,873  |   |   |
|   |    Cargo                                                                                                                                                                    | 82                                                                                                                                                                      |   | 132  |   | 167  |   | 254  |   |   |
|   |    Other                                                                                                                                                                    |    277                                                                                                                                                   |   |    262  |   |    536  |   |    487  |   |   |
|   |                                                                                                                                                                                       | 3,126                                                                                                                                                                   |   | 4,044  |   | 6,087  |   | 7,614  |   |   |
|   |                                                                                                                                                                                       |                                                                                                                                                                         |   |   |   |   |   |   |   |   |
|   | Operating      Expenses:                                                                                                                                                                   |                                                                                                                                                                         |   |   |   |   |   |   |   |   |
|   |    Aircraft      fuel and related taxes                                                                                                                                     | 891                                                                                                                                                                     |   | 1,653  |   | 1,626  |   | 2,915  |   |   |
|   |    Wages,      salaries and related costs                                                                                                                                   | 799                                                                                                                                                                     |   | 704  |   | 1,564  |   | 1,432  |   |   |
|   |    Aircraft      rentals                                                                                                                                                    | 235                                                                                                                                                                     |   | 246  |   | 472  |   | 493  |   |   |
|   |    Regional      capacity purchase, net                                                                                                                                     | 217                                                                                                                                                                     |   | 299  |   | 431  |   | 591  |   |   |
|   |    Landing      fees and other rentals                                                                                                                                      | 216                                                                                                                                                                     |   | 210  |   | 425  |   | 418  |   |   |
|   |    Maintenance,      materials and repairs                                                                                                                                  | 161                                                                                                                                                                     |   | 167  |   | 314  |   | 326  |   |   |
|   |    Distribution      costs                                                                                                                                                  | 150                                                                                                                                                                     |   | 194  |   | 307  |   | 375  |   |   |
|   |    Depreciation      and amortization                                                                                                                                       | 118                                                                                                                                                                     |   | 108  |   | 229  |   | 215  |   |   |
|   |    Passenger      services                                                                                                                                                  | 96                                                                                                                                                                      |   | 107  |   | 183  |   | 203  |   |   |
|   |    Special      charges                                                                                                                                                     | 44                                                                                                                                                                      |   | 58  |   | 48  |   | 50  |   |   |
|   |    Other                                                                                                                                                                    |    353                                                                                                                                                   |   |    369  |   |     696  |   |     733  |   |   |
|   |                                                                                                                                                                                       | 3,280                                                                                                                                                                   |   | 4,115  |   |  6,295  |   |  7,751  |   |   |
|   |                                                                                                                                                                                       |                                                                                                                                                                         |   |   |   |   |   |   |   |   |
|   | Operating      Loss                                                                                                                                                                        |  (154)                                                                                                                                                                  |   |    (71) |   |  (208) |   |  (137) |   |   |
|   |                                                                                                                                                                                       |                                                                                                                                                                         |   |   |   |   |   |   |   |   |
|   | Nonoperating      Income (Expense):                                                                                                                                                        |                                                                                                                                                                         |   |   |   |   |   |   |   |   |
|   |    Interest      expense                                                                                                                                                    | (90)                                                                                                                                                                         |   | (91) |   | (183) |   | (185) |   |   |
|   |    Interest      capitalized                                                                                                                                                | 8                                                                                                                                                                       |   | 8  |   | 17  |   | 17  |   |   |
|   |    Interest      income                                                                                                                                                     | 4                                                                                                                                                                       |   | 16  |   | 8  |   | 40  |   |   |
|   |    Gain      on sale of investments                                                                                                                                         | -                                                                                                                                                                       |   | 78  |   | -  |   | 78  |   |   |
|   |    Other-than-temporary      impairment losses on     investments                                                                                  |  -                                                                                                                                                                 |   |  (29) |   |  -  |   |  (29) |   |   |
|   |    Other,      net                                                                                                                                                          |    19                                                                                                                                                    |   |    40  |   |       17  |   |       39  |   |   |
|   |                                                                                                                                                                                       |  (59)                                                                                                                                                                   |   |    22  |   |   (141) |   |     (40) |   |   |
|   |                                                                                                                                                                                       |                                                                                                                                                                         |   |   |   |   |   |   |   |   |
|   | Loss      before Income Taxes                                                                                                                                                              | (213)                                                                                                                                                                        |   | (49) |   | (349) |   | (177) |   |   |
|   |                                                                                                                                                                                       |                                                                                                                                                                         |   |   |   |   |   |   |   |   |
|   | Income      Tax Benefit                                                                                                                                                                    |       -                                                                                                                                   |   |    44  |   |        -  |   |      90  |   |   |
|   |                                                                                                                                                                                       |                                                                                                                                                                         |   |   |   |   |   |   |   |   |
|   | Net      Loss                                                                                                                                                                              | $(213)                                                                                                                                                                       |   | $   (5) |   | $ (349) |   | $   (87) |   |   |
|   |                                                                                                                                                                                       |                                                                                                                                                                         |   |   |   |   |   |   |   |   |
|   | Basic      and Diluted Loss per Share                                                                                                                                                      | $(1.72)                                                                                                                                                                      |   | $(0.05) |   | $(2.82) |   | $(0.87) |   |   |
|   |                                                                                                                                                                                       |                                                                                                                                                                         |   |   |   |   |   |   |   |   |
|   | Shares      Used for Basic and Diluted Computation                                                                                                                                         | 124                                                                                                                                                                     |   | 99  |   | 124  |   | 99  |   |   |

----

CONTINENTAL AIRLINES, INC.

|                                                                                                                                                                    | June      30,                                            | December      31,                                                                  | June      30,                                            |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------|------------------------------------------------------------------------------------|------------------------------------------------------------------------------|
| ASSETS                                                                                                                                                                  |      2009             |       2008        |      2008             |
|                                                                                                                                                                    | (Unaudited)                                                   |                                                                               | (Unaudited)                                                        |
|                                                                                                                                                                    |                                                                         |                                                                               |                                                                         |
| Current      Assets:                                                                                                                                                    |                                                                         |                                                                               |                                                                         |
|    Cash      and cash equivalents                                                                                                                        | $   2,521                                                |                                                                               | $   2,165                                                |   | $   3,049  |   |
|    Short-term      investments                                                                                                                           |      247                                       |                                                                               |      478                                       |   |      358  |   |
|       Total      unrestricted cash, cash equivalents and         short-term      investments |  2,768                                                             |                                                                               |  2,643                                                             |   |  3,407  |   |
|                                                                                                                                                                    |                                                                         |                                                                               |                                                                         |   |   |   |
|    Restricted      cash, cash equivalents and      short-term      investments                                             |  167                                                               |                                                                               |  190                                                               |   |  122  |   |
|    Accounts      receivable, net                                                                                                                         | 488                                                                     |                                                                               | 453                                                                     |   | 739  |   |
|    Spare      parts and supplies, net                                                                                                                    | 242                                                                     |                                                                               | 235                                                                     |   | 339  |   |
|    Deferred      income taxes                                                                                                                            | 172                                                                     |                                                                               | 216                                                                     |   | 249  |   |
|    Prepayments      and other                                                                                                                            |           494                                       |                                                                               |           610                                       |   |           602  |   |
|       Total      current assets                                                                                                           |   4,331                                                       |                                                                               |   4,347                                                       |   |   5,458  |   |
|                                                                                                                                                                    |                                                                         |                                                                               |                                                                         |   |   |   |
| Property      and Equipment:                                                                                                                                            |                                                                         |                                                                               |                                                                         |   |   |   |
|    Owned      property and equipment:                                                                                                                    |                                                                         |                                                                               |                                                                         |   |   |   |
|       Flight      equipment                                                                                                               | 8,614                                                                   |                                                                               | 8,446                                                                   |   | 7,960  |   |
|       Other                                                                                                                               |   1,740                                                       |                                                                               |   1,694                                                       |   |   1,641  |   |
|                                                                                                                                                                    | 10,354                                                                  |                                                                               | 10,140                                                                  |   | 9,601  |   |
|        Less:  Accumulated      depreciation                                                                                |   3,388                                                       |                                                                               |   3,229                                                       |   |   2,968  |   |
|                                                                                                                                                                    |   6,966                                                       |                                                                               |   6,911                                                       |   |   6,633  |   |
|                                                                                                                                                                    |                                                                         |                                                                               |                                                                         |   |   |   |
|    Purchase      deposits for flight equipment                                                                                                           |           257                                       |                                                                               |           275                                       |   |           328  |   |
|                                                                                                                                                                    |                                                                         |                                                                               |                                                                         |   |   |   |
|    Capital      leases                                                                                                                                   | 194                                                                     |                                                                               | 194                                                                     |   | 190  |   |
|        Less:  Accumulated      amortization                                                                                |             58                            |                                                                               |             53                            |   |             49  |   |
|                                                                                                                                                                    |      136                                       |                                                                               |      141                                       |   |      141  |   |
|           Total      property and equipment, net                                                                      |   7,359                                                       |                                                                               |   7,327                                                       |   |   7,102  |   |
|                                                                                                                                                                    |                                                                         |                                                                               |                                                                         |   |   |   |
| Routes      and airport operating rights, net                                                                                                                           | 797                                                                     |                                                                               | 804                                                                     |   | 791  |   |
| Investment      in student loan-related auction rate  securities,      long-term                                                                              |  -                                                                 |                                                                               |  -                                                                 |   |  264  |   |
| Other      assets, net                                                                                                                                                  |      175                                       |                                                                               |      208                                       |   |      203  |   |
|                                                                                                                                                                    |                                                                         |                                                                               |                                                                         |   |   |   |
|            Total      Assets                                                                                     | $12,662                                                                 |                                                                               | $12,686                                                                 |   | $13,818  |   |

----

| LIABILITIES ANDSTOCKHOLDERS'      EQUITY                                                                                                                                                                               | June      30,                                                         | December      31,                                                              | June      30,       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------|---------------------------------------------------|
|      2009                                                                                                                                                  |       2008          |      2008               |
|                                                                                                                                                                                                                   | (Unaudited)                                                                |                                                                                     | (Unaudited)                   |
|                                                                                                                                                                                                                   |                                                                                           |                                                                                     |                                              |
| Current      Liabilities:                                                                                                                                                                                              |                                                                                           |                                                                                     |                                              |
|    Current      maturities of long-term debt and      capital      leases                                                                                                 |  $   980                                                              |                                                                                     |  $   519                 |   |  $   466  |   |
|    Accounts      payable                                                                                                                                                                                | 1,062                                                                                     |                                                                                     | 1,021                                        |   | 1,043  |   |
|    Air      traffic and frequent flyer liability                                                                                                                                                        | 2,128                                                                                     |                                                                                     | 1,881                                        |   | 2,790  |   |
|    Accrued      payroll                                                                                                                                                                                 | 379                                                                                       |                                                                                     | 345                                          |   | 334  |   |
|    Accrued      other liabilities                                                                                                                                                                       |    307                                                                     |                                                                                     |    708                        |   |    294  |   |
|       Total      current liabilities                                                                                                                                                     | 4,856                                                                                     |                                                                                     | 4,474                                        |   | 4,927  |   |
|                                                                                                                                                                                                                   |                                                                                           |                                                                                     |                                              |   |   |   |
| Long-Term      Debt and Capital Leases                                                                                                                                                                                 | 4,963                                                                                     |                                                                                     | 5,353                                        |   | 5,300  |   |
|                                                                                                                                                                                                                   |                                                                                           |                                                                                     |                                              |   |   |   |
| Deferred      Income Taxes                                                                                                                                                                                             |    172                                                                     |                                                                                     |    216                        |   |    307  |   |
|                                                                                                                                                                                                                   |                                                                                           |                                                                                     |                                              |   |   |   |
| Accrued      Pension Liability                                                                                                                                                                                         | 1,375                                                                                     |                                                                                     | 1,417                                        |   |    472  |   |
|                                                                                                                                                                                                                   |                                                                                           |                                                                                     |                                              |   |   |   |
| Accrued      Retiree Medical Benefits                                                                                                                                                                                  |    239                                                                     |                                                                                     |    234                        |   |    242  |   |
|                                                                                                                                                                                                                   |                                                                                           |                                                                                     |                                              |   |   |   |
| Other                                                                                                                                                                                                                  |    821                                                                     |                                                                                     |    869                        |   |    843  |   |
|                                                                                                                                                                                                                   |                                                                                           |                                                                                     |                                              |   |   |   |
| Commitments      and Contingencies                                                                                                                                                                                     |                                                                                           |                                                                                     |                                              |   |   |   |
|                                                                                                                                                                                                                   |                                                                                           |                                                                                     |                                              |   |   |   |
| Stockholders'      Equity:                                                                                                                                                                                             |                                                                                           |                                                                                     |                                              |   |   |   |
|    Class      B common stock - $.01 par, 400,000,000      shares      authorized; 123,657,537, 123,264,534      and      109,796,597 issued |   1                                                                             |                                                                                     |   1                                |   |   1  |   |
|    Additional      paid-in capital                                                                                                                                                                      | 2,047                                                                                     |                                                                                     | 2,038                                        |   | 1,826  |   |
|    Retained      earnings (accumulated deficit)                                                                                                                                                         | (509)                                                                                          |                                                                                     | (160)                                             |   | 339  |   |
|    Accumulated      other comprehensive loss                                                                                                                                                            |  (1,303)                                                                                  |                                                                                     |  (1,756)                                     |   |     (439) |   |
|       Total      stockholders' equity                                                                                                                                                    |       236                                                   |                                                                                     |       123      |   |    1,727  |   |
|          Total      Liabilities and Stockholders' Equity                                                                                                                  | $ 12,662                                                                             |                                                                                     | $ 12,686                                |   | $ 13,818  |   |

----

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |         Six Months Ended June      30,                        |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |    2009                                                            |          2008     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                (Unaudited) |   |
| Cash      Flows from Operating Activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | $                                                                                                     |   |   |   |
| Net      loss                                                                                                                                                                                                                              |                                                                                                  | $  (349) | $ (87) |   |
| Adjustments to reconcile net loss      to net cash provided by operatingactivities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                  |   |   |   |
|  Depreciation and      amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                  | 229  | 215  |   |
|  Special      charges                                                                                                                                                                                                                                |                                                                                                  | 48  | 50  |   |
|  Gain on sale of      investments                                                                                                                                                                                                                    |                                                                                                  | -  | (78) |   |
|  Stock-based compensation      related to equity awards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                  | 3  | 8  |   |
|  Deferred income tax      benefit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                  | -  | (90) |   |
|  Other,      net                                                                                                                                                                                                                                     |                                                                                                  | 27  | 26  |   |
|  Changes in operating assets      and liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                  |     401  |    423  |   |
|     Net cash      provided by operating activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                  |     359  |    467  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                  |   |   |   |
| Cash      Flows from Investing Activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                  |   |   |   |
| Capital      expenditures                                                                                                                                                                                                                  |                                                                                                  | (147) | (293) |   |
| Aircraft purchase deposits      refunded, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                  | 17  | 56  |   |
| Proceeds from sales of short-term      investments, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                  | 233  | 82  |   |
| Proceeds from sales of property      and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                  | 7  | 74  |   |
| Decrease (increase) in restricted      cash, cash equivalents and      short-term      investments                                                                                            |                                                                                                  |  23  |  (21) |   |
| Proceeds from sale of Copa      Holdings, S.A. stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                  | -  | 149  |   |
| Proceeds from sales of      investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                  |         1  |      21  |   |
| Other                                                                                                                                                                                                                                      |                                                                                                  |       (3) |         -  |   |
| Net cash provided by investing      activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                  |     131  |      68  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                  |   |   |   |
| Cash      Flows from Financing Activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                  |   |   |   |
| Payments on long-term debt and      capital lease obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                  | (169) | (267) |   |
| Proceeds from issuance of      long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                  | 30  | 483  |   |
| Proceeds from public offering of      common stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                  | -  | 162  |   |
| Proceeds from issuance of common      stock pursuant to stock plans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                  |         5  |        8  |   |
| Net cash provided by (used in)      financing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                  |  (134) |    386  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                  |   |   |   |
| Net      Increase in Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                  | 356  | 921  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                  |   |   |   |
| Cash      and Cash Equivalents - Beginning of Period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                  | 2,165  | 2,128  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                  |   |   |   |
| Cash      and Cash Equivalents - End of Period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                  | $2,521  | $3,049  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                  |   |   |   |
| Investing      and Financing Activities Not Affecting Cash:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                  |   |   |   |
| Property and equipment acquired      through the issuance of debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                  | $   197  | $  690  |   |

----

NOTES TO CONSOLIDATED FINANCIALSTATEMENTS

|                                  | Three Months ended      June 30, 2008 | Six Months ended June      30, 2008 |
|---------------------------------------|---------------------------------------|-------------------------------------|
|                                  | OriginallyReported                    | AsAdjusted                          | OriginallyReported | AsAdjusted |
|                                  |                                  |                                |   |   |
| Interest      expense                 | $(88)                                 |                                | $(91) |   | $(179) |   | $(185) |   |
| Income      tax benefit               | 43                               |                                | 44  |   | 88  |   | 90  |   |
| Net      loss                         | (3)                                   |                                | (5) |   | (83) |   | (87) |   |
|                                  |                                  |                                |   |   |   |   |   |   |
| Basic      and Diluted Loss per Share | $(0.03)                               |                                | $(0.05) |   | $(0.84) |   | $(0.87) |   |

|                                         | December 31,      2008  | June 30,      2008  |
|----------------------------------------------|------------------------------|--------------------------|
|                                         | OriginallyReported           | AsAdjusted               | OriginallyReported | AsAdjusted |
|                                         |                         |                     |   |   |
| Long-term      debt and capital leases       | $5,371                  |                     | $5,353  |   | $5,323  |   | $5,300  |   |
| Deferred      income tax liability           | 216                     |                     | 216  |   | 299  |   | 307  |   |
| Additional      paid-in capital              | 1,997                   |                     | 2,038  |   | 1,785  |   | 1,826  |   |
| Retained      earnings (accumulated deficit) | (137)                        |                     | (160) |   | 365  |   | 339  |   |
| Total      stockholders’ equity        | 105                     |                     | 123  |   | 1,712  |   | 1,727  |   |

----

|                                                                                                                                                                                                            |                 |   |                            |        |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------|--------|---------------------------------|-------------|
|                                                                                                                                                                                                            |                 |   |                            | Third-Party |
| Aircraft      Type                                                                                                                                                                                              | Total                | Owned  | Leased                          | Aircraft    |
|                                                                                                                                                                                                            |                 |   |                            |        |
| Mainline      (a):                                                                                                                                                                                              |                 |   |                            |        |
|   777-200ER                                | 20              |   | 8                          |        | 12  |   | -  |   |
|   767-400ER                                | 16              |   | 14                         |        | 2  |   | -  |   |
|   767-200ER                                | 10              |   | 9                          |        | 1  |   | -  |   |
|   757-300                                  | 17              |   | 9                          |        | 8  |   | -  |   |
|   757-200                                  | 41              |   | 15                         |        | 26  |   | -  |   |
|   737-900ER                                | 22              |   | 22                         |        | -  |   | -  |   |
|   737-900                                  | 12              |   | 8                          |        | 4  |   | -  |   |
|   737-800                                  | 117             |   | 44                         |        | 73  |   | -  |   |
|   737-700                                  | 36              |   | 12                         |        | 24  |   | -  |   |
|   737-500                                  | 40              |   | -                          |        | 40  |   | -  |   |
|   737-300                                  |   20  |   |    12       |        |      8  |   |    -  |   |
|   Total      mainline                                                                                                                                                                                 | 351             |   |  153                  |        |  198  |   |    -  |   |
|                                                                                                                                                                                                            |                 |   |                            |        |   |   |   |   |
| Regional      (b):                                                                                                                                                                                              |                 |   |                            |        |   |   |   |   |
|   ERJ-145XR                                | 89              |   | -                          |        | 89  |   | -   |   |
|   ERJ-145                                  | 140             |   | 18                         |        | 107  |   | 15  | (c) |
|   CRJ200LR                                 | 7               |   | -                          |        | -  |   | 7  | (c) |
|   Q200                                     | 16              |   | -                          |        | -  |   | 16  | (d) |
|   Q400                                     |   14  |   |     -  |        |      -  |   |  14  | (e) |
|   Total      regional                                                                                                                                                                                 | 266             |   |   18             |        |  196  |   |  52  |   |
|                                                                                                                                                                                                            |                 |   |                            |        |   |   |   |   |
| Total                                                | 617             |   | 171                        |        | 394  |   |    52  |   |

| (a) | Excludes      nine grounded Boeing 737-500 aircraft, nine grounded Boeing 737-300      aircraft and one Boeing 737-900ER aircraft delivered but not yet placed      into service at June 30, 2009. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Excludes      30 temporarily grounded ERJ-135 aircraft and 30 ERJ-145 aircraft that are      subleased to ExpressJet but are not operated on our  behalf.                                          |
| (c) | Operated      by Chautauqua Airlines, Inc. (“Chautauqua”) under a capacity purchase      agreement.                                                                                    |
| (d) | Operated      by Champlain Enterprises, Inc. (“CommutAir”) under a capacity purchase      agreement.                                                                                   |
| (e) | Operated      by Colgan Air, Inc. (“Colgan”) under a capacity purchase      agreement.                                                                                                 |

| July      1, 2009 through December 31, 2009 | $411                                                                                                                                                                                                                                                                                                                                                                                                                               |
|---------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Year      ending December 31,               |                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                        | 2010                                                                      | 943 |
|                                        | 2011                                                                      | 1,114 |
|                                        | 2012                                                                      | 552 |
|                                        | 2013                                                                      | 619 |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | June      30,                                        | December      31,                                                                                    | June      30,                                                    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------|------------------------------------------------------------------------------------------------------|------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |     2009     |         2008         |      2008      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                 |                                                                                                 |                                                             |
| Principal      amount of Convertible Notes                                                                                                                                                                                                                                                                                                                                                                                                                                     | $175                                                 |                                                                                                 | $175                                                             |   | $175 |   |
| Unamortized      discount                                                                                   | 12                                                   |                                                                                                 | 18                                                               |   | 23 |   |
| Net      carrying      amount                                                                               | 163                                                  |                                                                                                 | 157                                                              |   | 152 |   |
| Additional      paid-in      capital                                                                        | 64                                                   |                                                                                                 | 64                                                               |   | 64 |   |

|                                                  | Three      MonthsEnded June      30, | Six      MonthsEnded June      30, |
|-------------------------------------------------------|--------------------------------------|------------------------------------|
|                                                  | 2009                                 | 2008                               | 2009 | 2008 |
|                                                  |                                 |                               |   |   |
| Contractual      coupon interest                      | $ 2                             |                               | $ 2 |   | $ 4 |   | $ 4 |   |
| Amortization      of discount on 5% Convertible Notes |   3                        |                               |   3 |   |   6 |   |   6 |   |
|     Interest      expense         | $  5                       |                               | $  5 |   | $ 10 |   | $10 |   |
|                                                  |                                 |                               |   |   |   |   |   |   |
| Effective      interest rate                          | 13%                                  |                               | 13% |   | 13% |   | 13% |   |

|   | 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 ofJune 30,      2009 |  Level      1 |  Level      2 |  Level      3  | ValuationTechnique |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|--------------------|--------------------|---------------------|--------------------|
|                                                                                                                                                                                                                                                                                                                                   |                                         |               |               |                |               |
| Cash      and cash equivalents                                                                                                                                                                                                                                                                                                         | $2,521                                  |               | $2,521        | -         | -             | (A) |
| Short-term      investments:                                                                                                                                                                                                                                                                                                           |                                         |               | -             |                |               |   |
|   Auction      rate securities                                                                                                                                                                                                                                                                                               | 230                                     |               |               | -         | $230               | (B) |
|   Other                                                                           | 17                                      |               | 17            | -         | -             | (A) |
| Restricted      cash, cash equivalents and  short-term      investments                                                                                                                                                                                                                                                      |  167                               |               |  167     |  -   |  -       |  (A) |
| Auction      rate securities put right                                                                                                                                                                                                                                                                                                 | 27                                      |               | -             | -         | 27            | (B) |
| Fuel      derivatives                                                                       | (17)                                         |               | -             | -         | (17)               | (A) |
| Foreign      currency  derivatives                                                |  1                                 |               |  -       |  $1       |  -       |  (A) |

|                                  | Carrying      Amount as ofJune 30,      2009 |  Level      1 |  Level      2 |  Level      3 | TotalLosses |
|---------------------------------------|----------------------------------------------|--------------------|--------------------|--------------------|-------------|
|                                  |                                         |               |               |               |        |
| Property      and Equipment:          |                                         |               |               |               |        |
|   Boeing      737-300 fleet | $90                                          |               | -                  |               | -           |   | $90 |   | $(19) |   |
|   Boeing      737-500 fleet | 82                                           |               | -                  |               | -           |   | 82 |   | (12) |   |
|                                  |                                         |               |               |               |        |   |   |   | $(31) |   |

|                                                                                                                                                                                                                                                                                                                           | Fair      Value | Par      Value | Amortized      Cost |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------|----------------|---------------------|
|                                                                                                                                                                                                                                                                                                                           |            |           |                |
| Short-term      investments:                                                                                                                                                                                                                                                                                                   |            |           |                |
|   Available-for-sale                                                 | $135            |           | $166                |   | $135 |   |
|   Trading                                                            |   95  |           | 125                 |   | N/A |   |
|     Total                                                  | $230            |           | $291                |   |   |   |

|                                                                                                                                                                                                                                                                                                                                                                          | Three Months Ended      June 30, 2009                 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                          | Student      Loan-RelatedAuction Rate      Securities | Auction      RateSecurities Put      Right | FuelDerivatives |
|                                                                                                                                                                                                                                                                                                                                                                          |                                                  |   |   |
| Balance      at beginning of period                                                                                                                                                                                                                                                                                                                                           | $229                                             |   | $26 |   | $(252) |   |
| Sales                                                             | (1)                                                   |   | -  |   | -  |   |
| Gains      and losses:                                                                                                                                                                                                                                                                                                                                                        |                                                  |   |   |   |   |   |
| Realized losses reported in      earnings                                                                                                                                                                                                                                                                                                                                     | -                                                |   | - |   | 204  |   |
|       Unrealized      gains reported in earnings                                                                                                                                                                                                                                                                                                | -                                                |   | 1 |   | 8  |   |
| Unrealized gains reported in      other        comprehensive      income (loss)                                                                                                                                                                                                                                                       |      2                  |   |     - |   |      23  |   |
| Balance      as of June 30, 2009                                                                                                                                                                                                                                                                                                                                              | $230                                             |   | $27 |   | $  (17) |   |

|                                                                                                                                                                                                                                                                                                                                                                                | Six Months Ended June      30, 2009                   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                | Student      Loan-RelatedAuction Rate      Securities | Auction      RateSecurities Put      Right | FuelDerivatives |
|                                                                                                                                                                                                                                                                                                                                                                                |                                                  |   |   |
| Balance      at beginning of period                                                                                                                                                                                                                                                                                                                                                 | $229                                             |   | $26 |   | $(415) |   |
| Sales                                                                   | (1)                                                   |   | - |   | -  |   |
| Settlements                                                             | -                                                |   | -  |   | 77  |   |
| Gains      and losses:                                                                                                                                                                                                                                                                                                                                                              |                                                  |   |   |   |   |   |
| Realized losses reported in      earnings                                                                                                                                                                                                                                                                                                                                           | -                                                |   | - |   | 345  |   |
|       Unrealized      gains reported in earnings                                                                                                                                                                                                                                                                                                      | -                                                |   | 1 |   | 6  |   |
| Unrealized gains (losses)      reported in        other      comprehensive income (loss)                                                                                                                                                                                                                                                    |      2                  |   |     - |   |    (30) |   |
| Balance      as of June 30, 2009                                                                                                                                                                                                                                                                                                                                                    | $230                                             |   | $27 |   | $  (17) |   |

| ·  | Debt.  The      fair value of our debt with a carrying value of $5.7 billion at June 30,      2009 was approximately $4.8 billion.  These estimates were based      on either market prices or the discounted amount of future cash flows      using our current incremental rate of borrowing for similar      liabilities.                                                                     |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ·  | Investment in COLI      Products.  In connection with certain of our supplemental      retirement plans, we have company owned life insurance policies covering      certain of our employees.  As of June 30, 2009, the carrying      value and fair value of the underlying investments was $27 million, which      approximates the cash surrender value of the life insurance      policies. |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ·  | Accounts Receivable      and Accounts Payable.  The fair values of accounts      receivable and accounts payable approximated carrying value due to their      short-term maturities.                                                                                                                                                                                                                      |

|                                                                                                                                                                                                                                                                                                        | Maximum      Price           | Minimum      Price                          |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|---------------------------------------------|
|                                                                                                                                                                                                                                                                                                        | %      ofExpectedConsumption | WeightedAverage      Price(per      gallon) | %      ofExpectedConsumption | WeightedAverage      Price(per      gallon) |
|                                                                                                                                                                                                                                                                                                        |                         |                                        |   |   |
| WTI      crude oil collars                                                                                                                                                                                                                                                                                  | 6%                           |                                        | $3.21 |   | 6% |   | $2.40 |   |
| WTI      crude oil swaps                                                                                                                                                                                                                                                                                    |   5%               |                                        | 1.33 |   |   5% |   | 1.33 |   |
|      Total                                             | 11%                          |                                        |   |   | 11% |   |   |   |

| ·  | 45%      of our projected Japanese yen-denominated cash inflows |
|--------------|-----------------------------------------------------------------|
|         |                                                            |
| ·  | 8%      of our projected euro-denominated cashinflows           |

----

|                                           | Asset      Derivatives                    | Liability      Derivatives            |
|------------------------------------------------|-------------------------------------------|---------------------------------------|
|                                           | Balance      SheetLocation                | FairValue                             | Balance      SheetLocation | FairValue |
|                                           |                                      |                                  |   |   |
| Fuel derivatives                | Prepayments      and other current assets | $   16            |   | Accrued      other current liabilities | $33  |   |
|                                           |                                      |                                  |   |   |   |   |
| Foreign      currency derivatives              | Prepayments      and other current assets | 1       |   | Accrued      other current liabilities |       -       |   |
|   Total derivatives   |                                      | $  17                       |   |   | $33 |   |

|                                                                                                                                      |                                                        Three      Months Ended June 30,      2009                                                  |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Cash      Flow      Hedges                                                                                                                | Gain      (Loss)Recognized      inOCI(Effective      Portion)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Gain      (Loss) Reclassified fromAccumulated      OCI into Income(Effective      Portion) | Gain      (Loss) Recognized inIncome (Ineffective      Portion) |
| Income      StatementLocation                                                                                                             | Amount                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Income      StatementLocation | Amount |
|                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |
| Fuel      derivatives                                                                                                                | $58                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Aircraft      fuel andrelated      taxes | $(210)  |   | Other      nonoperatingincome      (expense) | $8  |   |
|                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Foreign      currency       derivatives                                                                                              | (3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | Passenger      revenue  |    1           |   | Other      nonoperatingincome      (expense) |   -     |   |
| Total                       | $ 55                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | $(209) |   |   | $8 |   |

|                                                                                                                                      |                                                        Six      Months Ended June 30,      2009                                                  |
|-------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Cash      Flow      Hedges                                                                                                                | Gain      (Loss)Recognized      inOCI(Effective      Portion)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Gain      (Loss) Reclassified fromAccumulated      OCI into Income(Effective      Portion) | Gain      (Loss) Recognized inIncome (Ineffective      Portion) |
| Income      StatementLocation                                                                                                             | Amount                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Income      StatementLocation | Amount |
|                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |
| Fuel      derivatives                                                                                                                | $29                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | Aircraft      fuel andrelated      taxes | $(351)  |   | Other      nonoperatingincome      (expense) | $6  |   |
|                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| Foreign      currency       derivatives                                                                                              | 9                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Passenger      revenue  |    -           |   | Other      nonoperatingincome      (expense) |   -     |   |
| Total                       | $38                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | $(351) |   |   | $6 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Three      Months       Ended June      30,       | Six      Months         Ended June      30,      |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   2009                                                                                         |   2008                                                                                             |   2009   |   2008   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                               |                                                                                                                   |   |   |
| Net      loss                                                                                                                                                                                                                                           | $(213)                                                                                                        | $   (5)                                                                                            | $(349) | $(87) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                               |                                                                                                                   |   |   |
| Other      comprehensive income (loss):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                               |                                                                                                                   |   |   |
|   Derivative      financial instruments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                               |                                                                                                                   |   |   |
|     Reclassification      into earnings (net of deferred      taxes      of $(40) and $(51) in 2008)                                                                                                                                                                                                                                                                                                                                                                                                                                            |  201                                                                                                     |  (69)                                                                                                             |  343  |  (88) |
|     Changes      in fair value (net of deferred taxes of $73            and $79 in      2008)                                                                                                         |  55                                                                                                      |  125                                                                                                         |  38  |  135  |
|   Unrealized      gain on student loan-related auction rate    securities (net      of deferred taxes of $5 and $0 in    2008)                                                                   |   2                                                                                                 |   9                                                                                                     |   2  |   -  |
|   Items      related to employee benefit plans:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                               |                                                                                                                   |   |   |
|     Amortization      of net actuarial losses (net of      deferred      taxes of $3 and $5 in 2008)                                                                                                                                                                                                                                                                                                                                                                                                                                            |  27                                                                                                      |  4                                                                                                           |  54  |  9  |
|     Amortization      of prior service cost (net of      deferred      taxes of $3 and $6 in 2008)                                                                                                                                                                                                                                                                                                                                                                                                                                         |       7                                                                         |       5                                                                             |    16  |    10  |
| Comprehensive      income (loss) adjustments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  292                                                                                                     |    74                                                                                              | 453  |   66  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                               |                                                                                                                   |   |   |
| Total      comprehensive income (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | $  79                                                                                               | $ 69                                                                                                         | $104  | $(21) |

|                                                                                                                                                                                                                                                                                                                                   |        Defined      Benefit      Pension         |        Retiree      Medical      Benefits        |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                   | Three      MonthsEnded June      30,                                                                                        | Six      Months   Ended June      30,                                                                   | Three      MonthsEnded June      30, | Six      Months   Ended June      30, |
|                                                                                                                                                                                                                                                                                                                                   | 2009                                                                                                                        | 2008                                                                                                                   | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
|                                                                                                                                                                                                                                                                                                                                   |                                                                                                                        |                                                                                                                   |   |   |   |   |   |   |
| Service      cost                                                                                               | $ 16                                                                                                              | $ 15                                                                                                         | $ 32  | $ 29  | $ 3  | $ 3  | $5  | $ 6  |
| Interest      cost                                                                                              | 38                                                                                                                     | 37                                                                                                                | 77  | 74  | 4  | 4  | 8  | 8  |
| Expected      return on plan assets                                                                                                                                                                                                                                                                                                    | (22)                                                                                                                        | (41)                                                                                                                   | (44) | (81) | -  | -  | -  | -  |
| Amortization      of unrecognized net  actuarial      loss                                            |  28                                                                                                               |  8                                                                                                           |  55  |  15  |  (1) |  (1) |  (1) |  (1) |
| Amortization      of prior service cost                                                                                                                                                                                                                                                                                                |    2                                                                                                    |    2                                                                                               |    5  |    5  |   5  |    6  |  11  |  11  |
| Net      periodic benefit expense                                                                                                                                                                                                                                                                                                      | $  62                                                                                                        | $  21                                                                                                   | $125  | $ 42  | $11  | $12  | $23  | $24  |

|                                                                                                                                                                                                                                                                                                                                                                                                                                              | Three      Months       Ended June      30,       | Six      Months         Ended June      30,      |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                              |   2009                                                                                         |   2008                                                                                             |   2009   |   2008   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                               |                                                                                                                   |   |   |
| Aircraft-related      charges, net of gains on sales of aircraft                                                                                                                                                                                                                                                                                                                                                                                  | $ 43                                                                                                          | $ 41                                                                                                         | $ 47 | $33  |
| Other                                                                                              |     1                                                                                          | 17                                                                                                                |     1 | 17  |
| Total      special      charges                                                                    | $ 44                                                                                                          | $58                                                                                                               | $  48 | $50  |

|                                                                                                                                                                                                                                                                       | Severance/Medical      Costs | PermanentlyGrounded      Aircraft | UnusedFacilities |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|-----------------------------------|------------------|
|                                                                                                                                                                                                                                                                       |                         |                              |             |
| Balance,      December 31, 2008                                                                                                                                                                                                                                            | $28                     |                              |  $10   |   | $20  |   |
| Accrual                                             | -                       |                              | 2           |   | -  |   |
| Payments                                            | (8)                          |                              | (7)              |   | (1) |   |
| Balance,      June 30, 2009                                                                                                                                                                                                                                                | $20                     |                              | $ 5    |   | $19  |   |

|                          | Three      Months       Ended June      30,                                                                                                                                                                                             | Six      Months         Ended June      30,       |
|-------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------|
|                          |   2009                                                                                                                                                                                                                                                                                    |   2008                                                                                                        |   2009  |   2008  |
|                          |                                                                                                                                                                                                                                                                                                     |                                                                                                                         |   |   |
| Operating      Revenue:       |                                                                                                                                                                                                                                                                                                     |                                                                                                                         |   |   |
|                          | Mainline                                                 | $2,644                                                                                                                  | $3,365  | $5,173  | $6,380  |
|                          | Regional                                                 |    482                                                                                                   |    679  |    914  |  1,234  |
|                          | Total Consolidated                                                                                                                                                                                                                                                                             | $3,126                                                                                                                  | $4,044  | $6,087  | $7,614  |
|                          |                                                                                                                                                                                                                                                                                                     |                                                                                                                         |   |   |
| Operating      Income (Loss): |                                                                                                                                                                                                                                                                                                     |                                                                                                                         |   |   |
|                          | Mainline                                                 | $     (64)                                                                                          | $     12  | $        -  | $     48  |
|                          | Regional                                                 |       (90)                                                                                     |       (83) |     (208) |      (185) |
|                          | Total Consolidated                                                                                                                                                                                                                 | $  (154)                                                                                                           | $    (71) | $ (208) | $  (137) |
|                          |                                                                                                                                                                                                                                                                                                     |                                                                                                                         |   |   |   |
| Net      Income (Loss):       |                                                                                                                                                                                                                                                                                                     |                                                                                                                         |   |   |
|                          | Mainline                                                 | $  (120)                                                                                                           | $     46  | $ (135) | $      32  |
|                          | Regional                                                 |     (93)                                                                                                 |     (51) |  (214) |   (119) |
|                          | Total Consolidated                                                                                                                                                                                                                           | $  (213)                                                                                                           | $     (5) | $ (349) | $   (87) |

| ·  | a      total of $87 million if our unrestricted cash, cash equivalents and      short-term investments balance falls below $2.0billion;                                                                                                                                                                                             |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·  | a      total of $252 million if we fail to maintain the minimum unsecured debt      ratings specified above;                                                                                                                                                                                                                        |
| ·  | a      total of $472 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 $1.0 billion 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.     |

----

| ·  | We      recorded a net loss of $213 million in the second quarter of      2009.                                                                                                                                                                                                                                                                                                          |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                     |
| ·  | Passenger      revenue decreased 24.2% during the second quarter of 2009 as compared to      the second quarter of 2008 primarily due to lower fares and less high      yield business traffic attributable to the global recession.  We      estimate that the outbreak of the H1N1 flu virus reduced passenger revenue      by approximately $50 million during the quarter. |
|         |                                                                                                                                                                                                                                                                                                                                                                                     |
| ·  | We      recorded an operating loss of $154 million during the second quarter of      2009 as compared to an operating loss of $71 million in the second quarter      of 2008, due primarily to significantly reduced passenger revenue offset      in part by lower fuel expenses.                                                                                                       |
|         |                                                                                                                                                                                                                                                                                                                                                                                     |
| ·  | Unrestricted      cash, cash equivalents and short-term investments totaled $2.8 billion at      June 30, 2009.                                                                                                                                                                                                                                                                          |

| ·  | Consolidated      traffic decreased 6.4% and capacity decreased 7.8% during the second      quarter of 2009 as compared to the second quarter of 2008, resulting in a      consolidated load factor of 82.7% for the second quarter of      2009.                                                                                              |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                           |
| ·  | We      recorded a U.S. Department of Transportation (“DOT”) on-time arrival rate      of 78.7% and a mainline segment completion factor of 99.6% for the second      quarter of 2009, compared to a DOT on-time arrival rate of 73.1% and a      mainline segment completion factor of 99.5% for the second quarter of      2008. |
|         |                                                                                                                                                                                                                                                                                                                                           |
| ·  | We      placed one new Boeing 737-900ER aircraft into service and removed four      Boeing 737-500 aircraft fromservice.                                                                                                                                                                                                                       |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |     2009    |     2008    | Increase  (Decrease) |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------|------------------------------------------------|--------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                           |                                           |                           |
| Passengers      (thousands)      (1)                                                                                          | 16,348                                         | 17,962                                         | (9.0)%                         |
| Revenue      passenger miles (millions) (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 23,166                                         | 24,746                                         | (6.4)%                         |
| Available      seat miles (millions)      (3)                                                                                                                                                                                                                                                                                                                                                                                                  | 28,007                                         | 30,383                                         | (7.8)%                         |
| Passenger      load factor      (4)                                                                                           | 82.7%                                          | 81.4%                                          | 1.3 pts.                  |
| Passenger      revenue per available seat mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 9.88                                           | 12.01                                          | (17.7)%                        |
| Average      yield per revenue passenger mile (cents) (5)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 11.94                                          | 14.75                                          | (19.1)%                        |
| Average      price per gallon of fuel, including fuel taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $2.07                                          | $3.46                                          | (40.2)%                        |
| Fuel      gallons consumed      (millions)                                                                                                                                                                                                                                                                                                                                              | 430                                            | 478                                            | (10.0)%                        |

| (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.                                   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                              | Increase          | %      Increase  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|----------------------------------|------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                           |   2009                        |   2008       | (Decrease)       | (Decrease) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                              |                             |             |   |
| Operating      Revenue                                                                          | $3,126                                       | $4,044                      | $(918)           |   | (22.7)% |   |
| Operating      Expenses                                                                         | 3,280                                        | 4,115                       | (835)            |   | (20.3)% |   |
| Operating      Loss                                                                             | (154)                                             |     (71)     | 83          |   | NM      |   |
| Nonoperating      Income (Expense)                                                                                                                                                                                                                                                                                                                                                                                                             | (59)                                              |    22        | (81)             |   | NM      |   |
| Income      Tax      Benefit                                                                    |        -  |     44  |   (44) |   | (100.0)% |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                              |                             |             |   |   |   |
| Net      Loss                                                                                   | $ (213)                                      | $    (5)     | $ 208  |   | NM      |   |

|                                                                                                                                                                                                                                                                      |             Revenue          | Percentage      Increase (Decrease) in      Second Quarter 2009 vs      Second Quarter 2008 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                      |       (in      millions)                                                  | Revenue                                                                                               | RASM | ASMs |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                      |   |   |
| Passenger      revenue:                                                                                                                                                                                                                                                   |                                                                                                                                  |                                                                                                                      |   |   |
|   Domestic                                                   | $1,167                                                                                                                                |                                                                                                                      | (22.4)% |   | (14.3)% | (9.5)% |
|   Trans-Atlantic                                             | 577                                                                                                                                   |                                                                                                                      | (28.3)% |   | (19.8)% | (10.6)% |
|   Latin      America                                         | 345                                                                                                                                   |                                                                                                                      | (20.8)% |   | (16.5)% | (5.2)% |
|   Pacific                                                    |    211                                                                                                                 |                                                                                                                      | (12.3)% |   | (22.3)% | 12.8 % |
|   Total      Mainline                                        | 2,300                                                                                                                                 |                                                                                                                      | (22.9)% |   | (16.9)% | (7.3)% |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                      |   |   |   |   |
|   Regional                                                   |    467                                                                                                                 |                                                                                                                      | (29.9)% |   | (20.5)% | (11.8)% |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                      |   |   |   |   |
|     Total                                          | 2,767                                                                                                                                 |                                                                                                                      | (24.2)% |   | (17.7)% | (7.8)% |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                      |   |   |   |   |
| Cargo                                                                  | 82                                                                                                                                    |                                                                                                                      | (37.9)% |   |   |   |
| Other                                                                  |    277                                                                                                                 |                                                                                                                      | 5.7 % |   |   |   |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                      |   |   |   |   |
| Operating      Revenue                                                                                                                                                                                                                                                    | $3,126                                                                                                                                |                                                                                                                      | (22.7)% |   |   |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                    |    2009   |    2008   | Increase    (Decrease)   | %      Increase(Decrease) |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------|------------------------------------|--------------------------------------------------------|---------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                    |                               |                               |                                                   |                      |
| Aircraft fuel and related      taxes                                                                                                                                                                                                                                                                                                                                                                                    | $  891                   | $1,653                             | $(762)                                                 |                      | (46.1)% |   |
| Wages, salaries and related      costs                                                                                                                                                                                                                                                                                                                                                                                  | 799                           | 704                                | 95                                                |                      | 13.5 % |   |
| Aircraft      rentals                                                                   | 235                           | 246                                | (11)                                                   |                      | (4.5)% |   |
| Regional capacity purchase,      net                                                                                                                                                                                                                                                                                                                                                                                    | 217                           | 299                                | (82)                                                   |                      | (27.4)% |   |
| Landing fees and other      rentals                                                                                                                                                                                                                                                                                                                                                                                     | 216                           | 210                                | 6                                                 |                      | 2.9 % |   |
| Maintenance, materials and      repairs                                                                                                                                                                                                                                                                                                                                                                                 | 161                           | 167                                | (6)                                                    |                      | (3.6)% |   |
| Distribution      costs                                                                 | 150                           | 194                                | (44)                                                   |                      | (22.7)% |   |
| Depreciation and      amortization                                                                                                                                                                                                                                                                                                                                                                                      | 118                           | 108                                | 10                                                |                      | 9.3      % |   |
| Passenger      services                                                                 | 96                            | 107                                | (11)                                                   |                      | (10.3)% |   |
| Special      charges                                                                    | 44                            | 58                                 | (14)                                                   |                      | NM     |   |
| Other                                                                                   |    353              |    369              |  (16)                                             |                      | (4.3)% |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                    | $3,280                             | $4,115                             | $(835)                                                 |                      | (20.3)% |   |

| ·  | Aircraft fuel and      related taxes decreased due to a 40.2% decrease in consolidated jet      fuel prices and decreased flying.  Our average jet fuel price      per gallon including related taxes decreased to $2.07 in the second      quarter of 2009 from $3.46 in the second quarter of 2008.  Our      average jet fuel price includes losses related to our fuel hedging program      of $0.49 per gallon in the second quarter of 2009, compared to gains of      $0.17 per gallon in the second quarter of 2008. |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| ·  | Wages, salaries and      related costs increased primarily due to higher wage rates for      certain workgroups offset by a 6% reduction in the number of employees in      connection with capacity reductions in September 2008.  Expenses      in the second quarter of 2009 also include $41 million of higher pension      expense resulting from lower returns on plan assets.                                                                                                                                                   |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| ·  | Aircraft      rentals decreased due to the retirement of leased Boeing 737      aircraft in the second half of 2008 and the first half of      2009.  New aircraft delivered in 2008 and the first half of 2009      were purchased, with the related expense being reported in depreciation      and amortization.                                                                                                                                                                                                                    |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| ·  | Regional capacity      purchase, net, includes expenses related to our capacity purchase      agreements.  Our most significant capacity purchase agreement is      with ExpressJet.  We also have agreements with Chautauqua,      Colgan and CommutAir.  The net amounts consisted of the      following for the three months ended June 30 (in millions, except      percentage changes):                                                                                                                       |

|                                 |                                                 |                                                                               | Increase   | %      Increase |
|--------------------------------------|------------------------------------------------------|------------------------------------------------------------------------------------|----------------------|-----------------|
|                                 |   2009       |   2008            | (Decrease)           | (Decrease)      |
|                                 |                                                 |                                                                               |                 |            |
| Capacity      purchase expenses      | $217                                                 |                                                                               | $360            |            | $(143) |   | (39.7)% |   |
| Aircraft      sublease income        |       -                |                                                                               |  (61)           |            |   (61) |   | (100.0)% |   |
| Regional      capacity purchase, net | $217                                                 |                                                                               | $299            |            | $ (82)  |   | (27.4)% |   |

|         | Capacity      purchase expenses decreased due to rate reductions in conjunction with our      amended capacity purchase agreement with ExpressJet effective July 1, 2008      and capacity reductions.  There was no aircraft sublease income      in the quarter ended June 30, 2009 because ExpressJet no longer pays      sublease rent for aircraft operated on our behalf.  Sublease      income of $5 million and $26 million on aircraft operated by ExpressJet      outside the scope of our capacity purchase agreement with ExpressJet for      the three months ended June 30, 2009 and 2008, respectively, is recorded      as other revenue.                                                        |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ·  | Distribution      costs decreased due to lower credit card discount fees, booking      fees and travel agency commissions, all of which resulted from decreased      passenger revenue.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ·  | Passenger      services expenses decreased due to fewer meals and beverages in the      second quarter of 2009 compared to the second quarter of 2008, resulting      from the decreased demand for air travel in the weak    economy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ·  | Special charges      in the second quarter of 2009 include $31 million of non-cash impairments      on owned Boeing 737-300 and 737-500 aircraft and related assets, an $8      million non-cash charge related to the disposition of three 737-300      aircraft and a $4 million non-cash charge to write off certain obsolete      spare parts.                                                                                                                                                                                                                                                                                                                                                                                   |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|         | Special      charges in the second quarter of 2008 include $37 million of non-cash      impairments on owned Boeing 737-300 and 737-500 aircraft and related      assets and a non-cash charge of $14 million to write down spare parts and      supplies for the Boeing 737-300 and 737-500 fleets to the lower of cost or      net realizable value, partially offset by $10 million of gains on the sale      of two owned Boeing 737-500 aircraft.  We received proceeds of      $26 million on the sale of these aircraft.  Other special      charges in the second quarter of 2008 include $17 million of charges      related to contract settlements with regional carriers and unused      facilities. |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| ·  | Other operating      expenses decreased due to insurance settlements received in 2009      related to Hurricane Ike, reduced technology expenses resulting from new      contracts, lower expense due to station closings, the impact on certain      expenses of more favorable foreign currency exchange rates, lower OnePass      reward expenses and lower ground handling, security and outside services      costs as a result of capacity reductions, partially offset by increases in      expenses resulting from changes in how certain costs are handled under our      capacity purchase agreement withExpressJet.                                                                                                       |

| ·  | Net interest      expense increased $11 million primarily as a result of lower      interest income.                                                                                                                                                                                                                                                   |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                   |
| ·  | Gain on sale of      investments in 2008 consisted of $78 million related to the sale of      our remaining interest in Copa.                                                                                                                                                                                                                          |
|         |                                                                                                                                                                                                                                                                                                                                                   |
| ·  | Other-than-temporary      impairment losses on investments were $29 million in the second      quarter of 2008, reflecting the decline in value of student loan-related      auction rate securities.                                                                                                                                                  |
|         |                                                                                                                                                                                                                                                                                                                                                   |
| ·  | Other nonoperating      income (expense) included fuel hedge ineffectiveness gains of $8      million and $33 million in the second quarter of 2009 and 2008,      respectively.  This ineffectiveness was caused by our non-jet      fuel derivatives experiencing a higher relative increase in value than the      jet fuel being hedged. |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                     | Increase                       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |    2009    |    2008    | (Decrease) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                     |                                     |   |
| Mainline      Operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                     |                                     |   |
| Passengers      (thousands)                                                                                                   | 11,876                                   | 13,000                                   | (8.6)% |
| Revenue      passenger miles (millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 20,772                                   | 22,017                                   | (5.7)% |
| Available      seat miles      (millions)                                                                                                                                                                                                                                                                                                            | 24,963                                   | 26,933                                   | (7.3)% |
| Cargo      ton miles      (millions)                                                                                          | 219                                      | 263                                      | (16.7)% |
| Passenger      load factor:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                     |                                     |   |
|   Mainline                                                                                                          | 83.2%                                    | 81.7%                                    | 1.5 pts. |
|   Domestic                                                                                                          | 86.4%                                    | 84.7%                                    | 1.7 pts. |
|   International                                                                                                     | 80.2%                                    | 78.8%                                    | 1.4 pts. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                     |                                     |   |
| Passenger      revenue per available seat mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 9.21                                     | 11.08                                    | (16.9)% |
| Total      revenue per available seat mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 10.59                                    | 12.49                                    | (15.2)% |
| Average      yield per revenue passenger mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 11.07                                    | 13.55                                    | (18.3)% |
| Average      fare per revenue      passenger                                                                                                                                                                                                                                                                      | $195.82                                  | $231.94                                  | (15.6)% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                     |                                     |   |
| Cost      per available seat mile, including special      charges (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 10.85                                    | 12.45                                    | (12.9)% |
| Special      charges per available seat miles (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 0.18                                     | 0.16                                     | NM      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                     |                                     |   |
| Average      price per gallon of fuel, including fuel taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $2.08                                    | $3.45                                    | (39.7)% |
| Fuel      gallons consumed (millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 358                                      | 395                                      | (9.4)% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                     |                                     |   |
| Aircraft      in fleet at end of period (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 351                                      | 375                                      | (6.4)% |
| Average      length of aircraft flight (miles)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 1,551                                    | 1,497                                    | 3.6 % |
| Average      daily utilization of each aircraft (hours)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 10:46                                    | 11:34                                    | (7.0)% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                     |                                     |   |
| Regional      Operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                     |                                     |   |
| Passengers      (thousands)                                                                                                   | 4,472                                    | 4,962                                    | (9.9)% |
| Revenue      passenger miles (millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 2,394                                    | 2,729                                    | (12.3)% |
| Available      seat miles (millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 3,044                                    | 3,450                                    | (11.8)% |
| Passenger      load      factor                                                                                               | 78.7%                                    | 79.1%                                    | (0.4) pts. |
| Passenger      revenue per available seat mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 15.35                                    | 19.31                                    | (20.5) % |
| Average      yield per revenue passenger mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 19.51                                    | 24.41                                    | (20.1)% |
| Aircraft      in fleet at end of period (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 266                                      | 278                                      | (4.3)% |

| (1) | 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 our capacity purchase agreement with  ExpressJet. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                                                                                                                                                                                                                                            |    2009   |    2008   | Increase   (Decrease)  | %      Increase(Decrease) |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------|------------------------------------|--------------------------------------------|---------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                            |                               |                               |                                       |                      |
| Operating      Revenue                                                                        | $2,644                        | $3,365                        | $(721)                                     |                      | (21.4)% |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |                               |                               |                                       |                      |   |   |
| Operating      Expenses:                                                                                                                                                                                                                                                                                                                                                                        |                               |                               |                                       |                      |   |   |
|   Aircraft      fuel and related taxes                                                                                                                                                                                                                                                                                                                                                | 743                           | 1,363                         | (620)                                      |                      | (45.5)% |   |
|   Wages,      salaries and related costs                                                                                                                                                                                                                                                                                                                                              | 757                           | 689                           | 68                                         |                      | 9.9 % |   |
|   Aircraft      rentals                                                             | 157                           | 167                           | (10)                                       |                      | (6.0)% |   |
|   Landing      fees and other rentals                                                                                                                                                                                                                                                                                                                                                 | 189                           | 194                           | (5)                                        |                      | (2.6)% |   |
|   Maintenance,      materials and repairs                                                                                                                                                                                                                                                                                                                                             | 161                           | 167                           | (6)                                        |                      | (3.6)% |   |
|   Distribution      costs                                                           | 128                           | 164                           | (36)                                       |                      | (22.0)% |   |
|   Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                  | 115                           | 105                           | 10                                    |                      | 9.5 % |   |
|   Passenger      services                                                           | 89                            | 102                           | (13)                                       |                      | (12.7)% |   |
|   Special      charges                                                              | 44                            | 43                            | 1                                     |                      | NM     |   |
|   Other                                                                             |     325   |    359         |   (34)                           |                      | (9.5)% |   |
|                                                                                                                                                                                                                                                                                                                                                                                            | 2,708                         | 3,353                         |  (645)                                |                      | (19.2)% |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |                               |                               |                                       |                      |   |   |
| Operating      Income (Loss)                                                                                                                                                                                                                                                                                                                                                                    | $  (64)                  | $    12   | $  (76)                          |                      | NM     |   |

|                                                                                                                                                                                                                                                                                                                                                                                            |                         | Increase           | %      Increase                  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|------------------------------|----------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                            |   2009   |   2008   | (Decrease)                       | (Decrease)  |
|                                                                                                                                                                                                                                                                                                                                                                                            |                         |                         |                             |   |
| Operating      Revenue                                                                        | $482                    | $679                    | $(197)                           |   | (29.0)% |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |                         |                         |                             |   |   |   |
| Operating      Expenses:                                                                                                                                                                                                                                                                                                                                                                        |                         |                         |                             |   |   |   |
|   Aircraft      fuel and related taxes                                                                                                                                                                                                                                                                                                                                                | 148                     | 290                     | (142)                            |   | (49.0)%  |   |
|   Wages,      salaries and related costs                                                                                                                                                                                                                                                                                                                                              | 42                      | 15                      | 27                          |   | 180.0 % |   |
|   Aircraft      rentals                                                             | 78                      | 79                      | (1)                              |   | (1.3)% |   |
|   Regional      capacity purchase, net                                                                                                                                                                                                                                                                                                                                                | 217                     | 299                     | (82)                             |   | (27.4)% |   |
|   Landing      fees and other rentals                                                                                                                                                                                                                                                                                                                                                 | 27                      | 16                      | 11                          |   | 68.8      % |   |
|   Distribution      costs                                                           | 22                      | 30                      | (8)                              |   | (26.7)% |   |
|   Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                  | 3                       | 3                       | -                           |   | -       |   |
|   Passenger      services                                                           | 7                       | 5                       | 2                           |   | 40.0 % |   |
|   Special      charges                                                              | -                       | 15                      | (15)                             |   | NM     |   |
|   Other                                                                             |   28          |   10          |     18  |   | 180.0 % |   |
|                                                                                                                                                                                                                                                                                                                                                                                            | 572                     | 762                     | (190)                            |   | (24.9)% |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |                         |                         |                             |   |   |   |
| Operating      Loss                                                                           | $(90)                        | $ (83)                  | $    7  |   | 8.4      % |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |     2009    |     2008    | %      Increase (Decrease)  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------|------------------------------------------------|---------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                           |                                           |                                  |
| Passengers      (thousands)                                                                                                        | 30,756                                         | 34,401                                         | (10.6)%                               |
| Revenue      passenger miles (millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 42,956                                         | 47,025                                         | (8.7)%                                |
| Available      seat miles      (millions)                                                                                          | 54,331                                         | 58,759                                         | (7.5)%                                |
| Passenger      load      factor                                                                                                    | 79.1%                                          | 80.0%                                          | (0.9)      pts.                       |
| Passenger      revenue per available seat mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 9.91                                           | 11.70                                          | (15.3)%                               |
| Average      yield per revenue passenger mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 12.53                                          | 14.62                                          | (14.3)%                               |
| Average      price per gallon of fuel, including fuel taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | $1.95                                          | $3.14                                          | (37.9)%                               |
| Fuel      gallons consumed (millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 833                                            | 929                                            | (10.3)%                               |

|                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                              | Increase          | %      Increase              |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|----------------------------------|------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                           |   2009                        |   2008       | (Decrease)                   | (Decrease) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                              |                             |                         |   |
| Operating      Revenue                                                                          | $6,087                                       | $7,614                      | $(1,527)                     |   | (20.1)% |   |
| Operating      Expenses                                                                         | 6,295                                        | 7,751                       | (1,456)                      |   | (18.8)% |   |
| Operating      Loss                                                                             | (208)                                             | (137)                            | 71                      |   | 51.8      % |   |
| Nonoperating      Income (Expense)                                                                                                                                                                                                                                                                                                                                                                                                             | (141)                                             | (40)                             | (101)                        |   | NM     |   |
| Income      Tax      Benefit                                                                    |        -  |     90  |    (90)       |   | (100.0)% |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                              |                             |                         |   |   |   |
| Net      Loss                                                                                   | $ (349)                                      | $  (87)                | $   262  |   | NM     |   |

|                                                                                                                                                                                                                                                                      |             Revenue          | Percentage      Increase (Decrease) in      June 30, 2009 YTD vs      June 30, 2008 YTD |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                      |       (in      millions)                                                  | Revenue                                                                                           | RASM | ASMs |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                  |   |   |
| Passenger      revenue:                                                                                                                                                                                                                                                   |                                                                                                                                  |                                                                                                                  |   |   |
|   Domestic                                                   | $2,238                                                                                                                                |                                                                                                                  | (21.7)% |   | (12.3)% | (10.8)% |
|   Trans-Atlantic                                             | 1,052                                                                                                                                 |                                                                                                                  | (25.5)% |   | (19.7)% | (7.2)% |
|   Latin      America                                         | 765                                                                                                                                   |                                                                                                                  | (14.7)% |   | (13.2)% | (1.8)% |
|   Pacific                                                    |    443                                                                                                                 |                                                                                                                  | (10.9)% |   | (11.7)% | 0.9      % |
|   Total      Mainline                                        | 4,498                                                                                                                                 |                                                                                                                  | (20.6)% |   | (14.2)% | (7.5)% |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                  |   |   |   |   |
|   Regional                                                   |     886                                                                                                           |                                                                                                                  | (26.7)% |   | (20.2)% | (8.1)% |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                  |   |   |   |   |
|     Total                                          | 5,384                                                                                                                                 |                                                                                                                  | (21.7)% |   | (15.3)% | (7.5)% |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                  |   |   |   |   |
| Cargo                                                                  | 167                                                                                                                                   |                                                                                                                  | (34.3)% |   |   |   |
| Other                                                                  |    536                                                                                                                 |                                                                                                                  | 10.1 % |   |   |   |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                  |   |   |   |   |
| Operating      Revenue                                                                                                                                                                                                                                                    | $6,087                                                                                                                                |                                                                                                                  | (20.1)% |   |   |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                    |    2009   |    2008   | Increase  (Decrease)     | %      Increase(Decrease)  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------|------------------------------------|------------------------------------|----------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                    |                               |                               |                               |                       |
| Aircraft fuel and related      taxes                                                                                                                                                                                                                                                                                                                                                                                    | $1,626                             | $2,915                             | $(1,289)                           | (44.2)%                    |   |
| Wages, salaries and related      costs                                                                                                                                                                                                                                                                                                                                                                                  | 1,564                              | 1,432                              | 132                           | 9.2      %                 |   |
| Aircraft      rentals                                                                   | 472                                | 493                                | (21)                               | (4.3)%                     |   |
| Regional capacity purchase,      net                                                                                                                                                                                                                                                                                                                                                                                    | 431                                | 591                                | (160)                              | (27.1)%                    |   |
| Landing fees and other      rentals                                                                                                                                                                                                                                                                                                                                                                                     | 425                                | 418                                | 7                                  | 1.7      %                 |   |
| Maintenance, materials and      repairs                                                                                                                                                                                                                                                                                                                                                                                 | 314                                | 326                                | (12)                               | (3.7)%                     |   |
| Distribution      costs                                                                 | 307                                | 375                                | (68)                               | (18.1)%                    |   |
| Depreciation and      amortization                                                                                                                                                                                                                                                                                                                                                                                      | 229                                | 215                                | 14                            | 6.5      %                 |   |
| Passenger      services                                                                 | 183                                | 203                                | (20)                               | (9.9)%                     |   |
| Special      charges                                                                    | 48                                 | 50                                 | (2)                                | NM     |   |
| Other                                                                                   |     696        |    733              |      (37) | (5.0)%                     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                    | $6,295                             | $7,751                             | $(1,456)                           | (18.8)%                    |   |

| ·  | Aircraft fuel and      related taxes decreased due to a 37.9% decrease in consolidated jet      fuel prices and decreased flying.  Our average jet fuel price      per gallon including related taxes decreased to $1.95 in the first half of      2009 from $3.14 in the first half of 2008.  Our average jet fuel      price includes losses related to our fuel hedging program of $0.42 per      gallon in the first half of 2009, compared to gains of $0.12 per gallon in      the first half of 2008. |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| ·  | Wages, salaries and      related costs increased primarily due to higher wage rates for      certain workgroups offset by a 6% reduction in the number of employees in      connection with capacity reductions in September 2008.  Expenses      in the first half of 2009 also include $83 million of higher pension      expense resulting from lower returns on plan assets.                                                                                                                                       |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| ·  | Aircraft      rentals decreased due to the retirement of leased Boeing 737      aircraft in the second half of 2008 and the first half of      2009.  New aircraft delivered in 2008 and the first half of 2009      were purchased, with the related expense being reported in depreciation      and amortization.                                                                                                                                                                                                    |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| ·  | Regional capacity      purchase, net, includes expenses related to our capacity purchase      agreements.  Our most significant capacity purchase agreement is      with ExpressJet.  We also have agreements with Chautauqua,      Colgan and CommutAir.  The net amounts consisted of the      following for the six months ended June 30 (in millions, except percentage      changes):                                                                                                         |

|                                 |                                                 |                                                                               | Increase     | %      Increase |
|--------------------------------------|------------------------------------------------------|------------------------------------------------------------------------------------|------------------------|-----------------|
|                                 |   2009       |   2008            | (Decrease)             | (Decrease)      |
|                                 |                                                 |                                                                               |                   |            |
| Capacity      purchase expenses      | $431                                                 |                                                                               | $  713  |            | $(282) |   | (39.6)% |   |
| Aircraft      sublease income        |       -                |                                                                               | (122)                  |            | (122) |   | (100.0)% |   |
| Regional      capacity purchase, net | $431                                                 |                                                                               | $  591  |            | $(160) |   | (27.1)% |   |

|         | Capacity      purchase expenses decreased due to rate reductions in conjunction with our      amended capacity purchase agreement with ExpressJet effective July 1, 2008      and capacity reductions.  There was no aircraft sublease income      in the six months ended June 30, 2009 because ExpressJet no longer pays      sublease rent for aircraft operated on our behalf.  Sublease      income of $11 million and $52 million on aircraft operated by ExpressJet      outside the scope of our capacity purchase agreement with ExpressJet for      the six months ended June 30, 2009 and 2008, respectively, is recorded as      other revenue.                                                           |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ·  | Distribution      costs decreased due to lower credit card discount fees, booking      fees and travel agency commissions, all of which resulted from decreased      passenger revenue.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ·  | Passenger      services expenses decreased due to fewer meals and beverages in the      first half of 2009 compared to the first half of 2008, resulting from the      decreased demand for air travel in the weak economy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ·  | Special charges      (credits) in the first six months of 2009 include $31 million of      non-cash impairments on owned Boeing 737-300 and 737-500 aircraft and      related assets, an $8 million non-cash charge related to the disposition      of three 737-300 aircraft, a $4 million charge for future lease and other      related costs on a permanently grounded Boeing 737-300 aircraft and a $4      million non-cash charge to write off certain obsolete spare      parts.                                                                                                                                                                                                                                                  |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|         | Special      charges in the first six months of 2008 include $37 million of non-cash      impairments on owned Boeing 737-300 and 737-500 aircraft and related      assets and a non-cash charge of $14 million to write down spare parts and      supplies for the Boeing 737-300 and 737-500 fleets to the lower of cost or      net realizable value, partially offset by $18 million of gains on the sale      of five owned Boeing 737-500 aircraft.  We received proceeds of      $68 million on the sale of these aircraft.  Other special      charges in the first six months of 2008 include $17 million of charges      related to contract settlements with regional carriers and unused      facilities. |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ·  | Other operating      expenses decreased due to insurance settlements received in 2009      related to Hurricane Ike, reduced technology expenses resulting from new      contracts, lower expense due to station closings, the impact on certain      expenses of more favorable foreign currency exchange rates, lower OnePass      reward expenses and lower ground handling, security and outside services      costs as a result of capacity reductions, partially offset by increases in      expenses resulting from changes in how certain costs are handled under our      capacity purchase agreement with ExpressJet and foreign currency exchange      losses.                                                                 |

| ·  | Net interest      expense increased $30 million primarily as a result of lower      interest income.                                                                                                                                                                                                                                               |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                               |
| ·  | Gain on sale of      investments in 2008 consisted of $78 million related to the sale of      our remaining interests in Copa.                                                                                                                                                                                                                     |
|         |                                                                                                                                                                                                                                                                                                                                               |
| ·  | Other-than-temporary      impairment losses on investments were $29 million in the first half      of 2008, reflecting the decline in value of student loan-related auction      rate securities.                                                                                                                                                  |
|         |                                                                                                                                                                                                                                                                                                                                               |
| ·  | Other nonoperating      income (expense) included fuel hedge ineffectiveness gains of $6      million and $33 million in the first half of 2009 and 2008,      respectively.  This ineffectiveness was caused by our non-jet      fuel derivatives experiencing a higher relative increase in value than the      jet fuel being hedged. |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                     | Increase                       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |    2009    |    2008    | (Decrease) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                     |                                     |   |
| Mainline      Operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                     |                                     |   |
| Passengers      (thousands)                                                                                                   | 22,438                                   | 25,196                                   | (10.9)% |
| Revenue      passenger miles (millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 38,462                                   | 41,940                                   | (8.3)% |
| Available      seat miles      (millions)                                                                                               | 48,316                                   | 52,211                                   | (7.5)% |
| Cargo      ton miles      (millions)                                                                                          | 420                                      | 524                                      | (19.8)% |
| Passenger      load factor:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                     |                                     |   |
|   Mainline                                                                                                          | 79.6%                                    | 80.3%                                    | (0.7)      pts. |
|   Domestic                                                                                                          | 83.2%                                    | 83.4%                                    | (0.2) pts. |
|   International                                                                                                     | 76.2%                                    | 77.3%                                    | (1.1) pts. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                     |                                     |   |
| Passenger      revenue per available seat mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 9.31                                     | 10.85                                    | (14.2)% |
| Total      revenue per available seat mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 10.71                                    | 12.22                                    | (12.4)% |
| Average      yield per revenue passenger mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 11.69                                    | 13.50                                    | (13.4)% |
| Average      fare per revenue passenger                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | $202.48                                  | $227.07                                  | (10.8)% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                     |                                     |   |
| Cost      per available seat mile, including special charges (cents)      (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 10.71                                    | 12.13                                    | (11.7)% |
| Special      charges per available seat miles (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 0.10                                     | 0.06                                     | NM     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                     |                                     |   |
| Average      price per gallon of fuel, including fuel taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $1.96                                    | $3.13                                    | (37.4)% |
| Fuel      gallons consumed (millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 692                                      | 769                                      | (10.0)% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                     |                                     |   |
| Aircraft      in fleet at end of period (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 351                                      | 375                                      | (6.4)% |
| Average      length of aircraft flight (miles)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 1,527                                    | 1,477                                    | 3.4 % |
| Average      daily utilization of each aircraft (hours)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 10:34                                    | 11:23                                    | (7.1)% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                     |                                     |   |
| Regional      Operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                     |                                     |   |
| Passengers      (thousands)                                                                                                   | 8,318                                    | 9,205                                    | (9.6)% |
| Revenue      passenger miles (millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 4,494                                    | 5,085                                    | (11.6)% |
| Available      seat miles (millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 6,015                                    | 6,548                                    | (8.1)% |
| Passenger      load      factor                                                                                               | 74.7%                                    | 77.7%                                    | (3.0) pts. |
| Passenger      revenue per available seat mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 14.74                                    | 18.47                                    | (20.2)% |
| Average      yield per revenue passenger mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 19.72                                    | 23.78                                    | (17.1)% |
| Aircraft      in fleet at end of period (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 266                                      | 278                                      | (4.3)% |

| (1) | 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 our capacity purchase agreement with  ExpressJet. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                            |    2009                   |    2008   | Increase  (Decrease)           | %      Increase(Decrease)  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------|------------------------------------|------------------------------------------|----------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                            |                                               |                               |                                     |                       |
| Operating      Revenue                                                                        | $5,173                                             | $6,380                             | $(1,207)                                 | (18.9)%                    |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |                                               |                               |                                     |                       |   |
| Operating      Expenses:                                                                                                                                                                                                                                                                                                                                                                        |                                               |                               |                                     |                       |   |
|   Aircraft      fuel and related taxes                                                                                                                                                                                                                                                                                                                                                | 1,353                                              | 2,411                              | (1,058)                                  | (43.9)%                    |   |
|   Wages,      salaries and related costs                                                                                                                                                                                                                                                                                                                                              | 1,480                                              | 1,402                              | 78                                  | 5.6      %                 |   |
|   Aircraft      rentals                                                             | 315                                                | 336                                | (21)                                     | (6.3)%                     |   |
|   Landing      fees and other rentals                                                                                                                                                                                                                                                                                                                                                 | 373                                                | 387                                | (14)                                     | (3.6)%                     |   |
|   Maintenance,      materials and repairs                                                                                                                                                                                                                                                                                                                                             | 314                                                | 326                                | (12)                                     | (3.7)%                     |   |
|   Distribution      costs                                                           | 263                                                | 320                                | (57)                                     | (17.8)%                    |   |
|   Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                  | 223                                                | 209                                | 14                                  | 6.7      %                 |   |
|   Passenger      services                                                           | 171                                                | 194                                | (23)                                     | (11.9)%                    |   |
|   Special      charges                                                              | 48                                                 | 35                                 | 13                                       | NM     |   |
|   Other                                                                             |     633                        |   712                    |       (79) | (11.1)%                    |   |
|                                                                                                                                                                                                                                                                                                                                                                                            | 5,173                                              | 6,332                              | (1,159)                                  | (18.3)%                    |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |                                               |                               |                                     |                       |   |
| Operating      Income                                                                         | $        - | $    48        | $    (48)            | (100.0)%                   |   |

|                                                                                                                                                                                                                                                                                                                                                                                            |                                   | Increase                     | %      Increase                        |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------|----------------------------------------|----------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                            |   2009             |   2008             | (Decrease)                             | (Decrease)  |
|                                                                                                                                                                                                                                                                                                                                                                                            |                                   |                                   |                                   |   |
| Operating      Revenue                                                                        | $   914            | $1,234                            | $(320)                                 |   | (25.9)% |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |                                   |                                   |                                   |   |   |   |
| Operating      Expenses:                                                                                                                                                                                                                                                                                                                                                                        |                                   |                                   |                                   |   |   |   |
|   Aircraft      fuel and related taxes                                                                                                                                                                                                                                                                                                                                                | 273                               | 504                               | (231)                                  |   | (45.8)% |   |
|   Wages,      salaries and related costs                                                                                                                                                                                                                                                                                                                                              | 84                                | 30                                | 54                                |   | 180.0 % |   |
|   Aircraft      rentals                                                             | 157                               | 157                               | -                                 |   | -       |   |
|   Regional      capacity purchase, net                                                                                                                                                                                                                                                                                                                                                | 431                               | 591                               | (160)                                  |   | (27.1)% |   |
|   Landing      fees and other rentals                                                                                                                                                                                                                                                                                                                                                 | 52                                | 31                                | 21                                |   | 67.7      % |   |
|   Distribution      costs                                                           | 44                                | 55                                | (11)                                   |   | (20.0)% |   |
|   Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                  | 6                                 | 6                                 | -                                 |   | -       |   |
|   Passenger      services                                                           | 12                                | 9                                 | 3                                 |   | 33.3      % |   |
|   Special      charges                                                              | -                                 | 15                                | (15)                                   |   | NM     |   |
|   Other                                                                             |      63  |      21  |      42  |   | 200.0      % |   |
|                                                                                                                                                                                                                                                                                                                                                                                            | 1,122                             | 1,419                             | (297)                                  |   | (20.9)% |   |
|                                                                                                                                                                                                                                                                                                                                                                                            |                                   |                                   |                                   |   |   |   |
| Operating      Loss                                                                           | $ (208)                           | $ (185)                           | $    23            |   | 12.4      % |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                      |    2009    |    2008       | Change       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|---------------------------------------------|-----------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                      |                                     |                                        |                        |
| Capital      expenditures                                                                 | $(147)                                   | $(293)                                      | $ 146             |   |
| Aircraft      purchase deposits refunded, net                                                                                                                                                                                                                                                                                                                                                                             | 17                                  | 56                                     | (39)                        |   |
| Proceeds      from sales of short-term investments, net                                                                                                                                                                                                                                                                                                                                                                   | 233                                 | 82                                     | 151                    |   |
| Proceeds      from sales of property and equipment                                                                                                                                                                                                                                                                                                                                                                        | 7                                   | 74                                     | (67)                        |   |
| Decrease      (increase) in restricted cash, cash  equivalents      and short-term investments, net                                                                                                                                                                                                                                                                                                             |  23                            |  (21)                                  |  44               |   |
| Proceeds      from sale of Copa stock                                                                                                                                                                                                                                                                                                                                                                                     | -                                   | 149                                    | (149)                       |   |
| Proceeds      from sales of investments                                                                                                                                                                                                                                                                                                                                                                                   | 1                                   |     21             | (20)                        |   |
| Other                                                                                     |    (3)                    |       -  |    (3)       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                      | $ 131                          | $    68            | $   63  |   |

| Fleet      related (excluding aircraft to be acquired through  the      issuance of debt)                                                                                                                                                                                                                                                                                                                           |  $ 190            |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|
| Non-fleet                                                                           | 120                         |
| Spare      parts and capitalized interest                                                                                                                                                                                                                                                                                                                                                                                     |     56  |
|   Total                                                                   | $ 366                  |
| Aircraft      purchase deposits refunded                                                                                                                                                                                                                                                                                                                                                                                      |  (30)                       |
|   Projected      net capital expenditures                                                                                                                                                                                                                                                                                                                                                                           | $ 336                  |

|                                                                | 2009                                        | 2008                                   | Change      |
|---------------------------------------------------------------------|---------------------------------------------|---------------------------------------------|--------------------------------------|
|                                                                |                                        |                                        |                                 |
| Payments      on long-term debt and capital lease obligations       | $(169)                                      | $ (267)                                | $    98     |   |
| Proceeds      from issuance of long-term debt                       | 30                                     | 483                                    | (453)                                |   |
| Proceeds      from public offering of common stock                  | -                                      | 162                                    | (162)                                |   |
| Proceeds      from issuance of common stock pursuant to stock plans |       5  |       8  |     (3)          |   |
|                                                                | $(134)                                      | $  386                       | $(520)                               |   |

| Investment      in student loan-related auction rate securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Note      5  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|
| Fuel      hedges                                                                                              | Note      6  |
| Pension      obligations                                                                                      | Note      10 |
| Credit      card processing agreements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Note      15 |
| Credit      ratings                                                                                           | Note      15 |

Item 3.  Quantitative andQualitative Disclosures about Market Risk.

           Therehave been no material changes in market risk from the information provided inExhibit 99.3, “Quantitative and Qualitative Disclosures About Market Risk(adjusted to reflect the retrospective application of FSP APB 14-1 and certainreclassifications related to fuel and related taxes)” to our Current Report onForm 8-K dated April 24, 2009, except as follows:

|                                                                                                                                                                                                                                                                                                        | Maximum      Price              | Minimum      Price                          |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|---------------------------------------------|
|                                                                                                                                                                                                                                                                                                        | %      ofExpectedConsumption    | WeightedAverage      Price(per      gallon) | %      ofExpectedConsumption | WeightedAverage      Price(per      gallon) |
|                                                                                                                                                                                                                                                                                                        |                            |                                        |   |   |
| WTI      crude oil collars                                                                                                                                                                                                                                                                                  | 6%                              |                                        | $3.21 |   | 6% |   | $2.40 |   |
| WTI      crude oil swaps                                                                                                                                                                                                                                                                                    |   5    |                                        | 1.33 |   |   5    |   | 1.33 |   |
|      Total                                             | 11%                             |                                        |   |   | 11% |   |   |   |

| · | 45%      of our projected Japanese yen-denominated cash inflows |
|--------|-----------------------------------------------------------------|
| · | 8%      of our euro-denominated cashinflows                     |

|                                                                                                                                                                                                  | Increase      inFair      Value | Increase      in          Underlying      Exposure | ResultingNet      Loss |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|------------------------------------------------------------------------------------------------------|------------------------|
|                                                                                                                                                                                                  |                            |                                                                                                 |                   |
| Japanese      yen                               | $7                              |                                                                                                 | $(16)                  |   | $(9) |   |
| Euro                                            | 1                               |                                                                                                 | (16)                   |   | (15) |   |

Item1.                  LegalProceedings.

           Duringthe period between 1997 and 2001, we reduced or capped the base commissions thatwe paid to domestic travel agents, and in 2002 we eliminated those basecommissions.  These actions were similar to those also taken by other aircarriers.  We are a defendant, along with several other air carriers,in two lawsuits brought by travel agencies that purportedly opted out of a priorclass action entitled Sarah Futch Hall d/b/a/Travel Specialists v. United Air Lines, et al. (U.S.D.C., EasternDistrict of North Carolina), filed on June 21, 2000, in which the defendantairlines prevailed on summary judgment that was upheld onappeal.  These similar suits against Continental and other majorcarriers allege violations of antitrust laws in reducing and ultimatelyeliminating the base commissions formerly paid to travel agents and seekunspecified money damages and certain injunctive relief under the Clayton Actand the Sherman Anti-Trust Act.  The pending cases, which currentlyinvolve a total of 90 travel agency plaintiffs, are Tam Travel, Inc. v. DeltaAir Lines, Inc., et al. (U.S.D.C., Northern District of California),filed on April 9, 2003 and Swope Travel Agency, et al.v. Orbitz LLC et al. (U.S.D.C., Eastern District of Texas), filed on June5, 2003.  By order dated November 10, 2003, these actions weretransferred and consolidated for pretrial purposes by the Judicial Panel onMultidistrict Litigation to the Northern District of Ohio.  On October29, 2007, the judge for the consolidated lawsuit dismissed the case for failureto meet the heightened pleading standards established earlier in 2007 by theU.S. Supreme Court's decision in Bell Atlantic Corp. v.Twombly.  The plaintiffs have appealed to the Sixth CircuitCourt of Appeals.  In the consolidated lawsuit, we believe theplaintiffs' claims are without merit, and we intend to vigorously defend anyappeal.  Nevertheless, a final adverse court decision awardingsubstantial money damages could have a material adverse effect on our results ofoperations, financial condition or liquidity.

Item 1A.  Risk Factors

| ·  | 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;                                     |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                 |
| ·  | 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;    and |
|         |                                                                                                                                                                                                                                                                                                                 |
| ·  | difficulties      integrating our technology processes with Star Alliance      members.                                                                                                                                                                                                                              |

Item4.                  Submissionof Matters to a Vote of Security Holders.

| NOMINEE                      |  VOTES      FOR  | VOTES      WITHHELD |
|------------------------------|----------------------------|---------------------|
|                         |                       |                |
| Kirbyjon      H. Caldwell    | 86,459,465                 | 14,790,583          |   |
| Lawrence      W. Kellner     | 88,924,629                 | 12,325,419          |   |
| Douglas      H. McCorkindale | 88,726,267                 | 12,523,781          |   |
| Henry      L. Meyer III      | 86,576,289                 | 14,673,759          |   |
| Oscar      Munoz             | 87,902,923                 | 13,347,125          |   |
| Jeffery      A. Smisek       | 88,944,439                 | 12,305,609          |   |
| Karen      Hastie Williams   | 54,142,431                 | 47,107,617          |   |
| Ronald      B. Woodard       | 87,676,178                 | 13,573,870          |   |
| Charles      A. Yamarone     | 86,434,972                 | 14,815,076          |   |

|   VOTES      FOR   | VOTES      AGAINST | VOTES      ABSTAINING | BROKER      NON-VOTES |
|----------------------------------------|--------------------|-----------------------|-----------------------|
|                                   |               |                  |                  |
| 72,918,619                             | 466,161            | 1,579,032             |                  | 26,286,236 |   |

|   VOTES      FOR   | VOTES      AGAINST | VOTES      ABSTAINING |   |
|----------------------------------------|--------------------|-----------------------|--------|
|                                   |               |                  |   |
| 100,411,268                            | 541,514            | 297,266               |   |   |   |

|   VOTES      FOR   | VOTES      AGAINST | VOTES      ABSTAINING | BROKER      NON-VOTES |
|----------------------------------------|--------------------|-----------------------|-----------------------|
|                                   |               |                  |                  |
| 2,586,345                              | 70,508,527         | 1,868,939             |                  | 26,286,237 |   |

|   VOTES      FOR   | VOTES      AGAINST | VOTES      ABSTAINING | BROKER      NON-VOTES |
|----------------------------------------|--------------------|-----------------------|-----------------------|
|                                   |               |                  |                  |
| 11,218,126                             | 63,293,102         | 452,584               |                  | 26,286,236 |   |

Item 5.  Other Information.

Exhibits.

|   | 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).                 |
|--------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |       |                                                                                                                                                                                                                                                                                              |
|   | 3.1(a)     | Certification      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).        |
|   |       |                                                                                                                                                                                                                                                                                              |
|   | 3.1(a)(ii) | Certificate      of Increase – Series A Junior Participating Preferred Stock – incorporated      by reference to Exhibit 3.1(a)(ii) to Continental’s Quarterly Report on      Form 10-Q for the period ended June 30, 2008 (File no.      1-10323).                             |
|   |       |                                                                                                                                                                                                                                                                                              |
|   | 3.2        | Amended      and Restated Bylaws of Continental, effective as of June 10, 2009 –      incorporated by reference to Exhibit 3.2 to Continental’s Current Report      on Form 8-K dated June 10, 2009 (File no. 1-10323).                                                               |
|   |       |                                                                                                                                                                                                                                                                                              |
|   | 10.1       | Amendment      No. 2, dated March 25, 2009, to Agreement and Lease dated as of May 1987,      as supplemented, between Continental and Cleveland regarding Hopkins      International Airport.                                                                                                    |
|   |       |                                                                                                                                                                                                                                                                                              |
|   | 10.2       | Amendment      No. 3, dated April 3, 2009, to Agreement and Lease dated as of May 1987,      as supplemented, between Continental and Cleveland regarding Hopkins      International Airport.                                                                                                     |
|   |       |                                                                                                                                                                                                                                                                                              |
|   | 10.3       | Supplemental      Agreement No. 48, dated as of January 29, 2009, to Purchase Agreement No.      1951 (“P.A. 1951”), dated July 23, 1996, between Continental and The      Boeing Company (“Boeing”) relating to the purchase of Boeing 737      aircraft.  (1) |
|   |       |                                                                                                                                                                                                                                                                                              |
|   | 10.4       | Supplemental      Agreement No. 49, dated as of May 1, 2009, to P.A.      1951.  (1)                                                                                                                                                                                                    |
|   |       |                                                                                                                                                                                                                                                                                              |
|   | 10.5       | Supplemental      Agreement No. 15, dated as of October 15, 2008, to Purchase Agreement No.      2061 (“P.A. 2061”), dated October 10, 1997, between Continental and Boeing      relating to the purchase of Boeing 777      aircraft.  (1)                                 |
|   |       |                                                                                                                                                                                                                                                                                              |
|   | 10.6       | Supplemental      Agreement No. 16, dated as of May 1, 2009, to P.A.      2061.  (1)                                                                                                                                                                                                    |
|   |       |                                                                                                                                                                                                                                                                                              |
|   | 31.1       | Rule      13a-14 (a)/15d-14 (a) Certification of Chief Executive      Officer.                                                                                                                                                                                                                    |
|   |       |                                                                                                                                                                                                                                                                                              |
|   | 31.2       | Rule      13a-14 (a)/15d-14 (a) Certification of Chief Financial      Officer.                                                                                                                                                                                                                    |
|   |       |                                                                                                                                                                                                                                                                                              |
|   | 32.1       | Section      1350 Certifications.                                                                                                                                                                                                                                                                 |

| (1)   | Continental      has applied to the SEC for confidential treatment of a portion of this      exhibit. |
|-----------------|-------------------------------------------------------------------------------------------------------|

----

|                                                        | CONTINENTAL AIRLINES,      INC.           |
|-------------------------------------------------------------|---------------------------------------------------------------------------------------------|
|                                                        |                                                                                        |                      Registrant |
|                                                        |                                                                                        |   |
|                                                        |                                                                                        |   |
| Date:  July 21,      2009     | by:                                                                                         | /s/ Chris      Kenny                                |
|                                                        |                                                                                        | Chris      Kenny |
|                                                        |                                                                                        | Vice      President and Controller |
|                                                        |                                                                                        | (Principal      Accounting Officer) |

----

INDEX TO EXHIBITS

| 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).                 |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |                                                                                                                                                                                                                                                                                              |
| 3.1(a)     | Certification      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).        |
|       |                                                                                                                                                                                                                                                                                              |
| 3.1(a)(ii) | Certificate      of Increase – Series A Junior Participating Preferred Stock – incorporated      by reference to Exhibit 3.1(a)(ii) to Continental’s Quarterly Report on      Form 10-Q for the period ended June 30, 2008 (File no.      1-10323).                             |
|       |                                                                                                                                                                                                                                                                                              |
| 3.2        | Amended      and Restated Bylaws of Continental, effective as of June 10, 2009 –      incorporated by reference to Exhibit 3.2 to Continental’s Current Report      on Form 8-K dated June 10, 2009 (File no. 1-10323).                                                               |
|       |                                                                                                                                                                                                                                                                                              |
| 10.1       | Amendment      No. 2, dated March 25, 2009, to Agreement and Lease dated as of May 1987,      as supplemented, between Continental and Cleveland regarding Hopkins      International Airport.                                                                                                    |
|       |                                                                                                                                                                                                                                                                                              |
| 10.2       | Amendment      No. 3, dated April 3, 2009, to Agreement and Lease dated as of May 1987,      as supplemented, between Continental and Cleveland regarding Hopkins      International Airport.                                                                                                     |
|       |                                                                                                                                                                                                                                                                                              |
| 10.3       | Supplemental      Agreement No. 48, dated as of January 29, 2009, to Purchase Agreement No.      1951 (“P.A. 1951”), dated July 23, 1996, between Continental and The      Boeing Company (“Boeing”) relating to the purchase of Boeing 737      aircraft.  (1) |
|       |                                                                                                                                                                                                                                                                                              |
| 10.4       | Supplemental      Agreement No. 49, dated as of May 1, 2009, to P.A.      1951.  (1)                                                                                                                                                                                                    |
|       |                                                                                                                                                                                                                                                                                              |
| 10.5       | Supplemental      Agreement No. 15, dated as of October 15, 2008, to Purchase Agreement No.      2061 (“P.A. 2061”), dated October 10, 1997, between Continental and Boeing      relating to the purchase of Boeing 777      aircraft.  (1)                                 |
|       |                                                                                                                                                                                                                                                                                              |
| 10.6       | Supplemental      Agreement No. 16, dated as of May 1, 2009, to P.A.      2061.  (1)                                                                                                                                                                                                    |
|       |                                                                                                                                                                                                                                                                                              |
| 31.1       | Rule      13a-14 (a)/15d-14 (a) Certification of Chief Executive      Officer.                                                                                                                                                                                                                    |
|       |                                                                                                                                                                                                                                                                                              |
| 31.2       | Rule      13a-14 (a)/15d-14 (a) Certification of Chief Financial      Officer.                                                                                                                                                                                                                    |
|       |                                                                                                                                                                                                                                                                                              |
| 32.1       | Section      1350 Certifications.                                                                                                                                                                                                                                                                 |

| (1)   | Continental      has applied to the SEC for confidential treatment of a portion of this      exhibit. |
|-----------------|-------------------------------------------------------------------------------------------------------|