----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 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 MARCH 31, 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      _____*(*Registrant      is not subject to the requirements of Rule 405 of Regulation S-T at this      time.)     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 | 26     |
|     |                                                                                            |                       |
| Item      3.  | Quantitative and      Qualitative Disclosures about Market Risk                                 | 41                         |
|          |                                                                                            |                       |
| Item      4.  | Controls and Procedures                                                                         | 42                         |
|          |                                                                                            |                       |
| PART      II  | OTHER      INFORMATION                                                                          |                       |
|          |                                                                                            |                       |
| Item      1.  | Legal Proceedings                                                                               | 43                         |
|          |                                                                                            |                       |
| Item      1A. | Risk      Factors                                                                               | 43                         |
|          |                                                                                            |                       |
| Item      2.  | Unregistered Sales of      Equity Securities and Use of      Proceeds                           | 44                         |
|          |                                                                                            |                       |
| Item      3.  | Defaults Upon Senior      Securities                                                            | 44                         |
|          |                                                                                            |                       |
| Item      4.  | Submission of Matters to      a Vote of Security      Holders                                   | 44                         |
|          |                                                                                            |                       |
| Item      5.  | Other Information                                                                               | 45                         |
|          |                                                                                            |                       |
| Item      6.  | Exhibits                                                                                        | 46                         |
|          |                                                                                            |                       |
|          | Signatures                                                                                      | 47                         |
|          |                                                                                            |                       |
|          | Index to      Exhibits                                                                          | 48                         |

----

Item 1.  FinancialStatements.

CONSOLIDATED STATEMENTS OFOPERATIONS

|                                                                                        | Three Months Ended      March 31,                                                                                                                                                                     |
|---------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                        |    2009                                                                                                                                                                 |   |    2008    |   |
|                                                                                        | (Unaudited)                                |
| Operating      Revenue:                                                                     |                                                                                                                                                                                                  |   |
|    Passenger      (excluding fees and taxes of $346 and $376)                | $2,617                                                                                                                                                                                           |   | $3,223  |   |
|    Cargo                                                                     | 85                                                                                                                                                                                               |   | 122  |   |
|    Other                                                                     |    260                                                                                                                                                                            |   |    225  |   |
|                                                                                        | 2,962                                                                                                                                                                                            |   | 3,570  |   |
| Operating      Expenses:                                                                    |                                                                                                                                                                                                  |   |   |   |
|    Wages,      salaries and related costs                                    | 765                                                                                                                                                                                              |   | 729  |   |
|    Aircraft      fuel and related taxes                                      | 735                                                                                                                                                                                              |   | 1,262  |   |
|    Aircraft      rentals                                                     | 237                                                                                                                                                                                              |   | 247  |   |
|    Regional      capacity purchase, net                            | 213                                                                                                                                                                                              |   | 292  |   |
|    Landing      fees and other rentals                                       | 209                                                                                                                                                                                              |   | 207  |   |
|    Distribution      costs                                                   | 156                                                                                                                                                                                              |   | 182  |   |
|    Maintenance,      materials and repairs                                   | 153                                                                                                                                                                                              |   | 159  |   |
|    Depreciation      and amortization                                        | 111                                                                                                                                                                                              |   | 106  |   |
|    Passenger      services                                                   | 88                                                                                                                                                                                               |   | 96  |   |
|    Special      charges (credits)                                            | 4                                                                                                                                                                                                |   | (8) |   |
|    Other                                                                |    346                                                                                                                                                                            |   |    364  |   |
|                                                                                        | 3,017                                                                                                                                                                                            |   | 3,636  |   |
|                                                                                        |                                                                                                                                                                                                  |   |   |   |
| Operating      Loss                                                                         |    (55)                                                                                                                                                                                |   |    (66) |   |
|                                                                                        |                                                                                                                                                                                                  |   |   |   |
| Nonoperating      Income (Expense):                                                         |                                                                                                                                                                                                  |   |   |   |
|    Interest      expense                                                     | (93)                                                                                                                                                                                                  |   | (93) |   |
|    Interest      capitalized                                                 | 8                                                                                                                                                                                                |   | 9  |   |
|    Interest      income                                                      | 4                                                                                                                                                                                                |   | 24  |   |
|    Other,      net                                                           |         -                                                                                                                                                |   |      (1) |   |
|                                                                                        |    (81)                                                                                                                                                                                |   |    (61) |   |
|                                                                                        |                                                                                                                                                                                                  |   |   |   |
| Loss      before Income Taxes                                                               | (136)                                                                                                                                                                                                 |   | (127) |   |
|                                                                                        |                                                                                                                                                                                                  |   |   |   |
| Income      Tax Benefit                                                                     |       -                                                                                                                                                            |   |       45  |   |
|                                                                                        |                                                                                                                                                                                                  |   |   |   |
| Net      Loss                                                                               | $(136)                                                                                                                                                                                                |   | $  (82) |   |
|                                                                                        |                                                                                                                                                                                                  |   |   |   |
| Basic      and Diluted Loss per Share                                                       | $(1.10)                                                                                                                                                                                               |   | $(0.82) |   |
|                                                                                        |                                                                                                                                                                                                  |   |   |   |
| Shares      Used for Basic and Diluted      Computation       |    123                                                                                                                                                                            |   |      98  |   |

----

CONTINENTAL AIRLINES, INC.

|                                                                                                                                                                          | March      31,                                                | December      31,                                                                  | March      31,                                                |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------|------------------------------------------------------------------------------------|------------------------------------------------------------------------------|
| ASSETS                                                                                                                                                                        |      2009             |       2008        |      2008             |
|                                                                                                                                                                          | (Unaudited)                                                   |                                                                               | (Unaudited)                                                        |
|                                                                                                                                                                          |                                                                         |                                                                               |                                                                         |
| Current      Assets:                                                                                                                                                          |                                                                         |                                                                               |                                                                         |
|    Cash      and cash equivalents                                                                                                                              | $   2,210                                                |                                                                               | $   2,165                                                |   | $ 2,230  |   |
|    Short-term      investments                                                                                                                                 |      438                                       |                                                                               |      478                                       |   |     289  |   |
|       Total      unrestricted cash, cash equivalents and short-term               investments |      2,648                                     |                                                                               |  2,643                                                             |   |  2,519  |   |
|                                                                                                                                                                          |                                                                         |                                                                               |                                                                         |   |   |   |
|    Restricted      cash, cash equivalents and short-term investments                                                                                      | 173                                                                     |                                                                               | 190                                                                     |   | 109  |   |
|    Accounts      receivable, net                                                                                                                               | 546                                                                     |                                                                               | 453                                                                     |   | 719  |   |
|    Spare      parts and supplies, net                                                                                                                          | 229                                                                     |                                                                               | 235                                                                     |   | 315  |   |
|    Deferred      income taxes                                                                                                                                  | 170                                                                     |                                                                               | 216                                                                     |   | 273  |   |
|    Prepayments      and other                                                                                                                                  |           617                                       |                                                                               |           610                                       |   |     489  |   |
|       Total      current assets                                                                                                                 |   4,383                                                       |                                                                               |   4,347                                                       |   |  4,424  |   |
|                                                                                                                                                                          |                                                                         |                                                                               |                                                                         |   |   |   |
| Property      and Equipment:                                                                                                                                                  |                                                                         |                                                                               |                                                                         |   |   |   |
|    Owned      property and equipment:                                                                                                                          |                                                                         |                                                                               |                                                                         |   |   |   |
|       Flight      equipment                                                                                                                     | 8,583                                                                   |                                                                               | 8,446                                                                   |   | 7,590  |   |
|       Other                                                                                                                                     |   1,727                                                       |                                                                               |   1,694                                                       |   |  1,600  |   |
|                                                                                                                                                                          | 10,310                                                                  |                                                                               | 10,140                                                                  |   | 9,190  |   |
|        Less:  Accumulated      depreciation                                                                                      |   3,308                                                       |                                                                               |   3,229                                                       |   |  2,889  |   |
|                                                                                                                                                                          |   7,002                                                       |                                                                               |   6,911                                                       |   |  6,301  |   |
|                                                                                                                                                                          |                                                                         |                                                                               |                                                                         |   |   |   |
|    Purchase      deposits for flight equipment                                                                                                                 |           246                                       |                                                                               |           275                                       |   |     368  |   |
|                                                                                                                                                                          |                                                                         |                                                                               |                                                                         |   |   |   |
|    Capital      leases                                                                                                                                         | 194                                                                     |                                                                               | 194                                                                     |   | 238  |   |
|        Less:  Accumulated      amortization                                                                                      |             56                            |                                                                               |             53                            |   |       68  |   |
|                                                                                                                                                                          |      138                                       |                                                                               |      141                                       |   |     170  |   |
|           Total      property and equipment, net                                                                            |   7,386                                                       |                                                                               |   7,327                                                       |   |  6,839  |   |
|                                                                                                                                                                          |                                                                         |                                                                               |                                                                         |   |   |   |
| Routes      and airport operating rights, net                                                                                                                                 | 801                                                                     |                                                                               | 804                                                                     |   | 703  |   |
| Investment      in student loan-related auction rate securities                                                                                                          | -                                                                       |                                                                               | -                                                                       |   | 300  |   |
| Investment      in other companies                                                                                                                                            | -                                                                       |                                                                               | -                                                                       |   | 67  |   |
| Other      assets, net                                                                                                                                                        |      202                                       |                                                                               |      208                                       |   |      209  |   |
|                                                                                                                                                                          |                                                                         |                                                                               |                                                                         |   |   |   |
|            Total      Assets                                                                                           | $12,772                                                                 |                                                                               | $12,686                                                                 |   | $12,542  |   |

----

| LIABILITIES ANDSTOCKHOLDERS'      EQUITY                                                                                                                                                                                                                     | March      31,                                                             | December      31,                                                              | March      31,             |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------|-----------------------------------------------------|
|      2009                                                                                                                                                                                        |       2008          |      2008               |
|                                                                                                                                                                                                                                                         | (Unaudited)                                                                |                                                                                     | (Unaudited)                     |
|                                                                                                                                                                                                                                                         |                                                                                           |                                                                                     |                                                |
| Current      Liabilities:                                                                                                                                                                                                                                    |                                                                                           |                                                                                     |                                                |
|    Current      maturities of long-term debt and capital      leases                                                                                                                                                                     | $   578                                                                    |                                                                                     | $   519                         |   | $   539  |   |
|    Accounts      payable                                                                                                                                                                                                                      | 948                                                                                       |                                                                                     | 1,021                                          |   | 1,049  |   |
|    Air      traffic and frequent flyer liability                                                                                                                                                                                              | 2,192                                                                                     |                                                                                     | 1,881                                          |   | 2,498  |   |
|    Accrued      payroll                                                                                                                                                                                                                       | 365                                                                                       |                                                                                     | 345                                            |   | 342  |   |
|    Accrued      other liabilities                                                                                                                                                                                                             |    565                                                                     |                                                                                     |    708                          |   |     311  |   |
|       Total      current liabilities                                                                                                                                                                                           | 4,648                                                                                     |                                                                                     | 4,474                                          |   |  4,739  |   |
|                                                                                                                                                                                                                                                         |                                                                                           |                                                                                     |                                                |   |   |   |
| Long-Term      Debt and Capital Leases                                                                                                                                                                                                                       | 5,360                                                                                     |                                                                                     | 5,353                                          |   |  4,687  |   |
|                                                                                                                                                                                                                                                         |                                                                                           |                                                                                     |                                                |   |   |   |
| Deferred      Income Taxes                                                                                                                                                                                                                                   |    170                                                                     |                                                                                     |    216                          |   |     332  |   |
|                                                                                                                                                                                                                                                         |                                                                                           |                                                                                     |                                                |   |   |   |
| Accrued      Pension Liability                                                                                                                                                                                                                               |    1,395                                                                   |                                                                                     |    1,417                        |   |  485  |   |
|                                                                                                                                                                                                                                                         |                                                                                           |                                                                                     |                                                |   |   |   |
| Accrued      Retiree Medical Benefits                                                                                                                                                                                                                        |    236                                                                     |                                                                                     |    234                          |   |     239  |   |
|                                                                                                                                                                                                                                                         |                                                                                           |                                                                                     |                                                |   |   |   |
| Other                                                                                                                                                                                                                                                        |    810                                                                     |                                                                                     |    869                          |   |     572  |   |
|                                                                                                                                                                                                                                                         |                                                                                           |                                                                                     |                                                |   |   |   |
| Commitments      and Contingencies                                                                                                                                                                                                                           |                                                                                           |                                                                                     |                                                |   |   |   |
|                                                                                                                                                                                                                                                         |                                                                                           |                                                                                     |                                                |   |   |   |
| Stockholders'      Equity:                                                                                                                                                                                                                                   |                                                                                           |                                                                                     |                                                |   |   |   |
|    Preferred      Stock - $.01 par, 10,000,000 shares authorized;            zero, zero and one share of Series      B      issued      and outstanding, stated at par value |  -                                                                                   |                                                                                     |  -                                        |   |  -  |   |
|    Class      B common stock - $.01 par, 400,000,000 shares authorized;            123,531,752,      123,264,534 and 98,438,675      issued                                                      |      1                                                           |                                                                                     |  1                                        |   |  1  |   |
|    Additional      paid-in capital                                                                                                                                                                                                            | 2,043                                                                                     |                                                                                     | 2,038                                          |   | 1,656  |   |
|    Retained      earnings (accumulated deficit)                                                                                                                                                                                               | (296)                                                                                          |                                                                                     | (160)                                               |   | 344  |   |
|    Accumulated      other comprehensive income (loss)                                                                                                                                                                                         |   (1,595)                                                                            |                                                                                     |   (1,756)                                 |   |    (513) |   |
|       Total      stockholders' equity                                                                                                                                                                                          |        153                                             |                                                                                     |        123  |   |    1,488  |   |
|          Total      Liabilities and Stockholders' Equity                                                                                                                                                        | $ 12,772                                                                             |                                                                                     | $ 12,686                                  |   | $12,542  |   |

----

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                 |         Three Months Ended      March 31,                                 |
|--------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------|
|                                                                                 |    2009                                                                        |          2008     |   |
|                                                                                 | (Unaudited)                  |
| Cash      Flows from Operating Activities:                                           | $                                                                                                                 |   |   |   |
| Net loss                                                                             |                                                                                                              | $ (136) | $   (82) |   |
| Adjustments to reconcile net loss      to net cash provided by operating activities: |                                                                                                              |   |   |   |
|  Depreciation and      amortization                                        |                                                                                                              | 111  | 106  |   |
|  Special charges      (credits)                                                 |                                                                                                              | 4  | (8) |   |
|  Stock-based compensation      related to equity awards                         |                                                                                                              | 1  | 5  |   |
|  Deferred income tax benefit      (expense)                                |                                                                                                              | -  | (45) |   |
|  Other,      net                                                           |                                                                                                              | 17  | 9  |   |
|  Changes in operating assets      and liabilities                          |                                                                                                              |    113  |    84  |   |
|     Net cash      provided by operating activities               |                                                                                                              |    110  |      69  |   |
|                                                                                 |                                                                                                              |   |   |   |
| Cash      Flows from Investing Activities:                                           |                                                                                                              |   |   |   |
| Capital    expenditures                                                              |                                                                                                              | (86) | (101) |   |
| Aircraft purchase deposits      refunded, net                                        |                                                                                                              | 27  | 32  |   |
| Proceeds from sales of short-term      investments, net                              |                                                                                                              | 41  | 151  |   |
| Proceeds from sales of property      and equipment                              |                                                                                                              | 5  |     42  |   |
| Increase in restricted cash, cash      equivalents and short-term investments        |                                                                                                              |     17  |     (8) |   |
| Other                                                                                |                                                                                                              |       (1) |        -  |   |
| Net cash provided by investing      activities                                       |                                                                                                              |        3  |   116  |   |
|                                                                                 |                                                                                                              |   |   |   |
| Cash      Flows from Financing Activities:                                           |                                                                                                              |   |   |   |
| Payments on long-term debt and      capital lease obligations                        |                                                                                                              | (98) | (130) |   |
| Proceeds from issuance of      long-term debt                                        |                                                                                                              | 26  | 43  |   |
| Proceeds from issuance of common      stock pursuant to stock plans                  |                                                                                                              |         4  |        4  |   |
| Net cash used in financing      activities                                           |                                                                                                              |     (68) |    (83) |   |
|                                                                                 |                                                                                                              |   |   |   |
| Net      Increase in Cash and Cash Equivalents                                       |                                                                                                              | 45  | 102  |   |
|                                                                                 |                                                                                                              |   |   |   |
| Cash      and Cash Equivalents - Beginning of Period                                 |                                                                                                              | 2,165  | 2,128  |   |
|                                                                                 |                                                                                                              |   |   |   |
| Cash      and Cash Equivalents - End of Period                                       |                                                                                                              | $2,210  | $2,230  |   |
|                                                                                 |                                                                                                              |   |   |   |
| Investing      and Financing Activities Not Affecting Cash:                          |                                                                                                              |   |   |   |
| Property and equipment acquired      through the issuance of debt                    |                                                                                                              | $ 130  | $ 344  |   |

----

NOTES TO CONSOLIDATED FINANCIALSTATEMENTS

|                                  | Three Months ended      March 31, 2008 |
|---------------------------------------|----------------------------------------|
|                                  | OriginallyReported                     | AsAdjusted |
|                                  |                                   |   |
| Interest      expense                 | $(90)                                  |   | $(93) |   |
| Income      tax benefit               | 44                                |   | 45  |   |
| Net      loss                         | (80)                                   |   | (82) |   |
|                                  |                                   |   |   |   |
| Basic      and Diluted Loss per Share | $(0.81)                                |   | $(0.82) |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                            | December 31,      2008 | March 31,      2008  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|---------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                            | OriginallyReported     | AsAdjusted                | OriginallyReported | AsAdjusted |
|                                                                                                                                                                                                                                                                                                                                                                                                                            |                   |                      |   |   |
| Long-term      debt and capital      leases                                                               | $5,371            |                      | $5,353  |   | $4,713  |   | $4,687  |   |
| Deferred      income tax      liability                                                                   | 216               |                      | 216  |   | 323  |   | 332  |   |
| Additional      paid-in      capital                                                                      | 1,997             |                      | 2,038  |   | 1,615  |   | 1,656  |   |
| Retained      earnings (accumulated deficit)                                                                                                                                                                                                                                                                                                                                                                                    | (137)                  |                      | (160) |   | 368  |   | 344  |   |
| Total      stockholders’      equity                                                                | 105               |                      | 123  |   | 1,471  |   | 1,488  |   |

|                                                                                                                                                                                                                      |                 |   |                            | 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                                          | 21              |   | 21                         |        | -  |   | -  |   |
|   737-900                                            | 12              |   | 8                          |        | 4  |   | -  |   |
|   737-800                                            | 117             |   | 44                         |        | 73  |   | -  |   |
|   737-700                                            | 36              |   | 12                         |        | 24  |   | -  |   |
|   737-500                                            | 44              |   | -                          |        | 44  |   | -  |   |
|   737-300                                            |   20  |   |    12       |        |      8  |   |    -  |   |
|   Total      mainline                                | 354             |   |  152                  |        |  202  |   |    -  |   |
|                                                                                                                                                                                                                      |                 |   |                            |        |   |   |   |   |
| Regional      (b):                                                                                                                                                                                                        |                 |   |                            |        |   |   |   |   |
|   ERJ-145XR                                          | 89              |   | -                          |        | 89  |   | -   |   |
|   ERJ-145                                            | 145             |   | 18                         |        | 107  |   | 20  | (c) |
|   CRJ200LR                                           | 16              |   | -                          |        | -  |   | 16  | (c) |
|   Q200                                               | 16              |   | -                          |        | -  |   | 16  | (d) |
|   Q400                                               |   14  |   |     -  |        |      -  |   |  14  | (e) |
|   Total      regional                                | 280             |   |   18             |        |  196  |   |  66  |   |
|                                                                                                                                                                                                                      |                 |   |                            |        |   |   |   |   |
| Total                                                          | 634             |   | 170                        |        | 398  |   |   66  |   |

| (a) | Excludes      five grounded Boeing 737-500 aircraft and 11 grounded Boeing 737-300      aircraft.                                                         |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
| (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.                                                        |

| April      1, 2009 through December 31, 2009 | $     451 |
|----------------------------------------------|------------------------------------|
| Year      ending December 31,                |                               |
|                                         | 2010                               | 958 |
|                                         | 2011                               | 1,115 |
|                                         | 2012                               | 546 |
|                                         | 2013                               | 614 |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | March      31,                                       | December      31,                                                                                    | March      31,                                                   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------|------------------------------------------------------------------------------------------------------|------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |     2009     |         2008         |      2008      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                 |                                                                                                 |                                                             |
| Principal      amount of Convertible Notes                                                                                                                                                                                                                                                                                                                                                                                                                                     | $175                                                 |                                                                                                 | $175                                                             |   | $175 |   |
| Unamortized      discount                                                                                   | 15                                                   |                                                                                                 | 18                                                               |   | 26 |   |
| Net      carrying      amount                                                                               | 160                                                  |                                                                                                 | 157                                                              |   | 149 |   |
| Additional      paid-in      capital                                                                        | 64                                                   |                                                                                                 | 64                                                               |   | 64 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 2009           | 2008   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |           |   |
| Contractual      coupon      interest                                                                       | $ 2       |   | $ 2 |   |
| Amortization      of discount on 5% Convertible Notes                                                                                                                                                                                                                                                                                                                                                                                                                     |   3  |   |   3 |   |
|   Interest      expense                                                                           | $  5 |   | $  5 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |           |   |   |   |
| Effective      interest      rate                                                                           | 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 ofMarch 31,      2009 |  Level      1 |  Level      2 |  Level      3  | ValuationTechnique |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------|--------------------|--------------------|---------------------|--------------------|
|                                                                                                                                                                                                                                                                                                                                    |                                          |               |               |                |               |
| Cash      and cash      equivalents                                                          | $2,210                                   |               | $2,210             | -         | -             | (A) |
| Short-term      investments:                                                                                                                                                                                                                                                                                                            |                                          |               | -             |                |               |   |
|   Auction      rate      securities                                                | 229                                      |               |               | -         | $229               | (B) |
|   Other                                                                            | 209                                      |               | 209                | -         | -             | (A) |
| Restricted      cash, cash equivalents and    short-term investments                                                                                                                                                                                                                                           |  173                                |               |  173     |  -   |  -       |  (A) |
| Auction      rate securities put right                                                                                                                                                                                                                                                                                                  | 26                                       |               | -             | -         | 26            | (B) |
| Fuel      derivatives                                                                        | (252)                                         |               | -             | -         | (252)              | (A) |
| Foreign      currency derivatives                                                                                                                                                                                                                                                                                                  | 5                                        |               | -             | $5             | -             | (A) |

|                                                                                                                                                                                                                                                                                                                           | Fair      Value | Par      Value |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------|----------------|
|                                                                                                                                                                                                                                                                                                                           |            |           |
| Short-term      investments:                                                                                                                                                                                                                                                                                                   |            |           |
|   Available-for-sale                                                 | $133            |           | $166 |   |
|   Trading                                                            |   96  |           | 125 |   |
|     Total                                                  | $229            |           | $291 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                           | Student      Loan-RelatedAuction Rate      Securities | Auction      RateSecurities Put      Right | FuelDerivatives           |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------|--------------------------------------------|---------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                           |                                                  |                                       |                      |
| Balance      at beginning of period                                                                                                                                                                                                                                                                                                                                                                            | $229                                             |                                       | $26                       |   | $(415) |   |
| Settlements                                                                                        | -                                                |                                       | -                    |   | 77  |   |
| Gains      and losses:                                                                                                                                                                                                                                                                                                                                                                                         |                                                  |                                       |                      |   |   |   |
| Realized losses reported in      earnings                                                                                                                                                                                                                                                                                                                                                                      | -                                                |                                       | -                         |   | 141  |   |
| Unrealized losses reported in      other comprehensive         income      (loss)                                                                                                                                                                                                                                                                            |      -                  |                                       |     - |   |    (55) |   |
| Balance      as of March 31,      2009                                                             | $229                                             |                                       | $26                       |   | $(252) |   |

|                                                                                                                                                                                                                                                                                                        | Maximum      Price           | Minimum      Price                          |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|---------------------------------------------|
|                                                                                                                                                                                                                                                                                                        | %      ofExpectedConsumption | WeightedAverage      Price(per      gallon) | %      ofExpectedConsumption | WeightedAverage      Price(per      gallon) |
|                                                                                                                                                                                                                                                                                                        |                         |                                        |   |   |
| WTI      crude oil      collars                                                 | 15%                          |                                        | $3.41 |   | 15% |   | $2.56 |   |
| WTI      crude oil      swaps                                                   |   3%               |                                        | 1.33 |   |    3% |   | 1.33 |   |
|      Total                                             | 18%                          |                                        |   |   | 18% |   |   |   |

| ·  | 37%      of our projected Japanese yen-denominated cash inflows |
|--------------|-----------------------------------------------------------------|
|         |                                                            |
| ·  | 7%      of our projected euro-denominated cashinflows           |

|                                                                                                                                                 | Asset      Derivatives                    | Liability      Derivatives                                          |
|------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------|---------------------------------------------------------------------|
|                                                                                                                                                 | Balance      SheetLocation                | FairValue                                                           | Balance      SheetLocation | FairValue |
|                                                                                                                                                 |                                      |                                                                |   |   |
|   Fuel      derivatives                                                                                                                    | Prepayments      and other current assets | $    -                                     |   | Accrued      other current liabilities | $252  |   |
|                                                                                                                                                 |                                      |                                                                |   |   |   |   |
|   Foreign      currency derivatives                                                                                                        | Prepayments      and other current assets |     5        |   | Accrued      other current liabilities |       -        |   |
|     Total      derivatives                  |                                      | $    5                                          |   |   | $252 |   |

| 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                        | $(141)  |   | Other      nonoperatingincome      (expense) | $(2)  |   |
|                                                                                                                                      |                                                          |                                                                                       |                                                            |   |   |   |   |   |
| Foreign      currency       derivatives                                                                                              | 12                    |                                                                                       | Passenger      revenue                                     |    (1)          |   | Other      nonoperatingincome      (expense) |   -       |   |
| Total                       | $ (17)                                                   |                                                                                       |                                                            | $(142) |   |   | $(2) |   |

|                                                                                                                                                                                                                                                          |  2009                       |  2008                       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------|---------------------------------------|
|                                                                                                                                                                                                                                                          |                                  |                                  |
| Net      loss                                                                                                                                                                                                                                            | $(136)                                | $ (82)                           |
|                                                                                                                                                                                                                                                          |                                  |                                  |
| Other      comprehensive income (loss):                                                                                                                                                                                                                       |                                  |                                  |
|   Derivative      financial instruments:                                                                                                                                                                                                            |                                  |                                  |
|     Reclassification      into earnings (net of deferred taxes of $(10) in 2008)                                                                                                                                                          | 144                              | (19)                                  |
|     Changes      in fair value (net of deferred taxes of $6 in 2008)                                                                                                                                                                      | (17)                                  | 10                               |
|   Unrealized      loss on student loan-related auction rate securities (net      of deferred taxes of $5 in 2008)                                                                                                                              | -                                | (9)                                   |
|   Items      related to employee benefit plans:                                                                                                                                                                                                     |                                  |                                  |
|     Amortization      of net actuarial losses (net of deferred taxes of      $3 in 2008)                                                                                                                                                  | 27                               | 5                                |
|     Amortization      of prior service cost (net of deferred taxes of      $2 in 2008)                                                                                                                                                    |      7  |      5  |
| Comprehensive      income (loss)      adjustments                                   |  161                        |    (8)                 |
|                                                                                                                                                                                                                                                          |                                  |                                  |
| Total      comprehensive income (loss)                                                                                                                                                                                                                        | $  25                  | $(90)                                 |

|                                                                                                                                                                                                                                                                                                                                                                                                     | Defined          Benefit      Pension     | Retiree         Medical      Benefits   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                     |  2009                                                                                                 |  2008                                                                           |  2009  |  2008  |
|                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                            |                                                                                           |   |   |
| Service      cost                                                                                                                                                                                                                                                                                                                                                                                        | $ 16                                                                                                  | $ 15                                                                                 | $ 3  | $ 3  |
| Interest      cost                                                                                                                                                                                                                                                                                                                                                                                       | 38                                                                                                         | 37                                                                                        | 4  | 4  |
| Expected      return on plan assets                                                                                                                                                                                                                                                                                                                                                                      | (22)                                                                                                            | (41)                                                                                           | -  | -  |
| Amortization      of unrecognized net actuarial (gain)      loss                                                                                                                                                                                                                                                                                                                                         |   28                                                                                             |   8                                                                             | (1) |     -  |
| Amortization      of prior service      cost                                                           |     2                                                                                  |     2                                                                 |     5  |     5  |
| Net      periodic benefit      expense                                                                 | $ 62                                                                                                  | $ 21                                                                                 | $ 11  | $ 12  |

|                               | Balance,December 31,      2008 |  Accrual |  Payments | Balance,March 31,      2009 |
|------------------------------------|--------------------------------|---------------|----------------|-----------------------------|
|                               |                           |          |           |                        |
| Severance/medical      costs       | $28                            |          | $ -       |                        | $(4) |   | $24 |   |
| Permanently      grounded aircraft | 10                             |          | 4              |                        | (5) |   | 9 |   |
| Unused      facilities             | 20                             |          | -              |                        | (1) |   | 19 |   |

|                          |   2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   2008             |
|-------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                              |
| Operating      Revenue:       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                              |
|                          | Mainline                                                                                            | $2,529                       | $3,016  |
|                          | Regional                                                                                            |    433        |    554  |
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                              |   |
|                          | Total      Consolidated                                                                             | $2,962                       | $3,570  |
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                              |
| Operating      Income (Loss): |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                              |
|                          | Mainline                                                                                            | $    63  | $    36  |
|                          | Regional                                                                                            |  (118)                       |  (102) |
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                              |   |
|                          | Total      Consolidated                                                                             | $  (55)                 | $  (66) |
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                              |   |
| Net      Loss:                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                              |
|                          | Mainline                                                                                            | $  (15)                 | $  (14) |
|                          | Regional                                                                                            | (121)                             |    (68) |
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                              |   |
|                          | Total      Consolidated                                                                             | $(136)                            | $  (82) |

| ·  | a      total of $72 million if our unrestricted cash, cash equivalents and      short-term investments balance falls below $2.0billion;                                                                                                                                                                                             |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·  | a      total of $223 million if we fail to maintain the minimum unsecured debt      ratings specified above;                                                                                                                                                                                                                        |
| ·  | a      total of $423 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 $924 million if our unrestricted cash, cash equivalents and      short-term investments balance (plus any collateral posted at Chase) falls      below $1.0 billion or if our ratio of unrestricted cash, cash equivalents      and short-term investments to current liabilities falls below 0.22 to      1.0.     |

| · | We      recorded a net loss of $136 million in the first quarter of 2009, compared      to a net loss of $82 million in the first quarter of  2008.                                                                                                               |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                              |
| · | Passenger      revenue and cargo revenue decreased 18.8% and 30.3%, respectively, during      the first quarter of 2009 as compared to the first quarter of 2008      primarily due to the weak economy.                                                          |
|   |                                                                                                                                                                                                                                                              |
| · | We      recorded an operating loss of $55 million during the first quarter of 2009      as compared to an operating loss of $66 million in the first quarter of      2008, due primarily to reduced passenger revenue offset in part by lower      fuel expenses. |
|   |                                                                                                                                                                                                                                                              |
| · | Unrestricted      cash, cash equivalents and short-term investments totaled $2.6 billion at      March 31, 2009.                                                                                                                                                  |

| · | Consolidated      traffic decreased 11.2% and capacity decreased 7.2% during the first      quarter of 2009 as compared to the first quarter of  2008.                                                                                                                                                                                   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                     |
| · | We      recorded a U.S. Department of Transportation (“DOT”) on-time arrival rate      of 76% and a mainline segment completion factor of 99.2% for the first      quarter of 2009, compared to a DOT on-time arrival rate of 71% and a      mainline segment completion factor of 98.9% for the first quarter of      2008. |
|   |                                                                                                                                                                                                                                                                                                                                     |
| · | We      placed into service four new Boeing 737-900ER aircraft and one new Boeing      737-800 aircraft.                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                     |
| · | We      inaugurated service to Shanghai,China.                                                                                                                                                                                                                                                                                           |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |     2009    |     2008    | %      Increase (Decrease)  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------|------------------------------------------------|---------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                           |                                           |                                  |
| Passengers      (thousands)      (1)                                                                                                      | 14,408                                         | 16,440                                         | (12.4)%                               |
| Revenue      passenger miles (millions)      (2)                                                                                          | 19,790                                         | 22,280                                         | (11.2)%                               |
| Available      seat miles (millions)      (3)                                                                                             | 26,323                                         | 28,376                                         | (7.2)%                                |
| Passenger      load factor      (4)                                                                                                       | 75.2%                                          | 78.5%                                          | (3.3)      pts.                       |
| Passenger      revenue per available seat mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 9.94                                           | 11.36                                          | (12.5)%                               |
| Average      yield per revenue passenger mile (cents) (5)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 13.23                                          | 14.47                                          | (8.6)%                                |
| Average      price per gallon of fuel, including fuel taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | $1.82                                          | $2.80                                          | (35.0)%                               |
| Fuel      gallons consumed (millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 403                                            | 451                                            | (10.6)%                               |

| (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                                                                          | $2,962                                             | $3,570                                  | $(608)                      |   | (17.0)% |
| Operating      Expenses                                                                         | 3,017                                              | 3,636                                   | (619)                       |   | (17.0)% |
| Operating      Loss                                                                             |      (55)                      |      (66)           | (11)                        |   | (16.7)% |
| Nonoperating      Income (Expense)                                                                                                                                                                                                                                                                                                                                                                                                             | (81)                                                    | (61)                                         | 20                     |   | 32.8 % |
| Income      Tax      Benefit                                                                    |         -  |       45  |   (45)            |   | (100.0)% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                    |                                         |                        |   |   |
| Net      Loss                                                                                   | $  (136)                                      | $    (82)                | $   54  |   | 65.9 % |

|                                                                                                                                                                                                                                                                      |             Revenue          | Percentage      Increase (Decrease) in      First Quarter 2009 vs      First Quarter 2008 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                      |       (in      millions)                                                  | Revenue                                                                                             | RASM | ASMs |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                    |   |   |
| Passenger      revenue:                                                                                                                                                                                                                                                   |                                                                                                                                  |                                                                                                                    |   |   |
|   Domestic                                                   | $1,070                                                                                                                                |                                                                                                                    | (21.0)% |   | (10.0)% | (12.2)% |
|   Trans-Atlantic                                             | 475                                                                                                                                   |                                                                                                                    | (21.7)% |   | (19.3)% | (3.0)% |
|   Latin      America                                         | 421                                                                                                                                   |                                                                                                                    | (9.0)% |   | (10.3)% | 1.5 % |
|   Pacific                                                    |    232                                                                                                                 |                                                                                                                    | (9.6)% |   | 0.6      % | (10.2)% |
|   Total      Mainline                                        | 2,198                                                                                                                                 |                                                                                                                    | (18.0)% |   | (11.2)% | (7.6)% |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                    |   |   |   |   |
|   Regional                                                   |    419                                                                                                                 |                                                                                                                    | (22.8)% |   | (19.6)% | (4.1)% |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                    |   |   |   |   |
|     Total                                          | 2,617                                                                                                                                 |                                                                                                                    | (18.8)% |   | (12.5)% | (7.2)% |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                    |   |   |   |   |
| Cargo                                                                  | 85                                                                                                                                    |                                                                                                                    | (30.3)% |   |   |   |
| Other                                                                  |    260                                                                                                                 |                                                                                                                    | 15.6 % |   |   |   |
|                                                                                                                                                                                                                                                                      |                                                                                                                                  |                                                                                                                    |   |   |   |   |
| Operating      Revenue                                                 | $2,962                                                                                                                                |                                                                                                                    | (17.0)% |   |   |   |

|                                                                                                                                                                                                                                                                                                                                                                                                  |    2009   |    2008   | Increase   (Decrease) | %      Increase(Decrease) |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------|------------------------------------|--------------------------------------|---------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                  |                               |                               |                                 |                      |
| Wages, salaries and related      costs                                                                                                                                                                                                                                                                                                                                                                | $   765             | $   729        | $    36     |                      | 4.9 % |   |
| Aircraft fuel and related      taxes                                                                                                                                                                                                                                                                                                                                                                  | 735                                | 1,262                         | (527)                                |                      | (41.8)% |   |
| Aircraft rentals                                                                                                                                                                                                                                                                                                                                                                                      | 237                                | 247                           | (10)                                 |                      | (4.0)% |   |
| Regional capacity purchase,      net                                                                                                                                                                                                                                                                                                                                                                  | 213                                | 292                           | (79)                                 |                      | (27.1)% |   |
| Landing fees and other      rentals                                                                                                                                                                                                                                                                                                                                                                   | 209                                | 207                           | 2                               |                      | 1.0      % |   |
| Distribution costs                                                                                                                                                                                                                                                                                                                                                                                    | 156                                | 182                           | (26)                                 |                      | (14.3)% |   |
| Maintenance, materials and      repairs                                                                                                                                                                                                                                                                                                                                                               | 153                                | 159                           | (6)                                  |                      | (3.8)% |   |
| Depreciation and      amortization                                                                                                                                                                                                                                                                                                                                                                    | 111                                | 106                           | 5                               |                      | 4.7 % |   |
| Passenger services                                                                                                                                                                                                                                                                                                                                                                                    | 88                                 | 96                            | (8)                                  |                      | (8.3)% |   |
| Special charges      (credits)                                                                                                                                                                                                                                                                                                                                                                        | 4                                  | (8)                                | 12                              |                      | NM     |   |
| Other                                                                 |    346              |    364         |     (18)         |                      | (4.9)% |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  | $3,017                             | $3,636                        | $(619)                               |                      | (17.0)% |   |

| ·  | 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.  Expenses in the first      quarter of 2009 also include $41 million of higher pension expense      resulting from lower returns on plan assets, offset in part by a reduction      in variable compensation expense.                                                                        |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ·  | Aircraft fuel and      related taxes decreased due to a 35.0% decrease in consolidated jet      fuel prices.  Our average jet fuel price per gallon including      related taxes decreased to $1.82 in the first quarter of 2009 from $2.80      in the first quarter of 2008.  Our average jet fuel price      includes losses related to our fuel hedging program of $0.35 per gallon in      the first quarter of 2009, compared to gains of $0.06 per gallon in the      first quarter of 2008. |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ·  | Aircraft      rentals decreased due to the retirement of leased Boeing 737      aircraft in the second half of 2008 and the first quarter of      2009.  New aircraft delivered in 2008 and the first quarter 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 March 31 (in millions, except      percentage changes):                                                                                             |

|                                 |                                                 |                                                                               | Increase   | %      Increase |
|--------------------------------------|------------------------------------------------------|------------------------------------------------------------------------------------|----------------------|-----------------|
|                                 |   2009       |   2008            | (Decrease)           | (Decrease)      |
|                                 |                                                 |                                                                               |                 |            |
| Capacity      purchase expenses      | $213                                                 |                                                                               | $353            |            | $(140) |   | (39.7)% |   |
| Aircraft      sublease income        |      -                      |                                                                               |  (61)           |            |   (61) |   | (100.0)% |   |
| Regional      capacity purchase, net | $213                                                 |                                                                               | $292            |            | $  (79) |   | (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 quarter ended March 31, 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 the ExpressJet CPA for the three months ended March      31, 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, both of which resulted from decreased      passenger revenue.                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| ·  | Other operating      expenses decreased due to insurance settlements related to      Hurricane Ike, reduced technology expenses resulting from new contracts      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.                                                                                                                                                           |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| ·  | Special charges      (credits) in the first quarter of 2009 consisted of a $4 million      charge for future lease costs and return conditions on a permanently      grounded Boeing 737-300 aircraft.  Special charges (credits) in      the first quarter of 2008 consisted of an $8 million gain on the sale of      three Boeing 737-500 aircraft.                                                                                                                                                                                                                                                                                 |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                     | Increase                       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |    2009    |    2008    | (Decrease) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                     |                                     |   |
| Mainline      Operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                     |                                     |   |
| Passengers      (thousands)                                                                                                           | 10,562                                   | 12,197                                   | (13.4)% |
| Revenue      passenger miles      (millions)                                                                                          | 17,690                                   | 19,923                                   | (11.2)% |
| Available      seat miles      (millions)                                                                                             | 23,352                                   | 25,278                                   | (7.6)% |
| Cargo      ton miles      (millions)                                                                                                  | 200                                      | 261                                      | (23.4)% |
| Passenger      load factor:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                     |                                     |   |
|   Mainline                                                                                                                  | 75.8%                                    | 78.8%                                    | (3.0) pts. |
|   Domestic                                                                                                                  | 79.7%                                    | 81.9%                                    | (2.2) pts. |
|   International                                                                                                             | 72.1%                                    | 75.6%                                    | (3.5) pts. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                     |                                     |   |
| Passenger      revenue per available seat mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 9.41                                     | 10.60                                    | (11.2)% |
| Total      revenue per available seat mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 10.83                                    | 11.93                                    | (9.2)% |
| Average      yield per revenue passenger mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 12.43                                    | 13.45                                    | (7.6)% |
| Average      fare per revenue passenger                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | $209.94                                  | $221.87                                  | (5.4)% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                     |                                     |   |
| Cost      per available seat mile, including special charges (credits)      (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 10.56                                    | 11.79                                    | (10.4)% |
| Special      charges (credits) per available seat miles (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 0.02                                     | (0.03)                                   | NM      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                     |                                     |   |
| Average      price per gallon of fuel, including fuel taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | $1.83                                    | $2.80                                    | (34.6)% |
| Fuel      gallons consumed (millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 333                                      | 375                                      | (11.2)% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                     |                                     |   |
| Aircraft      in fleet at end of period (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 354                                      | 372                                      | (4.8)% |
| Average      length of aircraft flight (miles)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 1,502                                    | 1,457                                    | 3.1 % |
| Average      daily utilization of each aircraft (hours)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 10:22                                    | 11:11                                    | (7.4)% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                     |                                     |   |
| Regional      Operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                     |                                     |   |
| Passengers      (thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 3,846                                    | 4,243                                    | (9.4)% |
| Revenue      passenger miles      (millions)                                                                                          | 2,100                                    | 2,357                                    | (10.9)% |
| Available      seat miles      (millions)                                                                                             | 2,971                                    | 3,098                                    | (4.1)% |
| Passenger      load      factor                                                                                                       | 70.7%                                    | 76.1%                                    | (5.4) pts. |
| Passenger      revenue per available seat mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 14.11                                    | 17.54                                    | (19.6)% |
| Average      yield per revenue passenger mile (cents)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 19.96                                    | 23.05                                    | (13.4)% |
| Aircraft      in fleet at end of period (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 280                                      | 269                                      | 4.1 % |

| (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                                                                                    | $2,529                             | $3,016                        | $(487)                         |                      | (16.1)% |   |
|                                                                                                                                                                                                                                                                                                                                                                                                        |                               |                               |                           |                      |   |   |
| Operating      Expenses:                                                                                                                                                                                                                                                                                                                                                                                    |                               |                               |                           |                      |   |   |
|   Wages,      salaries and related costs                                                                                                                                                                                                                                                                                                                                                          | 723                                | 714                           | 9                         |                      | 1.3 % |   |
|   Aircraft      fuel and related taxes                                                                                                                                                                                                                                                                                                                                                            | 610                                | 1,048                         | (438)                          |                      | (41.8)% |   |
|   Landing      fees and other rentals                                                                                                                                                                                                                                                                                                                                                             | 184                                | 193                           | (9)                            |                      | (4.7)% |   |
|   Aircraft      rentals                                                                         | 158                                | 168                           | (10)                           |                      | (6.0)% |   |
|   Distribution      costs                                                                       | 135                                | 156                           | (21)                           |                      | (13.5)% |   |
|   Maintenance,      materials and repairs                                                                                                                                                                                                                                                                                                                                                         | 153                                | 159                           | (6)                            |                      | (3.8)% |   |
|   Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                              | 108                                | 104                           | 4                         |                      | 3.8 % |   |
|   Passenger      services                                                                       | 81                                 | 91                            | (10)                           |                      | (11.0)% |   |
|   Special      charges      (credits)                                                           | 4                                  | (8)                                | 12                        |                      | NM     |   |
|   Other                                                                                         |    310              |    355         |   (45)               |                      | (12.7)% |   |
|                                                                                                                                                                                                                                                                                                                                                                                                        | 2,466                              | 2,980                         | (514)                          |                      | (17.2)% |   |
|                                                                                                                                                                                                                                                                                                                                                                                                        |                               |                               |                           |                      |   |   |
| Operating      Income                                                                                     | $     63  | $    36   | $   27     |                      | 75.0 % |   |

|                                                                                                                                                                                                                                                                                                                                                                               |                             | Increase                    | %      Increase             |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|---------------------------------------|-----------------------------|
|                                                                                                                                                                                                                                                                                                                                                                               |   2009       |   2008            | (Decrease)                  | (Decrease)  |
|                                                                                                                                                                                                                                                                                                                                                                               |                             |                                  |                        |   |
| Operating      Revenue                                                           | $  433            | $554                             | $(121)                      |   | (21.8)% |   |
|                                                                                                                                                                                                                                                                                                                                                                               |                             |                                  |                        |   |   |   |
| Operating      Expenses:                                                                                                                                                                                                                                                                                                                                                           |                             |                                  |                        |   |   |   |
|   Wages,      salaries and related costs                                                                                                                                                                                                                                                                                                                                 | 42                          | 15                               | 27                     |   | 180.0 % |   |
|   Aircraft      fuel and related taxes                                                                                                                                                                                                                                                                                                                                   | 125                         | 214                              | (89)                        |   | (41.6)% |   |
|   Aircraft      rentals                                                                                                                                                                                                                                                                                                                                                  | 79                          | 79                               | -                      |   | -       |   |
|   Regional      capacity purchase, net                                                                                                                                                                                                                                                                                                                                   | 213                         | 292                              | (79)                        |   | (27.1)% |   |
|   Landing      fees and other rentals                                                                                                                                                                                                                                                                                                                                    | 25                          | 14                               | 11                     |   | 78.6 % |   |
|   Distribution      costs                                                                                                                                                                                                                                                                                                                                                | 21                          | 26                               | (5)                         |   | (19.2)% |   |
|   Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                     | 3                           | 2                                | 1                      |   | 50.0 % |   |
|   Passenger      services                                                                                                                                                                                                                                                                                                                                                | 7                           | 5                                | 2                      |   | 40.0 % |   |
|   Other                                                                                                                                                                                                                                                                                                                                                                  |     36  |      9  |    27   |   | 300.0 % |   |
|                                                                                                                                                                                                                                                                                                                                                                               |   551             |   656                  | (105)                       |   | (16.0)% |   |
|                                                                                                                                                                                                                                                                                                                                                                               |                             |                                  |                        |   |   |   |
| Operating      Loss                                                                                                                                                                                                                                                                                                                                                                | $(118)                           | $(102)                                | $   16  |   | 15.7 % |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                      |                                     | Cash            |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                      |                                     | Increase                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                      |    2009    |    2008    | (Decrease) |
|                                                                                                                                                                                                                                                                                                                                                                                                                      |                                     |                                     |   |
| Capital      expenditures                                                                 | $(86)                                    | $(101)                                   | $   15  |   |
| Purchase      deposits refunded in connection with future      aircraft deliveries, net                                                                                                                                                                                                                                                                                                                              | 27                                  | 32                                  | (5) |   |
| Proceeds      from sales of short-term investments, net                                                                                                                                                                                                                                                                                                                                                                   | 41                                  | 151                                 | (110) |   |
| Proceeds      from sales of property and equipment                                                                                                                                                                                                                                                                                                                                                                        | 5                                   | 42                                  | (37) |   |
| Decrease      (increase) in restricted cash, net                                                                                                                                                                                                                                                                                                                                                                          |   17                      |     (8)              | 25  |   |
| Other                                                                                     |     (1)              |      -     |      (1) |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                      | $     3    | $ 116                          | $(113) |   |

| Fleet      related (excluding aircraft to be acquired through the      issuance of debt)                                                                                                                                                                                                                                                                                                                                                                             | $210                       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|
| Non-fleet                                                                                                                  | 180                        |
| Spare      parts and capitalized      interest                                                                             |    57       |
|   Total                                                                                                          | $447                       |
| Aircraft      purchase      deposits                                                                                       |     7  |
|   Projected      net capital      expenditures                                                                   | $454                       |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                     | Cash            |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                     | Increase                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |    2009    |    2008    | (Decrease) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                     |                                     |   |
| Payments      on long-term debt and capital lease obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $ (98)                              | $ (130)                             | $32  |   |
| Proceeds      from issuance of long-term      debt                                                                                      | 26                                  | 43                                  | (17) |   |
| Proceeds      from issuance of common stock pursuant to stock plans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |      4     |      4     |    -  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | $  (68)                        | $  (83)                        | $15  |   |

Item 3.  Quantitative andQualitative Disclosures about Market Risk.

|                                                                                                                                                                                                                                                                                                        | Maximum      Price              | Minimum      Price                          |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|---------------------------------------------|
|                                                                                                                                                                                                                                                                                                        | %      ofExpectedConsumption    | WeightedAverage      Price(per      gallon) | %      ofExpectedConsumption | WeightedAverage      Price(per      gallon) |
|                                                                                                                                                                                                                                                                                                        |                            |                                        |   |   |
| WTI      crude oil      collars                                                 | 15%                             |                                        | $3.41 |   | 15% |   | $2.56 |   |
| WTI      crude oil      swaps                                                   |   3    |                                        | 1.33 |   |   3     |   | 1.33 |   |
|      Total                                             | 18%                             |                                        |   |   | 18% |   |   |   |

| · | 37%      of our projected Japanese yen-denominated cash inflows |
|--------|-----------------------------------------------------------------|
| · | 7%      of our euro-denominated cashinflows                     |

|                                                                                                                                                                                                  | Increase      inFair      Value | Increase      in          Underlying      Exposure | ResultingNet      Loss |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|------------------------------------------------------------------------------------------------------|------------------------|
|                                                                                                                                                                                                  |                            |                                                                                                 |                   |
| Japanese      yen                               | $10                             |                                                                                                 | $(26)                  |   | $(16) |   |
| Euro                                            | 2                               |                                                                                                 | (26)                   |   | (24) |   |

Item4.  Controls and Procedures.

----

Item1.                  LegalProceedings.

Item 1A.  Risk Factors

Item2.                  UnregisteredSales of Equity Securities and Use of Proceeds.

Item4.                  Submissionof Matters to a Vote of Security Holders.

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 November 20, 2008 –      incorporated by reference to Exhibit 3.2 to Continental’s Current Report      on Form 8-K dated November 20, 2008 (File no. 1-10323).                                                |
|   |       |                                                                                                                                                                                                                                                                                       |
|   | 10.1*      | Confidentiality      and Non-Competition Agreement dated April 23, 2009 between Continental and      Jeffery A. Smisek.                                                                                                                                                                    |
|   |       |                                                                                                                                                                                                                                                                                       |
|   | 10.2*      | Confidentiality      and Non-Competition Agreement dated April 23, 2009 between Continental and      Zane C. Rowe.                                                                                                                                                                         |
|   |       |                                                                                                                                                                                                                                                                                       |
|   | 10.3*      | Confidentiality      and Non-Competition Agreement dated April 23, 2009 between Continental and      James E. Compton.                                                                                                                                                                     |
|   |       |                                                                                                                                                                                                                                                                                       |
|   | 10.4*      | Confidentiality      and Non-Competition Agreement dated April 23, 2009 between Continental and      Mark J. Moran.                                                                                                                                                                        |
|   |       |                                                                                                                                                                                                                                                                                       |
|   | 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.                                                                                                                                                                                                                                                          |

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|                                                         | CONTINENTAL AIRLINES,      INC.           |
|--------------------------------------------------------------|---------------------------------------------------------------------------------------------|
|                                                         |                                                                                        |                      Registrant |
|                                                         |                                                                                        |   |
|                                                         |                                                                                        |   |
| Date:  April 24,      2009     | by:                                                                                         | /s/ Chris      Kenny                                |
|                                                         |                                                                                        | Chris      Kenny |
|                                                         |                                                                                        | Vice      President and Controller |
|                                                         |                                                                                        | (Principal      Accounting Officer) |

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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 November 20, 2008 –      incorporated by reference to Exhibit 3.2 to Continental’s Current Report      on Form 8-K dated November 20, 2008 (File no. 1-10323).                                                |
|       |                                                                                                                                                                                                                                                                                       |
| 10.1*      | Confidentiality      and Non-Competition Agreement dated April 23, 2009 between Continental and      Jeffery A. Smisek.                                                                                                                                                                    |
|       |                                                                                                                                                                                                                                                                                       |
| 10.2*      | Confidentiality      and Non-Competition Agreement dated April 23, 2009 between Continental and      Zane C. Rowe.                                                                                                                                                                         |
|       |                                                                                                                                                                                                                                                                                       |
| 10.3*      | Confidentiality      and Non-Competition Agreement dated April 23, 2009 between Continental and      James E. Compton.                                                                                                                                                                     |
|       |                                                                                                                                                                                                                                                                                       |
| 10.4*      | Confidentiality      and Non-Competition Agreement dated April 23, 2009 between Continental and      Mark J. Moran.                                                                                                                                                                        |
|       |                                                                                                                                                                                                                                                                                       |
| 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.                                                                                                                                                                                                                                                          |