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|                                                                                                                                                                                                                                                                                                                                                                                                                               |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 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, 2010                                                                                                                                                                                                                                                                                                                                                                                |
|  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 ____  |

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| Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ______        No _____  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of "large accelerated filer,” “accelerated filer" and “smaller reporting company” in Rule 12b-2 of the Exchange Act.:                                                                                                                                                              |
| Large accelerated filerNon-accelerated filer(Do not check ifsmaller reporting company)                                                                                                                                                                                                                                                                                                                                                                                                              |         X       _________ | Accelerated filerSmaller 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                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| As of April 21, 2010, 139,657,197 shares of Class B common stock of the registrant were outstanding.                                                                                                                                                                                                                                                                                                                                                                                                |

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|     |                                                                                 | 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 Conditionand Results of Operations |  24 |
|     |                                                                                 |     |
| Item 3.  | Quantitative and Qualitative Disclosures about Market Risk                           | 40       |
|     |                                                                                 |     |
| Item 4.  | Controls and Procedures                                                              | 40       |
|     |                                                                                 |     |
| PART II  | OTHER INFORMATION                                                                    |     |
|     |                                                                                 |     |
| Item 1.  | Legal Proceedings                                                                    | 42       |
|     |                                                                                 |     |
| Item 1A. | Risk Factors                                                                         | 42       |
|     |                                                                                 |     |
| Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds                          | 43       |
|     |                                                                                 |     |
| Item 3.  | Defaults Upon Senior Securities                                                      | 43       |
|     |                                                                                 |     |
| Item 4.  | (Removed and Reserved)                                                               | 43       |
|     |                                                                                 |     |
| Item 5.  | Other Information                                                                    | 43       |
|     |                                                                                 |     |
| Item 6.  | Exhibits                                                                             | 43       |
|     |                                                                                 |     |
|     | Signatures                                                                           | 45       |
|     |                                                                                 |     |
|     | Index to Exhibits                                                                    | 46       |

----

|                                          | Three Months Ended March 31,             |
|-----------------------------------------------|------------------------------------------|
|                                          |    2010    |   |    2009    |   |
|                                          | (Unaudited)                              |
| Operating Revenue:                            |                                     |   |
|                                          | Passenger:                               |   |   |
|                                          |                                     | Mainline | $2,322 |   | $2,198 |   |
|                                          |                                     | Regional |     481 |   |     419 |   |
|                                          |                                     |   | Total Passenger Revenue | 2,803 |   | 2,617 |   |
|                                          | Cargo                                    | 102 |   | 85 |   |
|                                          | Other                                    |    264 |   |    260 |   |
|                                          | Total Operating Revenue                  | 3,169 |   | 2,962 |   |
|                                          |                                     |   |   |   |
| Operating Expenses:                           |                                     |   |   |   |
|                                          | Aircraft fuel and related taxes          | 854 |   | 735 |   |
|                                          | Wages, salaries and related costs        | 796 |   | 765 |   |
|                                          | Aircraft rentals                         | 229 |   | 237 |   |
|                                          | Landing fees and other rentals           | 213 |   | 209 |   |
|                                          | Regional capacity purchase, net          | 201 |   | 213 |   |
|                                          | Distribution costs                       | 171 |   | 156 |   |
|                                          | Maintenance, materials and repairs       | 147 |   | 153 |   |
|                                          | Depreciation and amortization            | 134 |   | 111 |   |
|                                          | Passenger services                       | 93 |   | 88 |   |
|                                          | Special charges                          | 10 |   | 4 |   |
|                                          | Other                                    |    372 |   |    346 |   |
|                                          | Total Operating Expenses                 | 3,220 |   | 3,017 |   |
|                                          |                                     |   |   |   |
| Operating Loss                                |    (51                    | ) |    (55 | ) |
|                                          |                                     |   |   |   |
| Nonoperating Income (Expense):                |                                     |   |   |   |
|                                          | Interest expense                         | (94 | ) | (93 | ) |
|                                          | Interest capitalized                     | 7 |   | 8 |   |
|                                          | Interest income                          | 2 |   | 4 |   |
|                                          | Other, net                               |    (10 | ) |         - |   |
|                                          | Total Nonoperating Income (Expense)      |    (95 | ) |    (81 | ) |
|                                          |                                     |   |   |   |
| Loss before Income Taxes                      | (146                                     | ) | (136 | ) |
|                                          |                                     |   |   |   |
| Income Taxes                                  |       -    |   |       - |   |
|                                          |                                     |   |   |   |
| Net Loss                                      | $(146                                    | ) | $(136 | ) |
|                                          |                                     |   |   |   |
| Basic and Diluted Loss per Share              | $(1.05                                   | ) | $(1.10 | ) |
|                                          |                                     |   |   |   |
| Shares Used for Basic and Diluted Computation |    139                    |   |    123 |   |

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|                                     | March 31,                                                               | December 31,                                                                             | March 31,                                     |
|------------------------------------------|-------------------------------------------------------------------------|------------------------------------------------------------------------------------------|-----------------------------------------------|
| ASSETS                                   |    2010                                   |        2009        |    2009         |
|                                     | (Unaudited)                                                             |                                                                                     | (Unaudited)                                   |
|                                     |                                                                    |                                                                                     |                                          |
| Current Assets:                          |                                                                    |                                                                                     |                                          |
|                                     | Cash and cash equivalents                                               | $   2,861                                                                 |                                          | $   2,546 |   | $   2,210 |   |
|                                     | Short-term investments                                                  |      292                                                        |                                          |      310 |   |      438 |   |
|                                     |                                                                    | Total unrestricted cash, cash equivalents and  short-term investments          |  3,153                                   |   |  2,856 |   |  2,648 |   |
|                                     |                                                                    |                                                                                     |                                          |   |   |   |
|                                     | Restricted cash, cash equivalents and short-term  investments |  164                                                                                |                                          |  164 |   |  173 |   |
|                                     | Accounts receivable, net                                                | 617                                                                                      |                                          | 494 |   | 546 |   |
|                                     | Spare parts and supplies, net                                           | 277                                                                                      |                                          | 254 |   | 229 |   |
|                                     | Deferred income taxes                                                   | 205                                                                                      |                                          | 203 |   | 170 |   |
|                                     | Prepayments and other                                                   |       510                                                       |                                          |      402 |   |      617 |   |
|                                     |                                                                    | Total current assets                                                                     |    4,926                       |   |   4,373 |   |   4,383 |   |
|                                     |                                                                    |                                                                                     |                                          |   |   |   |
| Property and Equipment:                  |                                                                    |                                                                                     |                                          |   |   |   |
|                                     | Owned property and equipment:                                           |                                                                                     |                                          |   |   |   |   |
|                                     |                                                                    | Flight equipment                                                                         | 8,764                                         |   | 8,769 |   | 8,583 |   |
|                                     |                                                                    | Other                                                                                    |    1,807                       |   |   1,787 |   |   1,727 |   |
|                                     |                                                                    |                                                                                     | Flight equipment and other                    | 10,571 |   | 10,556 |   | 10,310 |   |
|                                     |                                                                    | Less:  Accumulated depreciation                                                |    3,603                       |   |   3,509 |   |   3,308 |   |
|                                     |                                                                    |                                                                                     | Owned property and equipment, net             |    6,968 |   |   7,047 |   |   7,002 |   |
|                                     |                                                                    |                                                                                     |                                          |   |   |   |
|                                     | Purchase deposits for flight equipment                                  |       298                                                       |                                          |      242 |   |      246 |   |
|                                     |                                                                    |                                                                                     |                                          |   |   |   |   |
|                                     | Capital leases                                                          | 194                                                                                      |                                          | 194 |   | 194 |   |
|                                     |                                                                    | Less:  Accumulated amortization                                                |         65 |   |        63 |   |        56 |   |
|                                     |                                                                    |                                                                                     | Capital leases, net                           |       129 |   |      131 |   |      138 |   |
|                                     |                                                                    |                                                                                     |                                          | Total property and equipment, net |    7,395 |   |   7,420 |   |   7,386 |   |
|                                     |                                                                    |                                                                                     |                                          |   |   |   |
| Routes and airport operating rights, net | 774                                                                     |                                                                                     | 778                                           |   | 801 |   |
| Other assets                             |       223                                 |                                                                                     |      210             |   |      202 |   |
|                                     |                                                                    |                                                                                     |                                          |   |   |   |
|                                     |                                                                    |                                                                                     |                                          | Total Assets | $13,318 |   | $12,781 |   | $12,772 |   |

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| LIABILITIES ANDSTOCKHOLDERS' EQUITY                                          | March 31,                                                                                                                              | December 31,                                                                 | March 31,                                  |
|------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------|--------------------------------------------|
|       2010       |         2009                                           |       2009       |
|                                                                         | (Unaudited)                                                                                                                            |                                                                         | (Unaudited)                                |
|                                                                         |                                                                                                                                   |                                                                         |                                       |
| Current Liabilities:                                                         |                                                                                                                                   |                                                                         |                                       |
|                                                                         | Current maturities of long-term debt and  capital leases                                                                     |  $   919                                                 |                                       |  $   975 |   |  $   578 |   |
|                                                                         | Accounts payable                                                                                                                       | 969                                                                          |                                       | 924 |   | 948 |   |
|                                                                         | Air traffic and frequent flyer liability                                                                                               | 2,473                                                                        |                                       | 1,855 |   | 2,192 |   |
|                                                                         | Accrued payroll                                                                                                                        | 369                                                                          |                                       | 367 |   | 365 |   |
|                                                                         | Accrued other liabilities                                                                                                              |    338                                                        |                                       |    268 |   |    565 |   |
|                                                                         |                                                                                                                                   | Total current liabilities                                                    | 5,068                                      |   | 4,389 |   | 4,648 |   |
|                                                                         |                                                                                                                                   |                                                                         |                                       |   |   |   |
| Long-Term Debt and Capital Leases                                            | 5,272                                                                                                                                  |                                                                         | 5,291                                      |   | 5,360 |   |
|                                                                         |                                                                                                                                   |                                                                         |                                       |   |   |   |
| Deferred Income Taxes                                                        | 205                                                                                                                                    |                                                                         | 203                                        |   |    170 |   |
|                                                                         |                                                                                                                                   |                                                                         |                                       |   |   |   |
| Accrued Pension Liability                                                    | 1,243                                                                                                                                  |                                                                         | 1,248                                      |   |    1,395 |   |
|                                                                         |                                                                                                                                   |                                                                         |                                       |   |   |   |
| Accrued Retiree Medical Benefits                                             | 221                                                                                                                                    |                                                                         | 216                                        |   |    236 |   |
|                                                                         |                                                                                                                                   |                                                                         |                                       |   |   |   |
| Other                                                                        | 812                                                                                                                                    |                                                                         | 844                                        |   |    810 |   |
|                                                                         |                                                                                                                                   |                                                                         |                                       |   |   |   |
| Commitments and Contingencies                                                |                                                                                                                                   |                                                                         |                                       |   |   |   |
|                                                                         |                                                                                                                                   |                                                                         |                                       |   |   |   |
| Stockholders' Equity:                                                        |                                                                                                                                   |                                                                         |                                       |   |   |   |
|                                                                         | Class B common stock - $.01 par, 400,000,000   shares authorized; 139,357,186, 138,537,127  and 123,531,752 issued |   1                                                                |                                       |   1 |   |   1 |   |
|                                                                         | Additional paid-in capital                                                                                                             | 2,228                                                                        |                                       | 2,216 |   | 2,043 |   |
|                                                                         | Accumulated deficit                                                                                                                    | (588                                                                         | )                                          | (442 | ) | (296 | ) |
|                                                                         | Accumulated other comprehensive loss                                                                                                   | (1,144                                                                       | )                                          | (1,185 | ) |   (1,595 | ) |
|                                                                         |                                                                                                                                   | Total stockholders' equity                                                   |      497          |   |      590 |   |        153 |   |
|                                                                         |                                                                                                                                   |                                                                         | Total Liabilities and Stockholders' Equity | $13,318 |   | $12,781 |   | $ 12,772 |   |

----

|                                                   | Three Months Ended March 31,                                                               |
|--------------------------------------------------------|--------------------------------------------------------------------------------------------|
|                                                   | 2010                                                                                       | 2009 |   |
|                                                   | (Unaudited)                                                                                |
| Cash Flows from Operating Activities:                  |                                                                                       |   |   |   |
|                                                   | Net loss                                                                                   | $  (146 | ) | $ (136 | ) |
|                                                   | Adjustments to reconcile net loss to net cash provided by operating  activities: |   |   |   |   |
|                                                   |                                                                                       | Depreciation and amortization | 134 |   | 111 |   |
|                                                   |                                                                                       | Special charges | 10 |   | 4 |   |
|                                                   |                                                                                       | Stock-based compensation related to equity awards | 2 |   | 1 |   |
|                                                   |                                                                                       | Other, net | 1 |   | 17 |   |
|                                                   |                                                                                       | Changes in operating assets and liabilities |     430 |   |    113 |   |
|                                                   | Net cash provided by operating activities                                                  |     431 |   |    110 |   |
|                                                   |                                                                                       |   |   |   |
| Cash Flows from Investing Activities:                  |                                                                                       |   |   |   |
|                                                   | Capital expenditures                                                                       | (80 | ) | (86 | ) |
|                                                   | Aircraft purchase deposits (paid) refunded, net                                            | (52 | ) | 27 |   |
|                                                   | Proceeds from sales of short-term investments, net                                         | 24 |   | 41 |   |
|                                                   | Proceeds from sales of property and equipment                                              | 24 |   | 5 |   |
|                                                   | Decrease in restricted cash, cash equivalents and short-term investments                   | - |   |     17 |   |
|                                                   | Other                                                                                      |         - |   |       (1 | ) |
|                                                   |                                                                                       | Net cash (used in) provided by investing activities |     (84 | ) |        3 |   |
|                                                   |                                                                                       |   |   |   |
| Cash Flows from Financing Activities:                  |                                                                                       |   |   |   |
|                                                   | Payments on long-term debt and capital lease obligations                                   | (151 | ) | (98 | ) |
|                                                   | Proceeds from issuance of long-term debt, net                                              | 109 |   | 26 |   |
|                                                   | Proceeds from issuance of common stock pursuant to stock plans                             |       10 |   |         4 |   |
|                                                   |                                                                                       | Net cash used in financing activities |     (32 | ) |     (68 | ) |
|                                                   |                                                                                       |   |   |   |
| Net Increase in Cash and Cash Equivalents              | 315                                                                                        |   | 45 |   |
|                                                   |                                                                                       |   |   |   |
| Cash and Cash Equivalents - Beginning of Period        | 2,546                                                                                      |   | 2,165 |   |
|                                                   |                                                                                       |   |   |   |
| Cash and Cash Equivalents - End of Period              | $2,861                                                                                     |   | $2,210 |   |
|                                                   |                                                                                       |   |   |   |
| Investing and Financing Activities Not Affecting Cash: |                                                                                       |   |   |   |
|                                                   | Property and equipment acquired through the issuance of debt                               | - |   | $ 130 |   |

----

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|          |           |                 |   |                      |
|---------------|----------------|----------------------|--------|---------------------------|
|          |           |                 |   | 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        | 20                   |   | 9                         |   | 11 |   | - |   |
|          | 757-200        | 41                   |   | 15                        |   | 26 |   | - |   |
|          | 737-900ER      | 30                   |   | 30                        |   | - |   | - |   |
|          | 737-900        | 12                   |   | 8                         |   | 4 |   | - |   |
|          | 737-800        | 117                  |   | 44                        |   | 73 |   | - |   |
|          | 737-700        | 36                   |   | 12                        |   | 24 |   | - |   |
|          | 737-500        |    31 |   |     - |   |    31 |   |    - |   |
|          | Total mainline | 333                  |   | 149                       |   | 184 |   |    - |   |
|          |           |                 |   |                      |   |   |   |   |
| Regional (b): |           |                 |   |                      |   |   |   |   |
|          | ERJ-145XR      | 89                   |   | -                         |   | 89 |   | - |   |
|          | ERJ-145        | 134                  |   | 18                        |   | 101 |   | 15 | (c) |
|          | Q400           | 14                   |   | -                         |   | - |   | 14 | (d) |
|          | Q200           |   16       |   |     - |   |      - |   |  16 | (e) |
|          | Total regional | 253                  |   |   18            |   | 190 |   |  45 |   |
|          |           |                 |   |                      |   |   |   |   |
| Total         | 586            |                 | 167    |                      | 374 |   |    45 |   |

----

| (a) | Excludes eight grounded Boeing 737-500 aircraft (two owned and six leased) and eight grounded owned Boeing 737-300 aircraft.  Also excludes one leased 757-300 aircraft delivered but not yet placed into service. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Excludes 25 ERJ-135 aircraft that are temporarily grounded and 15 ERJ-145XR aircraft, 21 ERJ-145 aircraft and five ERJ-135 aircraft that are subleased to other operators, but are not operated on our behalf.               |
| (c) | Operated by Chautauqua Airlines, Inc. (“Chautauqua”) under a capacity purchase agreement.                                                                                                                        |
| (d) | Operated by Colgan Air, Inc. (“Colgan”) under a capacity purchase agreement.                                                                                                                                     |
| (e) | Operated by Champlain Enterprises, Inc. (“CommutAir”) under a capacity purchase agreement.                                                                                                                       |

----

|   | 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   |  Level 1 |  Level 2 |  Level 3 | ValuationTechnique                     |
|-------------------------------------------------------------------------|-------------------------|---------------|---------------|---------------|----------------------------------------|
|                                                                    |                    |          |          |          |                                   |
| March 31, 2010                                                          |                    |          |          |          |                                   |
| Cash and cash equivalents                                               | $2,861                  |          | $2,861        | $-            | $     -       | (A) |   |
| Short-term investments:                                                 |                    |          |          |          |                                   |   |   |
|                                                                    | Auction rate securities | 164           |          | -             | -                                      | 164 | (B) |   |
|                                                                    | CDARS                   | 82            |          | 82            | -                                      | - | (A) |   |
|                                                                    | Asset-backed securities | 46            |          | 46            | -                                      | - | (A) |   |
| Restricted cash, cash equivalents and  short-term investments |  164               |          |  164     |  -       |  -                                |  (A) |   |
| Auction rate securities put right                                       | 16                      |          | -             | -             | 16                                     | (B) |   |
| Fuel derivatives:                                                       |                    |          |          |          |                                   |   |   |
|                                                                    | Swaps                   | 24            |          | -             | -                                      | 24 | (A) |   |
|                                                                    | Call options            | 14            |          | -             | -                                      | 14 | (A) |   |
| Foreign currency forward contracts                                      | 4                       |          | -             | 4             | -                                      | (A) |   |
|                                                                    |                    |          |          |          |                                   |   |   |
| December 31, 2009                                                       |                    |          |          |          |                                   |
| Cash and cash equivalents                                               | $2,546                  |          | $2,546        | $-            | $      - | (A) |   |
| Short-term investments:                                                 |                    |          |          |          |                                   |   |   |
|                                                                    | Auction rate securities | 201           |          | -             | -                                      | 201 | (B) |   |
|                                                                    | CDARS                   | 102           |          | 102           | -                                      | - | (A) |   |
|                                                                    | Asset-backed securities | 7             |          | 7             | -                                      | - | (A) |   |
| Restricted cash, cash equivalents and  short-term investments |  164               |          |  164     |  -       |  -                                |  (A) |   |
| Auction rate securities put right                                       | 20                      |          | -             | -             | 20                                     | (B) |   |
| Fuel derivatives:                                                       |                    |          |          |          |                                   |   |   |
|                                                                    | Swaps                   | 6             |          | -             | -                                      | 6 | (A) |   |
|                                                                    | Call options            | 8             |          | -             | -                                      | 8 | (A) |   |
| Foreign currency forward contracts                                      | 5                       |          | -             | 5             | -                                      | (A) |   |

----

|                                                                    |  Carrying Amount   |  Level 1 |  Level 2 |  Level 3 |                                   | ValuationTechnique |
|-------------------------------------------------------------------------|-------------------------|---------------|---------------|---------------|----------------------------------------|--------------------|
|                                                                    |                    |          |          |          |                                   |
| March 31, 2009                                                          |                    |          |          |          |                                   |
| Cash and cash equivalents                                               | $2,210                  |          | $2,210        | $-            | $      - |               | (A) |
| Short-term investments:                                                 |                    |          |          |          |                                   |               |   |
|                                                                    | Auction rate securities | 229           |          | -             | -                                      | 229                |   | (B) |
|                                                                    | CDARS                   | 189           |          | 189           | -                                      | -                  |   | (A) |
|                                                                    | Asset-backed securities | 20            |          | 20            | -                                      | -                  |   | (A) |
| Restricted cash, cash equivalents and  short-term investments |  173               |          |  173     |  -       |  -                                |               |  (A) |
| Auction rate securities put right                                       | 26                      |          | -             | -             | 26                                     |               | (B) |
| Fuel derivatives:                                                       |                    |          |          |          |                                   |               |   |
|                                                                    | Swaps                   | 2             |          | -             | -                                      | 2                  |   | (A) |
|                                                                    | Collars                 | (254          | )             | -             | -                                      | (254               | ) | (A) |
| Foreign currency forward contracts                                      | 5                       |          | -             | 5             | -                                      |               | (A) |

|                    | Fair Value         | Par Value                        | Amortized Cost |
|-------------------------|--------------------|----------------------------------|----------------|
|                    |               |                             |
| Short-term investments: |               |                             |           |   |   |
|                    | Available-for-sale | $117                             |           | $145 |   | $116 |   |
|                    | Trading            |      47 |           |   64 |   | N/A |   |
|                    | Total              | $164                             |           | $209 |   |   |   |

----

----

|                                                         | Auction                                                   |                                  |                   Fuel Derivatives                      |
|--------------------------------------------------------------|-----------------------------------------------------------|---------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Rate Securities                                              | Put Right                                                 | Swaps                                 | Call Options                                                                                                                                                                                                                                               | Collars |
|                                                         |                                                      |                                  |
| Three Months Ended March 31, 2010                            |                                                      |                                  |
| Balance at beginning of period                               | $201                                                      |                                  | $20                                                                                                                                                                                                                                                        |   | $ 6 |   | $ 8 |   | $      - |   |
| Purchases, sales, issuances and  settlements (net) |  (42                                                 |  )                               |  -                                                                                                                                                                                                                                                    |   |  (4 |  ) |  12 |   |  - |   |
| Gains and losses:                                            |                                                      |                                  |                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
|                                                         | Reported in earnings:                                     |                                  |                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
|                                                         |                                                      | Realized                              | 6                                                                                                                                                                                                                                                          |   | (5 | ) | - |   | - |   | - |   |
|                                                         |                                                      | Unrealized                            | -                                                                                                                                                                                                                                                          |   | 1 |   | - |   | - |   | - |   |
|                                                         | Reported in other comprehensive   income (loss) |     (1            |  )                                                                                                                                                                                                                                                    |     - |   |   22 |   |  (6 |  ) |        - |   |
| Balance as of March 31, 2010                                 | $164                                                      |                                  | $16                                                                                                                                                                                                                                                        |   | $24 |   | $14 |   | $      - |   |
|                                                         |                                                      |                                  |                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Three Months Ended March 31, 2009                            |                                                      |                                  |                                                                                                                                                                                                                                                       |   |   |   |   |
| Balance at beginning of period                               | $229                                                      |                                  | $26                                                                                                                                                                                                                                                        |   | $ 2 |   | $ 1 |   | $(418 | ) |
| Purchases, sales, issuances and  settlements (net) |  -                                                   |                                  |  -                                                                                                                                                                                                                                                    |   |  5 |   |  (1 |  ) |  190 |   |
| Gains and losses:                                            |                                                      |                                  |                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
|                                                         | Reported in earnings:                                     |                                  |                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
|                                                         |                                                      | Realized                              | -                                                                                                                                                                                                                                                          |   | - |   | - |   | - |   | - |   |
|                                                         |                                                      | Unrealized                            | -                                                                                                                                                                                                                                                          |   | - |   | - |   | - |   | (2 | ) |
|                                                         | Reported in other comprehensive   income (loss) |       - |                                                                                                                                                                                                                                                       |     - |   |  (5 |  ) |     - |   |    (24 |  ) |
| Balance as of March 31, 2009                                 | $229                                                      |                                  | $26                                                                                                                                                                                                                                                        |   | $ 2 |   | $   - |   | $(254 | ) |

| · | Debt.  The fair value of our debt with a carrying value of $6.0 billion at March 31, 2010 was approximately $5.9 billion.  These estimates were based on either market prices or the discounted amount of future cash flows using our current incremental rate of borrowing for similar liabilities. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                     |
| · | Accounts Receivable and Accounts Payable.  The fair values of accounts receivable and accounts payable approximated carrying value due to their short-term maturity.                                                                                                                                           |

----

|                       | Maximum Price           | Minimum Price                     |
|----------------------------|-------------------------|-----------------------------------|
|                       | % ofExpectedConsumption | WeightedAverage Price(per gallon) | % ofExpectedConsumption | WeightedAverage Price(per gallon) |
|                       |                    |                              |   |
| Remainder of 2010          |                    |                              |   |
| WTI crude oil swaps        | 10                      | %                                 | $1.83 |   |    10 | % | $1.83 |   |
| WTI crude oil call options | 14                      |                              | $2.25 |   | N/A |   | N/A |   |
|                       | Total                   | 24                                | % |   |   |    10 | % |   |   |
|                       |                    |                              |   |
| First Quarter of 2011      |                    |                              |   |
| WTI crude oil call options | 2                       | %                                 | $2.33 |   | N/A |   | N/A |   |

----

|                                    | Asset Derivatives (1)                                         |                                                                                                       | Liability Derivatives (2)                                     |
|-----------------------------------------|---------------------------------------------------------------|------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------|
|                                    | March 31,    2010     | December 31,        2009        | March 31,    2009     |   | March 31,    2010     | December 31,        2009        | March 31,    2009     |
|                                    |                                                          |                                                                                                       |                                                          |   |   |   |   |
| Fuel derivatives                        | $38                                                           |                                                                                                       | $14                                                           |   | $ - |   |   | $ - |   | $ - |   | $252 |   |
|                                    |                                                          |                                                                                                       |                                                          |   |   |   |   |   |   |   |   |   |   |
| Foreign currency  derivatives |    4                                           |                                                                                                       |    5                                           |   |   5 |   |   |   - |   |   - |   |        - |   |
|                                    |                                                          |                                                                                                       |                                                          |   |   |   |   |   |   |   |   |   |   |
|                                    | Total derivatives                                             | $42                                                                                                        |                                                          | $19 |   | $ 5 |   |   | $ - |   | $ - |   | $252 |   |

| (1) | Amounts are included in prepayments and other current assets. |
|-----|---------------------------------------------------------------|
| (2) | Amounts are included in accrued other current liabilities.    |

|   Cash FlowHedges             |   Gain (Loss) Recognized inOCI (Effective Portion) | Gain (Loss) Reclassifiedfrom Accumulated OCIinto Income(Effective Portion) (1) |  Gain (Loss) Recognized in Income (Ineffective Portion) (2) |
|-----------------------------------------|--------------------------------------------------------------|--------------------------------------------------------------------------------|------------------------------------------------------------------|
|                                    | March 31,2010                                                | December 31,2009                                                               | March 31,2009                                                    |  2010 |  2009 |  2010 |  2009 |
|                                    |                                                         |                                                                           |                                                             |   |   |   |   |
| Fuel derivatives                        | $16                                                          |                                                                           | $36                                                              |   | $(29 | ) | $4 |   | $(141 | ) | $- |   | $(2 | ) |
|                                    |                                                         |                                                                           |                                                             |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency  derivatives |    -                                          |                                                                           |  10                                                         |   |   12 |   |   - |   |      (1 |  ) |   - |   |     - |   |
|                                    |                                                         |                                                                           |                                                             |   |   |   |   |   |   |   |   |   |   |   |
| Total                                   | $16                                                          |                                                                           | $46                                                              |   | $(17 | ) | $4 |   | $(142 | ) | $- |   | $(2 | ) |

| (1) | Amounts related to fuel derivatives are included in aircraft fuel and related taxes and amounts related to foreign currency derivatives are included in passenger revenue. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Amounts are included in other nonoperating income (expense).                                                                                                               |

----

|                                                               | 2010                              | 2009                                 |
|--------------------------------------------------------------------|-----------------------------------|--------------------------------------|
|                                                               |                              |
| Net loss                                                           | $(146                             | )                                    | $(136 | ) |
|                                                               |                              |                                 |   |   |
| Other comprehensive income (loss) adjustments, before tax:         |                              |                                 |   |   |
|                                                               | Derivative financial instruments: |                                 |   |   |   |
|                                                               |                              | Reclassification into earnings       | (4 | ) | 144 |   |
|                                                               |                              | Change in fair value                 | 16 |   | (17 | ) |
|                                                               | Employee benefit plans:           |                                 |   |   |   |
|                                                               |                              | Amortization of net actuarial losses | 21 |   | 27 |   |
|                                                               |                              | Amortization of prior service cost   |      8 |   |     7 |   |
|                                                               |                              |                                 | Comprehensive income (loss) adjustments, before tax |    41 |   | 161 |   |
| Income taxes related to items of other comprehensive income (loss) |      -   |                                 |     - |   |
|                                                               |                              |                                 |   |   |
| Total comprehensive income (loss)                                  | $(105                             | )                                    | $ 25 |   |

----

|                                                              | DefinedBenefit Pension | RetireeMedical Benefits |
|-------------------------------------------------------------------|------------------------|-------------------------|
|                                                              | 2010                   | 2009                    | 2010 | 2009 |
|                                                              |                   |                    |   |   |   |   |   |   |
| Service cost                                                      | $ 16              |                    | $16 |   | $ 3 |   | $ 3 |   |
| Interest cost                                                     | 40                     |                    | 38 |   | 3 |   | 4 |   |
| Expected return on plan assets                                    | (28                    | )                       | (22 | ) | - |   | - |   |
| Amortization of unrecognized net actuarial  (gain) loss |  22               |                    |  28 |   |  (1 |  ) |  (1 |  ) |
| Amortization of prior service cost                                |    3    |                    |    2 |   |   5 |   |    5 |   |
| Net periodic benefit expense                                      | $ 53              |                    | $62 |   | $10 |   | $ 11 |   |

|                          | 2010           | 2009   |
|-------------------------------|----------------|--------|
|                          |           |
| Aircraft-related charges, net | $  6 |   | $ 4 |   |
| Severance                     |   4  |   |  - |   |
| Total special charges         | $10            |   | $ 4 |   |

----

|                       | Severance/Medical Costs | UnusedFacilities |
|----------------------------|------------------------------|------------------|
|                       |                         |             |
| Balance, December 31, 2009 | $14                          |             | $26 |   |
| Accrual                    | 4                            |             | - |   |
| Payments                   |  (5                     | )                |  (1 | ) |
| Balance, March 31, 2010    | $13                          |             | $25 |   |

----

|                     | 2010               | 2009                              |
|--------------------------|--------------------|-----------------------------------|
|                     |               |
| Operating Revenue:       |               |                              |   |   |
|                     | Mainline           | $2,676                            |   | $2,529 |   |
|                     | Regional           |    493             |   |    433 |   |
|                     | Total Consolidated | $3,169                            |   | $2,962 |   |
|                     |               |                              |   |   |   |
| Operating Income (Loss): |               |                              |   |   |
|                     | Mainline           | $     23 |   | $     63 |   |
|                     | Regional           |    (74             | ) | (118 | ) |
|                     | Total Consolidated | $   (51            | ) | $   (55 | ) |
|                     |               |                              |   |   |   |
| Net Loss:                |               |                              |   |   |
|                     | Mainline           | $   (69            | ) | $   (15 | ) |
|                     | Regional           |   (77                   | ) | (121 | ) |
|                     | Total Consolidated | $(146                             | ) | $(136 | ) |

----

----

| ·  | a total of $72 million if our unrestricted cash, cash equivalents and short-term investments balance falls below $2.0 billion;                                                                                                                                                                             |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·  | a total of $222 million if we fail to maintain the minimum unsecured debt ratings specified above;                                                                                                                                                                                                         |
| ·  | a total of $422 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 $921 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.     |

----

----

----

| · | Passenger revenue and cargo revenue increased 7.1% and 20.0%, respectively, during the first quarter of 2010 as compared to the first quarter of 2009 primarily due to increasing demand resulting from improving economic conditions. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                   |
| · | We recorded an operating loss of $51 million during the first quarter of 2010 as compared to an operating loss of $55 million in the first quarter of 2009, due primarily to weakness in demand resulting from the global recession.   |
|   |                                                                                                                                                                                                                                   |
| · | Unrestricted cash, cash equivalents and short-term investments totaled $3.2 billion at March 31, 2010.                                                                                                                                 |

| · | Consolidated traffic increased 5.7% and capacity remained essentially flat during the first quarter of 2010 as compared to the first quarter of 2009, resulting in a record first quarter load factor of 79.5%.                                                                                                                                                                                                                                                                                                                                               |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| · | We recorded a U.S. Department of Transportation (“DOT”) on-time arrival rate of 78.4% for Continental mainline flights and a mainline segment completion factor of 98.3% for the first quarter of 2010, compared to a DOT on-time arrival rate of 76% and a mainline segment completion factor of 99.2% for the first quarter of 2009.  Our operating results for the first quarter of 2010 were adversely impacted by severe winter weather, particularly at our New York hub at Newark Liberty International Airport during February. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

----

| · | We began to offer customers the option of purchasing premium seat assignments for unreserved economy-class seats with extra legroom and announced plans to offer food for purchase in the economy cabin on select flights to U.S., Canadian and Latin American destinations beginning in fall 2010. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                |
| · | We completed the installation of flat-bed seats on seven of our Boeing 777 aircraft and four of our Boeing 757-200 aircraft.                                                                                                                                                                        |

----

----

----

|                                                                                                              |     2010    |     2009    | % Increase (Decrease)            |
|-------------------------------------------------------------------------------------------------------------------|------------------------------------------------|------------------------------------------------|---------------------------------------|
|                                                                                                              |                                           |                                           |                                  |
| Passengers (thousands) (1)                                                                                        | 14,535                                         | 14,408                                         | 0.9 %                            |
| Revenue passenger miles (millions) (2)                                                                            | 20,919                                         | 19,790                                         | 5.7 %                            |
| Available seat miles (millions) (3)                                                                               | 26,316                                         | 26,323                                         | -       |
| Passenger load factor (4)                                                                                         | 79.5%                                          | 75.2%                                          | 4.3 pts.                         |
| Passenger revenue per available seat mile (cents)                                                                 | 10.65                                          | 9.94                                           | 7.1 %                            |
| Total revenue per available seat mile (cents)                                                                     | 12.04                                          | 11.25                                          | 7.0 %                            |
| Average yield per revenue passenger mile (cents) (5)                                                              | 13.40                                          | 13.23                                          | 1.3 %                            |
| Cost per available seat miles (cents)                                                                             | 12.23                                          | 11.46                                          | 6.7 %                            |
| Cost per available seat mile excluding special charges and  aircraft fuel and related taxes (cents) (6) |  8.95                                     |  8.65                                     |  3.5 %                      |
| Average price per gallon of fuel, including fuel taxes                                                            | $2.15                                          | $1.82                                          | 18.1 %                           |
| Fuel gallons consumed (millions)                                                                                  | 398                                            | 403                                            | (1.2)%                                |
| Average full-time equivalent employees                                                                            | 39,365                                         | 40,320                                         | (2.4)%                                |

| (1) | The number of revenue passengers measured by each flight segment flown.                                         |
|-----|-----------------------------------------------------------------------------------------------------------------|
| (2) | The number of scheduled miles flown by revenue passengers.                                                      |
| (3) | The number of seats available for passengers multiplied by the number of scheduled miles those seats are flown. |
| (4) | Revenue passenger miles divided by available seat miles.                                                        |
| (5) | The average passenger revenue received for each revenue passenger mile flown.                                   |
| (6) | See “Reconciliation of GAAP to non-GAAP Financial Measures” at the end of this item.                |

----

|                          |  2010            |  2009 | Increase(Decrease)    | % Increase(Decrease) |
|-------------------------------|-----------------------|------------|-----------------------|----------------------|
|                          |                  |       |
| Operating Revenue             | $3,169                |       | $2,962                |                 | $207 |   | 7.0 |  % |
| Operating Expenses            | 3,220                 |       | 3,017                 |                 | 203 |   | 6.7 |  % |
| Operating Loss                | (51                   | )          | (55                   | )                    | (4 | ) | (7.3 | )% |
| Nonoperating Income (Expense) |    (95 | )          |    (81 | )                    |   14 |   | 17.3 | % |
| Net Loss                      | $ (146           | )          | $ (136           | )                    | $  10 |   | 7.4 | % |

|               |  Revenue     | Percentage Increase (Decrease) inFirst Quarter 2010 vs First Quarter 2009 |
|--------------------|-------------------|---------------------------------------------------------------------------|
| (in millions)      | Revenue           | ASMs                                                                      | RASM |
|               |              |                                                                      |
| Passenger revenue: |              |                                                                      |   |   |   |
|               | Domestic          | $1,104                                                                    |   | 3.1 | % | (1.7 | )% | 4.9 |  % |
|               | Trans-Atlantic    | 520                                                                       |   | 9.4 | % | (5.3 | )% | 15.6 |  % |
|               | Latin America     | 439                                                                       |   | 4.4 | % | 5.2 |  % | (0.8 | )% |
|               | Pacific           |     259                                               |   | 11.6 | % | 15.5 |  % | (3.4 | )% |
|               | Total Mainline    | 2,322                                                                     |   | 5.6 | % | 0.2 |  % | 5.4 |  % |
|               |              |                                                                      |   |   |   |   |   |   |   |
|               | Regional          |     481                                               |   | 14.8 | % | (1.6 | )% | 16.7 |  % |
|               |              |                                                                      |   |   |   |   |   |   |   |
|               | Total             | 2,803                                                                     |   | 7.1 | % | -   |   | 7.1 |  % |
|               |              |                                                                      |   |   |   |   |   |   |   |
|               | Cargo             | 102                                                                       |   | 20.0 | % |   |   |   |   |
|               | Other             |     264                                               |   | 1.5 | % |   |   |   |   |
|               |              |                                                                      |   |   |   |   |   |   |   |
|               | Operating Revenue | $3,169                                                                    |   | 7.0 | % |   |   |   |   |

----

|                               |  2010                   |  2009 | Increase(Decrease)           | % Increase(Decrease) |
|------------------------------------|------------------------------|------------|------------------------------|----------------------|
|                               |                         |       |
| Aircraft fuel and related taxes    | $    854 |       | $    735 |                 | $119 |   | 16.2 |  % |
| Wages, salaries and related costs  | 796                          |       | 765                          |                 | 31 |   | 4.1 |  % |
| Aircraft rentals                   | 229                          |       | 237                          |                 | (8 | ) | (3.4 | )% |
| Landing fees and other rentals     | 213                          |       | 209                          |                 | 4 |   | 1.9 |  % |
| Regional capacity purchase, net    | 201                          |       | 213                          |                 | (12 | ) | (5.6 | )% |
| Distribution costs                 | 171                          |       | 156                          |                 | 15 |   | 9.6 |  % |
| Maintenance, materials and repairs | 147                          |       | 153                          |                 | (6 | ) | (3.9 | )% |
| Depreciation and amortization      | 134                          |       | 111                          |                 | 23 |   | 20.7 |  % |
| Passenger services                 | 93                           |       | 88                           |                 | 5 |   | 5.7 |  % |
| Special charges                    | 10                           |       | 4                            |                 | 6 |   | NM |   |
| Other                              |    372        |       |    346        |                 |    26 |   | 7.5 |  % |
|                               | Total                        | $3,220     |                         | $3,017               |   | $203 |   | 6.7 |  % |

| ·  | Aircraft fuel and related taxes increased due to an 18.1% increase in consolidated jet fuel prices, partially offset by a decrease in gallons consumed.  Our average jet fuel price per gallon including related taxes increased to $2.15 in the first quarter of 2010 from $1.82 in the first quarter of 2009.  Our average jet fuel price includes gains related to our fuel hedging program of $0.01 per gallon in the first quarter of 2010, compared to losses of $0.35 per gallon in the first quarter of 2009. |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ·  | Wages, salaries and related costs increased primarily due to higher variable compensation expense in 2010.  We recorded a $24 million net credit in stock-based compensation expense in the first quarter of 2009, primarily related to our profit based RSU awards.                                                                                                                                                                                                                                                            |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ·  | Aircraft rentals decreased due to the retirement of leased Boeing 737 aircraft in 2009 and the first quarter of 2010.                                                                                                                                                                                                                                                                                                                                                                                                                     |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ·  | 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.  Capacity purchase expenses decreased due to capacity reductions.                                                                                                                                                                                                     |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ·  | Distribution costs increased due to higher credit card discount fees, booking fees and travel agency commissions, all of which resulted from increased passenger revenue.                                                                                                                                                                                                                                                                                                                                                                 |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

----

| ·  | Depreciation and amortization expense increased in 2010 due to higher capitalizable project costs and increased depreciation from new aircraft placed in service during 2009.  In addition, we recorded $11 million of depreciation expense during the quarter ended March 31, 2010 that relates to prior periods. |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                         |
| ·  | Special charges.  See Note 8 to our consolidated financial statements contained in Item 1 of this report for a discussion of the special charges.                                                                                                                                                                  |
|         |                                                                                                                                                                                                                                                                                                                         |
| ·  | Other operating expenses increased due to higher OnePass reward expenses in 2010 and the receipt in 2009 of insurance settlements related to Hurricane Ike, which reduced other operating expenses in 2009.                                                                                                                  |

----

|                                                                                                              |                                     | Increase                       |
|-------------------------------------------------------------------------------------------------------------------|------------------------------------------|------------------------------------------|
|                                                                                                              |    2010    |    2009    | (Decrease) |
|                                                                                                              |                                     |                                     |   |
| Mainline Operations:                                                                                              |                                     |                                     |   |
| Passengers (thousands)                                                                                            | 10,562                                   | 10,562                                   | -       |
| Revenue passenger miles (millions)                                                                                | 18,727                                   | 17,690                                   | 5.9 % |
| Available seat miles (millions)                                                                                   | 23,393                                   | 23,352                                   | 0.2 % |
| Cargo ton miles (millions)                                                                                        | 262                                      | 200                                      | 31.0 % |
|                                                                                                              |                                     |                                     |   |
| Passenger load factor:                                                                                            |                                     |                                     |   |
|   Mainline                                                                                              | 80.1%                                    | 75.8%                                    | 4.3 pts. |
|   Domestic                                                                                              | 81.7%                                    | 79.7%                                    | 2.0 pts. |
|   International                                                                                         | 78.6%                                    | 72.1%                                    | 6.5 pts. |
|                                                                                                              |                                     |                                     |   |
| Passenger revenue per available seat mile (cents)                                                                 | 9.92                                     | 9.41                                     | 5.4 % |
| Total revenue per available seat mile (cents)                                                                     | 11.44                                    | 10.83                                    | 5.6 % |
| Average yield per revenue passenger mile (cents)                                                                  | 12.40                                    | 12.43                                    | (0.2)% |
| Average fare per revenue passenger                                                                                | $221.81                                  | $209.94                                  | 5.7 % |
|                                                                                                              |                                     |                                     |   |
| Cost per available seat mile (cents)                                                                              | 11.34                                    | 10.56                                    | 7.4 % |
| Cost per available seat mile excluding special charges and aircraft fuel  and related taxes (cents) (1) |  8.29                               |  7.93                               |  4.5 % |
|                                                                                                              |                                     |                                     |   |
| Average price per gallon of fuel, including fuel taxes                                                            | $2.14                                    | $1.83                                    | 16.9 % |
| Fuel gallons consumed (millions)                                                                                  | 330                                      | 333                                      | (0.9)% |
|                                                                                                              |                                     |                                     |   |
| Aircraft in fleet at end of period (2)                                                                            | 333                                      | 354                                      | (5.9)% |
| Average length of aircraft flight (miles)                                                                         | 1,590                                    | 1,502                                    | 5.9 % |
| Average daily utilization of each aircraft (hours)                                                                | 10:34                                    | 10:22                                    | 1.8 % |
|                                                                                                              |                                     |                                     |   |
| Regional Operations:                                                                                              |                                     |                                     |   |
| Passengers (thousands)                                                                                            | 3,973                                    | 3,846                                    | 3.3 % |
| Revenue passenger miles (millions)                                                                                | 2,192                                    | 2,100                                    | 4.4 % |
| Available seat miles (millions)                                                                                   | 2,923                                    | 2,971                                    | (1.6)% |
| Passenger load factor                                                                                             | 75.0%                                    | 70.7%                                    | 4.3 pts. |
| Passenger revenue per available seat mile (cents)                                                                 | 16.46                                    | 14.11                                    | 16.7 % |
| Average yield per revenue passenger mile (cents)                                                                  | 21.95                                    | 19.96                                    | 10.0 % |
| Aircraft in fleet at end of period (2)                                                                            | 253                                      | 280                                      | (9.6)% |

| (1)    | See “Reconciliation of  GAAP to non-GAAP Financial Measures” at the end of this Item.                                                                                                                                                   |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                          |
| (2)    | Excludes aircraft that were removed from service.  Regional aircraft include aircraft operated by all carriers under capacity purchase agreements, but exclude any aircraft that we sublease to other operators but are not operated on our behalf. |

----

|                |  2010                         |  2009            | Increase(Decrease)                | % Increase(Decrease)  |
|---------------------|------------------------------------|-----------------------|-----------------------------------|-----------------------|
|                |                               |                  |
| Operating Revenue   | $2,676                             |                  | $2,529                            |                  | $147 |   | 5.8 |  % |
|                |                               |                  |                              |                  |   |   |   |   |
| Operating Expenses: |                               |                  |                              |                  |   |   |   |   |
|                | Aircraft fuel and related taxes    | 707                   |                              | 610                   |   | 97 |   | 15.9 |  % |
|                | Wages, salaries and related costs  | 754                   |                              | 723                   |   | 31 |   | 4.3 |  % |
|                | Aircraft rentals                   | 152                   |                              | 158                   |   | (6 | ) | (3.8 | )% |
|                | Landing fees and other rentals     | 186                   |                              | 184                   |   | 2 |   | 1.1 |  % |
|                | Distribution costs                 | 147                   |                              | 135                   |   | 12 |   | 8.9 |  % |
|                | Maintenance, materials and repairs | 147                   |                              | 153                   |   | (6 | ) | (3.9 | )% |
|                | Depreciation and amortization      | 130                   |                              | 108                   |   | 22 |   | 20.4 |  % |
|                | Passenger services                 | 86                    |                              | 81                    |   | 5 |   | 6.2 |  % |
|                | Special charges                    | 8                     |                              | 4                     |   | 4 |   | NM |   |
|                | Other                              |    336 |                              |    310 |   |   26 |   | 8.4 |  % |
|                | Total Operating Expenses           | 2,653                 |                              | 2,466                 |   | 187 |   | 7.6 |  % |
|                |                               |                  |                              |                  |   |   |   |   |
| Operating Income    | $    23        |                  | $     63 |                  | $(40 | ) | (63.5 | )% |

|                |  2010                        |  2009      | Increase(Decrease) | % Increase(Decrease)       |
|---------------------|-----------------------------------|-----------------|--------------------|----------------------------|
|                |                              |            |
| Operating Revenue   | $ 493                        |            | $  433   |                       | $  60 |   | 13.9 |  % |
|                |                              |            |               |                       |   |   |   |   |
| Operating Expenses: |                              |            |               |                       |   |   |   |   |
|                | Aircraft fuel and related taxes   | 147             |               | 125                        |   | 22 |   | 17.6 |  % |
|                | Wages, salaries and related costs | 42              |               | 42                         |   | - |   | -    |   |
|                | Aircraft rentals                  | 77              |               | 79                         |   | (2 | ) | (2.5 | )% |
|                | Landing fees and other rentals    | 27              |               | 25                         |   | 2 |   | 8.0 |  % |
|                | Regional capacity purchase, net   | 201             |               | 213                        |   | (12 | ) | (5.6 | )% |
|                | Distribution costs                | 24              |               | 21                         |   | 3 |   | 14.3 |  % |
|                | Depreciation and amortization     | 4               |               | 3                          |   | 1 |   | 33.3 |  % |
|                | Passenger services                | 7               |               | 7                          |   | - |   | -    |   |
|                | Special charges                   | 2               |               | -                          |   | 2 |   | NM |   |
|                | Other                             |    36 |               |     36 |   |     - |   | -    |   |
|                | Total Operating Expenses          |  567       |               |   551            |   |   16 |   | 2.9 |  % |
|                |                              |            |               |                       |   |   |   |   |
| Operating Loss      | $ (74                             | )               | $(118              | )                          | $(44 | ) | (37.3 | )% |

----

----

|                                                                                           |   2010          |   2009 | CashIncrease(Decrease) |
|------------------------------------------------------------------------------------------------|---------------------------|------------------|------------------------|
|                                                                                           |                      |             |
| Capital expenditures                                                                           | $(80                      | )                | $(86                   | ) | $    6 |   |
| Aircraft purchase deposits (paid) refunded, net                                                | (52                       | )                | 27                     |   | (79 | ) |
| Proceeds from sales of short-term investments, net                                             | 24                        |             | 41                     |   | (17 | ) |
| Proceeds from sales of property and equipment                                                  | 24                        |             | 5                      |   | 19 |   |
| Decrease (increase) in restricted cash, cash  equivalents and short-term investments |  -                   |             |  17               |   |  (17 |  ) |
| Other cash flows from investing activities                                                     |     - |             |   (1         | ) |    1 |   |
|                                                                                           | Total                     | $(84             | )                      | $   3 |   | $(87 | ) |

| Fleet related (excluding aircraft to be acquired through the issuance of debt) | $265                               |   |
|--------------------------------------------------------------------------------|------------------------------------|--------|
| Non-fleet                                                                      | 140                                |   |
|                                                                           | Net capital expenditures           | 405    |   |
| Aircraft purchase deposits                                                     |  20                           |   |
|                                                                           | Projected net capital expenditures | $425   |   |

----

|                                                           |   2010     |   2009 | CashIncrease(Decrease) |
|----------------------------------------------------------------|----------------------|------------------|------------------------|
|                                                           |                 |             |
| Payments on long-term debt and capital lease obligations       | $(151                | )                | $(98                   | ) | $(53 | ) |
| Proceeds from issuance of long-term debt, net                  | 109                  |             | 26                     |   | 83 |   |
| Proceeds from issuance of common stock purchase to stock plans |    10 |             |    4    |   |    6 |   |
|                                                           | Total                | $ (32       | )                      | $(68 | ) | $ 36 |   |

----

| Investment in student loan-related auction rate securities                                                                  | Note 4        |
|-----------------------------------------------------------------------------------------------------------------------------|---------------|
| Fuel hedges                                                                                                                 | Note 5        |
| Pension obligations                                                                                                         | Note 7        |
| Guarantees and indemnifications, credit card processing agreements, credit ratings  and environmental liabilities |  Note 11 |

|                                              | 2010                          | 2009                            |
|---------------------------------------------------|-------------------------------|---------------------------------|
|                                              |                          |
| Net loss – GAAP                             | $(146                         | )                               | $(136 | ) |
| Special charges:                                  |                          |                            |   |   |
|                                              | Aircraft-related charges, net | 6                               |   |   4 |   |
|                                              | Severance                     |      4 |   |       - |   |
| Net loss excluding special items – non-GAAP | $(136                         | )                               | $(132 | ) |

----

|                                                                                                                | 2010                                                                                                   | 2009                                  |                                                          |
|---------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|---------------------------------------|---------------------------------------------------------------|
|                                                                                                                |                                                                                                   |                                  |                                                          |
| Mainline cost per available seat mile excluding special  charges and aircraft fuel and related taxes:     |                                                                                                   |
|                                                                                                                | Operating expenses – GAAP                                                                        | $2,653                           | $  2,466                                       |   |
|                                                                                                                | Special charges:                                                                                       |                                  |                                                          |   |
|                                                                                                                |                                                                                                   | Aircraft-related charges, net         |   6                                            |       4  |   |
|                                                                                                                |                                                                                                   | Severance                             |          2  |           -  |   |
|                                                                                                                | Aircraft fuel and related taxes                                                                        |     707      |     610                                        |   |
|                                                                                                                | Operating expenses excluding above items  –  non-GAAP                        |  $ 1,938                    |  $  1,852                                      |   |
|                                                                                                                |                                                                                                   |                                  |                                                          |   |
|                                                                                                                | Available seat miles – mainline                                                                  | 23,393                           | 23,352                                                   |   |
|                                                                                                                |                                                                                                   |                                  |                                                          |   |
|                                                                                                                | CASM – GAAP (cents)                                                                              | 11.34                            | 10.56                                                    |   |
|                                                                                                                | CASM excluding special charges and aircraft  fuel and related taxes – non-GAAP (cents) | `8.29                            |  7.93                                               |   |
|                                                                                                                |                                                                                                   |                                  |                                                          |   |
| Consolidated cost per available seat mile excluding  special charges and aircraft fuel and related taxes: |                                                                                                   |                                  |                                                          |
|                                                                                                                | Operating expenses – GAAP                                                                        | $3,220                           | $3,017                                                   |   |
|                                                                                                                | Special charges:                                                                                       |                                  |                                                          |   |
|                                                                                                                | Aircraft-related charges, net                                                                          |      6  |        4              |   |
|                                                                                                                |                                                                                                   | Severance                             |         4        |           -  |   |
|                                                                                                                | Aircraft fuel and related taxes                                                                        |     854           |     735                                   |   |
|                                                                                                                | Operating expenses excluding above items –  non-GAAP                                   |  $ 2,356               |  $ 2,278                                            |   |
|                                                                                                                |                                                                                                   |                                  |                                                          |   |
|                                                                                                                | Available seat miles – consolidated                                                              | 26,316                           | 26,323                                                   |   |
|                                                                                                                |                                                                                                   |                                  |                                                          |   |
|                                                                                                                | CASM – GAAP (cents)                                                                              | 12.23                            | 11.46                                                    |   |
|                                                                                                                | CASM excluding special charges and aircraft  fuel and related taxes – non-GAAP (cents) |  8.95                       |  8.65                                               |   |

----

|                       | Maximum Price           | Minimum Price                      |
|----------------------------|-------------------------|------------------------------------|
|                       | % ofExpectedConsumption | WeightedAverage price(per gallons) | % ofExpectedConsumption | WeightedAverage price(per gallons) |
|                       |                    |                               |
| Remainder of 2010          |                    |                               |
| WTI crude oil swaps        | 10                      | %                                  | $1.83 |   |   10 | % | $1.83 |   |
| WTI crude oil call options | 14                      |                               | $2.25 |   | N/A |   | N/A |   |
|                       |                    | 24                                 | % |   |   |   10 | % |   |   |
|                       |                    |                               |
| First Quarter of 2011      |                    |                               |
| WTI crude oil call options | 2                       | %                                  | $2.33 |   | N/A |   | N/A |   |

----

----

----

|   | 3.1    | Amended and Restated Certificate of Incorporation of Continental, as amended through June 6, 2006 – incorporated by reference to Exhibit 3.1 to Continental’s Annual Report on Form 10-K for the year ended December 31, 2006 (File no. 1-10323). |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                          |
|   | 3.1(a) | Certification of Designation of Series A Junior Participating Preferred Stock, included as Exhibit A to Exhibit 3.1.                                                                                                                                          |

----

|   |       |                                                                                                                                                                                                                                                                   |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 3.1(a)(i)  | Certificate of Amendment of Certificate of Designation of Series A Junior Participating Preferred Stock – incorporated by reference to Exhibit 3.1(b) to Continental’s Annual Report on Form 10-K for the year ended December 31, 2001 (File no. 1-10323). |
|   |       |                                                                                                                                                                                                                                                                   |
|   | 3.1(a)(ii) | Certificate of Increase – Series A Junior Participating Preferred Stock – incorporated by reference to Exhibit 3.1(a)(ii) to Continental’s Quarterly Report on Form 10-Q for the period ended June 30, 2008 (File no. 1-10323).                      |
|   |       |                                                                                                                                                                                                                                                                   |
|   | 3.2        | Amended and Restated Bylaws of Continental, effective as of June 10, 2009 – incorporated by reference to Exhibit 3.2 to Continental’s Current Report on Form 8-K dated June 10, 2009 (File no. 1-10323).                                                   |
|   |       |                                                                                                                                                                                                                                                                   |
|   | 10.1*      | Continental Airlines, Inc. Long-Term Incentive and RSU Program, as amended and restated through March 11, 2010 (adopted pursuant to Incentive Plan 2010).                                                                                                              |
|   |       |                                                                                                                                                                                                                                                                   |
|   | 10.2       | Supplemental Agreement No. 54, dated March 2, 2010, to Purchase Agreement No. 1951 (“P.A. 1951”), dated July 23, 1996, between Continental and The Boeing Company (“Boeing”) relating to the purchase of Boeing 737 aircraft.  (1)   |
|   |       |                                                                                                                                                                                                                                                                   |
|   | 10.3       | Supplemental Agreement No. 55, dated March 31, 2010, to P.A. 1951.  (1)                                                                                                                                                                                      |
|   |       |                                                                                                                                                                                                                                                                   |
|   | 10.4       | Supplemental Agreement No. 19, dated March 2, 2010, to Purchase Agreement No. 2061, dated October 10, 1997, between Continental and Boeing relating to the purchase of Boeing 777 aircraft.  (1)                                                             |
|   |       |                                                                                                                                                                                                                                                                   |
|   | 31.1       | Rule 13a-14 (a)/15d-14 (a) Certification of Chief Executive Officer.                                                                                                                                                                                                   |
|   |       |                                                                                                                                                                                                                                                                   |
|   | 31.2       | Rule 13a-14 (a)/15d-14 (a) Certification of Chief Financial Officer.                                                                                                                                                                                                   |
|   |       |                                                                                                                                                                                                                                                                   |
|   | 32.1       | Section 1350 Certifications.                                                                                                                                                                                                                                           |

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

----

|                                                    | CONTINENTAL AIRLINES, INC.           |
|---------------------------------------------------------|----------------------------------------------------------------------------------------|
|                                                    |                                                                                   |                      Registrant |
|                                                    |                                                                                   |   |
|                                                    |                                                                                   |   |
| Date:  April 22, 2010     | by:                                                                                    | /s/ Chris Kenny                                |
|                                                    |                                                                                   | Chris Kenny |
|                                                    |                                                                                   | Vice President and Controller |
|                                                    |                                                                                   | (Principal Accounting Officer) |

----

| 3.1        | Amended and Restated Certificate of Incorporation of Continental, as amended through June 6, 2006 – incorporated by reference to Exhibit 3.1 to Continental’s Annual Report on Form 10-K for the year ended December 31, 2006 (File no. 1-10323).          |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |                                                                                                                                                                                                                                                                   |
| 3.1(a)     | Certification of Designation of Series A Junior Participating Preferred Stock, included as Exhibit A to Exhibit 3.1.                                                                                                                                                   |
|       |                                                                                                                                                                                                                                                                   |
| 3.1(a)(i)  | Certificate of Amendment of Certificate of Designation of Series A Junior Participating Preferred Stock – incorporated by reference to Exhibit 3.1(b) to Continental’s Annual Report on Form 10-K for the year ended December 31, 2001 (File no. 1-10323). |
|       |                                                                                                                                                                                                                                                                   |
| 3.1(a)(ii) | Certificate of Increase – Series A Junior Participating Preferred Stock – incorporated by reference to Exhibit 3.1(a)(ii) to Continental’s Quarterly Report on Form 10-Q for the period ended June 30, 2008 (File no. 1-10323).                      |
|       |                                                                                                                                                                                                                                                                   |
| 3.2        | Amended and Restated Bylaws of Continental, effective as of June 10, 2009 – incorporated by reference to Exhibit 3.2 to Continental’s Current Report on Form 8-K dated June 10, 2009 (File no. 1-10323).                                                   |
|       |                                                                                                                                                                                                                                                                   |
| 10.1*      | Continental Airlines, Inc. Long-Term Incentive and RSU Program, as amended and restated through March 11, 2010 (adopted pursuant to Incentive Plan 2010).                                                                                                              |
|       |                                                                                                                                                                                                                                                                   |
| 10.2       | Supplemental Agreement No. 54, dated March 2, 2010, to Purchase Agreement No. 1951 (“P.A. 1951”), dated July 23, 1996, between Continental and The Boeing Company (“Boeing”) relating to the purchase of Boeing 737 aircraft.  (1)   |
|       |                                                                                                                                                                                                                                                                   |
| 10.3       | Supplemental Agreement No. 55, dated March 31, 2010, to P.A. 1951.  (1)                                                                                                                                                                                      |
|       |                                                                                                                                                                                                                                                                   |
| 10.4       | Supplemental Agreement No. 19, dated March 2, 2010, to Purchase Agreement No. 2061, dated October 10, 1997, between Continental and Boeing relating to the purchase of Boeing 777 aircraft.  (1)                                                             |
|       |                                                                                                                                                                                                                                                                   |
| 31.1       | Rule 13a-14 (a)/15d-14 (a) Certification of Chief Executive Officer.                                                                                                                                                                                                   |
|       |                                                                                                                                                                                                                                                                   |
| 31.2       | Rule 13a-14 (a)/15d-14 (a) Certification of Chief Financial Officer.                                                                                                                                                                                                   |
|       |                                                                                                                                                                                                                                                                   |
| 32.1       | Section 1350 Certifications.                                                                                                                                                                                                                                           |

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