Full Description

Continental Airlines, Inc. (Continental), incorporated in 1980, is a United States air carrier engaged in the business of transporting passengers, cargo and mail. The Company operates in two business segments: mainline and regional. Including its wholly owned subsidiary, Continental Micronesia, Inc. (CMI), and regional flights operated on its behalf under capacity purchase agreements with other carriers, it operated more than 2,800 daily departures. As of December 31, 2008, Continental flew to 120 domestic and 121 international destinations, and offered additional connecting service through alliances with domestic and foreign carriers. The Company directly served 10 Canadian cities, 25 European cities, seven South American cities and six Asian cities from the United States mainland as of December 31, 2008. In addition, it provides service to destinations in Mexico and Central America serving 39 cities. Through its Guam hub, CMI provides service in the western Pacific, including service to Japanese cities.

The mainline segment consists of flights to cities using larger jets, while the regional segment consisted of flights with a capacity of 50 or fewer seats (for jets) or 78 or fewer seats (for turboprops). As of December 31, 2008, the regional segment was operated by ExpressJet Airlines, Inc. (ExpressJet), Chautauqua Airlines, Inc. (Chautauqua) and Champlain Enterprises, Inc. (CommutAir) and Colgan Air, Inc. (Colgan) through capacity purchase agreements.

Domestic Operations

The Company operates its domestic route system primarily through its hubs in the New York metropolitan area at Newark Liberty International Airport (New York Liberty); in Houston, Texas, at George Bush Intercontinental Airport (Houston Bush), and in Cleveland, Ohio, at Hopkins International Airport (Cleveland Hopkins). As of December 31, 2008, Continental operated 74% of the average daily departures from New York Liberty, 84% of the average daily departures from Houston Bush and 65% of the average daily departures from Cleveland Hopkins, in each case based on scheduled commercial passenger departures and including regional flights flown for the Company under capacity purchase agreements.

International Operations

Continental directly serves destinations throughout Europe, Canada, Mexico, Central and South America and the Caribbean. It also provides service to destinations through codesharing arrangements with other carriers and has operations in the western Pacific conducted by CMI. From New York Liberty, it served 25 cities in Europe, six cities in Asia, eight cities in Canada, five cities in Mexico, seven cities in Central America, three cities in South America and 16 Caribbean destinations as of December 31, 2008.

Houston Bush is the focus of the Company’s flights to destinations in Mexico, and Central and South America. As of December 31, 2008, it flew from Houston Bush to 29 cities in Mexico, all seven countries in Central America, seven cities in South America, six Caribbean destinations, three cities in Canada, three cities in Europe and Tokyo. At December 31, 2008, the Company flew from Cleveland Hopkins to two cities in Canada, San Juan, Puerto Rico and Cancun, Mexico. It also has seasonal service between Cleveland Hopkins and London.

As of December 31, 2008, from its hub operations based on the Island of Guam, CMI provided service to eight cities in Japan, as well as other Pacific rim destinations, including Manila in the Philippines and Cairns, Australia. CMI operates as an air carrier in the Micronesian Islands. CMI's route system is linked to the United States market through Tokyo and Honolulu, each of which CMI serves non-stop from Guam.

Alliances

The Company has alliance agreements, which are also referred to as codeshare agreements or co-operative marketing agreements, with other carriers. These relationships may include codesharing (one carrier placing its name and flight number, or code, on flights operated by the other carrier); reciprocal frequent flyer program participation, reciprocal airport lounge access and other joint activities (such as seamless check-in at airports), and capacity purchase agreements. The Company’s regional capacity purchase agreements are with ExpressJet, a wholly owned subsidiary of ExpressJet Holdings, Inc. (Holdings); Chautauqua, a wholly owned subsidiary of Republic Airways Holdings, Inc.; CommutAir, and Pinnacle Airlines Corp.'s subsidiary, Colgan.

Continental is a member of SkyTeam, a global alliance of airlines. SkyTeam members include Aeroflot, Aeromexico, Air France, Alitalia, China Southern, CSA Czech, Delta Air Lines, Inc. (Delta), KLM, Korean Air and Northwest Airlines, Inc. (Northwest), as well as associate members, including Copa Airlines of Panama (Copa Airlines), Kenya Airways and AirEuropa. As a member of SkyTeam, the Company has bilateral codeshare, frequent flyer program participation and airport lounge access agreements with each of the SkyTeam members.

The Company has domestic codesharing agreements with Hawaiian Airlines, Alaska Airlines and Horizon Airlines and international codesharing agreements with Emirates (the flag carrier of the United Arab Emirates), EVA Airways Corporation (an airline based in Taiwan), Virgin Atlantic Airways and French rail operator, Societe Nationale des Chemins de fer Francais (SNCF). It also has codeshare agreements with Gulfstream International Airlines, Hyannis Air Service, Inc. (Cape Air), Colgan, Hawaii Island Air, Inc. (Island Air) and American Eagle Airlines, who provide the Company with commuter feed traffic. The Company also has a train-to-plane alliance with Amtrak, and a codeshare agreement with US Helicopter Corporation, which provides eight-minute shuttle service between Manhattan and Continental’s New York Liberty hub.

Regional Operations

The Company’s regional operations using regional jet aircraft are conducted under the name Continental Express by ExpressJet and Chautauqua, and those using turboprop aircraft are conducted under the name Continental Connection by CommutAir and Colgan. As of December 31, 2008, its regional operators served 103 destinations in the United States, 26 cities in Mexico, eight cities in Canada and one Caribbean destination on the Continental’s behalf.