Jeff Smisek - Chairman, President & Chief Executive Officer Jim Compton - Executive Vice President & Chief Marketing Officer Zane Rowe - Executive Vice President & Chief Financial Officer Mark Moran - Executive Vice President & Chief Operations Officer Gerry Laderman - Senior Vice President Finance and Treasurer Nene Foxhall - Senior Vice President of Communications Affairs DeAnne Gabel- Director of Investor Relations

Bill Greene - Morgan Stanley Hunter Keay - Stifel Nicolaus Gary Chase - Barclays Capital Mike Linenberg - Bank of America/Merrill Lynch Kevin Christy - UBS Dan McKenzie - Next Generation Helane Becker - Jesup & Lamont Ted Reid - TheStreet.com Richard Newman - The Record Shannon Buggs - Houston Chronicle

Thank you, Christine. Good morning everyone.

Joining us here in Houston are Continental’s Chairman, President and Chief Executive Officer, Jeff Smisek; Executive Vice President and Chief Marketing Officer, Jim Compton; Executive Vice President and Chief Financial Officer, Zane Rowe; Executive Vice President and Chief Operations Officer, Mark Moran; and Senior Vice President of Finance and Treasurer, Gerry Laderman to discuss Continental’s fourth quarter and year end 2009 financial results. Jeff will begin with some overview comments after, which Jim will review our capacity and revenue results.

Zane will follow with a discussion of Continental’s cost structure and balance sheet. At that point we will open the call for questions.

We’ll start with executive comments which will be followed by analyst questions and at the conclusion of those questions he we’ll begin a Q-and-A session for the media. We’d appreciate it if each of you would limit your questions to one with one follow up.

With that I’ll turn it over to DeAnne.

Thanks, Nene. Earlier today we issued an update for investors presenting information relating to our financial and operational outlook for the first quarter and full year 2010 and other information.

This investor update was included and filed with the SEC. Today we will be discussing some non-GAAP measures such as net income excluding special items.

Please note that a reconciliation of the GAAP to non-GAAP financial measures as well as the investor update can be found on our website at www.continental.com under the Investor Relations section. In addition, our discussion today may contain forward-looking statements that are not limited to historical facts, but reflect the company’s current beliefs, expectations, or intentions regarding future events.

All forward-looking statements involve risks and uncertainties that could cause actual results to differ materially. For example of such risks and uncertainties please see the risk factors set forth in the company’s 2008 10-K and its other filings.

With that, I’ll turn the call over to Jeff.

Thanks, Nene and DeAnne. Good morning and thanks for joining us.

I want to start by thanking my coworkers for their support and dedication to customer service. They did a great job dealing with the many challenges we faced in 2009 and they did a superb job ensuring that our transition to Star Alliance went smoothly.

This was the first ever move by a major airline to a new global alliance. It took tremendous effort and we accomplished it by our coworkers across the company working together.

Turning now to our financial results, for the full year 2009, we reported a net loss of $295 million, or diluted loss per share of $2.28, excluding $145 million of previously announced special charges and $158 million non-cash income tax benefit. Including special charges and the income tax benefit Continental reported a net loss of $282 million, or a loss of $2.18 per diluted share.

For the fourth quarter of 2009, Continental reported a net income of $4 million, or a profit of $0.03 per diluted share, excluding $77 million of previously announced special charges and $158 million non-cash income tax benefit. Including those special charges and the income tax benefit, we reported a net income $85 million or a profit of $0.60 per diluted share for the quarter.

During 2009, the team once again did a great job delivering consistent operational performance. Our system-wide mainline completion factor was 99.5% and we operated 101 days without a single mainline flight cancellation.

For the full year, we averaged a record 81.9% mainline load factor. Despite the heavy loads we recorded a DOT on time arrival rate of 78.8%, and our employees earned cash incentives for on-time performance for seven months of the year.

As Jim will share in a moment, throughout the quarter we saw sequential RASM improvements. Although this was good news, in large part those RASM improvements were the result of very weak year-over-year comps as the economy and business travel began their steep downward slide in the fourth quarter of 2008.

Everyone should curb their RASM enthusiasm going into this quarter as we will again benefit from extremely weak year-over-year comps as we lap the steep drop-off in business travel we experienced in the first quarter of 2009. We’re a long way from being out of the woods, although, as Jim will discuss, we’re seeing some signs that business travel is beginning to head in the right direction.

We are keenly focused on making money again, and we will make many changes as we challenge every aspect of our business to find ways to increase revenue and decrease costs. That said the two things that won’t change are our working together culture and our dedication to operating a clean, safe, and reliable airline.

We continue to work with our good partner United Airlines to implement our alliance. We’ve begun the process of aligning our gates at key locations, and we’ve already accomplished quite a bit.

This is a benefit for both of us as we reduce our costs and enhanced connectivity for our customers. We’ve announced mutual upgrades for each other’s Elite passengers that becoming this summer and our president’s club members now have accessed to United Red Carpet Clubs worldwide.

Even with just a portion of the customer service benefits between Continental and United having that implemented, we are now connecting as many passengers with United as we connected during the same period last year with Delta and Northwest combined. I think this shows great results already from our new partnership with United.

Our teams are working together to find additional revenue generating and cost saving opportunities. Our membership in StarAlliance is also off to a very good start.

Our new partners want us to succeed, and their support had assistance helps to make our transition go so smoothly. We’ve begun to align our networks to leverage the power of StarAlliance with our New York to Frankfurt service and our recently launched Houston to Frankfurt service we’re already seeing benefits as our customers choose to connect over Frankfurt.

This summer we will be adding New York and Munich, which will be add connections for our customers over Lufthansa’s powerful Munich hub. Additionally, leveraging our new StarAlliance membership, in December we filed an application with DOT for a grant of Antitrust Immunity to form a trans-Pacific joint venture with United and All Nippon Airways.

This joint venture will be the first of its kind between the U.S. and Asia.

We’ve only just begun to see the benefits to being a member of the world’s most comprehensive global alliance. We like what we see and look forward to capturing future benefits.

We have a solid, well balanced network, and we will continue to look for strategic growth opportunities such as New York-Munich, that enhance our overall network in the context of StarAlliance. However, let me be clear that we are not looking to grow for growth’s sake.

At Continental, we have seen the benefits from and understand the importance of capacity discipline. We have a bias towards capacity discipline, because we are firmly committed to achieving and sustaining profitability.

Accordingly, we’ve adjusted downwards our anticipated 2010 capacity from earlier estimates. For 2010, we now expect our consolidated capacity will be up only 1% to 2% with our mainline capacity up 1.5% to 2.5%, our mainline domestic capacity about flat year-over-year and our mainline international capacity up 4% to 5% year-over-year.

As a reminder, the bulk of the international increase is the run rate of our capacity additions last year, which included the long haul roots of Houston-Frankfurt in November, Houston-Rio in August, and New York-Shanghai in March, as well as the restoration of our schedule to Mexico following the large pull down we did last year related to H1N1. On the revenue side, in addition to tapping into the power of StarAlliance and optimizing traditional revenue management, overtime you’ll see us offering customers more control over their travel experience.

So customers will have more choices regarding the elements of the travel experience they consume and pay for. We will further unbundle our product and also offer new goods and services.

We believe that this will be good for customer choice and good for Continental’s revenue. One example of these opportunities that we’ve implemented last year is our day of departure upgrade program.

On the day of departure if, after all Elite upgrades have been made, there are still first class seats available for sale, we offer customers an opportunity to buy a day of departure upgrade to first class. Last year, we generated over $25 million from this program.

Before we started offering day of departure upgrades those empty first class seats simply spoiled. We have a lot of ideas for generating additional revenue and offering customers’ choice and we think our passengers and investors will like them as we roll them out in the future.

With that, I’ll turn the call over to Jim and Zane to discuss the quarter’s revenue and cost performance details.

Thanks, Jeff. I join Jeff and thanking our coworkers for running a great operation this past quarter.

Thanks to the efforts of our coworkers across all divisions the transition Star Alliance went smoothly and as Jeff said, things are spooling up nicely. Moving on to our fourth quarter revenue results, in each of the months throughout the fourth quarter, we experienced sequential improvements in our year-over-year RASM decline.

The results for the fourth quarter were that mainline RASM was down 9.9% and regional RASM was down 4.0% year-over-year. Fourth quarter load factor was up year year-over-year and we also had improvements in year-over-year yield he declines.

However, on an absolute basis, yields remained weak. For the fourth quarter mainline yield declined 13.6% year-over-year and regional yield declined 7.5% year-over-year.

Our December mainline year-over-year RASM decline outperformed what many were expecting. Part of our performance was related to the spool up of our Star Alliance.

Comparing connecting passengers this December, over Frankfurt with connecting passengers last December, over Paris and Amsterdam combined, we have 65% less seats in the Frankfurt market, but we’ve made up 85% of the connect traffic. As a result, we are now connecting twice as many passengers per seat beyond Frankfurt than we did last December in Paris and Amsterdam combined.

We also saw sequential improvement in year-over-year business first RASM comparisons throughout the quarter, which turned positive in the trans-Atlantic and trans-Pacific region in December 2009, mainly driven by increased load factors. We believe that some of our corporate accounts are beginning to ease some of their travel restrictions, such as allowing employees to book in the front cabin again.

However, part of the December RASM improvement was due to year-over-year comparison issues. We saw significant year-over-year improvement in December 2009 RASM performance on the New York/Mumbai route, largely due to the fact that last year’s results were skewed by the Mumbai terrorist attacks, which occurred in late November 2008.

As expected, we had relatively strong leaser demand and yields over the peak holiday travel periods and while we’ve also seen some improvements in yields for the off peak periods, when we are more dependent on business traffic, yields are still down year-over-year. In a recovery period, it is typical to see volume comeback first, then yield.

We’ve seen improvement in the volume and we are seeing modest improvement in business mix trends as business travelers are slowly returning. However, we’re still waiting to see any real strength in yield.

Now turning to the first quarter outlook, corporate revenue booking trends are positive, and we are seeing a pickup in bookings inside of 14 days, but even, so yields remain soft. We continue to believe the recovery will be long and slow, but the recent trends are encouraging as they’re at least headed in the right direction.

On the pricing side, we had some success in the international marks as the industry matched a modest international fuel surcharge increase that we initiated earlier this month. Our corporate accounts are telling that you say travel budgets are still fairly tight.

That said we are seeing business travel slowly comeback. In addition to easing restrictions on front cabin bookings, some accounts are permitting travel for internal meetings, which have stimulated a small pickup in our bookings related to group meetings.

We’ve also seen a pickup in corporate bookings from the financial sector and of course, we’re getting great feedback on our new flat-bed seat. We believe that we’ve been losing some customers, otherwise could have attracted, especially on really long haul routes because we didn’t have flat-bed seats.

We expect to have our entire 777 fleet retrofitted by the end of this year and we just installed our first 757-200 with flat-bed seats. We will now have a highly competitive product to offer those business travelers who expect a good rest on board our long haul routes.

Before I discuss January’s RASM expectations, I want to address a couple of housekeeping items. In the investor update file this morning you may have noticed that mainline domestic will street factor for the next six weeks is running one to two points behind the same period last year and regional book seat factor is also running behind.

Last year, at this time, due to the declining business mix and weakness in yields, we made the decision to make more domestic leisure inventory available for sale earlier in the booking curve and maximize our revenue. This year we have returned to a more normal management of the domestic booking curve, as we’ve seen a modest improvement in business demand.

As Jeff mentioned, as we move through the first quarter of 2010, the year-over-year RASM comps get sequentially easier. Last January our consolidated RASM was down 4.8% year-over-year.

In February, it was down 11.5% year-over-year and in March of last year it was down 19.6% year-over-year. In regards to January 2010 RASM, we still have a little over a week left in the month of January, and things could change, but based on data thus far, we are currently estimating consolidated January RASM will be down around 3% year-over-year, and mainline January RASM will be down around 4% year-over-year.

Again, these numbers are preliminary estimates based on the data we have for January thus far and will likely change. With that I will turn the call over to Zane.

Thanks, Jim. I also want to thank the entire Continental team for their hard work in what was a challenging year.

Throughout 2009 we saw pressure on unit costs as we pulled down capacity. However, the team did a great job working more efficiently and finding additional ways to reduce costs.

That effort is reflected in our cost performance for the fourth quarter as well as for the full year. For the fourth quarter, mainline CASM holding fuel rate constant and excluding special items was up 1.4% on a mainline capacity decrease of a half% year-over-year and for the full year, it was up 1.5% year-over-year on a capacity decreased of 5%.

Again, the solid CASM performance is largely a result of the hard work of our employees. We’ll continue to see these benefits in 2010.

For the full year 2010, excluding special items and holding fuel rate constant we expect both our consolidated and mainline CASM to be up about 1% year-over-year. Our fourth quarter consolidated fuel price, including taxes and hedge impact, was $2 per gallon.

Given the current forward curve we estimate that including taxes and hedge impact our further quarter consolidated fuel price per gallon will be about $2.13 and for the full year about $2.25. We’ve hedged a portion of our fuel needs using a mix of swaps and call options.

You’ll find our current hedge position outlined in our investor update. We continue to layer in additional fuel hedges to reduce some of the volatility of fuel expense.

We have the most fuel efficient fleet of all the major US network carriers, and we continue to look for ways to further improve our overall fuel burn. We will also continue to add modern fuel efficient aircraft to our fleet while retiring older less efficient aircraft.

During the fourth quarter, we placed into service one 757-300, and two 737-900 ER Aircraft and retired four 737-300 Aircraft, ending the year with 337 mainline aircraft in systems. On the regional side, during the quarter we reached an agreement with ExpressJet to remove eight Embraer 145 Aircraft from our capacity purchase agreements.

Two of these aircraft were removed in December. We ended the year with a total of 264 regional jets flown on our behalf.

The other six 145 will be removed from the capacity purchase agreement by the end of April. ExpressJet will continue to sublease these eight aircraft from us, but will not be flying them on our behalf; we will also remove seven CRJ-200 from service in the first quarter.

By the end of the first quarter, we plan to retire the three remaining 737-300 in our fleet. During 2010 we plan to take delivery of 14 new aircraft, including to 777, to 737-900ERs and 10 737-800s.

We expect to receive one of these 800s in late December and we’ll pay to the interest service in January, 2011. In addition, during the first quarter we will place into service three leased 757-300s.

By the end of June, our mainline fleet counts will be down seven aircraft year-over-year and our regional fleet count will be down 15 aircraft year-over-year. Moving onto the balance sheet, last quarter we completed a $644 million EETC transaction.

This included an A and B tranche with a blended coupon of 7.5%. $179 million of the proceeds will go to refinance eight aircrafts that unencumbered in the first half of the year.

The remaining proceeds will be used to finance 11 of the new aircraft deliveries this year. We have back-up financing for the remaining three 737 deliveries in 2010, so we will explore other financing alternatives.

In December, we issued $230 million of 4.5% convertible notes. The notes mature in January 2015 and are convertible into common stock at an initial conversion price of approximately $19.87.

We ended the year with $2.86 billion unrestricted cash and short term investments. As a percentage of the last 12 months’ revenue, cash was approximately 23%.

We expect to end the first quarter with approximately $2.9 billion to $3 billion of unrestricted cash and short term investments. For full year 2010, we estimate our cash capital expenditures related to fleet will be approximately $265 million.

This includes aircraft, winglets, and our new flat bed business first seats. Our non-fleet cash capital expenditures will be approximately $140 million.

We estimate our net purchase deposits for the year will be $25 million. Earlier this month, we contributed $34 million to a defined benefit pension plan.

We estimate our remaining minimum defined benefit pension funding requirements for this year are approximately $85 million. In conclusion, the last couple of years have been a challenge for both Continental and the industry.

We’ve taken actions that will better prepare to us meet our future goals and strengthen the airline. We’ve adjusted capacity to meet the new level of demand.

We’ve continued to make investments in our products and our fleets. We now offer customers the best network in our history and are now part of the best alliance in the world.

We continue to better merchandise our product, offering customers more choice while growing our revenue streams, and we’re investing in technology to provide efficiencies and reduced costs. We need to, and we will continue to adapt to the competitive environments on both the revenue and the cost front.

Our goal is to deliver a meaningful sustained profitability that benefits our shareholders, employees, and the customers we serve each day. With that, I’ll turn the call back to Jeff.

Thanks, Jim and Zane. We’re at the very beginning of the economic recovery, and we don’t know how long that recovery will take, but I suspect it will belong and slow.

That said a long and slow recovery is better than what we faced in 2008 and 2009. We’ve seen a lot of changes in our industry as it’s weathered many challenges over the past couple years.

I think you’ll see even more changes ahead for the industry. Certainly, you will change at Continental.

We need to start making money and to keep making money. To do this, we’ll need to take thoughtful and measured risks by trying out some different approaches to the business, and you’ll see a number of changes at Continental as a result.

What we won’t ever change, our culture of working together and our commitment to providing clean, safe, and reliable air transportation. We have a great franchise.

Never in the history of Continental have we had a better fleet, a better network, better facilities, a better product, or better people. I’m confident that my coworkers, working together, can return to us profitability and put us in a position to sustain that profitability.

We owe it to our employees to provide a future that is more stable and secure than the past and we owe it to our stockholders to start making money and to keep making money. We are committed to doing just that.

With that I’ll turn the call back over the DeAnne to begin our Q-and-A.

Thank you Jeff, Jim, and Zane, with that we’ll begin the question-and-answer session for the analyst, followed by the question-and-answer session for the media. Christine, if you could please review the Q-and-A process, we’re ready to he begin.

Jeff, I just wanted to ask a question on your last comment there, which is getting back to profitability, clearly that would be cyclical, but to sustain profitability we’d have to argue that there’s been some structural change, because every downturn sees this industry lose money. I’m curious what those changes might be, what structural changes you think you can make to actually sustain it in the next down cycle?

I think there are a couple of structural changes. One I think you’re seeing as the industry further, not only unbundled its product, but discovers its merchandising power, and the ability to sell goods and services and generate ancillary revenue that has a very significant margin.

I think that’s structural change that unfolding in this industry and will continue for a considerable period of time. The second structural change, I think is the transformation of self service in this industry.

Customers are demanding more and more and expecting more self service, and we’re investing technology that will permit that throughout the process. That is during the purchase process, post purchase at the airport, after the flight itself and that technology is going tone able not only ultimately better customer service and more consistent customer service, but also I think significant cost savings in the industry.

So I think the combination of unbundling and merchandising, coupled with more and more customer self service and investment in technology I think is a structural change in this industry that hopefully will lead to sustainable profitability.

If we look at your ancillary trends, even before bag fees, you guys generated a fair amount of non-fare revenue in the past. So that didn’t drive sustained profitability, so why wouldn’t this just get competed away as well?

I would think the industry would need to change more than just get a revenue stream out of fares and into ancillaries.

I think that you’re assuming that you’re just fracturing the fares and keeping the fares the say. I think what you are going to see is the ability to merchandise goods and services in addition to what you would expect the traditional fares.

So I think its additive.

One last question is just on your capacity comments. You talked about capacity discipline, but you’d also talked in the past, as a management team, about long term capacity growth rate in the mid single digits.

How long do you think it takes for us to get back to those levels?

I’m not sure that we have that expectation going forward.

So that’s a change from before, the fleet doesn’t…?

As I said, there are lots of things to need to change at Continental and that’s one of them.

I just want to peel the onion a little bit on the RASM guidance. I think you said it was going to be down 3%.

To me, that seems like kind of a sequential step backwards. I think if you adjust for some of the Thanksgiving shift and you look at what the comp did from December ‘08 into January ‘09.

I know it’s preliminary, but is there anything in that number that we should be aware of in terms of something that would make at tough comp because I was expecting that to be maybe in positive territory.

Hunter, this is Jim. As you mentioned, we talked about and again, it’s over a week and things will change, but on the consolidated RASM, we’re looking for it to be down around 3%.

I think the one thing point to that in the commentary we talked a number of things as to why December outperformed expectations. One of those things is the strong leaser period that we had over the Christmas period.

Both from a yield point of view relatively to prior to the December period. So think about it.

No different than the contribution to RASM from leaser in the summer, historically stronger than in the fall. So I think what we’re seeing is some of that affect, when you look at January versus December, that kind of seasonal strength of the leaser yields and the contributions to RASM, coupled in with our commentary that we are seeing business traffic come back slowly, but we’re stressing the word slowly.

So I think that kind of smooth the line as how we look at it versus a step function coming off of November, December, and January, but that seasonal factor, that I think we’re seeing on the leaser side.

Wouldn’t the seasonal factor kind of be washed down if you’re just looking at it on a year-over-year change basis?

Yes, but I think again the industry capacity, again, leaser time, at that the margins, both last summer and this December, when you talk about industry capacity those are periods of time where actually capacity is, in terms of the volatile demand out there, i.e. stronger leaser demand, is much more in think than we’ve seen in the past, even a year ago.

So I think you do break away from some of the seasonality.

I guess quickly, Jeff, your decision to work 2010 pro bono, if you guys don’t make an operating profit, are you trying to send a message to your labor groups that you expect them to take maybe a commensurate, but a higher percentage of risk and they’re on compensation maybe tie more of their salary and their competition to overall company results?

No, I’m not, although I am a big believer in incentive compensation as you know. We ever historically had a profit sharing plan in Continental.

The reason that I decided not to take a salary or bonus until we become profitable on an annual basis is I wanted to send a very strong sign to the entire Continental team that we really need to focus on profitability. I’m not asking anyone else to take a cut, and this is not a signal of bad things to come, but rather it focuses a lot of attention on the need to become profitable, and I think it’s gotten a lot of attention, and that was what I desired.

Jim, could you walk us through what you think the transition impact to Star Alliance was and how that might have played through months, and how you think, if any about impact it might be having in January. By the way, I think I heard two things in there.

I forget who said what, but I thought one of you had said you were connecting as many passengers, and I thought I heard you say twice as many?

Gary, first on that, what we were comparing was the Frankfurt hub to Lufthansa today and what we connect in versus last December looking at Amsterdam and Paris where we were connecting our alliance passengers last year. So if you took the seats in Frankfurt today, compared to the seats in Paris and Amsterdam last year, we have 65% less seats.

It’s just that we don’t have as much obviously seats into Frankfurt as we did last year into Paris and Amsterdam, but we’re already seeing 85% of the connecting passengers, of what we carried across Paris and Amsterdam last year, we’re already seeing 85% of that being connected over Frankfurt into the Lufthansa system. So that translated into twice as many passengers per seat connecting over Frankfurt as were connecting over Amsterdam and Paris last year.

Again, to answer your kind of the general question, that’s a sign to us that’s really clear that star is pulling up very nicely and I would say better than our expectations, part of star is the relationship with united, and Jeff mentioned in his comments that already connecting passengers to and from united are exceeding where Delta and Northwest were combined, again, another example that it’s spooling up very nicely for us with our partners in star and schools better than our original expectation.

If I could just follow up, too, on the RASM guidance for January, and just the sequential issue that you were just speaking to, if I look back, I want to say that December comp last year was up some where in the 4% range you noted in the prepared remarks down 4/8 in January. That obviously means the comps getting substantially easier as you move from December to January, yet what you are expecting for RASM seems about the same.

Is there something in those comps that, in other words, was there something in the history that we need to understand, or should we really read it as the kind of deceleration that that would imply?

I think it’s a combination of we’re seeing slight improvement in business traffic that we think is going to be a long and slow haul as we go forward and coupled with, what I mentioned is the RASM contribution from leaser in periods, where industry capacity for leaser periods is, on a relative basis tighter, you see that contribution spiking more in leaser periods in this environment. As you walk away from that, that’s the piece we’re losing once you get past the New Year’s Day return in January.

So the slight improvement that we’re estimating is, again that slow improvement in traffic. Again in terms of what was happening last year, I mentioned that happened at the end of November that affected for awhile as we went through the first half of 2009.

Are your corporate revenues up yet year-on-year?

Let me refer to a slide that we did in the past and I think in May, we talked about high yield revenue being down about 35%. I’m talking about high yield, so that includes our corporate contract, but we also look at business traffic as fares within seven days.

That’s what that slide reports. I thought it would be really clear on kind of what I’m defining.

We saw in that December basically down 1%. So again, that’s sequential improvement, but I do want to highlight that, as Jeff also mentioned, that last year we began the slide on traffic in fourth quarter of ‘08 and so some of that’s the comps year-over-year that includes sequential improvement.

So a good little bit of improvement and favorable comps drove that change from June to December.

Two questions here. Zane, if you can just clarify, when you talked about the EETC deal that you did that brought in $644 million, you walked through the airplanes that were securing that.

When I look at the press release that you put out today, it looks like there’s some remainder that is the remainder of the proceeds that will be used for general corporate purposes. So I just want know is there a piece and how big is that and does that show up in the first quarter?

Mike, this is Gerry. So the press release talked about the use of proceeds that was in the prospectus supplement, as far as general corporate purposes because cash is sort of fungible.

From my perspective, from the corporate finance perspective, the reason for raising that money was because we had these maturities on existing aircraft in the first half of this year and we’ll take that when we get that cash, we will pledge those aircraft to the EETC.

Then my second question and this is to Jim. I think over the last couple months, we’ve seen some route announcements.

In the past you’ve been very good about doing hub flying and the more recent ads have been non-hub flying. I’m referring to some of the West Coast to Hawaii and I saw that you’re adding a segment up to Anchorage out of Portland.

I’m just curious, number one, are you being opportunistic here and you’re seeing some of the capacity that has pulled out of that market is creating an opportunity? Number two, is some of this begs driven by the fact that now that you’re tied up with united, you as a carrier probably have much stronger brand presence or just presence in West Coast markets, whether it be L.A., San Fran, Denver?

Can you just give us some color, insight into your thinking on these addition, these non hub additions.

I’ll start with the partnership with united. We are seeing stronger demand off the West Coast to Hawaii, first of all.

That, I think is again, one of the spooling up of our partnership with United, both in Star and obvious well United bilaterally. So we are seeing that increasing demand of the West Coast to Hawaii.

The second thing is we serve more destinations in the pacific than any other carrier. One of the ways we get people to the pacific is off the West Coast through Hawaii.

We have increased demand, West Coast to Hawaii, and we also have demand into the Micronesia Islands that we’re trying to meet and with a nice market like Fiji being served out of Honolulu and Guam that also added to that need for demand. So the West Coast to Hawaii is an opportunity for us to make sure that one we continue to meet that demand for West Coast to Hawaii that we’re seeing, as well as support the Micronesia demand that we have going out over Hawaii.

That allows us to do that. The Alaska anchorage, the Portland flight, that’s seasonal flying and we’re able to do it using that aircraft really efficiently, and it’s a market we’ve been in before and trying to satisfy the demand out there in the summer.

Jim, presumably these flights, will they all ultimately carry the united code? Does that in that’s part of the plan, right?

Yes, I think our plan from a code perspective, is the phased approach somewhat that you can do, but clearly, again their presence out there is helping us in those markets like that. So yes, I think we’ll continue to build on that him relationship.

Mike, this is Jeff. I mean, code is important as you know, but the frequent flyer response, we actually drives far greater value than code share.

Just to kill the minus 3%, Jim, did you say whether leaning towards 3% domestic or international was doing better or worse than that? If the relative trends from December on international versus domestic would continue into January?

Our commentary in January was consolidated mainline. We don’t break it out and again, it’s too early for know comment on that, we’ll stick with that.

As I mentioned, it’s still a week to go and the numbers are changing and so we’ll stick with the consolidated mainline.

I think in the past, you’d indicated or management team had indicated losing share to the OTAs through website direct. I imagine that would still be continuing, particularly in a seasonally weaker demand period like January, February.

Can you comment on if that’s still happening and whether if it’s a concern and whether ultimately be a reaction to that?

I think what we’ve seen over the past year and we’ve talked about it a little bit is that a couple things. Obviously, the OTAs removable fees, I think there’s a natural behavior change, obviously just to be about place that versus Continental.com or quite frankly any other supplier side.

I would say also that as we’ve talked through the year and we’ve talked about business traffic declining, that business traffic, quite frankly is fundamentally stronger in your hub. As we optimize revenue, we also begin to carry more flow traffic versus local traffic.

Continental.com’s presence is going to be greater in local marks than it would be in slow markets. So going forward, I really can’t comment on it, but as to where it would end up, but in improving economy that we’re seeing slowly improving business traffic will translate into local market strengthening and so that effect the elasticity effect I’ve mentioned is real, but that effect of local versus flow should abate that.

One last one, do your contracts pay the OTAs less for bookings kind of the back haul bookings rather than out of Newark out of your hubs?

We don’t comment on our contract.

I wanted to circle back on the commentary related to the unbundling of the product even further. It sounds like there are a number of new ancillary revenue initiatives in the works.

I’m wondering if you can provide some perspective about how investors should think about the materiality of these initiatives. I guess, in particular, some of the other airlines have quantified partly their ancillary revenues today and the incremental revenues they’re targeting.

So I’m wondering if Continental could do the same.

We’re not going to quantify at this time, but I will tell you that we do indeed have a number of initiatives in the works, and we’ll announce them as we roll them out. In terms of materiality, recognize that there is, I think, somewhat quantitative difference in the margin associated with ancillary revenue versus our core product.

So I think that ultimately the ancillary revenues can become a significant portion of our future profitability.

The second question here is really more housecleaning. Zane, given where Continental stock price is, I’m wondering if some of the convertible notes have already converted at this point.

I guess, what I’m wondering is if the interest expense assumes, for the years, assumes at the converts are, in fact, converted.

We can’t comment on that, unfortunately. Dan, I will tell you that Jerry is actively looking at how we optimize things, but we can’t comment on forward-looking in that regard.

Jeff, you guys have applied for HEI with ANA and United for Japanese in Pacific routes. Can you just say what you think the timing own that is going to be?

Because, I guess there’s been press reports that the U.S. DOT and DOJ can get it done in less than six months, and yet that hasn’t necessarily been the case in the past.

So I’m kind of wondering if you’re thinking in terms of 2010 or ‘11 event.

I am not even going to attempt to prognosticate on how quickly DOT and DOJ, I can go through the process. The application Antitrust Immunity with respect to the treaty, I believe were due in February.

We would anticipate reasonably prompt review of our application, but I can’t give you a specific timeframe.

With that Christine, we are ready to move on to the question-and-answer session for the media, if you could please review the Q-and-A process.

I have a couple of questions about Star. First of all, in Europe, you’re just saying that Frankfurt just a better hub, it has better connections, more connections than either of the other two?

Is that the dynamic there? Secondly, what’s the major location for domestic benefit with United?

Ted this is Jeff, I’m sorry you’re really weak on the phone. We’re having a hard time hearing you.

Could you repeat your question, please?

How about now? My first question is you just saying that Frankfurt is a better hub?

Is that what the dynamic is? Better than either of the other two hubs with more connections?

Is that the dynamic?

It is a better hub, but it’s a better hub for a combination of things. One, Star again is a much more expansive network from where we came from, so the number of destinations that we’re able to offer is much greater is that what we’re able to offer in the past and so forth.

So not only is it the terrific facility, the breadth of what we can do out of Frankfurt is very powerful in terms of connecting traffic.

Secondly, on the domestic side, what’s the major benefit of the link-up on the domestic side? Is there one particular hub or city?

Also, is there any benefit that you’re seeing from linking up with U.S. Airways?

Let me talk about domestic briefly. The beauty of our alliance with United and the beauty of our alliance in Star, first, we have partners who want us to succeed as opposed to want to kill us, and that’s a positive.

Secondly, with United, United and we have very complimentary route network. United and we are essentially not competitors, although legally my general counsel will tell me, we are competitors, we essential aren’t in the sense that we are very little over that and what you want in the line is precisely is that, you complimentarity so that you provide for your customers a broad array of destinations and connection points.

That’s what United and Star Alliance bring us. Our U.S.

Airways is helpful as well with us as a partner, but clearly not as important to us as united, given the complimentarity of our network with United.

I want to ask you if the regional capacity cuts at New York in particular, both in ‘09 and coming in this year, what destinations were to that effect as far as frequencies and or routes.

It really has no appreciable effect on frequency or destinations in Newark.

Overtime, what you’re going to Newark is fewer regional jets and more mainline jets as we continue to grow our hub there. We have plenty of room for future growth in Newark it’s a very powerful hub for us.

One regional jet takes up the same airspace and slot as one 777 or 787 for the future. So I think you’ll see, overtime, a trend of fewer and fewer regional jet operations in our Newark hub and more mainline operations.

How might that affect the customers who use those shorter hauls?

Well, I think we’ll continue to keep the customers satisfied in the shorter hauls. It’s less as we grow, especially in the StarAlliance, we are also be able to grow the feed, and many of those shorter hauls will be covered, for example, by Q400s, which you’ll see as increasing usage of those Q400s.

Candidly, those are great aircraft. They have essentially the same trip cost as of 145 and they have 24 additional seats.

They’re very quiet and very comfortable aircraft for those shorter home markets. So they satisfy the customers and they are more efficient operation for us to run.

Christine, we have time for one more media questions.

I didn’t quite understand Jim’s answer to the question from the Barclay’s analyst. I thought it was a pretty clear yes or no answer, but I got confused.

It was Continental revenues up year-over-year or not?

Shannon, could you repeat the question you broke up on me?

I’m sorry. I didn’t understand Jim’s answer to the question from the Barclay’s analyst that seemed like a yes or no question about whether or not Continental’s revenues are up year-over-year or not, the corporate revenues.

What I was trying to explain is that as we’ve gone through the year in 2009 on the monthly basis, we’ve seen the year-over-year trends improve. Back in May we were seeing 38% decline in high yield, which includes our corporate revenue, until December being down about 1%.

In December, we’re starting to see improvements in ticketing trends for future travel dates from the corporate side. So we think again that potential improvement is a combination of the year-over-year comps from some of the toughness of the fourth quarter of last year with also a modest growing strength in the ticketing going forward on the corporate side.

The year-over-year was a 1% decline.

In December, it was down 1%, and it was down 38% in May in 2009.

There was a question about the ancillary fees at some of the new initiatives. I know you said you weren’t going to talk about them until they roll out, but for the passengers who are trying to pay very close attention to how all of this is impacting them?

What can they start to anticipate that they might see a change in?

I think, what we’re trying to do, and I think ultimately will accomplish is to provide our customers with various attributes of their flight that they can pick and choose from and determine what they want. The way I would phrase it, we have historically served sort of a pizza with everything on it, and now what we’re going do is let customers not only build their own pizza, but determine the size of their slice or whether they want the whole part, and some customers want and show reason and other don’t and cannily for the lactose intolerant, if they don’t want cheese they don’t have pay for cheese either.

So, what were going to elect people do is choose the level and type of services and attribute they have in travel and pay for those things that they choose and not pay for those things they don’t choose and we think ultimately that is better for the customer and better for Continental

Okay. Jeff, Jim, Zane, DeAnne, thanks for your participation this morning, and thanks to all of you for joining us.

Please call corporate communications if any of you have further communications and with that we’ll look forward to talking to you next quarter. Thanks.