Continental Airlines today reported a first quarter net loss of $124
million ($1.88 diluted loss per share), including previously announced
after-tax special charges of $35 million. These results represent a 44
percent improvement over first quarter 2003 diluted loss per share of
$3.38. Excluding the special items, Continental’s loss per share was $1.36 for
the quarter, which compares to the First Call mean estimate of $1.43 loss
per share. The results, excluding special items, are a 51 percent
improvement over the first quarter 2003 loss per share of $2.75.

Continuing record high fuel prices severely impacted first quarter
operating results. The per barrel price of West Texas Intermediate crude
oil jumped about 10 percent in the quarter, hitting a high of $38.18 on
Mar. 17, 2004. Fuel prices remain at near record highs, closing at $36.72
per barrel on Apr. 14, 2004. Had jet fuel prices been at Continental’s
five-year average (1999 to 2003) price, the company’s fuel expense for the
quarter would have been $102 million less.

“We’ve made tremendous progress removing non-value added costs from our
operations while maintaining a superior product,” said Gordon Bethune,
chairman and chief executive officer of Continental Airlines. “The
outrageously high cost of fuel remains a challenge to our return to
profitability.”

First Quarter Revenue and Capacity

Passenger revenue improved 11.5 percent to $2.1 billion in the quarter
versus the same period in 2003. Additionally, Continental’s mainline load
factor was up 3.0 points over 2003, to 72.6 percent, while revenue
passenger miles increased 10.8 percent on 6.3 percent higher capacity.
Mainline yields continued to be weak, decreasing 3.0 percent
year-over-year, primarily due to intense competition on transcontinental
routes.

Continental’s regional operations continue to provide significant growth
for the company. Revenue passenger miles for regional operations were up
43.0 percent on a capacity increase of 35.8 percent during the first
quarter of 2004 compared to the first quarter of 2003. The regional load
factor increased 3.2 points in the first quarter over the same period in
2003, to 64.2 percent.

Continental maintained its domestic length-of-haul adjusted yield and
revenue per available seat mile (RASM) premiums to the industry, recording
an increase in mainline RASM of 1.2 percent in the first quarter of 2004
over the same period last year.

Operational Results

Despite high load factors and extreme winter weather, Continental
continued to run a superb operation in the first quarter with a systemwide
mainline on-time arrival rate of 80 percent and a completion factor of
99.4 percent.

“Our employees continue to deliver an outstanding product in a tough
operational and economic environment,” said Larry Kellner, president and
chief operating officer. “The professionalism, focus and commitment of our
employees remain the key driver in our return to profitability.”

Continental opened the final phase of the new 23-gate “Terminal E” at its
largest and busiest hub, Bush Intercontinental Airport in Houston. The
facility, which will host all of Continental’s international service from
Houston beginning in early 2005, features a spacious, modern design and
conveniences for travelers, and gives Continental a platform for growing
domestic and international service.

With the new terminal opening at Bush Intercontinental, Continental
shattered several operational records the Monday following Super Bowl
XXXVIII, accommodating over 28,000 local originating customers, more than
double the amount on a typical day, and more than 31,000 locally checked
bags.

Continental was the first airline to complete installation of eService
Center self-check-in kiosks at all of its airport terminal check-in areas
in the United States. In addition, the company announced that it is
expanding complimentary wireless Internet access to all 22 Presidents
Clubs in the continental United States by summer, with the remaining six
international clubs to be completed by fall. The airline currently offers
the free service at its Presidents Clubs at Houston, Newark Liberty and
Cleveland.

Continental was the most admired airline among FORTUNE magazine’s annual
list of Most Admired Global Companies. The carrier ranked No. 1 in several
key categories including employee talent, innovation, quality of
management, use of corporate assets, long-term investment value,
globalness and social responsibility. In addition, Continental is the only
U.S. airline ranked on FORTUNE’s Global Most-Admired “Top 50” list, which
ranks companies in a wide variety of industries.

For the seventh consecutive year, the airline was also named to Hispanic
magazine’s One Hundred Companies Providing the Most Opportunities for
Hispanics.

First Quarter Financial Results

Continental’s mainline cost per available seat mile (CASM) decreased 4.8
percent in the first quarter compared to the same period last year as the
airline continued to realize the benefits of its cost saving initiatives.
Excluding special charges, CASM declined 4.2 percent (4.4 percent decrease
holding fuel rate constant and excluding special charges).

“As we implement our cost saving initiatives, we are identifying
additional changes that will enable us to compete profitably in the
evolving domestic fare environment,” said Jeff Misner, Continental’s
senior vice president and chief financial officer.

Special charges for the quarter include $19 million ($12 million after
taxes) associated with future obligations for rent and return conditions
related to three MD-80 aircraft that were permanently grounded during the
quarter, and a non-cash charge of $34 million ($22 million after taxes)
related to the termination of a 1993 service agreement with United
Micronesian Development Association.

The financial statement deconsolidation of ExpressJet in November 2003
affects the comparability of quarter-to-quarter financial results in all
line items except passenger revenue. Post-deconsolidation, Continental’s
proportionate share of ExpressJet’s net income is reflected in equity in
the income of affiliates. Payments made to ExpressJet under Continental’s
capacity purchase agreement, previously eliminated in consolidation, are
reported in ExpressJet capacity purchase, net, in 2004. See the attached
table “ExpressJet Deconsolidation Impact” for a year-over-year comparison
of individual items excluding the impact of ExpressJet deconsolidation.

Continental took delivery of three Boeing 737-800 aircraft and four Boeing
757-300 aircraft during the quarter, and has completed financing
arrangements for the remaining Boeing 757-300 and eight Boeing 737-800
aircraft to be delivered this year.
The airline ended the first quarter with $1.6 billion in cash and short-
term investments, of which $175 million is restricted.

Corporate Background

Continental Airlines is the world’s sixth-largest airline with more than
2,800 daily departures throughout the Americas, Europe and Asia.
Continental serves 149 domestic and 117 international destinations—more
than any other airline in the world—and nearly 200 additional points
are served via codeshare partner airlines. With 41,000 mainline employees,
the airline has hubs serving New York, Houston, Cleveland and Guam, and
carries approximately 51 million passengers per year. For more company
information, visit continental.com.

Continental Airlines will conduct a regular quarterly telephone briefing
today to discuss these results and the company’s financial and operating
outlook with the financial community and news media at 9:30 a.m. CT/10:30
a.m. ET. To listen to a live broadcast of this briefing, go to
continental.com/company.
——-