April 17, 2008


EMPLOYEE BULLETIN NO. 5



CO issued the following news release today.



CONTINENTAL AIRLINES ANNOUNCES FIRST QUARTER NET LOSS


Record fuel prices lead to quarterly loss; Continental to shrink domestic mainline capacity 5.0 percent on an annual run-rate basis; company to retire 14 additional mainline aircraft; Continental redeems Northwest’s Golden Share



HOUSTON, April 17, 2008 – Continental Airlines (NYSE: CAL ) today reported a first quarter 2008 net loss of $80 million ($0.81 diluted loss per share). Excluding a $5 million after tax gain from the sale of aircraft, Continental recorded a net loss of $85 million ($0.86 diluted loss per share).

Fuel costs increased 53.2 percent ($364 million) in the first quarter compared to the first quarter of last year, with crude oil prices peaking at $110.33 per barrel and Gulf Coast jet fuel peaking at $139.67 per barrel during the quarter. Further, during the quarter, the company incurred additional fuel costs of $69 million year-over-year that were included as part of its regional capacity purchase cost. As a result, the total year-over-year impact of higher fuel costs on the company for the first quarter was $433 million.

Continental plans to remove from service an additional 14 older, less fuel efficient 737-300 aircraft as leases expire on those aircraft from September 2008 to April 2009. These 14 737-300s are in addition to the 34 737-300s and 500s that were already planned to be removed from service in 2008 and 2009.

Continental also expects to reduce regional jet capacity beginning in the fall 2008; however, its plans are fluid as it is attempting to negotiate better economics with ExpressJet, and as the CRJs flown for Continental by Chautauqua come off lease.



This can't be good for Express.