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CONTINENTAL AIRLINES REPORTS JUNE 2002 OPERATIONAL PERFORMANCE AND SECOND QUARTER $96 MILLION FLEET CHARGE

1 July 2002

Continental Airlines (NYSE: CAL) today reported a June 2002 systemwide mainline jet load factor of 78.7 percent, 0.7 points above last year's June load factor. For June 2002, Continental reported a domestic mainline jet load factor of 77.5 percent and an international mainline jet load factor of 80.5 percent.
Continental also reported an after tax special charge of $96 million ($152 million pre-tax) primarily related to the impairment and accrual of lease exit costs of its MD-80 and turboprop fleet. Continental also recorded an after tax charge of $8 million ($12 million pre-tax) to write down its receivable from the U.S. government related to the Air Transportation Safety and System Stabilization Act grant program as a result of the finalization of its application for that grant. Both of these charges were recorded in the quarter ended June 30, 2002. 

Continental reported an on-time arrival rate of 81.5 percent and a completion factor of 99.7 percent for its mainline jet operations in June 2002.

In June 2002, Continental flew 5.5 billion mainline jet revenue passenger miles (RPMs) systemwide and 6.9 billion mainline jet available seat miles (ASMs), resulting in a traffic decrease of 7.8 percent and a capacity decrease of 8.6 percent as compared to June 2001. Domestic mainline jet traffic was 3.2 billion RPMs in June 2002, down 11.1 percent from June 2001, and June 2002 domestic mainline jet capacity was 4.1 billion ASMs, down 11.3 percent from June last year.
Estimated June 2002 mainline jet passenger revenue per available seat mile (RASM) decreased between 5 and 7 percent compared to June 2001 as a result of lower year-over-year yields, slightly offset by higher load factors. For May 2002, RASM declined 6.3 percent as compared to May 2001. 

Continental expects to report it ended the second quarter with a cash balance of approximately $1.3 billion. 

Consolidated breakeven load factor for July 2002 is estimated to be 79.0 percent. Actual consolidated breakeven load factor may vary significantly from this estimate depending on actual passenger revenue yields, fuel price and other factors.

On June 28, 2002, Standard & Poor's lowered its debt ratings for all of Continental's debt securities, except bond-insured obligations. Continental's corporate credit rating was reduced from BB- to B+ and its unsecured credit rating was reduced from B to B-.

ExpressJet Airlines, a subsidiary of Continental Airlines doing business as Continental Express, separately reported a load factor of 68.0 percent for June 2002, 0.9 points below last year's June load factor. ExpressJet flew 345.8 million RPMs and 508.7 million ASMs in June 2002, resulting in a traffic increase of 8.5 percent and a capacity increase of 10.0 percent versus June 2001.

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