This summary is based on the second quarter fiscal 2008 earnings call conducted Continental Airlines Inc. (CAL: chart) on July 17, 2008.

Management:

President, Director: Jeffery A Smisek
Chairman, CEO: Lawrence W Kellner
CFO, EVP: Zane Rowe
SVP, Finance & Treasurer: Jerry Laderman
EVP, Marketing: Jim Compton
EVP, Operations: Mark Moran
SVP, Worldwide Corporate Communications: Ned Walker
Director, IR: DeAnne Gabel

Key Investor Issues:

- Q2 total revenue increased 9% to $4 billion.
- Q2 earnings loss was 3 cents versus EPS of $2.03 in Q2 of 2007.
- The company raised net proceeds of $162 million through a public offer of 11 million common shares.

Second-Quarter Financial Highlights:

Amidst the challenging economic environment, the carrier implemented a number of initiatives during the quarter to maintain its competitive industry position as well as bolster its cash balance.

- The management announced capacity reductions beginning September 2008.
- The company expects that the reductions will result in a 10% decline in domestic mainline capacity, a 15.4% decline in domestic airline departures and a 6.7% decline in consolidated capacity in Q4 of 2008 versus the same period in 2007.

- The company is accelerating the retirement of 67 Boeing 737-300 and 737-500 aircraft.
- This implies removing a majority of the least fuel efficient aircraft from the mainline fleet by the end of 2009.
- The management anticipates that this will result in the elimination of about 3,000 positions across all work groups.

- The airliner is entering into a new seven-year capacity purchase agreement with ExpressJet Airlines, Inc.
- The agreement is designed to provide regional jet service at lower rates resulting in approximately $50 million of annual savings.

- The management is raising approximately $900 million through a variety of initiatives.
- These initiatives include an amended credit card marketing agreement, issuance of common stock, sale of Continental’s remaining equity interest in Copa Holdings, S.A. and several secured borrowings.

- The carrier is entering into framework agreements for a planned transition to the Star Alliance, linking worldwide networks and services of alliance members including Lufthansa, Air Canada, Singapore, ANA and Air China.
- This will benefit customers and create opportunities, cost savings and other efficiencies.

- The management decided to implement a new checked bag policy charging non-Elite customers on certain economy-class tickets a $25 service fee for a second checked bag, and numerous fuel surcharge and fare increases.

The passenger revenue grew 7.5% ($254 million) versus the same period last year.

- Despite the solid operational and financial performance, the company was unable to generate revenue to keep pace with the stratospheric increase in fuel prices.
- The management will continue to take actions to increase revenues and decrease costs whilst preserving the culture and core product integrity.

- The Q2 consolidated revenue passenger miles (RPMs) increased 0.5% year-over-year on a capacity increase of 2.7%.
- This resulted in a second quarter consolidated load factor of 81.4%, 1.8 points below the Q2 record set in fiscal 2007.

- The consolidated yield for the quarter rose 7% year-over-year.
- The consolidated revenue per available seat mile (RASM) for Q2 firmed 4.6% year-over-year due to increased yields.

- The mainline RPMs during the quarter decreased 0.2% versus the same period last year, on a capacity increase of 2%.
- The mainline load factor was 81.7%, down 1.8 points year-over-year.
- The mainline yield increased 6% over the same period in 2007 resulting in mainline RASM firming 3.8% over the second quarter of 2007.

During the quarter, the carrier recorded a U.S. Department of Transportation (DOT) on-time arrival rate of 73.1%.

- The company recorded a system wide mainline segment completion factor of 99.5%.
- For the fifth straight year, the airliner was named the ”Best Airline in North America” at the 2008 OAG Airline of the Year Awards.