This summary is based on the first quarter fiscal 2007 earnings conducted by Continental Airlines Inc. (CAL: chart) on April 19, 2007.

Management:

President: Jeff Smisek
Chairman and CEO: Larry Kellner
EVP and CFO: Jeff Misner

Key Investor Issues:

- Total revenue grew by 8% to about $3.2 billion.
- Quarterly EPS rose to 21 cents from loss per share of 76 cents in the year ago quarter.
- Quarterly income had gain of $7 million from disposal of ExpressJet Holding shares.

First Quarter Fiscal 2007 Highlights

The passenger revenues increased by 7.9% to $2.9 billion compared with $2.7 billion last year quarter.

- This was fueled by strong international revenue growth and improved yield.
- The consolidated revenue passenger miles (RPMs) for the quarter rose 5.5% from last year quarter, on a capacity increase of 4.3%.
- During the quarter, consolidated load factor was a record 78.7%, an increase of 0.8 basis points above the previous last year quarter record.
- The consolidated passenger revenue per available seat (RASM) increased by 3.4% during the quarter from previous year quarter, due to increased yield and record load factors.
- The mainline RPMs rose by 5.9% versus first quarter fiscal 2006, on a capacity increase of 4.7%.
- Quarter mainline load factor was a record 79.1%, an increase of 0.9 points from last year quarter.
- The company’s mainline yield firmed by 4.1% versus first quarter 2006 and mainline RASM increased by 5.3% from last year quarter.
- An estimated 47% of mainline capacity was international during the quarter.

During the quarter, the company twice finished in the top three of the major network carriers for monthly on time performance.

- This was accomplished despite the severe conditions in the North East and Texas.
- The management rewarded employees through $5 million in cash incentives.

- For the fourth consecutive year, the carrier was the top airline on FORTUNE’s annual industry list of World’s Most Admired Companies.
- The company ranked number one in all nine categories measured to determine the most admired airlines: quality of products and services, people management, quality of management, financial soundness, long term investment, innovation, community/environment, use of corporate assets and globalness.
- Across all the industries, the carrier was ranked among the top ten in seven of the nine categories in the World’s Most Admired Companies survey.
- Furthermore, the company was named by FORTUNE magazine as one of the top ten ‘Green Giants’, global companies whose environmental policies go beyond the standard requirements.
- The company won two major awards in the OAG Airline of the Year Awards 2007.
- For the fifth consecutive year, the carrier won ‘Best Executive/Business Class’, which recognizes the excellent comfort, service and value of Continental’s Business First product, available on many international flights.
- The carrier won ‘Best Airline Based in North America’ for the fourth consecutive year.

The company posted first quarter system wide mainline completion factor of 98.9%.

- The carrier operated 23 days without a single mainline cancellation.
- The company achieved a U.S. Department of Transportation on-time arrival rate of 73%, despite the weather and air traffic control ground delay programs.

During the quarter, the company announced nonstop service between its New York area hub at Newark Liberty International Airport and Mumbai in India.

- The service is anticipated to commence in October subject to government approval.
- The management reported that the company has operated nonstop service between New York Liberty and Delhi since 2005.
- Effective June 7, 2007, the company will operate daily nonstop flights between New York Liberty and Athens, Greece, and twice-weekly flights between Houston and Loreto, Mexico.
- The management also announced plans to inaugurate service from its Houston hub to London/Heathrow on March 30, 2008. This will be subject to government approval and the airline obtaining necessary slots and facilities at Heathrow Airport.

The management expanded the company’s alliance with US Helicopter Corporation.

The alliance will provide eight-minute shuttle service between New York Liberty and Midtown Manhattan. The same service is also being offered between the airport and Wall Street. A first rail service is also operational between New York Liberty and New York City.

The company’s mainline cost per available seat mile (CASM) increased by 2% during the quarter compared with the same period last year.

CASM increased by 1.3% holding fuel rate constant and excluding special charges. The good execution and attention to detail by the entire team helped lower costs below the expected levels. The carrier is currently about 35% more fuel efficient per mainline revenue passenger mile than ten years ago. The quarterly ASMs and RPMs increases led to a commendable 4% increase in fuel consumption.

The fuel costs per gallon for the quarter averaged $1.89, a decrease of 0.5% year-over-year.