Good day, ladies and gentlemen and welcome to Continental Airlines Q4 and full-year 2008 financial results conference call. [Operator instructions] I will now turn the call over to Nene Foxhall, Senior Vice President of Global Communications and Public Affairs, and DeAnne Gabel, Director of Investor Relations. First, Miss Foxhall. Ma’am, you may begin.

Thanks John. Good morning everyone. Joining us here in Houston are Continental Chairman and Chief Executive Officer Larry Kellner; President and Chief Operating Officer Jeff Smisek; Executive Vice President and Chief Financial Officer Zane Rowe; Executive Vice President of Marketing, Jim Compton; Executive Vice President of Operations Mark Moran, and Senior Vice President Finance and Treasurer Jerry Laderman, to discuss Continental’s Q4 and full-year 2008 financial results. First, Larry will make some overview comments, after which Jeff Smisek will review our capacity and revenue results. Zane Rowe will follow with the discussion of Continental’s cost-structure and balance sheets. At that point, we will open the call for questions. We have planned about 20 minutes for the executive comments and then 25 for analyst questions. At the conclusion of the analyst questions, we’ll begin a 15-minute question and answer session for the media. We would appreciate it if each of you would limit your questions to one, with one follow-up. With that, I’ll turn it over to DeAnne.

Thank you Nene. Earlier today, we issued an update for investors presenting information relating to our financial and operation outlook for the Q4 and full-year 2009 and other information. This investor update was included in a filing with the SEC and can be found on our website under the investor relations section. Please note that today we will be discussing some non-GAAP financial measures, such as net loss excluding special items. A reconciliation of the GAAP to non-GAAP financial measures to be discussed can be located on Continental's website, at contintental.com under the Investor Relations section. Our discussion today may contain forward-looking statements that are not limited to historical fact, but reflect the company’s current beliefs, expectations or intentions regarding future events. All forward-looking statements, involvements and uncertainties could cause actual results to differ materially. For examples of such risks and uncertainties, please see the risk factors set forth in the company’s 2007 10-K and its other security filings. With that, here’s Larry.

Thank you, Nene and DeAnne. Again, good morning and thanks for joining us. I want to start by thanking my coworkers who did a great job operating under some very tough conditions this past quarter. I specifically want to thank the crew of flight 1404 that went off the runway in Denver on December 20th. We’re grateful for the quick actions to safely evacuate all the customers on board with no life-threatening injuries. Our top priority is to continue to work closely with passengers and crew members who need assistance. In addition, we’re cooperating with the National Transportation Safety Board in their investigation to determine the probable cause of the accident. Looking back at 2008, the environment was very challenging throughout the year. Crude oil prices were extremely [bubable], peaking as high as $147 per barrel in July, and then dropping to a low of $32 per barrel in December. Add in the revenue environment deteriorating as the economy weakened, and you have an operating backdrop that rivaled any we’ve seen in our industry for many years. However, this backdrop also provided a stimulus for change in our industry. The major network carriers kept their domestic capacity to deal with high-yield prices, which put the industry in a much better position to cope with an economic downturn. We now turn to our 2008 financial results. With the full-year 2008, we reported a net loss of $351 million, or diluted loss per share of $3.32, excluding $234 million of previously announced special items. Including special items, Continental reported a net loss of $585 million, or loss of $5.54 per diluted share. For Q4, Continental reported a net loss of $96 million, or a loss of $0.84 per diluted share, excluding $187 million of previously announced special items. Including those special items,…

Thank you Larry. I want to join Larry in thanking my coworkers for their dedication and commitment to running a good operation under difficult conditions. During Q4, our employees earned incentive payments for on-time performance in the months of October and November. Unfortunately, December was another matter. It was a tough month from an operations viewpoint. Not only were we hit with an unusual number of severe storms across the country, we also had to deal with a rare snowstorm in Houston; the severity and duration of which exceeded our planning forecasts. It was the earliest recorded snowfall in Houston since WWII. The weather caused extensive mainline and regional flight cancellations and delays, including numerous lengthy delays on the tarmac in Houston. Our team worked hard to deal with the unexpected storm, but we did not perform to our normal high standard of operational excellence. We apologize for the inconvenience our customers suffered. We have revived operational procedures, and are improving our de-icing capabilities in Houston to prevent this from recurring. Finally, we are implementing a new internal policy for 2009, whereby we will give customers the opportunity to get off an airplane during tarmac delays in excess of 3 hours; subject, of course, to making sure we can do that safely. Unfortunately, difficult weather wasn’t the only challenge we faced during the quarter. Beginning in October, we began to see a negative revenue impact from a weakening economic backdrop. Despite this in Q4, we achieved RASM gains in all our mainline entities. Mainline RASM for Q4 was up 5.9%, driven by yield increases as load factors were just slightly down year-over-year. Regional yield was also up slightly, but those factors were down 2.6 points resulting in regional RASM decrease of 2%. Turning to the first quarter outlook. In general,…

Thanks, Jeff, and again thank all of you for joining us this morning. I join Larry and Jeff in voicing appreciation to the entire Continental team. 2008 certainly seemed to have more than its fair share of challenges, but everyone stayed focused on running the business ambitiously and delivering excellent service to our customers. Throughout the year, we continued our company-wide efforts to control costs. For the full year 2008, our mainline CASM holding fuel rate constant and excluding special items was down 1.5% year-over-year. In Q4, with our mainline capacity down 8%, CASM was up 3% year-over-year, holding fuel rate constant and excluding special items. While overall, we are pleased with our performance in Q4, we recognize that with capacity coming out, there’s going to be continued pressure on unit costs. Historically, we’ve done a good job at controlling costs, and our emphasis in this area will continue. Excluding special items for Q1 2009, we expect both our consolidated CASM and mainline CASM to be down 6.5% to 7% year-over-year. For the full year 2009, we expect both our consolidated CASM and mainline CASM to be down 10% to 11% year-over-year. Excluding special items and holding fuel rate constant, we expect Q1 consolidated CASM to be up 2.5% to 3% year-over-year, with the mainline number up 3% to 3.5% year-over-year. For the full year, excluding special items and holding fuel rate constant, we expect both our consolidated and mainline CASM to be up 2% to 3% year-over-year. We expect to see some cost pressure on various line items, but the biggest driver from the unit cost respective will be wages, salaries and benefits. This is primarily driven by higher pension expense, which will be about $150 million higher than it was last year, excluding special settlement charges. The pension…

Thank you, Jeff and Zane. There are many challenges ahead in 2009. There will also be opportunities for us to distinguish ourselves from our competitors. We will continue to make appropriate changes to our network in light of the changing demand environment, keeping in mind that we’re in business for the long haul. With the decline in premium yielding business first traffic on our international market, meaning reduced contributions to the system as a whole, these markets remain good businesses and we do receive a significant benefit from lower fuel costs on our longer haul international routes. While we continue to lose money in our domestic operation, there is a certain tension between our domestic results and the need to keep a proper balance between the scope and scale of our domestic and international operations. We need a properly sized domestic network to provide necessary fee and schedule utility and have sufficient market presence to make sure that our regular domestic customers choose Continental when they decide to take an international trip as well. That said, we’ll continue to examine our options and remain committed to achieving sustained profitability. We’re excited about the opportunities joining Star Alliance presents us. We’re focused on making the transition go smoothly and have confidence as our team as we successfully accomplish the task. Whatever challenges lie ahead, we’re going to stay focused on the basics of our business, providing clean, safe, and reliable air transportation. We’ve got the best team in the business and we’ll work together to succeed in this tough operating environment. I want to close by again thanking my coworkers. They make it happen every day. With that, I’ll turn the call back over to DeAnne to begin our Q&A.

Thank you, Larry. With that, we’ll begin the question and answer session for the analysts, followed by the question and answer session for the media.

(Operator Instructions) Your first question comes from William Greene from Morgan Stanley.

Larry, I have a question for you on your ASM target growth rates. In the past you’ve said you target 5% to 7% and you're saying that the international now is slowing, and so you’re running a little bit lower than that given what’s going on in the economy and that makes sense. How fast could you ramp that up if you saw a turn and if international really started to slow in a big way, how fast could you pull more out of international? What’s the lead time or I guess the lag time to when you decide and when you can get that in?

Let me break that into a couple of pieces. First, we continue to have a long term goal that we should be growing 5% to 7 % a year. We’re the fourth largest carrier in what’s very much a network business and so it’s important that we stay competitive. Having said that, between the delays in the 787 and the economy, it makes sense to put that on hold for not just this year but probably a couple of years. We need to get the balance lag bodies up on a long term basis. We continue to believe in the international markets over the long term, and so we keep that goal for the long term, but I wouldn’t expect to see growth of any substantial amount over the next couple of years based on what we see in the economy or the marketplace and we need to get the 787 to really help us move that plan forward. Clearly we’d expected to take our first 787 next month and so between the delay of those and the economy, that pushes our plan back. As you look at the other side of your question, which is if things got worse, how fast can we pull stuff out of the international markets, they are clearly more difficult because a lot of the markets you only fly once a day. But we’ll continue to look at the markets we fly multiple times, we’ll also continue to look at day of week. It doesn’t make much sense to take something out without at least a couple of months notice because you’ve started to sell it to a point where it’s very difficult to recon it, so there’s clearly a two to three month minimum reaction time to kind of put significant changes in place. If you watched last summer, we announced some stuff in June that we didn’t put in until September, and from a booking standpoint, international tends to book a little bit ahead of domestic, especially in some of the back cabin stuff. So you probably have a little longer lead time than you do in domestic, so it’s not a year but it’s probably a 3 or 4 months on the international front, but again it’s tough because there’s not... Our international business is still pretty solid, it’s just less profitable than it used to be, and so we’ll be very careful at how we look at our adjustments there.

So if we looked at sort of seat count in domestic versus international, would it show a different picture in capacity because of the stage length for international?

Clearly we’ve got a lot more seats in domestic than we do in international which is much longer haul but we tend to look at the business more on a balanced ASM perspective which we’re close to 50-50 at the moment. But our seats are much more domestic than they are international, especially when you add in the regional flying as well.

What I more meant was the year-over-year change in seat count. Because you’re cutting a lot of domestic, but not that much international, but I think it’s safe to assume that international is probably going to slow a lot from here, so maybe it’s that the ASM change is sort of skewing that capacity cut.

That’s correct. The ASMs will clearly make it look more international from a seat then it is as you look at the number of seats coming out of those markets because they are longer haul flights, but again, I think we’ll continue to watch as we go forward. What I can tell you is this is at least since 9/11 the most volatile market we’ve seen and the most difficult to predict in, and so I’m going to be cautious about predicting too far forward. There’s a lot of both physical policy and stimulus going on and I think we have not seen the impact of that hit the economy and when you look at scale, when it hits the economy, it could be significant, and so it makes it difficult to see very far out.

Your next question comes from Hunter Keay from Stifel Nicolaus. Hunter Keay – Stifel Nicolaus: Given the continuing fall in energy prices, what kind of demand degradation have you guys seen from your corporate energy customers out of Houston?

We spend a lot of time, the sales force has constantly worked with all of our corporations and so forth, and I think I wouldn’t have an absolute number, so kind of the feedback we’re getting from our travel partners and their managers is a little... it’s somewhat across the board in the sense that quite frankly that some are not flying in terms of policy, some are having to have people sign off, others are saying it’s essential travel and so forth. I think across all sectors we see a little bit of all of that so I would add that even into some of the... typically the oil companies that you mentioned specifically. But across the board, if you weigh it all in, there’s this certain kind of wait and see that both Larry and Jeff talked about kind of in the economy has been watching real time what’s happening in the economy, so it’s really across the board and some are traveling, some you need to get permission to travel, and some are actually holding travel back.

I would just add to that that the volatility I think for us is a huge problem, as I talked to the oil companies, it’s a huge problem. If they thought they had a stable price going forward, even while $40 seems low in comparison to last summer’s $147, five years ago I think if you’d have told the oil companies you had it at $40 a barrel, they would have viewed that very positively. So I think part of the challenge for everybody, us and the oil companies, is the volatility. Is it going back to $100 or $150 or is it going back down to $20? And while that makes planning tough for us, it also makes planning tough for them and I think that again adds to some of the uncertainty about future travel. Hunter Keay – Stifel Nicolaus: Quickly on Houston, it looks like you had a slight uptick there in your 4Q load factor. Any color there may be on how much that may have been, any incremental growth in say O&D traffic or is that maybe more just sort of re-routing through the hub? Is there any kind of local tailwind you’re getting out of that particular market on an O&D basis?

I think specifically other than obviously with our adjustment in capacity and so forth, I don’t point to anything specific. Hunter Keay – Stifel Nicolaus: I guess Larry, this might be one for you, you have talked in prior calls about keeping sort of your internal focus on I think your top three internal priorities. If you don’t mind sharing, can you maybe share those with us and maybe what they are right now in order and how that’s changed over the past say three and six months?

I’d be glad to share those today. Sometimes we’ll be cautious but clearly we’re focused on revenue across the system and right now we’re focused on cash and we’re focused on the transition to start.

Your next question comes from Ray Neidl from [Plains] Securities. Raymond Neidl – [Plains] Securities Inc.: Larry, just to go into the economy again a little bit more, Continental as you said has a smaller system, has a balanced domestic and international, I’m just wondering, how much flexibility do you have if the economy does deteriorate further of cutting your capacity. You’re getting less bang for your buck probably as you shrink and it could compromise your system. I’m just wondering if something like what United’s doing with their Lingus for some of the smaller routes overseas now that the European open skies market is there that you could get a partner to fly some of those routes.

Ray, thanks for the question. One, we don’t have any intentions of having a partner fly some stuff for us. I think when you look at our consistency and what we do from the product side, it’s very important to us and we’ve seen, if you look back over the last 10 years, pretty significant growth during that period. That is partially because of our relative site and we need that growth and while we continue to plan for it long term, but we planned for it to be our flying. We’ve got 25 787s on firm order and so I think if you look at our long term plans, clearly we’re focused on doing that ourselves. In the short term, while it will be extremely painful... last year was very painful, to take the capacity out we did, and that will appear easy compared to what we have to do this year, if we have to take more capacity out. Let me tell you, we are committed to doing what we need to do to be a successful business and have long term sustained profitability. We will make the tough decisions where we need to make the tough decisions and we’re keeping a close eye on the economy. We’re clearly hopeful things get better, but I can tell you we’re pushing hard both on the what’s the right capacity decisions and how do we manage our costs while not doing that at the expense of our customers. So clearly we want to make sure that we keep our service levels up but we’re trying to be as efficient as we can be and we see slightly lower load factors, especially on some days we’re trying very hard to make sure we’re adequately managing our costs on those days, to get the best possible result. And most importantly, I think we’ve got the right team here. I’ve got just a great group of coworkers and a great group of colleagues here on the management team as well, and I think the group together will collectively make the best decisions. Raymond Neidl – [Plains] Securities Inc.: Okay, and tied in with that, I think you just signed a new seven year agreement with the Express Jet for your regional feed. Express Jet, there’s some questions about their long term viability. I’m just wondering, what is your back up plans with that, how important is the regional feed that they’re supplying to you?

The regional feed Express Jet supplies to us is very important. Clearly it’s part of what makes our network work as we look and we need that regional feed to be successful and I’m very confident about Express Jet’s capabilities going long term and also about their position.

Your next question comes from Mike Linenberg from BOA. Mike Linenberg – Bank of America: I apologize if you provided this data but in addition to the mainline capacity, what does it look like domestic on a consolidated basis and then also what your system capacity change is on a consolidated basis for ’09?

For the full year? Mike Linenberg – Bank of America: Yes, for the full year.

Earlier we had talked about for the full year mainline capacity being down 3.5% to 4% with mainline domestic down 6% to 7% and our mainline international down 1% to 2% so we didn’t give any consolidated guidance. Mike Linenberg – Bank of America: Then my second question, and this is maybe to Zane or Larry, can you just talk about the [status intention] plan and when I talk about status, I believe your pilot plan is frozen, your flight attendants, I think they may be part of the IAM’s national sponsored plan. I mean, can you talk about that, and then maybe about the fact that maybe the liability hump is behind you going forward since employees who come on new would automatically come into the DC plan, any color on that front would be helpful.

A couple of things, one, just on a fact basis, we have two pension plans, one that covers our pilots which is frozen, and one that covers the rest of our workforce which we refer to as [CARP] and so CARP has the vast majority of our employees in it and the pilot plan has just the pilots. The flight attendants are in CARP, they are not in the IAM national plan. So they are in CARP as well. CARP is not frozen and so we continue to accrue benefits there. The pilots have a separate B plan which is actually defined contribution plan rather than a defined benefit plan and so the pilots actually have two plans, both their frozen plan as well as the defined contribution plan. I can tell you we’re very committed to the pensions as we look going forward and I think evidence of that was our $50 million contribution earlier this month. We think it’s important. Clearly, we were impacted by asset performance last year and the market continues to be a challenge but our employees do a great job for us and we think our retirement commitment is part of that so we’re very focused on maintaining that in a way that works for them and a way that works for us. Mike Linenberg – Bank of America: Larry, but both the frozen plan and the perpetual plan, they are both... You are a beneficiary of the Pension Protection Act of ’06. They both benefit that in more favorable terms, is that correct?

There’s two different bills. They weren’t covered in the same bill but both plans are beneficiary bills. I’d also point out that we’re different than most of our competitors in that... I think we may be different than all but I’m not sure if anybody’s got any full lump sum... We have a full lump sum option which is very important to us and very important to my coworkers as well. What that means is we are 100% funded on any retiree, so [inaudible] retiree who’s taken a lump sum, we have a few who don’t take it, but he vast majority of our people take a lump sum, so if you look at our pension plan balances, they are significantly below many of our competitors who don’t have a lump sum because they have large asset balances for retirees as well. Typically when someone retires here, the vast majority take a lump sum and so we fund that and that ends our obligation. So that’s also a big distinction for us and as pilots retire, that plan will continue to decrease in size in the frozen plan because again, almost all the pilots take the lump sum when they retire. Mike Linenberg – Bank of America: Okay, I don’t want to get too technical here, but that would suggest that maybe it’s better to look at the ABO than the PBO?

I think as in all pension accounting, it’s complicated. I think the best way to look at the balance we have and look at what our future obligations are going forward, I think under a number of different assumptions, knowing that we probably got less pension volatility than some of our competitors.

Your next question comes from Kevin Crissey from UBS. Kevin Crissey – UBS: Good morning, I was wondering did you kind of give away your demands/RASM implied within your profit share or how profit share relates to your overall CASM ex fuel? Trying to get a sense for what you’re thinking about. Does the current demand stay this level to get to your unit cost guidance or is there a deterioration? How you’re viewing that.

We don’t give any earnings guidance but when we do give CASM guidance, it includes all components of the cost structure, so it includes either what we believe is in or out of profit sharing is included in our CASM guide. Kevin Crissey – UBS: Right, I understand, that, I’m just wondering whether... how you viewed... and then I’m looking more directional and I’m sure you’re not going to say 4% RASM decline like say maybe Delta said, but something kind of directionally from here as to how we should think about it because one of the disadvantages of having your profit share within your guidance is that we can’t model sensitivities very well, and so what I want to try to get a sense of is how you’re viewing it, is the kind of run rate that you’re looking at, I think January was pretty poor on the RASM front relative to even maybe some other competitors, and then I look at it and say, “Well what is their expectation as we go forward that gets them to their CASM ex fuel guidance?” Do you have a little bit of profits or a lot of profits, that kind of thing, I just want to understand if there’s any color you can provide.

Probably not a lot of color. What I’d say is that the one part I disagree with here, I think actually if you look at our January RASM performance relative to our competitors, we at the moment remain confident that it will look a lot like October, November, December where we did relatively well year-over-year versus the industry and we are in a very tough environment. We would fully acknowledge that and we gave where we think we’ll be for January. It has been difficult for us to predict even a month out and so while we’ll be as good as we can as far as where we are currently, we’re going to not move forward trying to project RASM. We did a little bit of that in the fall and we were consistently wrong, so we’ll learn from that and just report it as it occurs. We’re pretty good and once the... We have great systems here, I want to compliment the technology team as well. We know what happened yesterday. We’re not as good as what’s going to happen tomorrow and so I think we’re going to keep our projections internal but be very good at reporting the external market, we put our load factor on the website daily. We report first business day on RASM for the prior month and today we even gave you some guidance on January, but we’re not going to get into trying to give guidance on future months based on how volatile things are.

Your next question comes from Bob Macadoo from Avondale Partners. Bob McAdoo – Avondale Partners LLC: I understand that there have been emails sent out to your frequent travelers in the New York area basically offering specials on front of the cabin to places like London and Paris and whatever and I’m curious, is that something that’s driven by what some competitors are doing or is that something just driven by a realization that people are starting to slide to the back cabin and you’re trying to give them an incentive to come back to the front cabin?

We obviously do part of our marketing program through targeted marketing where we see some opportunity that will benefit us and so as we’ve talked about it and I think Jeff mentioned, some of the corporate travel we have, that response we have seen, is a number of things, people planning early, taking advantage of advance purchase tickets, or for instance, as you’re talking about, transatlantic moving to the back of the cabin from the front of the cabin. So those are ways to kind of from a direct point of view with a lot of fences around then to generate some leisure business first traffic that might otherwise not be traveling, so again, with fences around them to protect kind of the segmentation that we like to have in our business.

I would just add, we’ve been for at least a couple of years in the summertime trying to do the same concept and so this was partially just an expansion of what we’ve always tried to do which is to maximize total revenue on the airplane while making sure that we don’t discount the whole thing because then we get to the point where we don’t have a business model that works and so we’re always trying to find a way to offer the leisure traveler a discount to encourage that travel at points. Clearly we’ve done that in the past in the summer months, July and August, where you see business first traffic be down. We’re looking to try to broaden that where it makes sense for us and it makes sense for our customers. Bob McAdoo – Avondale Partners LLC: So it’s something that you guys are doing, it’s not a reflection of something that somebody else is throwing at you. It’s your own conscious decision that says you think we’re better off.

That’ right. We’ve done this, we’ve actually done this in the summer time consistently. We may structure it differently from time to time and certainly in an era of less front cabin demand, the structure here is going to be more attractive than we have n the past, but this is consistent with what we’ve done historically. This is always a competitive business so probably what our competitors are doing, we’re always paying attention to, but I think in general what you see is a softer market in the front cabin across the industry. We’re not the only people who have commented on that, so there’s no question in my mind that this is also something you see broadly competitively, not necessarily responding, but simply the fact that people are looking for ways to get the maximum revenue they can. Bob McAdoo – Avondale Partners LLC: Then one other quick thing, the 25 787s that you now have on the books, what is the current plan for deliveries, what are they telling you now? What are you planning on in terms of when 787s do actually get here?

Right now we are looking at the first scheduled delivery in 2011 and then the remaining aircraft spread out beyond that.

I think the one challenge we have is that they may also slow down a little bit at the pace at with which we get them initially over the first couple of years and so we’re clearly going to be two to three years behind our plan which was what I reflected earlier in my comments, and we won’t come back to growing 5% to 7% until we can get those airplanes flying in here on a regular basis. Bob McAdoo – Avondale Partners LLC: Is it just kind of one in 2011 and everything else flows beyond because it’s late in 2011 or do you have any...

We would hope to get three I think in 2011 at the current moment but there’s a good bit of flux in that and so we’ll continue to work with Boeing as they work on a schedule. I would say though Boeing has continued to be a great partner in keeping us informed and keeping us in the loop and so while we’re disappointed with the delay the communication from Boeing has been excellent and they know it’s a challenge for us and they continue to work with us.

Your next question comes from Gary Chase from Barclays Capital. Gary Chase – Barclays Capital: Wanted to follow up on a few things if I could. Jeff, since we are talking about something that’s backward looking and you gave at least a pretty good preview of what the January RASM is expected to be, can you give us any flavor for how that breaks out between domestic and international, because I think as we hear from competitors certainly the domestic seems to be pointed at a January result that look a lot closer to December than w hat you’re suggesting.

Clearly overall the system in terms of what we’re seeing in terms of year-over-year RASM is performing better than the international and that’s because we’ve taken a huge amount of capacity out of the domestic system. That said, I just want to make sure that we all continue to focus. Our international business continues to be a very good business. It’s just that it isn’t as good a business as it was earlier and we are being benefited by the tremendous decline in fuel in our international markets. Gary Chase – Barclays Capital: Also on the front cabin comments that you made, I think as you noted last week, had talked about how this was something that had been going on for a while. I think they refer to the first quarter of ’08 when it started. Is it relatively new for you or are you just trying to articulate getting incrementally worse?

I would say the second derivative is negative. It’s significantly increasing in terms of the degradation of the demand and the yield in the front cabin.

I’d add two things. One, I think that clearly ’07 was a great year internationally and so I think there were some of us that said, “Okay, that probably won’t continue in ’08 necessarily, especially as we saw the economy starting to soften” so it didn’t concern you as much. I think what concerns me is just you’re moving back to one of kind of the key business periods and if you look, well I wouldn’t tell you there’s a direct correlation there if you look at the fall off [inaudible] it kind of reflects what you see in a lot of places that you’re gist is we’ve gotten back into the core business period here in the second half of January. We’re not seeing the demand we’d like to see in business first internationally, especially on the transatlantic. Two, I think many, as you commented, I just come back on January in general, January is really in many ways two months. There is the first 10-12 days of January which was actually pretty good because it was really tied onto the holiday season which we were actually pleased with versus our expectations, or I was pleased with versus my expectations, kind of a couple weeks before and where the economy has been. Within the trade offices you’ve gone back to what I consider the business period post the holidays we have not been encouraged by what we’ve seen and so I think as you look at commentary and thoughts on January, as the months progressed, we haven’t seen the kind of bump I would call say that we saw around the holidays that was a little better than what we expected, while you always get a bump on the holidays and clearly it flew fairly well. We have not seen that bump continue here in the later January and so you really have two months. That is more pronounced in the international markets because this is the period where you go back to looking for a good amount of international front cabin demand. Gary Chase – Barclays Capital: Just one clean up, the guidance change on capacity particularly for domestic mainline, should we be thinking that you were going to back fill that with the consolidated guidance or are those unrelated?

We haven’t got it to consolidated capacity. It’s not transition from mainline to --

It’s not transition from mainline to regional, if anything, while we’re keeping our regional relatively flat, we are actually seeing a lot of difficulties in some of the smaller regional markets that continue to focus on that. The challenge is you want to keep a pattern that works for business travelers in those markets so it’s hard to go below two or three a day in many of those markets. But no, we continue to look on the regional side to say should we reduce, not increase, based on the market demand we’re seeing and it’s not a plan where we’re going to take mainline and rebuild it with regional.

And recognize that a lot of the regional markets are really disproportionately business markets themselves.

That concludes our session for the analyst question and answer session. With that I’ll open the call over to Nene.

Thanks, DeAnne. John, if you could briefly review the process for asking questions, we’ll now begin the media session.

Your next question comes from Ann Keaton from Dow Jones.

Could you zero in a little bit on the London market? I know you made some important investments there and I’m curious to know how that’s going and when given all that’s happened in the world that might become profitable for you?

We never comment on the profitability of a specific market. I would just say that London continues to be a very important market for us and Heathrow – as you look, it was a process as we moved from Gatwick to Heathrow, but we’re now in a spot where we have three New Yorks and two Houstons all to Heathrow, and I think we’re competitively well positioned both with regard to the frequencies and the time of the day we’re flying out, which is hugely important to get the slots in the right place. I think probably the sign that we’re pleased with how things are going in the sense of the context of the economy; clearly the UK is a very soft economy, but we factor that in – I think we’re pleased with how we’re doing competitively there. I think that’s evidenced by the fact that we were actually able to secure a slot and moved our Cleveland seasonal service from Gatwick to Heathrow to allow [inaudible] all our operations at Heathrow. Houston has always been a strong market to London here, because of the oil business, and we continue to think it’s a very important market for us to have in New York as well.

Your next question comes from Bill Hensel from Houston Chronicle. Bill Hensel – Houston Chronicle: Good morning. I wanted to follow up on – you’ve given a hard date on the transition from Sky Team to Star. You start the last flight – October 24th.

That’s our hard date for exiting Sky Team, yes. Bill Hensel – Houston Chronicle: Do you expect the entry into Star to be immediate?

Promptly thereafter. I’ll leave it at that, Bill. Bill Hensel – Houston Chronicle: Okay. I want also to ask about what you said about you’d do whatever it takes in this environment, where you’re seeing less revenue. Do you expect to have layoffs?

Currently, with the adjustments we’ve made, we don’t expect to have layoffs. I strongly prefer not to have layoffs, but I think that’s in the vein of we need to be successful to stay in business as a company for the long term, and get back to sustained profitability. That’s good for everybody here for their careers. Clearly the debt markets are much more difficult than they were, which makes it even more important that we get back to sustained profitability. 2008 is a year we’re not going to repeat. We need to have a much stronger 2009. If that requires us to make tough decisions, we will do what we need to do to make sure we’re successful in the long-term basis.

Your next question comes from Mary Schlangenstein - Bloomberg News.

Good morning. I just wanted to ask about the new delivery schedule for the 787. Do you feel pretty confident in that, or do you think that you might see some further delays based on Boeing has had to say lately?

Mary, this is Larry. Boeing’s been great. I tell you specifically, Ray Connor at Boeing has been just super at keeping us informed. For a tough situation for them, I think what makes it workable for us is how hard Boeing in general, and Ray in particular, have worked. Having said that, they’ve had several delays. They haven’t flown the airplane, and so we need to wait and see. We need to see the plane fly and we need to get forward. While it’s an issue if we were to have additional delays based on the number they have, I wouldn’t rule it out. Boeing would speak for where they are and what they have to do. From a planning side, it’s far enough out for us. I think the key thing Boeing’s done is we’ve always had plenty of notice of these and we can still see out where we are. It’s something we can plan for. Again, while disappointing, we think the plane will be a game-changer, and we’re extremely excited about getting it in our fleet. We think it’s the right aircraft; we think it’s an excellent fit for us. We think it will help us grow as we look out over the next decade, and it’s important to think about it that way. This is the day something – even though we have 25 on firm order, this is going to be make a dramatic shift in a single year. It’s more a case of over a number of years, as we add them into the fleet. The international destinations will allow us to add to the flexibility they give us will be a positive. We hope the current schedule sticks, but we do have some planning flexibility knowing that there’s been some issues, and if there’s some more issues, we know Boeing will communicate with us, and we’ll work with them moving forward.

In the future, if there were more delays that moved out to a certain period, is it something that you might revisit in terms of the number or the order altogether?

I think no. We’re confident as long as Boeing is building the airplane, I think we’re very confident it’s the right fit for us. It’s the right plane, and it provides us the capacity to do a lot of things we can’t do today, because we get a plane in the 787, and it’s a little smaller with ranges that looks like the 777, and is also very efficient. When we can get to the -9, we’re getting extremely efficient airplane that’s about the same size as our current 777-200, but will really give us cost advantages and markets. We’re committed to it – we think it’s a great fit for our growth plan, and it’s just a question of when are we going to get it.

Okay, thank you.

This is Nene. We have time for one more question.

Your next question comes from David Koenig - Associated Press.

Thanks. Real quick question on hedging. Your last hedge, and some of your libels – are you acting now, or at least considering rebuilding your hedge position while oil is in the 40s?

We have put on some hedges this month. Those were related to an unwind of our position with a bankrupt counterparty. We have not been actively adding new hedges to the book, other than that. I think we’ve seen the volatility in the markets. We have had, I will just tell you the input to us, while oil was at 70 and 60 was usually on should we lock it in whilst it’s this low. We’re grateful for that. Oil today is somewhat acting as a hedge to the economy, and if you look at the forward curve, it’s fairly steep going forward. It’s not like you can go out at hedges today’s prices moving forward. The market is counting on prices to go back up, so any hedge would include that. We’ll continue to watch that balance between fuel and the economy, but we have not been adding positions, and [do the volatility] calls are extremely expensive today, and we would strongly prefer to put on hedges as called, as opposed to swaps. We don’t find that economically viable, based on how much volatility we’ve seen in the marketplace.

Thank you for that detail.

That was the end, thank you. With that we’ll conclude the call.