Ladies and gentlemen, thank you for standing by. Welcome to Continental Airlines first quarter 2010 financial results conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions). As a reminder, this conference call is being webcast and recorded Thursday, April 22, 2010. I would like to turn the conference over to Nene Foxhall, Senior Vice President of Communications and Government Affairs; and DeAnne Gabel, Director of Investor Relations. First Ms. Foxhall, ma’am you may begin.

Thank you, John. Good morning everyone. Joining us here in Houston are Continental’s Chairman, President and Chief Executive Officer, Jeff Smisek; Executive Vice President and Chief Marketing Officer, Jim Compton; Executive Vice President and Chief Financial Officer, Zane Rowe; Executive Vice President and Chief Operations Officer, Mark Moran; and Senior Vice President of Finance and Treasurer, Gerry Laderman to discuss Continental’s first quarter 2010 financial results. Jeff will begin with some overview comments after, which Jim will review our capacity and revenue results. Zane will follow with a discussion of Continental’s cost structure and balance sheet. At that point we will open the call for questions. And with questions, we will follow the executive comments, and then we will begin a 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 will turn it over to DeAnne.

Thanks, Nene. Earlier today we issued an update for investors presenting information relating to our financial and operational outlook for the second quarter and full-year 2010 and other information. This investor update was included and filed with the SEC. Today we will be discussing some non-GAAP financial measures such as net income excluding special items. Please note that a reconciliation of the GAAP to non-GAAP financial measures as well as the investor update can be found on our website at continental.com under the Investor Relations section. In addition, our discussion today may contain forward-looking statements that are not limited to historical facts, but reflect the company’s current beliefs, expectations, or intentions regarding future events. All forward-looking statements involve risks and uncertainties that 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 2009 10-K and with other securities filings. With that, let me turn the call over to Jeff.

Thanks, Nene and DeAnne. Good morning and thanks for joining us. I want to start by thanking my coworkers for overcoming the many operational challenges we had this quarter. Despite those challenges, the remain committed to delivering a high-quality product and excellent customer service that our passengers come to expect from us. I also want to thank our customers and crews for their patience as we work through recover from the operational challenges caused by the volcanic ash plume in Europe. Beginning last Wednesday, the volcanic ash led to the cancellation of some UK-bound flights and most eastbound flights canceled on Thursday, escalating to the cancellation of virtually all our European operations for the next five days. Yesterday, we resumed all our eastbound flights and today we began to operating a full schedule to Europe and have added extra flights as well as larger aircraft. We will continue to look for opportunities to add more seats to help re-accommodate our passengers. We understand how stressful it can be to be stranded faraway from home and also understand the difficulty our customers maybe experiencing in getting re-accommodated. We are keenly focused on getting our customers to their scheduled destination as quickly as possible. Now, turning to our financial results, for the first quarter of 2010, Continental reported a net loss of a $146 million, which is a loss of $1.05 per diluted share or a loss of $0.98 per diluted share excluding $10 million of severance and aircraft special charges. On the operational front, twice during the quarter, we had severe winter storms that forced us to suspend operations at our North Liberty Hub. Our team did an excellent job of getting the operation back on schedule and seeing to our customers. Our system wide mainline completion factor was 98.3% for…

Thanks, Jeff. I join Jeff in thanking our coworkers for running a great operation this past quarter, despite a lot of operational challenges. They have also done a superb job implementing and executing on our Star Alliance membership. Throughout the quarter, our mainline passenger RASM, on a length of haul adjusted basis, outperformed the industry average. While it is not unusual for us to run a RASM premium to the industry, for the last six months, our RASM has outperformed the average of the APA reporting carrier by anywhere from six to more than 10 basis points. And for the first quarter, our RASM outperformed the industry by 8.6 points. So we feel pretty good about our relative performance as it relates to RASM. In each of the months throughout the first quarter, we experienced sequential improvement in our year-over-year RASM percent changes. The results of the first quarter was that mainline RASM was up 5.4% due to strong load factors which were up 4.3 points year-over-year, while main line yields were about flat year-over-year. Regional RASM was up 16.7% year-over-year, due to both stronger yield, which were up 10% year-over-year and stronger load factor which was up 4.3 points. As the economy started its downturn, regional yields were where we first saw the hit to revenue, as regional markets are more sensitive to business traffic. So it is an encouraging sign to see these markets rebound. That said we are still very early in what maybe a long recovery. But we like the direction of the recent trend. Throughout January, February and March, we saw improvement in leisure yield. So this trend bodes well for the summer. We have also seen sequential improvements in the year-over-year change in high yield passengers. In a recovery, it is difficult to see…

Thanks Jim. I want to begin by thanking the entire Continental team for running an excellent operations despite numerous weather events during the quarter. Our team also did a good job of controlling cost during the quarter. We will look to ways to reduce cost company wide and to operate more efficiently as we focus on achieving and sustaining profitability. Our first quarter main line CASM, holding fuel rate constant and excluding special items was up 3.1%. CASM was negatively impacted by the severe winter storms during the quarter including blizzard like conditions in the New York area that caused us to suspend operations twice at Liberty International. We estimate these closures to have negatively impacted the first quarter results by approximately $15 million. For the full-year 2010, excluding special items and holding fuel rate constant, we expect both our consolidated and main line CASM to be up 1.5% to 2.5% year-over-year. We are seeing some cost pressure from the lower capacity outlook and increased depreciation expense from the acceleration of certain projects. In addition, we are seeing an increase in our frequent flyer activity with our stock partners, which results in higher expense from higher frequent flyers earning miles in Continental as well as hire reward expense as our one pass members take advantage of our expanded network. Our first quarter consolidated fuel price including taxes and hedge impacts was $2.15 per gallon, given the current forward curve, we estimate that including taxes and hedge impacts, our second quarter consolidated fuel price will be $2.28 per gallon, and for the full year $2.30. We currently have about 30% of our remaining 2010 fuel needs hedge using a mix of swap and call option. We continue to hedge our field exposure to mitigate some of the volatility of fuel prices.…

Thanks Jim and Zane. The economic environment is clearly improving and we are encouraged by that trend. However, we are only in the early stages of the recovery. Business travel is indeed returning, but at a slow pace. A certain amount of caution regarding business trend is warranted as we are uncertain as to the level to which business travel will return. That said, the trends we have been seeing on the leader side bode well for the peak summer season. As always, we will continue to monitor the operating environment and will adapt if necessary to the challenges that arise. We will continue to explore different approaches to the business and are willing to take measured and thoughtful product risk so we can start making money again. We are also well attuned to industry and competitive dynamics and will make changes necessitated by those dynamics. We have a great franchise and many strengths. We remain committed to leveraging those strength to return to and sustain profitability. With that, I will turn the call back over to DeAnne to begin our Q&A.

Thank you, Jeff, Jim, and Zane. With that we will begin the question-and-answer session for the analyst, followed by the question-and-answer session for the media. John, if you could please review the Q&A process, we are ready to begin.

Thank you. We will now begin the question-and-answer session. (Operator Instructions). Our first question comes from Jamie Baker from JPMorgan. Please go ahead. Jamie Baker – JPMorgan: Hi. Good morning, everybody. A question probably for Zane. The ex-fuel CASM for the remainder of the year appears to have gone up slightly, basically in line with the amount of capacity that ends now – have been withdrawn. Makes perfectly good sense. But were there any changes to the underlying profit-sharing assumption, relative to the earlier ex-fuel CASM guidance that you had given?

Jamie, unfortunately I can’t comment on that piece in particular. And as you know there are a lot of moving parts. I think I highlighted the critical components of the change, but I can’t comment on our underlying profit assumption there. Jamie Baker – JPMorgan: Let me ask the question in a slightly different way. When you provided your last guidance update in March, had you already captured the revision to your profit-sharing program that was announced earlier in the year?

Yes, that’s fair to assume Jaime. Jamie Baker – JPMorgan: That’s fair to assume. Okay, thanks, that’s it.

Thanks.

Our next question comes from Dan McKenzie from Hudson Securities. Please go ahead. Dan McKenzie – Hudson Securities : Hi, good morning guys.

Good morning. Dan McKenzie – Hudson Securities : Corporate travel managers tell me that eight frequencies a day between New York City and London Heathrow seems to be the magic number, for when corporate travel managers become indifferent to a carrier's schedules versus the competition. And feel free to disagree with that, but I see you folks are increasing the frequencies to five a day. And I guess my question is how much flexibility does Continental have? And this is assuming Continental ultimately joins the joint venture here to find more Heathrow slots from other JV partners?

Hi Dan, this is Jeff. We were locked out of Heathrow for a long time and it’s taken us a while to build the portfolio we have got and we are pretty pleased with ultimately being able to get five flights a day out of New York and twice a day out of Houston. But we will continue to look for growth opportunities. Heathrow is an important, although from the perspective of our overall ASMs to Europe, relatively modest. At this point, we want to grow that and continue to grow that. So it’s really a function of slot availability, the time of the slots and the price of slots, but we are always interested in additional slots in the Heathrow, it’s a very important market for us and a growing one. Dan McKenzie – Hudson Securities : Okay, understood. And then, I guess my second question here is can you talk about the flexibility to reduce regional jets?

Hi Dan, it’s Jim. I think the – we are actually – right now quite frankly in terms of our capacity, we are rarely comfortable with our regional capacity going forward. We have obviously contractual agreement with our partner, we can work within those contractual agreements. But right now, so there is – there is obviously flexibility with utilization within those contracts and so forth, but right now we are very comfortable with where we are at with our capacity. Dan McKenzie – Hudson Securities : Okay, understood. Thanks a lot.

Our next question comes from Hunter Keay from Stifel Nicolaus, please go ahead. Hunter Keay – Stifel Nicolaus: Thanks, good morning.

Good morning. Hunter Keay – Stifel Nicolaus: Jim, do you think the industry is spilling business travel right now? I mean load factors are high, CASM has come in a little bit light than most people are looking for this quarter. And we hear continued commentary how close in bookings are gradually improving and the curve is sort of normalizing. And if so, it's a two part question. If you are spilling, are you willing to maybe take some risk to drive your advance bookings down a little bit in the hopes that some of the other business travel will potentially spill under your aircraft? Do you think that's happening right now or is that dynamic you could see unfolding?

If I understand I question, we are managing to a business – different business curve year-over-year as it’s reflected even in our investor update again where we talk about bookings over the next six weeks, for instance, and the domestic being down versus last year. Very similar to what we said in the January investor update, and so continue to look for that. And then if you looked at our actual load factor both that we reported in February, January, February and March, they were all up year-over-year. So what it does is, kind of validates that the booking curve, the way we are managing it has worked for us over the last quarter. And in this investor update we are basically saying the bookings in the first six weeks domestically are down year-over-year. So we will continue to do that, because I do think it’s slowly coming back. Those business traffic balances both I and Jeff mentioned, but it really slow and the absolute value are still down from 2008, getting closer more towards 2007, but on the revenue perspective, still way down from 2008. Hunter Keay – Stifel Nicolaus: So I guess, maybe the question, a better way to put it is, would you be willing to take risks in the sense of obviously managing spill versus spoil. There is a sweet spot in there somewhere. Would you be willing to maybe spoil some seats to take the risk that you give yourself the opportunity to capitalize and maybe better than expected bookings?

I mean in the sense that by describing that our book load factor, that we are managing back toward a normal book load factor which means you are managing more toward in an environment where you are managing at the risk. I think we have moved in that direction and so we will continue to look like that, because clearly load factors are high and we would like mange up the yields. Hunter Keay – Stifel Nicolaus: Okay, thanks a lot.

Our next question comes from Bill Greene from Morgan Stanley, please go ahead. Bill Greene – Morgan Stanley: Yes, good morning. Jeff, in the past, I think you've said that Continental would consider or at least reconsider M&A if it found it was losing market share in the corporate market to merge Delta, Northwest. And so you sort of admitted earlier that you are at least looking at all options and Delta said on their call they think they have won about $100 million in business. So should we assume that you have seen a degradation in your corporate share where you are competing against Delta?

I don’t know that I would characterize it quite that way. I will tell you that we are a business travel airline and very focused on that and we continue to invest in our onboard product, for example in flatbed seats, AVOD, modern fleet to 787 coming and to attract corporate travel. We are keenly focused on it. I think you could – I think you need to perhaps at Delta is the source of that corporate traffic, because there are other people that they must be claiming to take corporate traffic from. Clearly, we are in battle with Delta in New York, there is not question about that and in Latin America. I think we hold our own – certainly hold our own in the product, but I would – I can’t really comment on Delta’s numbers or where they are sourcing.

Hi Bill, this is Jim. And I – in their commentary, I also know they mentioned that they weren’t sure where it’s coming from. So looking at our data, we actually see pretty consistent share out there versus what’s the – particularly in New York. Bill Greene – Morgan Stanley: Okay. Also, can I ask you to comment a little bit on your updated capacity guidance? I realize some of it in the near term may be related to the volcanic disruptions. But one would think that if you were bullish on revenue, airlines generally would be adding to capacity, not cutting, but you are going in the opposite direction. Does that suggest a more cautious outlook from you?

Bill this is Jeff. I am not sure it’s a cautious outlook as – what it really is, is we are just fine tuning the schedule. Obviously you have got the SM to come out from the volcano and things like that. But we have also had some aircraft delivery delays, because of the – the issues with the (inaudible) seats. If you go out to Boeing Field, you will see a number of our aircraft scattered around the fields right now. And we are working to get seats on those aircraft and get the aircraft delivered. So it’s really more a recognition of some delivery delays we have got. But I will tell you we are focused on capacity discipline here. We want to make money here. And at Continental, we are probably have committed to the past in terms of spooling up utilization and spooling up capacity little too quickly and relative to demand and pricing. And we are going to be cautious and thoughtful about that. Bill Greene – Morgan Stanley: I would applaud your discipline. I don't want you to think that I want to see you grow too fast. I just was curious if that suggested change in view. Thank you for the time.

You bet.

Our next question comes from Kevin Crissey from UBS. Please go ahead. Kevin Crissey – UBS: Hi, good morning. Jim, maybe this is for you. In January, I think you guided January RASM to down, I don't know, was it 3% or 4% and it came in at 1%. What was it that changed in January then? And what would have to happen to your 14%, to get your 14% number to be a percent or two higher than that RASM that you have guided to for April?

Yes. Kevin I think the – right now I think it’s really a function of business traffic and we have certain expectations that we have talked about the rate of growth in business traffic. My guess if we began to see business traffic accelerate versus our expectation that would be obviously trying for higher RASM. But again at this point, what we are seeing is a very slow pace to business traffic coming back. Kevin Crissey – UBS: Okay, and, well I guess I should just follow-up. I mean at this point in the month, I know business traveler books close in, but it's not that much walk-up. And then last week you get maybe 1% of your revenue for the month booked in for travel in the last week. So you got to have maybe 10% of revenues still left for the month. So to be off by a couple percent in January was kind of surprising, maybe it was just conservative guidance and that's what I am really trying to work around. 14%, I don't think is a bad number. I just wanted to assess whether there is a conservatism there.

Yes, I mean, again as I mentioned, it’s what we see today and (inaudible) has also mentioned their likelihood change, because it’s the best information that we have as we look at April today. Kevin Crissey – UBS: Okay, and Air Tran mentioned losing some share to the online travel agencies. And I recall, I think in the past you have indicated something to that degree. What are your thoughts these days on that, we will be lapping the booking fee cuts from a year-ago and just want to get a sense for where that stands?

Obviously looking back, I think you are right. I think around last May of last year, the booking fees on the online agency they pulled and so we thought that effect our penetration on Continental.com. I will tell you that we see great strength on Continental.com today and we continue to invest in it and the feedback that we get is great. But you are right, we begin to lap that in May, but clearly there was an effect on our penetration rates. Kevin Crissey – UBS: So would you ramp up, I mean to defend your website, do you ramp up your online advertising or whatever, Google and such?

The way I would like to think about it is reinvest in our website to bring value to customers, I think the best way to grow it is to increase best value to customers. So whether it’s a fair product, whether it’s some of the ancillary revenues that mentioned this morning that you can check in, take advantage of, as well as quite frankly continuing to add customer functionality to it. There is a lot of noise for instance with volcanic and the more that we can assist customers through the web and build that functionality which we continue to do today. I think that’s what will bring value to our website and that’s who we will compete. Kevin Crissey – UBS: Okay, thank you.

And our next question is from Gary Chase from Barclays Capital. Please go ahead. Gary Chase – Barclays Capital: Good morning, everybody. Wanted to see, Jim, you gave some year-over-two statistics, excuse me. And I just wondered if you could give us a sense of what your corporate revenue is doing on a year-over-two basis?

Yes, our revenue versus – Gary, versus ’08? Gary Chase – Barclays Capital: Yes, corporate revenue. Yes, I mean it's clearly, well it's up year-on-year, but where is it relative to year-over-two? And it would be great if you could give us a sense of how sharply that's been trending one direction or another.

Yes, keep it in perspective, in November and December, we saw it’s about high yield revenue which is all of our corporate bookings booked within seven days, so I just wanted to be clear on the base. And we talked to being down about a percent year-over-year in December. And so for the first quarter, our first quarter bag revenue was up 20% year-over-year, but still down 17% from 2008. Gary Chase – Barclays Capital: And did – was there a difference in the way that looked through the quarter on a year-over-two basis? We know what happened during the quarter relative to last year. But –

Yes, I think we saw a sequential improvement – I got a leap year in ’08, I am looking at numbers. I got a little bit – but January being down about 16% and March being down about 13% on a year-over-two year basis. Gary Chase – Barclays Capital: Okay, and then just when you made those comments. I wasn't fast enough to do the math on the fly and it was also a news release of interest during your call. Was that helpful to the April RASM, the volcanic ash, or was it hurtful when you did your revenue loss in ASM loss, where does that net to?

At this point, because the numbers are changing, I would say – I just want to be careful, because I would say it’s slightly helpful, but again it’s preliminary number in terms of kind of bookings closing out the month and so forth. So based on kind of what we would report today will be slightly positive. Gary Chase – Barclays Capital: Okay, thank you.

Our next question comes from Helane Becker from Jesup & Lamont. Please go ahead. Helane Becker – Jesup & Lamont: Thank you very much, operator. Hi, everybody. Thank you for taking my question. I heard your comments about consolidation and so on. And I don't know what you are willing to say about this. But have you heard at all from the Justice Department about how you might want to structure a transaction or have they been quiet about the whole thing?

Helane, this is Jeff. As I said, we are not going to have any further comments on consolidation. Helane Becker – Jesup & Lamont: Okay, that's fair. And my other question is can you make any comments or any updates on where you are in labor negotiations?

Sure, I will be happy to do that. We have as you know open contracts with most all of our work groups today. We are in negotiations with them, the negotiations continue. I won’t comment on the subsequent negotiations, but I will tell you that we are treating these negotiations like we have always treated negotiations, which is we are interested in getting deals done, we are interested in getting deals done in a timely fashion, and we are interested in making sure that what we end up was fair to the company and fair to the employees. Helane Becker – Jesup & Lamont: Okay, thank you very much. I appreciate your help.

John, we have time for one more question from the analyst.

Our last question from the analyst comes from Bill Mastoris with Broadpoint, please go ahead. Bill Mastoris – Broadpoint: Thank you. Gerry, I wonder if you could give us a status report on the aircraft deliveries into the EETCs. And maybe if you could just comment on how many remaining aircraft are yet to be placed into those transactions. And I'm specifically referring to really the second half of last year 2009-1 and 2009-2.

Bill, you are breaking up a little bit, this is Jerry. But I think you are asking about the 2009-2 EETC and the aircraft to go into that. There are some vintage aircraft that roll off an existing EETC in May that we expect to go into that EETC as the prospective outlines. And then with respect to new aircraft, the two 777s and nine 737s that were earmarked to that transaction, we expected this time to take delivery of those aircraft by the end of August, in which case they would go into that EETC. Bill Mastoris – Broadpoint: Okay, and Gerry, if you could comment briefly on the aircraft deliveries, for 2011. Maybe the financing for those, is that all non-back stop financing from other third parties which have been lined up or is that back stop financing?

We have no back stop financing for those aircrafts. Bill Mastoris – Broadpoint: For any deliveries, in 2011?

For any remaining deliveries at all. Bill Mastoris – Broadpoint: Okay, thank you.

With that, I will turn the call over to Nene, we can begin the session with the media Q&A.

John, if you can briefly review the process for asking questions, we will begin the media session.

Certainly. (Operator Instructions). We have a question from Terry Maxon from Dallas Morning News. Please go ahead. Terry Maxon – Dallas Morning News: Good morning, guys. Question. We have got the DOT rules on delayed flights and tarmac delays coming up next Thursday. What do you all think the impact will be on your operations and on your general customer service?

Well, Terry, we are – this is Jeff. We are very prepared for that. We had I think a very good program in place for quite a while not even necessarily in anticipation of rules, and I think we have done a good job. We, at Continental, have not had a single long-term delay since last August. So I think we have done a very good job. We are very focused on customer service and we are very focused on taking care of passengers. Many of those delays, as you know, in fact all those delays are outside of our control, but we are keenly focused on the customer service elements of it and we want to get our passengers where they want to go on time. Sometimes we are hampered by the air traffic control system, which is quite antiquated and sometimes we are hampered by weather, but we have got – we have got plenty of planning and we have got the ability too and we will of course comply with the new regulation. Terry Maxon – Dallas Morning News: Great, thank you very much.

Our next question comes from Deepa Seetharaman from Thomson Reuters. Deepa Seetharaman – Thomson Reuters: Please go ahead. Hi, Jeff, how are you?

Great. Deepa Seetharaman – Thomson Reuters: I wanted to know at first if you guys had any comment at all on the US Airways statement that came out during the call. Basically, US Airways said they have decided to discontinue merger discussions with United. Do you guys have anything to say to that?

No we do not. Deepa Seetharaman – Thomson Reuters: I guess what has changed in the past couple of years since 2008 when you guys decided not to merge with United? I remember those being due to financial concerns, but how have industry balance sheets changed in the past two years and to the point where you are now maybe weighing your options. And I am also referring to some of your comments at a March conference where you said you would bulk up defensively if you needed to. It seemed to be a shift in the common rhetoric about consolidation from Continental?

Nice try, but we will have no further comments. Deepa Seetharaman – Thomson Reuters: Okay, and then maybe can you talk a little bit more about the demand environment. Any kind of comment on business traffic and we know that April is supposed to be up 13% but would you expect these kind of double-digit increases to continue for the rest for the next couple months?

Well, let me say, as we said earlier, business travel is indeed coming back, we are coming back slowly. The – what you are seeing as Jim contemplated out in terms of the unit revenue is remember the comps. The comparables from last year are very easy, because we are going to take this off back in time business travel was falling off a slip this time last year. So the year-over-year comps that you are going to see can be a little misleading, because they are out of a very low base. Deepa Seetharaman – Thomson Reuters: So might we see a smaller increase in May?

We – I am not – we don’t give forward guidance on RASM or CASM. Deepa Seetharaman – Thomson Reuters: Okay, thank you.

Our next question comes from David Koenig from Associated Press. Please go ahead. David Koenig – Associated Press: Good morning. I won't try again on the consolidation thing. I will ask something else. You have talked about some of the steps you are taking to return to profitability. I wondered if there are any recent or future steps that you would highlight that are specific designed to deal with the high fuel costs including your views on hedging.

Well, I will take a couple of things and maybe ask Zane to jump in. What really focus on from the long-term is we take delivery of and operate a modern and fuel efficient fleet. That is the best hedge, because that’s not a financial derivative, that’s a physical asset that is very efficient. And at any fuel level is beneficial to us. In addition to that, we engage in the – in typical hedging activities to mitigate again some of the volatility that we see in the fuel market, we use call options, swaps, cost of collars, depending on what we are doing at the time and our hedge strategy is a pretty consistent from year-to-year.

David, this is Zane. Our hedge strategy hasn’t changed and you see us continue to build up our hedge position through the course of the year. If you see our investor update, we have got it well laid out there with all of our current positions. David Koenig – Associated Press: Okay, do you expect to be raising fuel surcharges?

We never comment on the forward pricing. David Koenig – Associated Press: Alright, okay, thank you.

Our next question comes from Jed Melnick from New York Times. Please go ahead. Jed Melnick – New York Times: Good morning everyone. In the past few weeks, we have seen Delta and American kind of talk a lot about New York. And I was wondering as business travelers come back, kid of what are your views about kind of the competitive space in New York? Jeff, you mentioned just a few minutes ago that you are in battle with Delta in New York among other places. So can you kind of maybe just walk me through how you see that particular market?

Sure, it’s a very important market to us. And we are – we have got a spectacular hub at New York Liberty, it’s a true global gateway and not to be produced by any of our competitors. And so we are comfortable with our position in New York. Obviously, it’s a market that we focus on, we defend, we offer a very good product as I was talking about earlier, we are improving our scheduled utility to important business market like Heathrow, as we have gone into Star Alliance, the breadth of Star Alliance and our – for example increasing connectivity, our more recent flight inaugural from New York to Munich, a tie in Lufthansa network as well. So New York is a vital market to us. When we focus on heavily, we provide great service, great – and growing schedule utility and a superb product. So we are pretty pleased in our position in New York market. Jed Melnick – New York Times: Thank you.

Our next question comes from Richard Newman from The Record. Please go ahead. Richard Newman – The Record: Good morning. My question is related. I wanted to ask to the last one. Being in New Jersey, how well can you compete going forward with Delta and American, in light of their recently announced expansion plans there?

Well, we – obviously we draw a lot of traffic from New Jersey through the New York Liberty hub for its geographic proximity and of course for people who lived on the West side or Wall Street we are an extremely convenient airport. So we draw from New York, we draw from Manhattan, we draw from New Jersey. But the New York hub is a well functioning hub with very modern facilities and we can take you pretty much anywhere in the world either directly or indirectly via Star Alliance. So we are comfortable with our competitive positioning. Richard Newman – The Record: Can you define where you overlap as far as competition goes with JFK and LaGuardia airlines?

Well, that is one – that is – JFK and LaGuardia and New York are essentially one market. There are – we compete for people who otherwise use JFK, we compete for people who would otherwise use LaGuardia. That is clearly one and a single market and I think we are quite competitive. I mean there are people who prefer Continental service, prefer our loyalty program, who have a choice of airports between LaGuardia, JFK, or New York who prefer Continental, happens all the time. Richard Newman – The Record: All right, sir. Thanks.

Our next question comes from Ted Reed from the TheStreet.com. Please go ahead. Ted Reed – TheStreet.com: Thank you, I have two things. First of all what's so great about Star Alliance that it's producing such fabulous numbers for you, such big increases?

Hi Ted, this is Jim. A couple of things; one, it’s clearly the largest alliance and so what you are doing is you are offering your customers significantly more options that they have had in the past, so that’s the main point. I will tell you also that the partnership with these carriers in Star Alliance has been fantastic in terms of focusing on the customer and trying to enhance seamlessness and as well as good things like inventories and access across their networks and so forth. And so the key point though is that it’s a much bigger more expansive network. It’s been around the longest and it’s all working really well for us. Ted Reed – TheStreet.com: Are there any particular markets that I notice – I recall you spoke about Frankfurt being a lot of incremental revenue there. Is that the main one that's helping you, Frankfurt in Europe?

Well, I think and quite honestly, all the hubs of the partners out there, whether it’s Copenhagen, Frankfurt, Munich, London with BMI our partner, they are conducting a significant amount of traffic. But you know again, also under Alliance, I will tell you that Alliance work when they are win-win, and so that way Continental brings the Star in the New York partner as well as a partner in the US to Latin America. You can see the results, when Alliances are win-win for both guys, you really see – you will see it in the network and the numbers connecting across and it’s pretty exciting. Ted Reed – TheStreet.com: Thank you. I have another thing. Jeff, could you repeat those numbers of the percentage of bag check changes due to the fees. And I guess you are saying you have incurred responsible behavior by diminished – by people carrying stuff they don't need on their flights?

Well, I mean, when you charge a fee, big swings are in the second check bag, right? When you charge a fee, obviously there is consumer response to that fee and that’s good for us, because it’s fewer bags in the whole less on the job injuries from our employees, fewer bags that are misplaced, fewer bags that run out to a customer's hotel and it has changed customer behavior. I will give the stats again. For the – and this is again – this is only with respect to customers who are subject to the bag fees and it’s on a bag check per passenger basis, since we started implementing the fees. It’s 17% drop in domestic first bags, 56% drop in domestic second bags, 52% drop in Latin second bags, and the 38% drop in trans-Atlantic second bags. Those are all pretty big numbers and very good for Continental. Ted Reed – TheStreet.com: All right, last thing. Are you seeing more carry-ons?

: Ted Reed – TheStreet.com: All right, thank you.

John, we have time for one last question.

Our last question comes from Dan Reed from USA TODAY, please go ahead. Dan Reed – USA TODAY: Hi, guys. Can you put into some sort of analytical terms what you think the competitive impact is going to be on Continental standalone and Star as a grouping of American and BA finally getting their ATI? Assuming it actually does come to pass, especially since they are both big in New York where you were the only big Star member.

Dan, this is Jeff. I think we are comfortable with the Alliance to Alliance competition, that’s why we got into Star Alliance. I mean Star Alliance is a superior Alliance to the other two Alliances in terms of scope and scale, connectivity, the technology, it’s the oldest Alliance, it's the most sophisticated alliance, it's a well-functioning alliance and has superb members. So we are very comfortable from an alliance perspective and we have all along been assuming the BA AA tie-up and we have been assuming the Iberia merger, as well, so I think we are comfortable where we are. We without question picked the right alliance. And as Jim was saying earlier in the call, clearly that is working for us and we are pleased with it.

Hi Dan, this is Jim. I would just also add that for us in the Star – our Star Alliance is so much different too, because what we offer New York is really a breadth of Europe. And so with 30 destinations with the Trans Atlantic, little bit different than the Oneworld, obviously focus the New York to London, not to minimize the importance of London, as Jeff mentioned our growth that we started with our fourth trip and our fifth trip in the fall, very important to us. But I would note that our breadth, we are flying to Copenhagen non-stop, we are flying to Oslow non-stop, we are not connecting in Heathrow in the case Oneworld or so forth. So we think we have a terrific position in New York. Dan Reed – USA TODAY: Okay, thank you.

Yes, Jeff, Jim, Zane, Deane thanks and thanks to all of you for joining us. Please call corporate communications if any of you have further communications and we will look forward to talking to you next quarter.

Thank you ladies and gentlemen, this concludes today’s conference. Thank you for participating. You may all disconnect.