<PAGE> 1
MERRILL LYNCH GLOBAL
TRANSPORTATION LEADERS CONFERENCE
JUNE 13, 2000
CONTINENTAL AIRLINES
[GRAPHIC OF CONTINENTAL LOGO]
<PAGE> 2
Please note that the discussion today may contain forward looking statements.
Actual results could differ materially from those described in the forward
looking statements. Additional information concerning factors that could cause
actual results to differ materially from those in the forward looking statements
are contained in the company's Form 10-K and other securities filings with the
Securities and Exchange Commission.
<PAGE> 3
FIVE YEARS OF CONSISTENT PROFITABILITY
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C>
PRE-TAX INCOME($MILLIONS) $202 $538 $640 $770 $585
</TABLE>
Excludes Special Charges & Gains
<PAGE> 4
STRONG GLOBAL PRESENCE
[MAP OF CONTINENTAL'S INTERNATIONAL DESTINATIONS]
<PAGE> 5
GLOBALLY WELL-BALANCED
<TABLE>
<CAPTION>
% CAPACITY
CO AA DL NW UA US
<S> <C> <C> <C> <C> <C> <C>
DOMESTIC 63.7 69.0 77.8 60.7 65.0 88.4
ATLANTIC 16.8 12.4 15.9 12.0 12.5 9.9
LATIN 11.2 15.6 2.9 0.0 5.1 1.7
PACIFIC 8.3 3.0 3.4 27.3 17.4 0.0
</TABLE>
<PAGE> 6
STRONG GROWTH WITH ABOVE AVERAGE MARGINS
<TABLE>
<CAPTION>
EBITDAR MARGIN*
-------------------
LTM ENDING: 1Q98 1Q99 1Q00
<S> <C> <C> <C>
21.2% 22.5% 19.9%
</TABLE>
<TABLE>
<CAPTION>
AVAILABLE SEAT MILE (ASM) GROWTH
--------------------------------
LTM ENDING: 1Q98 1Q99 1Q00
<S> <C> <C> <C>
10.3% 10.3% 9.5%
</TABLE>
*Excludes special gains & charges
<PAGE> 7
2000 PLANNED SYSTEM GROWTH BY QUARTER
<TABLE>
<CAPTION>
1Q00 2Q00E 3Q00E 4Q00E
<S> <C> <C> <C> <C>
ASM % GROWTH 9% 6% 3% 3%
</TABLE>
FULL YEAR 2000: 5%
<PAGE> 8
MODERATE GROWTH PLAN FOR 2001
<TABLE>
<CAPTION>
LATIN
DOMESTIC AMERICA PACIFIC TRANSATLANTIC* SYSTEM
<S> <C> <C> <C> <C> <C>
% INCREASE/(DECREASE) 3.5% 4.0% (1.0)% (4.0)% 2.5%
</TABLE>
* Downgauging select Atlantic markets
<PAGE> 9
CO IS NYC'S "HOME TOWN AIRLINE"
<TABLE>
<CAPTION>
ANNUAL PASSENGER DESTINATIONS MARKET SHARE
REVENUE SERVED (% OF NYC REVENUE)
---------------- ------------ ------------------
($ BILLIONS)
<S> <C> <C> <C>
1996 $2.0 90 19.9%
1999 $3.5 116 23.8%
</TABLE>
<PAGE> 10
NEWARK - GLOBAL GATEWAY DEVELOPMENT
[MAP OF PLANNED ADDITIONS/MODIFICATIONS OF NEWARK HUB]
<PAGE> 11
CONTINENTAL IS THE NYC ON-TIME AIRLINE
FIRST QUARTER 2000
NEWARK/LAGUARDIA
<TABLE>
<CAPTION>
CONTINENTAL OTHER AIRLINES
<S> <C> <C>
% ARRIVALS WITHIN 14 MINUTES 72.0% 67.6%
</TABLE>
<PAGE> 12
LGA EXPANSION ENHANCES NY PRESENCE
FIVE-YEAR GROWTH PLAN
[MAP]
<PAGE> 13
CONSISTENT OPERATIONAL RESULTS
FIRST QUARTER
<TABLE>
<CAPTION>
1999 2000
<S> <C> <C>
% OF FLIGHTS ARRIVING WITHIN 14 MINUTES 78.0% 78.0%
</TABLE>
<TABLE>
<CAPTION>
1999 2000 CHANGE
<S> <C> <C> <C>
LOAD FACTOR 71.5% 71.6% 0.2 PTS
ASMS (MILLIONS) 19,225 20,951 9.0%
</TABLE>
<PAGE> 14
RECENT ACHIEVEMENTS
[PICTURES OF CERTAIN RECENT AWARDS]
<PAGE> 15
CONSISTENT AWARD-WINNING PRODUCT
LONG-HAUL JD POWER AWARD
[BAR CHART REFLECTING CONTINENTAL IN FIRST PLACE 4 OF LAST 5 YEARS]
<PAGE> 16
WORK CULTURE PROVIDES AWARD
WINNING PRODUCT
o Ranked #2 in the National Airline Quality Study conducted by Wichita State
University
o Named "Best Airline in the US" by Fortune Magazine
o Freddie Award for the Best Overall Frequent Flyer Program for the last 3
years
o Smart Money Magazine - Best US airline for business travel
o Conde Nast Traveler - Named Best Transpacific and Best Transatlantic
Business Class among US carriers 3 years in a row
<PAGE> 17
EXCELLENT LABOR RELATIONS
o Labor Agreements in Place
<TABLE>
<CAPTION>
LABOR GROUP AMENDABLE DATE
----------- --------------
<S> <C>
Mechanics 01/02
Pilots 10/02
Dispatchers 10/03
Flight Attendants 09/04
</TABLE>
o Above Industry Average Productivity for All Labor Groups
<PAGE> 18
EMPLOYEES ENJOY COMING TO WORK
<TABLE>
<CAPTION>
AS OF MARCH 31
LOST TIME TURNOVER
<S> <C> <C>
1999 3.3% 7.3%
2000 3.1% 7.2%
</TABLE>
Lost Time Data reflects YTD March 31
Turnover reflects LTM average ending March 31
<PAGE> 19
LARRY KELLNER
CHIEF FINANCIAL OFFICER
[GRAPHIC OF CONTINENTAL LOGO]
<PAGE> 20
STRONG REVENUE ENVIRONMENT
YEAR 2000 DOMESTIC RASM
YEAR-OVER-YEAR % CHANGE
(LENGTH OF HAUL ADJUSTED)
<TABLE>
<S> <C> <C> <C> <C>
CONTINENTAL 2.4% 1.3% 6.8% 8.2%
INDUSTRY (2.4)% 0.9% 4.3% 4.8%
<CAPTION>
JANUARY FEBRUARY MARCH APRIL
CONTINENTAL YOY
ASM GROWTH 7.4% 10.7% 9.0% 6.5%
</TABLE>
INDUSTRY SOURCE ATA DATA
<PAGE> 21
FOCUSED ON THE BUSINESS TRAVELER
<TABLE>
<CAPTION>
1Q96 1Q98 1Q00 GOAL
<S> <C> <C> <C> <C>
HIGH YIELD REVENUE AS % OF
DOMESTIC REVENUE 44.2% 45.7% 49.0% 50-55.0%
</TABLE>
<PAGE> 22
TRANSATLANTIC RASM
<TABLE>
<CAPTION>
1Q99 2Q99 3Q99 4Q99 1Q00
<S> <C> <C> <C> <C> <C>
YEAR-OVER-YEAR % CHANGE 0.2% (9.2)% (15.2)% (14.1)% (11.1)%
ASM YOY
% CHANGE 7.3% 21.5% 35.3% 42.5% 41.4%
</TABLE>
<PAGE> 23
LATIN AMERICA RASM REMAINS STRONG
<TABLE>
<CAPTION>
1Q99 2Q99 3Q99 4Q99 1Q00
<S> <C> <C> <C> <C> <C>
YEAR-OVER-YEAR % CHANGE 2.2% 1.8% 6.9% 6.8% 0.8%
ASM YOY
% CHANGE 16.6% 7.3% 2.8% 0.9% 9.9%
</TABLE>
<PAGE> 24
MICRONESIA RASM INCREASES SIGNIFICANTLY
ON REDUCED CAPACITY
<TABLE>
<CAPTION>
1Q99 2Q99 3Q99 4Q99 1Q00
<S> <C> <C> <C> <C> <C>
YEAR-OVER-YEAR
% CHANGE 6.8% 10.2% 19.9% 20.7% 18.9%
ASM YOY
% CHANGE (18.0)% (26.9)% (32.2)% (24.0)% (11.0)%
</TABLE>
<PAGE> 25
NORTHWEST ALLIANCE CONTRIBUTION ON TARGET
<TABLE>
<CAPTION>
1999 2000E
<S> <C> <C>
PRE-TAX CONTRIBUTION ($MILLIONS) $80 $149
</TABLE>
<PAGE> 26
SIGNIFICANT PRESENCE IN EVERY REGION
WITH ALLIANCE PARTNERS
DOMESTIC DEPARTING SEAT SHARE*
<TABLE>
<CAPTION>
Northwest 5%
------------
<S> <C>
CO/NW 50%
UA/U 17%
DL 10%
</TABLE>
<TABLE>
<CAPTION>
North Central 21%
-----------------
<S> <C>
CO/NW 31%
UA/U 20%
DL 12%
</TABLE>
<TABLE>
<CAPTION>
Northeast 19%
-------------
<S> <C>
UA/U 42%
CO/NW 16%
DL 12%
</TABLE>
<TABLE>
<CAPTION>
Southwest 24%
-------------
<S> <C>
UA/U 28%
CO/NW 18%
DL 10%
</TABLE>
<TABLE>
<CAPTION>
South Central 11%
-----------------
<S> <C>
AA 32%
CO/NW 23%
DL 13%
</TABLE>
<TABLE>
<CAPTION>
Southeast 19%
-------------
<S> <C>
DL 36%
UA/U 23%
CO/NW 11%
</TABLE>
*CO/NW includes HP and AS
Source: May 2000 OAG
<PAGE> 27
COSTS ARE BEING MANAGED
CASM HOLDING FUEL RATE CONSTANT
<TABLE>
<CAPTION>
1Q99 2Q99 3Q99 4Q99 1Q00
<S> <C> <C> <C> <C> <C>
YEAR-OVER-YEAR % INCREASE 3.2% 2.9% 0.1% (0.4)% (1.6)%
</TABLE>
<PAGE> 28
DISTRIBUTION COSTS DECLINE
DISTRIBUTION COSTS AS A % OF SALES
<TABLE>
<CAPTION>
1995 1999 2004E
<S> <C> <C> <C>
21.2% 15.8% 7.0%-10.0%
E TICKETS AS
% OF SALES 0% 41% 100%
</TABLE>
Sales within US only
<PAGE> 29
INTERNET DISTRIBUTION STRATEGY
<TABLE>
<CAPTION>
CUSTOMER CURRENT FUTURE % OF SALES
-------- ------- ------ ----------
<S> <C> <C>
Competitive Travel Agencies T2, Travelocity, 70%-75%
Schedule Expedia, Extranet
Brand Loyal Reservations CO.com, Wings.com, 15%-20%
CTOs, Reservations
Price Only Consolidators Priceline.com 3%-5%
- Cheap Tickets
- Travel800
</TABLE>
<PAGE> 30
YOUNG FLEET IS FUEL EFFICIENT
YEAR-OVER-YEAR % INCREASE
<TABLE>
<CAPTION>
1997 1998 1999 2000E
<S> <C> <C> <C> <C>
ASMs 9.9% 10.6% 9.7% 5.2%
Gallons Consumed 10.5% 9.6% 3.7% 0.5%
Year-End Avg.
Jet Fleet Age 13.7 10.7 7.4 6.8
</TABLE>
<PAGE> 31
NEW WIDEBODY AIRCRAFT OFFER COST SAVINGS
% TRIP COST SAVINGS VS. DC10
<TABLE>
<CAPTION>
777-200 767-400ER 767-200ER
<S> <C> <C>
1% 18% 26%
</TABLE>
% SEATS
VS. DC10 +17% (3)% (28)%
Assumes fuel price of 75 cents per gallon
<PAGE> 32
MARKET DRIVEN FLEET PLAN
TOTAL JET AIRCRAFT
<TABLE>
<CAPTION>
1999 2000 2001 2002 2003 2004
<S> <C> <C> <C> <C> <C> <C>
Minimum 363 372 385 376 352 341
Maximum 398 433 466 501
Fleet Types 6 5 5 5 4 4
</TABLE>
Minimum = Committed fleet less lease expirations
Maximum = Committed fleet and all options are exercised
<PAGE> 33
2000 FLEET FINANCING SUBSTANTIALLY COMPLETE
o EETC 2000-1 21 Boeing Aircraft
- Amount Financed: $743 Million
- Average Interest Rate: 8.12%
- New Aircraft: 14 Boeing 737
3 Boeing 757
4 Boeing 767
o 2 Boeing Aircraft - Operating Leases
o 5 Boeing Aircraft to be financed in Bank Market
<PAGE> 34
REPURCHASED 26% OF SHARES
CUMULATIVE SHARE REPURCHASES
<TABLE>
<CAPTION>
1998 1999 1Q00
<S> <C> <C> <C>
($MILLIONS) $223 $751 $896
</TABLE>
SHARES PURCHASED (MILLIONS): 21.6
AVERAGE PRICE: $41.55
<PAGE> 35
CONTINENTAL'S HIGH RETURN
LOW RISK OPPORTUNITIES
<TABLE>
<CAPTION>
----------Goal----------
Annual
Today 2005 Pretax Benefits
----- ------- ---------------
<S> <C> <C> <C>
o Alliance Partners 18 20 $200 Million
o Dist. Cost % of Revenue 15.8% 7-10% $200 Million
o Business Mix 49% 50-55% $175 Million
o Low Risk Growth 2,448 2,750 $175 Million
(Daily Departures)
o Fleet Types 6 4 $125 Million
------------
$875 Million
</TABLE>
<PAGE> 36
CONTINENTAL AIRLINES
[GRAPHIC OF CONTINENTAL LOGO]
