Continental Airlines Chooses Not to Merge

   Dear Co-worker,



   We want you to know that our Board of Directors met today and has

   unanimously supported management's recommendation that, in the current

   industry environment, the best course for Continental is to not merge

   with another airline at this time.



   Our recommendation, and the Board's careful and considered decision,

   followed a comprehensive review of our strategic alternatives, assisted

   by our senior officers and advised by Continental's outside financial and

   legal advisors.  The Board very carefully considered all the risks and

   benefits of a merger with another airline, and determined that the risks

   of a merger at this time outweigh the potential rewards, as compared to

   Continental's prospects on a standalone basis.



   We have significant cultural, operational and financial strengths

   compared to the rest of the industry, and we want to protect and enhance

   those strengths -- which we believe would be placed at risk in a merger

   with another carrier in today's environment.  We will, however, continue

   to review potential alliances and our membership in SkyTeam.  We are

   considering alternatives to SkyTeam as we carefully evaluate which major

   global alliance will be best for Continental over the long term.



   While some would prefer to see Continental pursue a merger, we strongly

   believe we have made the right decision -- one that is in the best

   interests of our stockholders, co-workers, customers and the communities

   we serve.



   Every U.S. carrier, including Continental, is under enormous pressure

   from record high fuel prices, a slowing U.S. economy and a weak dollar.

   In today's harsh environment, we must continue to adjust our business

   model to ensure we successfully navigate through these difficult times,

   so that in the future we can once again grow and prosper.   As we take

   actions, we will communicate them to you as soon as possible.  In the

   meantime, we must all continue to concentrate on what we do so well:

   delivering clean, safe and reliable air transportation every day.



   Even in these tough times, we have great strengths.  We have an enviable

   position in the New York market, a powerful hub in Houston, and hubs in

   Cleveland and Guam.  We have a solid trans-Atlantic route network, which

   has recently been enhanced by our access to London Heathrow.  We also

   have a great Latin American network and a growing portfolio of routes to



   India and Asia.  We fly the youngest, most fuel-efficient fleet and have

   the best new aircraft order book among the major network carriers.



   Most importantly, we have our Working Together culture, and we will

   ensure it remains intact. We've achieved our industry-leading customer

   service reputation because of you -- our co-workers.  We will all work

   together to get through these tough times.



   We are both proud to be on your team.



   Larry               Jeff

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