REGISTRATION NO. 333-___
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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM S-3
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                           --------------------------

                           CONTINENTAL AIRLINES, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


          DELAWARE                          4512                    74-2099724
(STATE OR OTHER JURISDICTION    (PRIMARY STANDARD INDUSTRIAL    (I.R.S. EMPLOYER
    OF INCORPORATION OR          CLASSIFICATION CODE NUMBER)      IDENTIFICATION
       ORGANIZATION)                                                 NUMBER)


                               2929 ALLEN PARKWAY
                              HOUSTON, TEXAS 77019
                                 (713) 834-5000
    (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
                  OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

                           --------------------------

    JEFFERY A. SMISEK, ESQ.                   COPIES OF CORRESPONDENCE TO:
   EXECUTIVE VICE PRESIDENT,
 GENERAL COUNSEL AND SECRETARY
   CONTINENTAL AIRLINES, INC.                      JOHN K. HOYNS, ESQ.
 2929 ALLEN PARKWAY, SUITE 2010                 HUGHES HUBBARD & REED LLP
     HOUSTON, TEXAS 77019                         ONE BATTERY PARK PLAZA
        (713) 834-2950                        NEW YORK, NEW YORK 10004-1482
(NAME, ADDRESS, INCLUDING ZIP
 CODE, AND TELEPHONE NUMBER,
 INCLUDING AREA CODE, OF AGENT
 FOR SERVICE)

                           --------------------------

        APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
     From time to time after this Registration Statement becomes effective.

                           --------------------------

      If the only  securities  being  registered  on this Form are being offered
pursuant to dividend or interest  reinvestment plans, please check the following
box. |_|

      If any of the securities being registered on this Form are so offered on a
delayed or continuous  basis  pursuant to Rule 415 under the  Securities  Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|




                         CALCULATION OF REGISTRATION FEE
==============================================================================================================
                                  |                | PROPOSED MAXIMUM  |  PROPOSED MAXIMUM    |    AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES |  AMOUNT TO BE  |  OFFERING PRICE   | AGGREGATE OFFERING   |   REGISTRATION
        TO BE REGISTERED          |  REGISTERED    |     PER UNIT      |     PRICE (1)        |     FEE (2)
- --------------------------------------------------------------------------------------------------------------
                                                                                        
Pass Through Certificates         | $1,850,000,000 |       (3)         |  $1,850,000,000      |     $560,607
==============================================================================================================



(1)  Estimated  solely for purposes of determining the registration fee pursuant
     to Rule 457(o) under the Securities Act of 1933, as amended.
(2)  Pursuant to Rule 457(o),  the  registration  fee has been calculated on the
     basis of the maximum aggregate offering price of the securities listed.
(3)  Omitted pursuant to Rule 457(o).


         The Registrant hereby amends this  Registration  Statement on such date
or dates as may be necessary to delay its  effective  date until the  Registrant
shall file a further amendment which specifically  states that this Registration
Statement shall  thereafter  become effective in accordance with Section 8(a) of
the  Securities  Act of 1933 or until the  Registration  Statement  shall become
effective on such date as the Commission,  acting pursuant to said Section 8(a),
may determine.




                  SUBJECT TO COMPLETION - DATED AUGUST 28, 1997

PROSPECTUS
                                 $1,850,000,000

                           CONTINENTAL AIRLINES, INC.

                            PASS THROUGH CERTIFICATES
                           --------------------------

         Up to  $1,850,000,000  aggregate  public offering price of Pass Through
Certificates  (the  "Certificates")  (or its equivalent (based on the applicable
exchange rate at the time of sale) in one or more foreign currencies or currency
units) may be offered for sale from time to time pursuant to this Prospectus and
related Prospectus Supplements (as defined below). Certificates may be issued in
one or more series in amounts,  at prices and on terms to be  determined  at the
time of the offering.  In respect of each offering of  Certificates,  a separate
Continental  Airlines Pass Through Trust for each series of  Certificates  being
offered  (each,  a "Trust") will be formed  pursuant to one or more Pass Through
Trust Agreements (each, a "Basic Agreement") and one or more supplements thereto
(each, a "Trust  Supplement")  relating to such Trust to be entered into between
Continental  Airlines,  Inc.  ("Continental"  or the  "Company") and the trustee
named therein (the "Trustee"),  as trustee under each Trust. Each Certificate in
a series will represent a fractional undivided interest in the related Trust and
will have no rights,  benefits or interests  in respect of any other Trust.  The
property  of  the  Trusts  will  consist  of  equipment  notes  issued  (a) on a
nonrecourse basis by one or more owner trustees  pursuant to separate  leveraged
lease  transactions  (the  "Leased  Aircraft  Notes") to finance or  refinance a
portion of the equipment  cost of aircraft,  including  engines (each, a "Leased
Aircraft" and, collectively,  the "Leased Aircraft"), which have been or will be
leased to Continental  pursuant to a separate lease  agreement  (each such lease
agreement,  a  "Lease")  for  each  Leased  Aircraft,  or (b) with  recourse  to
Continental  (the "Owned Aircraft Notes" and,  together with any Leased Aircraft
Notes,  the  "Equipment  Notes") to finance or refinance all or a portion of the
equipment cost of, or to purchase all or a portion of the outstanding  debt with
respect  to,  aircraft,  including  engines  (each,  an  "Owned  Aircraft"  and,
collectively,   the  "Owned  Aircraft";   together  with  Leased  Aircraft,  the
"Aircraft"),  which have been or will be purchased and owned by Continental.  To
the extent that the  proceeds of any  offering of  Certificates  are not used to
purchase  Equipment  Notes on the date of  issuance of such  Certificates,  such
proceeds will be held for the benefit of the holders of such Certificates.

         The specific terms of the particular  Certificates  in respect of which
this  Prospectus  is being  delivered  will be set forth in a supplement to this
Prospectus (the "Prospectus  Supplement")  which will be delivered together with
this Prospectus,  including, where applicable,  the specific designation,  form,
aggregate  principal amount,  interest rate, final distribution date, ranking in
respect of priority of payment,  initial public offering price and  distribution
dates  relating to such  Certificates,  the currency in which such  Certificates
will be  payable,  the  Trust  or  Trusts  relating  to such  Certificates,  the
Equipment Notes to be purchased by such Trust or Trusts,  the Aircraft  relating
to  such  Equipment  Notes,  the  leveraged  lease   transactions  or  financing
arrangements, as the case may be, relating to such  Equipment  Notes  and  other

                                              (CONTINUED ON THE FOLLOWING PAGE.)


(CONTINUED FROM THE PRIOR PAGE.)

special  terms  relating  to such  Certificates  and the net  proceeds  from the
offering of such  Certificates.  The Certificates  shall be issued in registered
form only and may, if so specified in the applicable Prospectus  Supplement,  be
issued in accordance with a book-entry system.

         With respect to one or more  Aircraft,  Equipment  Notes may be issued,
each of which  may have a  different  interest  rate,  final  maturity  date and
ranking in respect of priority of payment. For each series of Certificates,  the
Trustee will purchase one or more Equipment  Notes issued with respect to one or
more  Aircraft  such that all of the  Equipment  Notes held in the related Trust
will have identical ranking and identical  interest rates (in each case equal to
the rate applicable to the Certificates issued by such Trust), and such that the
latest  maturity date for such Equipment Notes will occur on or before the final
distribution  date for such  Certificates.  Interest paid on the Equipment Notes
held in each Trust will be passed  through  to the  holders of the  Certificates
relating  to such  Trust on the dates and at the rate per annum set forth in the
Prospectus Supplement relating to such Certificates until the final distribution
date for such Trust subject to the effect of any cross-subordination  provisions
described in the Prospectus  Supplement for a series of Certificates.  Principal
paid on the  Equipment  Notes held in each  Trust will be passed  through to the
holders of the Certificates  relating to such Trust in scheduled  amounts on the
dates set forth in the Prospectus Supplement relating to such Certificates until
the  final  distribution  date for  such  Trust  subject  to the  effect  of any
cross-subordination  provisions  described in the  Prospectus  Supplement  for a
series of Certificates.  The Equipment Notes issued with respect to any Aircraft
will be secured by a security  interest in such Aircraft and, in the case of the
Leased Aircraft, by a security interest in the Lease relating thereto, including
the right to receive  rentals  payable by  Continental in respect of such Leased
Aircraft.  Although  neither the Certificates nor the Leased Aircraft Notes will
be  direct   obligations  of,  or  guaranteed  by,   Continental,   the  amounts
unconditionally  payable by  Continental  for lease of Leased  Aircraft  will be
sufficient  to pay in full  when  due all  payments  required  to be made on the
corresponding Leased Aircraft Notes.

         The  Certificates  may be  sold  to or  through  underwriters,  through
dealers or agents or directly to  purchasers.  See "Plan of  Distribution".  The
Prospectus  Supplement will set forth the names of any underwriters,  dealers or
agents  involved  in the sale of the  Certificates  in  respect  of  which  this
Prospectus is being delivered,  the proposed amounts, if any, to be purchased by
underwriters and the compensation,  if any, of such underwriters or agents.  See
"Plan of  Distribution"  for  information  concerning  secondary  trading of the
Certificates.

         THIS  PROSPECTUS  MAY NOT BE USED TO CONSUMMATE  SALES OF  CERTIFICATES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
                                              
                           --------------------------


            THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
               THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
                SECURITIES COMMISSION NOR HAS THE SECURITIES AND
                   EXCHANGE COMMISSION OR ANY STATE SECURITIES
                       COMMISSION PASSED UPON THE ACCURACY
                       OR ADEQUACY OF THIS PROSPECTUS. ANY
                         REPRESENTATION TO THE CONTRARY
                             IS A CRIMINAL OFFENSE.

                           --------------------------

              The date of this Prospectus is             , 1997.


         INFORMATION  CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.  A
REGISTRATION  STATEMENT  RELATING  TO THESE  SECURITIES  HAS BEEN FILED WITH THE
SECURITIES  AND EXCHANGE  COMMISSION.  THESE  SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION  STATEMENT  BECOMES
EFFECTIVE.  THIS  PROSPECTUS  SHALL  NOT  CONSTITUTE  AN  OFFER  TO  SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE  SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER,  SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO  REGISTRATION  OR  QUALIFICATION  UNDER THE SECURITIES LAWS OF ANY SUCH
JURISDICTION.



                              AVAILABLE INFORMATION

         Continental has filed with the Securities and Exchange  Commission (the
"Commission")   a  Registration   Statement  on  Form  S-3  (together  with  all
amendments,  exhibits and schedules,  the  "Registration  Statement")  under the
Securities Act of 1933, as amended (the "Securities  Act"),  with respect to the
Certificates  offered  hereby.  This  Prospectus  does  not  contain  all of the
information set forth in the Registration Statement,  certain parts of which are
omitted in accordance with the rules and  regulations of the Commission,  and to
which  reference is hereby made.  Statements  made in this  Prospectus as to the
contents  of any  contract,  agreement  or other  document  referred  to are not
necessarily  complete.  With respect to each such  contract,  agreement or other
document filed as an exhibit to the Registration Statement, reference is made to
the exhibit for a more complete description of the matter involved.

         Continental  is  subject  to  the  informational  requirements  of  the
Securities  Exchange  Act of 1934,  as  amended  (the  "Exchange  Act"),  and in
accordance  therewith  files  periodic  reports and other  information  with the
Commission.  Such  reports and other  information,  as well as the  Registration
Statement may be inspected at the public reference facilities  maintained by the
Commission at 450 Fifth Street, N.W., Washington,  D.C. 20549, Room 1024, and at
the regional  offices of the  Commission  located at Citicorp  Center,  500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and at 7 World Trade Center,
13th Floor,  New York, New York 10048.  Copies of such materials may be obtained
from the Public  Reference  Section of the Commission,  450 Fifth Street,  N.W.,
Washington,  D.C. 20549 at prescribed  rates. Such material may also be accessed
electronically    by   means   of   the    Commission's    Internet   web   site
(http://www.sec.gov),  which contains reports,  proxy and information statements
and other information  regarding  registrants that file  electronically with the
Commission.  In  addition,  reports,  proxy  statements  and  other  information
concerning  Continental  may be  inspected  and copied at the offices of the New
York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.

         Continental is the successor to  Continental  Airlines  Holdings,  Inc.
("Holdings"), which merged with and into Continental on April 27, 1993. Holdings
had also been subject to the informational requirements of the Exchange Act.


                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

         The following documents filed with the Commission (File No. 0-9781) are
hereby  incorporated by reference in this Prospectus:  (i) Continental's  Annual
Report on Form 10-K for the year ended December 31, 1996,  filed on February 24,
1997,  (ii)  Continental's  Quarterly  Reports  on Form  10-Q for the  quarterly
periods ended March 31, 1997,  filed on April 28, 1997, and June 30, 1997, filed
on August 14, 1997, and (iii)  Continental's  Current  Reports on Form 8-K filed
January 6, March 21, April 18, May 28, June 10 and June 25, 1997.

         All reports and any definitive proxy or information statements filed by
Continental  pursuant to Section 13(a),  13(c),  14 or 15(d) of the Exchange Act
subsequent to the date of this  Prospectus  and prior to the  termination of the



offering of the  Certificates  offered hereby shall be deemed to be incorporated
by reference  into this  Prospectus  and to be a part hereof from the respective
dates of  filing  of such  documents.  Any  statement  contained  in a  document
incorporated or deemed to be incorporated  herein by reference,  or contained in
this  Prospectus,  shall be deemed to be modified or superseded  for purposes of
this Prospectus to the extent that a statement  contained herein or in any other
subsequently  filed  document which also is or is deemed to be  incorporated  by
reference  herein or contained in the Prospectus  Supplement with respect to the
Certificates  modifies or  supersedes  such  statement.  Any such  statement  so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.

         Continental will provide without charge to any person to whom a copy of
this Prospectus has been delivered,  upon written or oral request, a copy of any
or all of the foregoing  documents  incorporated herein by reference (other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference  into such  documents).  Requests  should be directed  to  Continental
Airlines, Inc., 2929 Allen Parkway, Suite 2010, Houston, Texas 77019, Attention:
Secretary, telephone (713) 834-2950.



                                   THE COMPANY

         Continental Airlines, Inc. is a major United States air carrier engaged
in the business of transporting  passengers,  cargo and mail. Continental is the
fifth largest United States airline (as measured by revenue  passenger  miles in
the first seven months of 1997) and, together with its wholly-owned subsidiaries
Continental Express, Inc. ("Express") and Continental Micronesia,  Inc. ("CMI"),
each a Delaware corporation, serves 198 airports worldwide as of August 1, 1997.

         The Company operates its route system  primarily  through domestic hubs
at Newark, George Bush Intercontinental in Houston, Cleveland, and a Pacific hub
on the island of Guam. Each of Continental's three domestic hubs is located in a
large business and population  center,  contributing to a high volume of "origin
and  destination"  traffic.  The Guam hub is  strategically  located  to provide
service from Japanese and other Asian cities to popular resort  destinations  in
the western  Pacific.  Continental is the primary carrier at each of these hubs,
accounting  for  56%,  80%,  54%  and  68%  of  average  daily  jet  departures,
respectively, as of August 1, 1997.

         The  Company is a  Delaware  corporation.  Its  executive  offices  are
located at 2929  Allen  Parkway,  Suite  2010,  Houston,  Texas  77019,  and its
telephone number is (713) 834-2950.


                                 USE OF PROCEEDS

         Except as set forth in a Prospectus  Supplement for a specific offering
of Certificates,  the Certificates will be issued in order to facilitate (a) the
financing  or  refinancing  of the debt  portion  and,  in  certain  cases,  the
refinancing  of some of the  equity  portion of one or more  separate  leveraged
lease transactions  entered into by Continental,  as lessee, with respect to the
Leased Aircraft as described in the applicable  Prospectus  Supplement,  and (b)
the financing or  refinancing  of the aggregate  principal  amount of debt to be
issued, or the purchase of the aggregate principal amount of the debt previously
issued,  by  Continental  in respect of the Owned  Aircraft as  described in the
applicable Prospectus Supplement. Except as set forth in a Prospectus Supplement
for a specific  offering  of  Certificates,  the  proceeds  from the sale of the
Certificates  will be used by the Trustee on behalf of the  applicable  Trust or
Trusts to purchase  either (a) Leased  Aircraft  Notes issued by the  respective
Owner  Trustee or Owner  Trustees to finance or refinance  (as  specified in the
applicable  Prospectus  Supplement)  the related Leased  Aircraft,  or (b) Owned
Aircraft  Notes issued by  Continental  to finance or refinance (as specified in
the applicable Prospectus  Supplement) the related Owned Aircraft. To the extent
that the  proceeds  of any  offering  of  Certificates  are not used to purchase
Equipment Notes on the date of issuance of such Certificates, such proceeds will
be held  for the  benefit  of the  holders  of such  Certificates.  If any  such
proceeds  are not  subsequently  utilized  to  purchase  Equipment  Notes by the
relevant date specified in the applicable Prospectus  Supplement,  such proceeds
will be  returned  to the  holders of such  Certificates.  See  "Description  of
Certificates--Delayed Purchase of Equipment Notes".

         The  Leased   Aircraft  Notes  will  be  issued  under  separate  trust
indentures (the "Leased Aircraft  Indentures")  between a bank, trust company or
other institution  specified in the related  Prospectus  Supplement,  as trustee
thereunder (in such capacity,  herein referred to as the "Loan Trustee"), and an



institution  specified in the related  Prospectus  Supplement acting, not in its
individual  capacity,  but solely as owner  trustee  (an "Owner  Trustee")  of a
separate trust for the benefit of one or more institutional  investors (each, an
"Owner  Participant").  With respect to each Leased Aircraft,  the related Owner
Participant  will have  provided or will  provide  from  sources  other than the
Leased  Aircraft  Notes a portion of the  equipment  cost of the related  Leased
Aircraft.  No Owner  Participant,  however,  will be  personally  liable for any
amount  payable  under the  related  Leased  Aircraft  Indenture  or the  Leased
Aircraft Notes issued thereunder. Each Leased Aircraft will have been or will be
leased by the related Owner Trustee to Continental pursuant to a separate Lease.
The Owned Aircraft Notes will be issued under  separate  trust  indentures  (the
"Owned Aircraft  Indentures" and, together with any Leased Aircraft  Indentures,
the "Indentures") between the applicable Loan Trustee and Continental.


                       RATIO OF EARNINGS TO FIXED CHARGES

         The following  information for the year ended December 31, 1992 and for
the period  January 1, 1993  through  April 27,  1993  relates to  Continental's
predecessor,  Holdings.  Information  for the  period  April  28,  1993  through
December 31, 1993, for the years ended December 31, 1994,  1995 and 1996 and for
the three and six months  ended June 30, 1996 and 1997  relates to  Continental.
The information as to Continental has not been prepared on a consistent basis of
accounting  with the information as to Holdings due to  Continental's  adoption,
effective  April 27,  1993,  of fresh start  reporting  in  accordance  with the
American Institute of Certified Public  Accountants'  Statement of Position 90-7
- -- "Financial Reporting by Entities in Reorganization Under the Bankruptcy Code"
("SOP 90-7").

         For the year ended December 31, 1992,  for the periods  January 1, 1993
through April 27, 1993 and April 28, 1993 through  December 31, 1993 and for the
year ended  December  31,  1994,  earnings  were not  sufficient  to cover fixed
charges. Additional earnings of $131 million, $979 million, $60 million and $667
million, respectively, would have been required to achieve ratios of earnings to
fixed charges of 1.0. The ratio of earnings to fixed charges for the years ended
December  31, 1995 and December  31, 1996 was 1.53 and 1.81,  respectively.  The
ratio of earnings to fixed  charges for the three months ended June 30, 1996 and
1997 was 2.57 and 2.48, respectively, and for the six months ended June 30, 1996
and 1997 was 2.13 and 2.18,  respectively.  For  purposes  of  calculating  this
ratio,  earnings  consist  of  earnings  before  taxes,  minority  interest  and
extraordinary  items plus interest  expense (net of capitalized  interest),  the
portion of rental expense representative of interest expense and amortization of
previously  capitalized interest.  Fixed charges consist of interest expense and
the portion of rental expense representative of interest expense.


                       GENERAL OUTLINE OF TRUST STRUCTURE

         In respect of each offering of Certificates, one or more Trusts will be
formed,  and  the  related  Certificates  issued,  pursuant  to  separate  Trust
Supplements to be entered into between the Trustee and Continental in accordance
with the terms of the  Basic  Agreement.  Concurrently  with the  execution  and
delivery of each Trust  Supplement,  the Trustee,  on behalf of the Trust formed
thereby, will enter into one or more purchase or refunding agreements (each such



agreement being herein referred to as a "Note Purchase  Agreement")  pursuant to
which it will agree to purchase one or more  Equipment  Notes relating to one or
more of the Aircraft described in the applicable Prospectus Supplement. Pursuant
to the  applicable  Note  Purchase  Agreement or Note Purchase  Agreements,  the
Trustee, on behalf of each Trust, will purchase one or more Equipment Notes such
that the Equipment  Notes that  constitute  the property of such Trust will have
identical  interest  rates (in each  case  equal to the rate  applicable  to the
Certificates issued by such Trust) and identical priority of payment relative to
each of the other  Equipment  Notes  issued  under the  Related  Indentures  (as
defined below). The maturity dates of the Equipment Notes acquired by each Trust
will  occur  on  or  before  the  final  distribution  date  applicable  to  the
Certificates  that will be issued by such Trust. The Trustee will distribute the
amount of payments of principal, premium, if any, and interest received by it as
holder of the Equipment  Notes to the registered  holders of Certificates of the
Trust (the "Certificateholders") in which such Equipment Notes are held, subject
to the effect of any cross-subordination  provisions described in the Prospectus
Supplement for a series of Certificates.  To the extent that the proceeds of any
offering of Certificates are not used to purchase Equipment Notes on the date of
issuance of such Certificates, such proceeds will be held for the benefit of the
holders of such Certificates. If any such proceeds are not subsequently utilized
to purchase  Equipment  Notes by the relevant date  specified in the  applicable
Prospectus  Supplement,  such  proceeds  will be returned to the holders of such
Certificates.  See  "Description of the  Certificates"  and  "Description of the
Equipment Notes".


                         DESCRIPTION OF THE CERTIFICATES

         In connection with each offering of Certificates,  one or more separate
Trusts  will be formed  and one or more  series of  Certificates  will be issued
pursuant to the Basic Agreement and one or more separate Trust Supplements to be
entered into between Continental and the Trustee. The statements made under this
caption are summaries  and  reference is made to the detailed  provisions of the
Basic  Agreement,  the  form of  which  has  been  filed  as an  exhibit  to the
Registration  Statement of which this Prospectus is a part. The summaries relate
to the Basic  Agreement  and each of the  Trust  Supplements,  the  Trusts to be
formed  thereby and the  Certificates  to be issued by each Trust  except to the
extent,  if  any,  described  in  the  applicable  Prospectus  Supplement.   The
Prospectus  Supplement that accompanies  this Prospectus  contains a glossary of
the  material  terms used with respect to the  specific  series of  Certificates
being  offered  thereby.  The  Trust  Supplement  relating  to  each  series  of
Certificates  and the forms of the related Note Purchase  Agreement,  Indenture,
Lease, Trust Agreement,  Participation  Agreement,  intercreditor  agreement and
liquidity facility  arrangement,  as applicable,  will be filed as exhibits to a
post-effective  amendment to the Registration Statement of which this Prospectus
is a part, a Current  Report on Form 8-K, a Quarterly  Report on Form 10-Q or an
Annual  Report  on Form  10-K,  as  applicable,  filed by  Continental  with the
Commission.

         The Certificates offered pursuant to this Prospectus will be limited to
$1,850,000,000  aggregate public offering price (or its equivalent (based on the
applicable  exchange rate at the time of sale) in one or more foreign currencies
or currency units).



         To the  extent  that any  provision  in any  Prospectus  Supplement  is
inconsistent  with  any  provision  in  this  summary,  the  provision  of  such
Prospectus Supplement will control.

GENERAL

         Each Certificate will represent a fractional  undivided interest in the
Trust created by the Trust  Supplement  pursuant to which such  Certificate  was
issued and all  payments and  distributions  shall be made only from the related
Trust  Property  (as  defined  below).  The  property  of each Trust (the "Trust
Property")  will  include  (i) the  Equipment  Notes  held in such Trust and all
monies at any time paid thereon and all monies due and to become due thereunder,
subject to the effect of any  cross-subordination  provisions  described  in the
Prospectus Supplement for a series of Certificates, (ii) funds from time to time
deposited  with the Trustee in  accounts  relating to such Trust and (iii) if so
specified  in the  Prospectus  Supplement  related to a series of  Certificates,
rights   under   intercreditor   agreements   relating  to   cross-subordination
arrangements and monies receivable under a liquidity facility.  Each Certificate
will  represent  a pro rata  share of the  outstanding  principal  amount of the
Equipment Notes held in the related Trust and, unless otherwise specified in the
applicable  Prospectus  Supplement,  will be issued in minimum  denominations of
$1,000 or any integral  multiple  thereof  except that one  Certificate  of each
series  may be issued  in a  different  denomination.  The  Certificates  do not
represent an interest in or obligation of Continental,  the Trustee,  any of the
Loan  Trustees  or Owner  Trustees  in their  individual  capacities,  any Owner
Participant,  or any  affiliate of any thereof.  Each  Certificateholder  by its
acceptance  of a  Certificate  agrees to look solely to the income and  proceeds
from the Trust  Property as provided in the Basic  Agreement and the  applicable
Trust Supplement.

         The Equipment  Notes issued under an Indenture may be held in more than
one Trust and one Trust may hold  Equipment  Notes  issued  under  more than one
Indenture  (each  Indenture the Equipment  Notes of which are held in a Trust, a
"Related Indenture"). Unless otherwise provided in a Prospectus Supplement, only
Equipment  Notes having the same priority of payment (the Equipment Notes of any
such priority, a "Class") may be held in the same Trust.

         Interest will be passed through to  Certificateholders of each Trust at
the rate per annum  payable on the  Equipment  Notes held in such Trust,  as set
forth for such Trust on the cover page of the applicable Prospectus  Supplement,
subject to the effect of any  cross-subordination  provisions  described  in the
Prospectus Supplement for a series of Certificates.

         Reference is made to the Prospectus  Supplement that  accompanies  this
Prospectus  for a  description  of the  specific  series of  Certificates  being
offered  thereby,  including:  (1) the  specific  designation  and title of such
Certificates;  (2) the Regular Distribution Dates (as defined below) and Special
Distribution Dates (as defined below) applicable to such  Certificates;  (3) the
currency or currencies (including currency units) in which such Certificates may
be denominated; (4) the specific form of such Certificates, including whether or
not such  Certificates are to be issued in accordance with a book-entry  system;
(5) a  description  of the  Equipment  Notes  to be  purchased  by  such  Trust,
including (a) the period or periods within which,  the price or prices at which,
and the terms and  conditions  upon  which such  Equipment  Notes may or must be



redeemed or defeased in whole or in part,  by  Continental  or, with  respect to
Leased  Aircraft  Notes,  the Owner  Trustee,  (b) the payment  priority of such
Equipment  Notes in relation to any other Equipment Notes issued with respect to
the related  Aircraft,  (c) any  additional  security or liquidity  enhancements
therefor and (d) any  intercreditor  or other rights or  limitations  between or
among the holders of Equipment Notes of different priorities issued with respect
to  the  same  Aircraft;  (6) a  description  of  the  related  Aircraft;  (7) a
description  of the related  Note  Purchase  Agreement  and Related  Indentures,
including a description  of the events of default under the Related  Indentures,
the remedies  exercisable  upon the occurrence of such events of default and any
limitations  on the exercise of such  remedies  with  respect to such  Equipment
Notes; (8) if such Certificates relate to Leased Aircraft,  a description of the
related Leases, Trust Agreements and Participation Agreements, including (a) the
names of the related Owner Trustees,  (b) a description of the events of default
under the related Leases,  the remedies  exercisable upon the occurrence of such
events of default and any  limitations  on the  exercise of such  remedies  with
respect to such Leased Aircraft  Notes,  and (c) the rights of the related Owner
Trustee,  if any,  and/or  Owner  Participant,  if  any,  to  cure  failures  of
Continental  to pay rent under the related  Lease;  (9) the  extent,  if any, to
which the  provisions of the operative  documents  applicable to such  Equipment
Notes may be amended by the parties  thereto  without the consent of the holders
of, or only  upon the  consent  of the  holders  of a  specified  percentage  of
aggregate  principal  amount of, such Equipment  Notes;  (10)  cross-default  or
cross-collateralization  provisions  in the  Related  Indentures,  if any;  (11)
subordination  provisions  among the  holders  of  Certificates,  including  any
cross-subordination  provisions  among the holders of  Certificates  in separate
Trusts; and (12) any other special terms pertaining to such Certificates.

         If any Certificates  are denominated in one or more foreign  currencies
or currency units,  the  restrictions,  certain United States federal income tax
considerations,  specific  terms  and other  information  with  respect  to such
Certificates  and such foreign  currency or currency  units will be set forth in
the applicable Prospectus Supplement.

BOOK-ENTRY REGISTRATION

      GENERAL

         If specified in the applicable Prospectus Supplement,  the Certificates
will be  subject  to the  provisions  described  below  and  under  the  caption
"--Definitive Certificates".  Upon issuance, each series of Certificates will be
represented  by  one  or  more  fully  registered  global  certificates.  Unless
otherwise provided in a Prospectus  Supplement,  each global certificate will be
deposited  with,  or on behalf of, The  Depository  Trust  Company  ("DTC")  and
registered  in the name of CEDE & Co.  ("Cede"),  the  nominee of DTC. No person
acquiring  an  interest  in  such  Certificates  ("Certificate  Owner")  will be
entitled to receive a certificate  representing  such person's  interest in such
Certificates,  except  as set forth  below  under  "--Definitive  Certificates".
Unless  and  until   Definitive   Certificates  are  issued  under  the  limited
circumstances  described herein, all references to actions by Certificateholders
shall refer to actions taken by DTC upon  instructions from DTC Participants (as
defined below), and all references herein to distributions, notices, reports and
statements  to   Certificateholders   shall  refer,  as  the  case  may  be,  to
distributions, notices, reports and statements to DTC or Cede, as the registered



holder  of  such  Certificates,  or to  DTC  Participants  for  distribution  to
Certificate Owners in accordance with DTC procedures.

         DTC is a limited purpose trust company  organized under the laws of the
State  of New  York,  a  member  of the  Federal  Reserve  System,  a  "clearing
corporation"  within the  meaning of the New York  Uniform  Commercial  Code and
"clearing  agency"  registered  pursuant to section 17A of the Exchange Act. DTC
was created to hold securities for its participants ("DTC  Participants") and to
facilitate the clearance and settlement of securities  transactions  between DTC
Participants through electronic  book-entries,  thereby eliminating the need for
physical transfer of certificates.  DTC Participants  include securities brokers
and dealers,  banks, trust companies and clearing corporations.  Indirect access
to the DTC system also is  available to others such as banks,  brokers,  dealers
and trust companies that clear through or maintain a custodial relationship with
a DTC Participant either directly or indirectly ("Indirect Participants").

         Certificate   Owners  that  are  not  DTC   Participants   or  Indirect
Participants but desire to purchase, sell or otherwise transfer ownership of, or
other interests in, the Certificates may do so only through DTC Participants and
Indirect  Participants.  In  addition,   Certificate  Owners  will  receive  all
distributions   of  principal  and  interest   from  the  Trustee   through  DTC
Participants  or Indirect  Participants,  as the case may be. Under a book-entry
format,  Certificate  Owners  may  experience  some  delay in their  receipt  of
payments,  because such  payments  will be forwarded by the Trustee to Cede,  as
nominee  for DTC.  DTC will  forward  such  payments  in  same-day  funds to DTC
Participants  who are credited  with  ownership of the  Certificates  in amounts
proportionate to the principal amount of each such DTC Participant's  respective
holdings of beneficial  interests in the  Certificates.  DTC  Participants  will
thereafter forward payments to Indirect  Participants or Certificate  Owners, as
the case may be, in accordance with customary industry practices. The forwarding
of such  distributions to the Certificate  Owners will be the  responsibility of
such DTC Participants.  Unless and until the Definitive  Certificates are issued
under the limited circumstances  described herein, the only  "Certificateholder"
will be Cede,  as nominee of DTC.  Certificate  Owners will not be recognized by
the Trustee as Certificateholders,  as such term is used in the Basic Agreement,
and   Certificate   Owners  will  be   permitted   to  exercise  the  rights  of
Certificateholders only indirectly through DTC and DTC Participants.

         Under the rules,  regulations and procedures creating and affecting DTC
and its operations (the "Rules"),  DTC is required to make book-entry  transfers
of the Certificates  among DTC Participants on whose behalf it acts with respect
to the  Certificates  and to receive and transmit  distributions  of  principal,
premium, if any, and interest with respect to the Certificates. DTC Participants
and Indirect  Participants  with which  Certificate  Owners have  accounts  with
respect to the Certificates  similarly are required to make book-entry transfers
and receive and transmit such payments on behalf of their respective  customers.
Accordingly,  although Certificate Owners will not possess the Certificates, the
Rules provide a mechanism by which Certificate  Owners will receive payments and
will be able to transfer their interests.

         Because DTC can only act on behalf of DTC Participants, who in turn act
on behalf of Indirect Participants, the ability of a Certificate Owner to pledge
the  Certificates  to persons or  entities  that do not  participate  in the DTC



system,  or to otherwise act with respect to such  Certificates,  may be limited
due to the lack of a physical certificate for such Certificates.

         DTC will take any action  permitted to be taken by a  Certificateholder
under the Basic Agreement only at the direction of one or more DTC  Participants
to whose accounts with DTC the Certificates are credited.  Additionally,  in the
event any action requires approval by Certificateholders of a certain percentage
of  beneficial  interest  in each  Trust,  DTC will take such action only at the
direction of and on behalf of DTC Participants  whose holdings include undivided
interests that satisfy any such  percentage.  DTC may take  conflicting  actions
with  respect to other  undivided  interests to the extent that such actions are
taken on  behalf of DTC  Participants  whose  holdings  include  such  undivided
interests.

         Neither  Continental  nor the Trustee will have any  liability  for any
aspect of the  records  relating to or  payments  made on account of  beneficial
ownership interests in the Certificates held by Cede, as nominee for DTC, or for
maintaining,  supervising or reviewing any records  relating to such  beneficial
ownership interests.

         The  applicable  Prospectus  Supplement  will  specify  any  additional
book-entry registration  procedures applicable to Certificates  denominated in a
currency other than United States dollars.

      SAME-DAY SETTLEMENT AND PAYMENT

         So long as the  Certificates  are  registered in the name of DTC or its
nominee, all payments made by Continental to the Loan Trustee under any Lease or
any Owned  Aircraft  Indenture  will be in  immediately  available  funds.  Such
payments,  including  the final  distribution  of principal  with respect to the
Certificates  of any  Trust,  will  be  passed  through  to  DTC in  immediately
available funds.

         Any  Certificates  registered  in the name of DTC or its nominee,  will
trade in DTC's Same-Day Funds  Settlement  System until maturity,  and secondary
market trading activity in the Certificates will therefore be required by DTC to
settle in  immediately  available  funds.  No  assurance  can be given as to the
effect,  if any,  of  settlement  in same-day  funds on trading  activity in the
Certificates.

      DEFINITIVE CERTIFICATES

         Certificates   will  be  issued  in  certificated   form   ("Definitive
Certificates")  to Certificate  Owners or their nominees,  rather than to DTC or
its nominee,  only if (i) Continental advises the Trustee in writing that DTC is
no  longer  willing  or able  to  discharge  properly  its  responsibilities  as
depository with respect to such Certificates and Continental is unable to locate
a qualified successor, (ii) Continental,  at its option, elects to terminate the
book-entry system through DTC or (iii) after the occurrence of certain events of
default  or  other  events  specified  in  the  related  Prospectus  Supplement,
Certificate Owners with fractional undivided interests aggregating not less than
a majority in interest in such Trust  advise the  Trustee,  Continental  and DTC
through DTC Participants in writing that the continuation of a book-entry system
through DTC (or a successor  thereto)  is no longer in the  Certificate  Owners'



best  interest.  Upon the occurrence of any event  described in the  immediately
preceding  sentence,  the Trustee  will be  required  to notify all  Certificate
Owners through DTC Participants of the availability of Definitive  Certificates.
Upon surrender by DTC of the  certificates  representing  the  Certificates  and
receipt of  instructions  for  re-registration,  the  Trustee  will  reissue the
Certificates as Definitive Certificates to Certificate Owners.

         Distributions of principal,  premium, if any, and interest with respect
to Certificates  will  thereafter be made by the Trustee  directly in accordance
with the  procedures set forth in the Basic  Agreement and the applicable  Trust
Supplements,  to  holders  in  whose  names  the  Definitive  Certificates  were
registered  at the  close  of  business  on the  applicable  record  date.  Such
distributions  will be made by check  mailed to the address of such holder as it
appears on the  register  maintained  by the Trustee.  The final  payment on any
Certificate,  however, will be made only upon presentation and surrender of such
Certificate  at  the  office  or  agency   specified  in  the  notice  of  final
distribution to Certificateholders.

         Definitive Certificates will be freely transferable and exchangeable at
the office of the Trustee upon compliance with the requirements set forth in the
Basic Agreement and the applicable Trust Supplements.  No service charge will be
imposed  for any  registration  of transfer  or  exchange,  but payment of a sum
sufficient to cover any tax or other governmental charge shall be required.

PAYMENTS AND DISTRIBUTIONS

         Subject to the effect of any  cross-subordination  provisions set forth
in  the  Prospectus  Supplement  for  a  series  of  Certificates,  payments  of
principal,  premium,  if any, and interest with respect to the  Equipment  Notes
held  in each  Trust  will be  distributed  by the  Trustee,  upon  receipt,  to
Certificateholders  of such Trust on the dates and in the currency  specified in
the applicable Prospectus  Supplement,  except in certain cases when some or all
of such Equipment Notes are in default as described in the applicable Prospectus
Supplement.  Payments of principal  of, and  interest  on, the unpaid  principal
amount  of the  Equipment  Notes  held in each  Trust  will be  scheduled  to be
received  by the Trustee on the dates  specified  in the  applicable  Prospectus
Supplement  (such scheduled  payments of interest and principal on the Equipment
Notes to the Trustee are herein  referred to as  "Scheduled  Payments",  and the
dates  specified in the applicable  Prospectus  Supplement for  distribution  of
Scheduled   Payments  to  the  Trustee  are  herein   referred  to  as  "Regular
Distribution Dates"). See "Description of the Equipment Notes--General". Subject
to the effect of any cross-subordination  provisions set forth in the Prospectus
Supplement for a series of Certificates,  each  Certificateholder  of each Trust
will be entitled to receive a pro rata share of any  distribution  in respect of
Scheduled Payments of principal and interest made on the Equipment Notes held in
the Trust.

         Payments of principal,  premium,  if any, and interest  received by the
Trustee on account  of the early  redemption,  if any,  of the  Equipment  Notes
relating  to one or more  Aircraft  held in a Trust,  and  payments,  other than
Scheduled  Payments received on a Regular  Distribution Date or within five days
thereafter,  received by the Trustee  following  default in respect of Equipment
Notes held in a Trust relating to one or more Aircraft ("Special Payments") will



be distributed on the date determined as described in the applicable  Prospectus
Supplement  (a "Special  Distribution  Date")  except that,  if specified in the
applicable  Prospectus  Supplement,  payments  received by the Trustee following
default in respect of the Equipment  Notes on a Regular  Distribution  Date as a
result of a drawing under any liquidity facility, as described in the applicable
Prospectus Supplement (each, a "Liquidity  Facility"),  provided for the benefit
of the  specified  Certificateholders  shall  be  distributed  on  such  Regular
Distribution  Date to such  Certificateholders.  The Trustee will mail notice to
the  Certificateholders  of  record of the  applicable  Trust  stating  any such
anticipated Special Distribution Date.

POOL FACTORS

         Unless otherwise described in the applicable Prospectus Supplement, the
"Pool  Balance"  for each  Trust or for the  Certificates  issued  by any  Trust
indicates,   as  of  any  date,  the  original  aggregate  face  amount  of  the
Certificates  of such Trust less the  aggregate  amount of all payments  made in
respect of the Certificates of such Trust other than payments made in respect of
interest  or  premium  thereon or  reimbursement  of any costs and  expenses  in
connection  therewith.  The  Pool  Balance  for  each  Trust  as of any  Regular
Distribution  Date or Special  Distribution  Date shall be computed after giving
effect to the  payment of  principal,  if any, on the  Equipment  Notes or other
Trust  Property  held in such Trust and the  distribution  thereof to be made on
that date.

         Unless otherwise described in the applicable Prospectus Supplement, the
"Pool  Factor"  for each Trust as of any  Regular  Distribution  Date or Special
Distribution  Date  is the  quotient  (rounded  to the  seventh  decimal  place)
computed by dividing (i) the Pool Balance by (ii) the  aggregate  original  face
amount of the  Certificates of such Trust.  The Pool Factor for each Trust as of
any Regular  Distribution  Date or Special  Distribution  Date shall be computed
after giving effect to the payment of principal,  if any, on the Equipment Notes
or other Trust Property held in such Trust and  distribution  thereof to be made
on that  date.  The Pool  Factor for each Trust  will  initially  be  1.0000000;
thereafter,  the Pool Factor for each Trust will decline as described  herein to
reflect  reductions  in  the  Pool  Balance  of  such  Trust.  The  amount  of a
Certificateholder's  pro  rata  share  of the  Pool  Balance  of a Trust  can be
determined by multiplying the original  denomination of the holder's Certificate
of such Trust by the Pool  Factor for such  Trust as of the  applicable  Regular
Distribution  Date or Special  Distribution  Date.  The Pool Factor and the Pool
Balance  for each  Trust will be mailed to  Certificateholders  of such Trust on
each Regular Distribution Date and Special Distribution Date.

         Unless  there has been an early  redemption,  a purchase of an issue of
Equipment  Notes by the related  Owner  Trustee  after an Indenture  Default (as
defined below),  a default in the payment of principal in respect of one or more
issues of the Equipment Notes held in a Trust or certain actions have been taken
following  a  default  thereon,  as  described  in  the  applicable   Prospectus
Supplement,  the Pool Factor for the Trusts will  decline in  proportion  to the
scheduled  repayments of principal on the Equipment  Notes held in such Trust as
described  in the  applicable  Prospectus  Supplement.  In  the  event  of  such
redemption,  purchase or default,  the Pool Factor and the Pool  Balance of each
Trust so affected  will be  recomputed  after giving  effect  thereto and notice
thereof will be mailed to the  Certificateholders of such Trust. Each Trust will
have a separate Pool Factor.



REPORTS TO CERTIFICATEHOLDERS

         On each Regular  Distribution Date and Special  Distribution  Date, the
Trustee will include with each  distribution  of a Scheduled  Payment or Special
Payment to Certificateholders of the related Trust a statement, giving effect to
such  distribution  to be made  on such  Regular  Distribution  Date or  Special
Distribution Date, setting forth the following information (per $1,000 aggregate
principal amount of Certificate for such Trust, as to (i) and (ii) below):

              (i) the amount of such distribution allocable to principal and the
         amount allocable to premium, if any;

             (ii) the amount of such distribution allocable to interest; and

            (iii) the Pool Balance and the Pool Factor for such Trust.

         So long as the  Certificates  are  registered in the name of DTC or its
nominee, on the record date prior to each Regular  Distribution Date and Special
Distribution  Date,  the Trustee will  request  from DTC a  securities  position
listing setting forth the names of all DTC Participants reflected on DTC's books
as holding  interests in the  Certificates  on such record date. On each Regular
Distribution  Date and Special  Distribution  Date, the applicable  Trustee will
mail to each such DTC  Participant  the statement  described above and will make
available  additional copies as requested by such DTC Participant for forwarding
to Certificate Owners.

         In  addition,  after the end of each  calendar  year,  the Trustee will
prepare  for  each  Certificateholder  of each  Trust  at any  time  during  the
preceding  calendar year a report  containing the sum of the amounts  determined
pursuant  to  clauses  (i) and (ii)  above  with  respect  to the Trust for such
calendar year or, in the event such person was a Certificateholder during only a
portion of such calendar year, for the applicable portion of such calendar year,
and such  other  items as are  readily  available  to the  Trustee  and  which a
Certificateholder  shall reasonably request as necessary for the purpose of such
Certificateholder's  preparation of its federal income tax returns.  Such report
and such other items shall be prepared on the basis of  information  supplied to
the Trustee by the DTC  Participants  and shall be  delivered  by the Trustee to
such DTC Participants to be available for forwarding by such DTC Participants to
Certificate Owners in the manner described above.

         At such time,  if any,  as the  Certificates  are issued in the form of
Definitive  Certificates,  the Trustee will prepare and deliver the  information
described  above to each  Certificateholder  of record of each Trust as the name
and period of ownership of such Certificateholder  appears on the records of the
registrar of the Certificates.

VOTING OF EQUIPMENT NOTES

         Subject to the effect of any  cross-subordination  provisions set forth
in the related Prospectus  Supplement,  the Trustee,  as holder of the Equipment
Notes held in each Trust,  has the right to vote and give  consents  and waivers
with respect to such  Equipment  Notes under the Related  Indentures.  The Basic
Agreement and related Trust Supplement set forth (i) the  circumstances in which



the  Trustee  may  direct  any  action  or cast  any vote as the  holder  of the
Equipment  Notes held in the applicable  Trust at its own  discretion,  (ii) the
circumstances   in  which  the  Trustee   shall  seek   instructions   from  the
Certificateholders  of such Trust and (iii) the percentage of Certificateholders
required  to direct the Trustee to take any such  action.  If  specified  in the
related Prospectus Supplement,  the right of a Trustee to vote and give consents
and waivers with respect to the  Equipment  Notes held in the related Trust may,
in the circumstances  set forth in an intercreditor  agreement to be executed by
such Trustee,  be  exercisable by another  person  specified in such  Prospectus
Supplement.

EVENTS OF DEFAULT AND CERTAIN RIGHTS UPON AN EVENT OF DEFAULT

         The Prospectus  Supplement will specify the events of default under the
Basic  Agreement  (an  "Event  of  Default")  and  the  Related  Indentures  (an
"Indenture  Default").  The  Indenture  Defaults in the case of Leased  Aircraft
Indentures  will include  events of default  under the related  Leases (a "Lease
Event of Default"). With respect to any Equipment Notes which are supported by a
Liquidity  Facility,  the  Indenture  Defaults  or Events of Default may include
events of default under such Liquidity Facility.  Unless otherwise provided in a
Prospectus  Supplement,  all  of the  Equipment  Notes  issued  under  the  same
Indenture   will   relate  to  a  specific   Aircraft   and  there  will  be  no
cross-collateralization  or  cross-default  provisions  in the  Indentures,  and
events resulting in an Indenture Default under any particular Indenture will not
necessarily  result in an Indenture Default occurring under any other Indenture.
If  an  Indenture   Default  occurs  in  fewer  than  all  of  the   Indentures,
notwithstanding  the  treatment  of Equipment  Notes issued under any  Indenture
under  which an  Indenture  Default has  occurred,  payments  of  principal  and
interest on the Equipment  Notes issued  pursuant to Indentures  with respect to
which  an  Indenture  Default  has  not  occurred  will  continue  to be made as
originally scheduled. As described below under "--Cross-Subordination Issues", a
Prospectus   Supplement  may  provide  the  terms  of  any   cross-subordination
provisions among  Certificateholders  of separate Trusts. If such provisions are
so  provided,  payments  made  pursuant  to a Related  Indenture  under which an
Indenture  Default has not occurred may be  distributed  first to the holders of
the  Certificates  issued under the Trust which holds the most senior  Equipment
Notes issued under all Related Indentures.

         The ability of the applicable Owner Trustee or Owner  Participant under
a Leased Aircraft Indenture to cure Indenture  Defaults,  including an Indenture
Default that results from the  occurrence  of a Lease Event of Default under the
related Lease, will be described in the Prospectus Supplement.  Unless otherwise
provided  in a  Prospectus  Supplement,  with  respect  to any  Certificates  or
Equipment  Notes  entitled to the  benefits of a Liquidity  Facility,  a drawing
under any such  Liquidity  Facility  for the  purpose  of  making a  payment  of
interest as a result of the failure by Continental to have made a  corresponding
payment  will  not  cure  an  Indenture  Default  related  to  such  failure  by
Continental.

         The  Prospectus  Supplement  related to a series of  Certificates  will
describe the circumstances under which the Trustee of the related Trust may vote
some  or all of  the  Equipment  Notes  held  in  such  Trust.  Such  Prospectus
Supplement  also will set forth the  percentage  of  Certificateholders  of such
Trust  entitled to direct the  Trustee to take any action  with  respect to such
Equipment Notes. If the Equipment Notes  outstanding under an Indenture are held



by more than one Trust, then the ability of the  Certificateholders  issued with
respect to any one Trust to cause the Loan Trustee with respect to any Equipment
Notes held in such Trust to accelerate the Equipment  Notes under the applicable
Indenture or to direct the  exercise of remedies by the Loan  Trustee  under the
applicable  Indenture will depend, in part, upon the proportion of the aggregate
principal  amount of the Equipment  Notes  outstanding  under such Indenture and
held in such Trust to the  aggregate  principal  amount of all  Equipment  Notes
outstanding under such Indenture. In addition, if cross-subordination provisions
are  applicable  to  any  series  of  Certificates,  then  the  ability  of  the
Certificateholders  of any one Trust  holding  Equipment  Notes  issued under an
Indenture to cause the Loan Trustee with respect to any Equipment  Notes held in
such Trust to accelerate  the Equipment  Notes under such Indenture or to direct
the exercise of remedies by the Loan Trustee under such  Indenture  will depend,
in part,  upon the Class of Equipment Notes held in such Trust. If the Equipment
Notes  outstanding under an Indenture are held by more than one Trust, then each
Trust will hold Equipment  Notes with different  terms from the Equipment  Notes
held in the other Trusts and therefore the  Certificateholders of each Trust may
have divergent or conflicting interests from those of the  Certificateholders of
the other Trusts holding  Equipment  Notes issued under the same  Indenture.  In
addition,  so long as the same institution acts as Trustee of each Trust, in the
absence of  instructions  from the  Certificateholders  of any such  Trust,  the
Trustee  for such  Trust  could for the same  reason be faced  with a  potential
conflict of interest upon an Indenture  Default.  In such event, the Trustee has
indicated  that it would  resign as  Trustee  of one or all such  Trusts,  and a
successor  trustee would be appointed in accordance  with the terms of the Basic
Agreement.

         The  Prospectus  Supplement for a series of  Certificates  will specify
whether and under what circumstances the Trustee may sell for cash to any person
all or part of the  Equipment  Notes held in the  related  Trust.  Any  proceeds
received  by the  Trustee  upon any such sale shall be  deposited  in an account
established  by the Trustee for the  benefit of the  Certificateholders  of such
Trust for the deposit of such Special Payments (the "Special Payments  Account")
and shall be  distributed to the  Certificateholders  of such Trust on a Special
Distribution  Date.  The  market  for  Equipment  Notes in  default  may be very
limited,  and there can be no assurance that they could be sold for a reasonable
price. Furthermore,  so long as the same institution acts as Trustee of multiple
Trusts,  it may be faced with a conflict  in  deciding  from which Trust to sell
Equipment  Notes to available  buyers.  If the Trustee sells any such  Equipment
Notes with  respect  to which an  Indenture  Default  exists for less than their
outstanding principal amount, the  Certificateholders of such Trust will receive
a smaller amount of principal  distributions  than anticipated and will not have
any claim for the  shortfall  against  Continental,  any  Owner  Trustee,  Owner
Participant   or  the  Trustee.   Furthermore,   neither  the  Trustee  nor  the
Certificateholders  of such  Trust  could take any  action  with  respect to any
remaining  Equipment  Notes held in such Trust so long as no Indenture  Defaults
exist with respect thereto.

         Any  amount,  other  than  Scheduled  Payments  received  on a  Regular
Distribution  Date,  distributed to the Trustee of any Trust by the Loan Trustee
under any  Indenture  on  account  of the  Equipment  Notes  held in such  Trust
following an Indenture  Default under such  Indenture  shall be deposited in the
Special  Payments  Account  for  such  Trust  and  shall be  distributed  to the
Certificateholders of such Trust on a Special Distribution Date. In addition, if
a Prospectus  Supplement  provides that the applicable  Owner Trustee may, under



circumstances  specified therein,  redeem or purchase the outstanding  Equipment
Notes  issued  under the  applicable  Indenture,  the price  paid by such  Owner
Trustee to the Trustee of any Trust for the  Equipment  Notes  issued under such
Indenture  and held in such Trust shall be  deposited  in the  Special  Payments
Account for such Trust and shall be  distributed  to the  Certificateholders  of
such Trust on a Special Distribution Date.

         Any funds representing  payments received with respect to any Equipment
Notes in default held in a Trust,  or the proceeds  from the sale by the Trustee
of any such Equipment Notes, held by the Trustee in the Special Payments Account
for such Trust shall, to the extent  practicable,  be invested and reinvested by
the Trustee in Permitted Investments pending the distribution of such funds on a
Special  Distribution  Date.  "Permitted  Investments"  will be specified in the
related Prospectus Supplement.

         The Basic  Agreement  provides  that the  Trustee of each Trust  shall,
within 90 days after the occurrence of a default in respect of such Trust,  give
to the  Certificateholders  of such Trust  notice,  transmitted  by mail, of all
uncured or unwaived  defaults  with respect to such Trust known to it,  provided
that,  except in the case of default in the payment of  principal,  premium,  if
any, or interest on any of the Equipment  Notes held in such Trust,  the Trustee
shall be protected  in  withholding  such notice if it in good faith  determines
that  the   withholding   of  such   notice   is  in  the   interests   of  such
Certificateholders.  The term "default" as used in this paragraph only means the
occurrence  of an Indenture  Default  with respect to Equipment  Notes held in a
Trust as described above,  except that in determining whether any such Indenture
Default has occurred,  any grace period or notice in connection  therewith shall
be disregarded.

         The Basic Agreement contains a provision  entitling the Trustee of each
Trust,  subject  to the duty of the  Trustee  during a  default  to act with the
required standard of care, to be offered reasonable security or indemnity by the
Certificateholders  of such Trust  before  proceeding  to exercise  any right or
power under the Basic Agreement at the request of such Certificateholders.

         The Prospectus Supplement for a series of Certificates will specify the
percentage of  Certificateholders  entitled to waive, or to instruct the Trustee
to  waive,  any  past  Event of  Default  with  respect  to such  Trust  and its
consequences.  The Prospectus  Supplement for a series of Certificates also will
specify the  percentage of  Certificateholders  (and whether of such Trust or of
any other  Trust  holding  Equipment  Notes  issued  under  Related  Indentures)
entitled to waive, or to instruct the Trustee or the Loan Trustee to waive,  any
past  Indenture  Default  under any  Related  Indenture  and  thereby  annul any
direction given with respect thereto.

MERGER, CONSOLIDATION AND TRANSFER OF ASSETS

         Continental will be prohibited from  consolidating with or merging into
any other  corporation  or  transferring  substantially  all of its assets as an
entirety  to any  other  corporation  unless  (i) the  surviving,  successor  or
transferee  corporation  shall  (a) be  validly  existing  under the laws of the
United States or any state thereof,  (b) be a "citizen of the United States" (as
defined  in Title  49 of the  United  States  Code  relating  to  aviation  (the
"Transportation  Code")) holding an air carrier operating  certificate issued by
the  Secretary  of  Transportation  pursuant to Chapter 447 of Title 49,  United
States Code,  if, and so long as, such status is a condition of  entitlement  to



the benefits of Section 1110 of the Bankruptcy  Code,  and (c) expressly  assume
all of the  obligations of Continental  contained in the Basic Agreement and any
Trust Supplement,  the Note Purchase  Agreements,  any Owned Aircraft Indentures
and,  with  respect  to  the  Leased  Aircraft,  the  applicable   Participation
Agreements and Leases, and any other operative  documents;  and (ii) Continental
shall  have  delivered  a  certificate  and an opinion  or  opinions  of counsel
indicating that such transaction, in effect, complies with such conditions.

MODIFICATIONS OF THE BASIC AGREEMENT

         The Basic Agreement contains provisions permitting  Continental and the
Trustee of each Trust to enter into a supplemental trust agreement,  without the
consent of the holders of any of the Certificates of such Trust, including among
other things (i) to provide for the  formation of such Trust and the issuance of
a series of Certificates, (ii) to evidence the succession of another corporation
to  Continental  and  the  assumption  by  such   corporation  of  Continental's
obligations under the Basic Agreement and the applicable Trust Supplement, (iii)
to add to the  covenants  of  Continental  for the  benefit  of  holders of such
Certificates,  or to  surrender  any  right  or  power  in the  Basic  Agreement
conferred upon Continental,  (iv) to cure any ambiguity or correct or supplement
any defective or inconsistent provision of the Basic Agreement or the applicable
Trust  Supplement  or to make any other  provisions  with  respect to matters or
questions  arising  thereunder,   provided  such  action  shall  not  materially
adversely affect the interests of the holders of such  Certificates,  or to cure
any ambiguity or correct any mistake or (without  limitation of the  foregoing),
to give effect or provide for replacement liquidity facilities, if applicable to
such  Certificates,  (v) to comply with any requirement of the  Commission,  any
applicable  law,  rules or  regulations  of any exchange or quotation  system on
which any  Certificates may be listed or of any regulatory body, (vi) to modify,
eliminate or add to the provisions of the Basic Agreement to the extent as shall
be necessary to continue the qualification of the Basic Agreement (including any
supplemental  agreement)  under the Trust Indenture Act of 1939, as amended (the
"Trust  Indenture Act") and to add to the Basic Agreement such other  provisions
as may be expressly permitted by the Trust Indenture Act, (vii) to provide for a
successor Trustee or to add to or change any provision of the Basic Agreement as
shall be necessary to facilitate the  administration of the Trusts thereunder by
more than one Trustee and (viii) to make any other  amendments or  modifications
to the Basic  Agreement,  provided such amendments or  modifications  shall only
apply to Certificates  issued thereafter;  provided,  in the case of clauses (i)
through (viii) above, that no such supplemental  trust agreement shall adversely
affect the status of any Trust as a grantor  trust for U.S.  federal  income tax
purposes.

         The Basic Agreement also contains provisions permitting Continental and
the Trustee of each Trust,  with the consent of the  Certificateholders  of such
Trust  evidencing  fractional  undivided  interests  aggregating not less than a
majority in interest of such Trust,  and,  with respect to any Leased  Aircraft,
with the  consent  of the  applicable  Owner  Trustee  (such  consent  not to be
unreasonably  withheld),  to execute  supplemental  trust agreements  adding any
provisions  to or changing or  eliminating  any of the  provisions  of the Basic
Agreement,  to the extent  relating  to such  Trust,  and the  applicable  Trust
Supplement,  or modifying the rights of the  Certificateholders,  except that no
such   supplemental   trust   agreement   may,   without  the  consent  of  each
Certificateholder  so affected thereby,  (a) reduce in any manner the amount of,



or delay the timing of, any receipt by the Trustee of payments on the  Equipment
Notes held in such Trust or distributions in respect of any Certificate  related
to such  Trust,  or change  the date or place of any  payment  in respect of any
Certificate,  or make distributions  payable in coin or currency other than that
provided for in such Certificates,  or impair the right of any Certificateholder
of such Trust to  institute  suit for the  enforcement  of any such payment when
due, (b) permit the disposition of any Equipment Note held in such Trust, except
as  provided in the Basic  Agreement  or the  applicable  Trust  Supplement,  or
otherwise deprive any  Certificateholder  of the benefit of the ownership of the
applicable   Equipment  Notes,  (c)  reduce  the  percentage  of  the  aggregate
fractional  undivided interests of the Trust provided for in the Basic Agreement
or the  applicable  Trust  Supplement,  the  consent of the  holders of which is
required for any such  supplemental  trust  agreement or for any waiver provided
for in the Basic  Agreement  or such  Trust  Supplement,  (d)  modify any of the
provisions  relating to the rights of the  Certificateholders  in respect of the
waiver of events of default or receipt of  payment,  (e) alter the  priority  of
distributions  specified in any applicable  intercreditor  agreement in a manner
materially adverse to the interests of the  Certificateholders  of such Trust or
(f) adversely affect the status of any Trust as a grantor trust for U.S. federal
income tax purposes.

MODIFICATION OF INDENTURE AND RELATED AGREEMENTS

         The Prospectus Supplement will specify the Trustee's obligations in the
event that the Trustee,  as the holder of any  Equipment  Notes held in a Trust,
receives a request  for its  consent to any  amendment,  modification  or waiver
under  the  Indenture  or  other  documents  relating  to such  Equipment  Notes
(including  any Lease with respect to Leased  Aircraft  Notes) or any  Liquidity
Facility.

CROSS-SUBORDINATION ISSUES

         The Equipment  Notes issued under an Indenture may be held in more than
one Trust and one Trust may hold  Equipment  Notes  issued  under  more than one
Related Indenture.  Unless otherwise provided in a Prospectus  Supplement,  only
Equipment  Notes of the same Class may be held in the same Trust. In such event,
payments made on account of a subordinate  class of Certificates  issued under a
Prospectus  Supplement  may, under  circumstances  described in such  Prospectus
Supplement,  be  subordinated  to the  prior  payment  of all  amounts  owing to
Certificateholders  of a Trust which holds senior  Equipment  Notes issued under
any Related  Indentures.  The  Prospectus  Supplement  related to an issuance of
Certificates  will describe any such  "cross-subordination"  provisions  and any
related terms,  including the percentage of  Certificateholders  under any Trust
which  are  permitted  to (i)  grant  waivers  of  defaults  under  any  Related
Indenture,  (ii)  consent  to the  amendment  or  modification  of  any  Related
Indenture  or (iii) direct the  exercise of remedial  actions  under any Related
Indenture.

TERMINATION OF THE TRUSTS

         The  obligations of Continental and the Trustee with respect to a Trust
will terminate upon the distribution to  Certificateholders of such Trust of all
amounts  required to be distributed to them pursuant to the Basic  Agreement and
the applicable Trust Supplement and the disposition of all property held in such
Trust.  In no event shall any Trust continue beyond 110 years following the date



of the  execution  of the  applicable  Trust  Supplement  (or such  other  final
expiration date as may be specified in such Trust Supplement).  The Trustee will
send to each Certificateholder of record of such Trust notice of the termination
of such Trust,  the amount of the proposed  final  payment and the proposed date
for  the   distribution  of  such  final  payment  for  such  Trust.  The  final
distribution  to any  Certificateholder  of such  Trust  will be made  only upon
surrender of such  Certificateholder's  Certificates  at the office or agency of
the Trustee specified in such notice of termination.

DELAYED PURCHASE OF EQUIPMENT NOTES

         In the event that, on the issuance date of any Certificates, all of the
proceeds  from  the  sale of such  Certificates  are not  used to  purchase  the
Equipment  Notes  contemplated  to be held in the related Trust,  such Equipment
Notes  may be  purchased  by the  Trustee  at any  time on or  prior to the date
specified in the applicable Prospectus  Supplement.  In such event, the proceeds
from the sale of such Certificates not used to purchase  Equipment Notes will be
held under an  arrangement  described in the  applicable  Prospectus  Supplement
pending the purchase of the Equipment Notes not so purchased.  The  arrangements
with  respect to the payment of interest on funds so held will be  described  in
the applicable Prospectus Supplement.  If any such proceeds are not subsequently
utilized to purchase  Equipment  Notes by the  relevant  date  specified  in the
applicable Prospectus Supplement,  such proceeds will be returned to the holders
of such Certificates.

LIQUIDITY FACILITY

         The related Prospectus Supplement may provide that one or more payments
of interest on the  Certificates  of one or more series will be  supported  by a
Liquidity Facility issued by an institution identified in the related Prospectus
Supplement.  The provider of such Liquidity  Facility may have a claim senior to
the Certificateholders' as specified in the related Prospectus Supplement.

THE TRUSTEE

         Unless otherwise  provided in the Prospectus  Supplement for any series
of Certificates,  the Trustee for each series of Certificates will be Wilmington
Trust Company. With certain exceptions,  the Trustee makes no representations as
to the validity or sufficiency of the Basic  Agreement,  the Trust  Supplements,
the  Certificates,  the Equipment  Notes,  the  Indentures,  the Leases or other
related documents. The Trustee shall not be liable with respect to any series of
Certificates  for any action taken or omitted to be taken by it in good faith in
accordance  with the direction of the holders of a majority in principal  amount
of  outstanding  Certificates  of such series issued under the Basic  Agreement.
Subject  to such  provisions,  such  Trustee  shall be under  no  obligation  to
exercise any of its rights or powers under the Basic Agreement at the request of
any holders of Certificates  issued thereunder unless they shall have offered to
the Trustee indemnity  satisfactory to it. The Basic Agreement provides that the
Trustee  in  its   individual  or  any  other  capacity  may  acquire  and  hold
Certificates issued thereunder and, subject to certain conditions, may otherwise
deal with Continental  and, with respect to the Leased Aircraft,  with any Owner
Trustee with the same rights it would have if it were not the Trustee.



         The Trustee may resign with  respect to any or all of the Trusts at any
time,  in which  event  Continental  will be  obligated  to appoint a  successor
trustee.  If the Trustee  ceases to be  eligible  to  continue  as Trustee  with
respect  to a Trust or  becomes  incapable  of  acting  as  Trustee  or  becomes
insolvent, Continental may remove such Trustee, or any Certificateholder of such
Trust for at least six months may, on behalf of himself and all others similarly
situated,  petition any court of competent  jurisdiction for the removal of such
Trustee and the appointment of a successor  trustee.  Any resignation or removal
of the Trustee with respect to a Trust and  appointment  of a successor  trustee
for such Trust does not become  effective until acceptance of the appointment by
the  successor  trustee.  Pursuant to such  resignation  and  successor  trustee
provisions, it is possible that a different trustee could be appointed to act as
the  successor  trustee  with  respect to each  Trust.  All  references  in this
Prospectus  to the Trustee  should be read to take into account the  possibility
that the Trusts could have different  successor  trustees in the event of such a
resignation or removal.

         The Basic Agreement  provides that  Continental  will pay the Trustee's
fees and expenses and indemnify the Trustee against certain liabilities.


                       DESCRIPTION OF THE EQUIPMENT NOTES

         The  statements  made under this caption are summaries and reference is
made  to  the  entire  Prospectus  and  detailed  information  appearing  in the
applicable  Prospectus  Supplement.  Where no  distinction  is made  between the
Leased  Aircraft Notes and the Owned Aircraft Notes or between their  respective
Indentures, such statements refer to any Equipment Notes and any Indenture.

         To the  extent  that any  provision  in any  Prospectus  Supplement  is
inconsistent  with  any  provision  in  this  summary,  the  provision  of  such
Prospectus Supplement will control.

GENERAL

         Equipment Notes will be issued under Indentures  either (a) between the
related Owner Trustee of a trust for the benefit of the Owner Participant who is
the beneficial owner of the related Aircraft,  and the related Loan Trustee,  or
(b) between Continental and the related Loan Trustee. The Equipment Notes issued
pursuant to clause (a) of the preceding sentence will be nonrecourse obligations
of the applicable Owner Trust.  Each Equipment Note will be authenticated  under
an  Indenture by the Loan  Trustee.  All  Equipment  Notes issued under the same
Indenture will relate to, and be secured by, one or more Aircraft identified and
described  in the  related  Prospectus  Supplement  and  which,  in the  case of
Equipment  Notes  issued  as  described  in  such  clause  (a),  are  leased  to
Continental  pursuant to a Lease between the Owner Trustee under the  applicable
Owner  Trust  and  Continental  or,  in the case of  Equipment  Notes  issued as
described in clause (b), owned by Continental.

         With respect to each Leased  Aircraft,  the related  Owner  Trustee has
acquired or will acquire such Aircraft,  will grant a security  interest in such
Aircraft to the related Loan Trustee as security for the payments of the related
Leased Aircraft Notes, and has leased or will lease such Aircraft to Continental
pursuant to the related  Lease which has been or will be assigned to the related



Loan Trustee. Pursuant to each such Lease, Continental will be obligated to make
or cause to be made rental and other  payments to the  related  Loan  Trustee on
behalf of the related Owner Trustee.

PRINCIPAL AND INTEREST PAYMENTS

         Interest  received by the Trustee on the  Equipment  Notes held in each
Trust  will be passed  through  to the  Certificateholders  of such Trust on the
dates  and at the  rate  per  annum  set  forth  in  the  applicable  Prospectus
Supplement  until the final  distribution  for such  Trust.  Principal  payments
received by the Trustee on the Equipment Notes held in each Trust will be passed
through  to the  Certificateholders  of such Trust in  scheduled  amounts on the
dates  set  forth  in the  applicable  Prospectus  Supplement  until  the  final
distribution date for such Trust.

         If any date scheduled for any payment of principal, premium, if any, or
interest with respect to the Equipment Notes is not a Business Day, such payment
will be  made  on the  next  succeeding  Business  Day  without  any  additional
interest.

REDEMPTION

         The applicable  Prospectus  Supplement will describe the circumstances,
whether  voluntary  or  involuntary,  under  which  the  Equipment  Notes may be
redeemed or purchased prior to the stated maturity date thereof,  in whole or in
part, the premium,  if any, applicable upon certain redemptions or purchases and
other terms applying to the redemptions or purchases of such Equipment Notes.

SECURITY

         The Leased  Aircraft  Notes will be secured by (i) an assignment by the
related Owner Trustee to the related Loan Trustee of such Owner Trustee's rights
(except for certain rights,  including those described below) under the Lease or
Leases with  respect to the  related  Aircraft,  including  the right to receive
payments of rent thereunder, and (ii) a mortgage granted to such Loan Trustee in
such Aircraft,  subject to the rights of Continental under such Lease or Leases.
Under the terms of each  Lease,  Continental's  obligations  in  respect of each
Leased  Aircraft  will be those of a lessee  under a "net  lease".  Accordingly,
Continental will be obligated,  among other things and at its expense,  to cause
each Leased Aircraft to be duly  registered,  to pay all costs of operating such
Aircraft  and  to  maintain,  service,  repair  and  overhaul  (or  cause  to be
maintained,  serviced,  repaired and overhauled) such Aircraft.  With respect to
the Leased Aircraft,  the assignment by the related Owner Trustee to the related
Loan Trustee of its rights  under the related  Lease will  exclude,  among other
things,  rights of such Owner Trustee and the related Owner Participant relating
to  indemnification  by  Continental  for certain  matters,  insurance  proceeds
payable  to such  Owner  Trustee in its  individual  capacity  and to such Owner
Participant under liability insurance maintained by Continental pursuant to such
Lease or by such Owner  Trustee or such Owner  Participant,  insurance  proceeds
payable  to such  Owner  Trustee  in its  individual  capacity  or to such Owner
Participant under certain casualty insurance maintained by such Owner Trustee or
such  Owner  Participant  pursuant  to such  Lease and any  rights of such Owner



Participant  or such Owner Trustee to enforce  payment of the foregoing  amounts
and their respective rights to the proceeds of the foregoing.

         The Owned Aircraft  Notes will be secured by a mortgage  granted to the
related Loan Trustee of all of Continental's right, title and interest in and to
such  Owned  Aircraft.  Under  the  terms  of  each  Owned  Aircraft  Indenture,
Continental will be obligated,  among other things and at its expense,  to cause
each Owned  Aircraft to be duly  registered,  to pay all costs of operating such
Aircraft  and  to  maintain,  service,  repair  and  overhaul  (or  cause  to be
maintained, serviced, repaired and overhauled) such Aircraft.

         The Prospectus Supplement will describe the required insurance coverage
with respect to the Aircraft.

         Continental will be required,  except under certain  circumstances,  to
keep each Aircraft  registered under the Transportation  Code, and to record the
Indenture and the Lease, if applicable,  among other documents,  with respect to
each Aircraft under the Transportation  Code. Such recordation of the Indenture,
the Lease, if applicable, and other documents with respect to each Aircraft will
give the  related  Loan  Trustee a  perfected  security  interest in the related
Aircraft  whenever it is located in the United States or any of its  territories
and possessions;  the Convention on the  International  Recognition of Rights in
Aircraft (the "Convention") provides that such security will also be recognized,
with certain limited  exceptions,  in those  jurisdictions that have ratified or
adhere to the Convention.  Continental  will have the right,  subject to certain
conditions, at its own expense to register each Aircraft in countries other than
the United  States.  Each Aircraft may also be operated by  Continental or under
lease, sublease or interchange arrangements in countries that are not parties to
the Convention. The extent to which the related Loan Trustee's security interest
would be recognized  in an Aircraft  located in a country that is not a party to
the  Convention,  and the  extent  to  which  such  security  interest  would be
recognized  in a  jurisdiction  adhering to the  Convention  if the  Aircraft is
registered  in a  jurisdiction  not a party  to the  Convention,  is  uncertain.
Moreover,  in the case of an Indenture Default,  the ability of the related Loan
Trustee to realize upon its security  interest in an Aircraft could be adversely
affected as a legal or practical  matter if such  Aircraft  were  registered  or
located outside the United States.

         Unless otherwise specified in the applicable Prospectus Supplement, the
Equipment Notes will not be cross-collateralized  and consequently the Equipment
Notes  issued in  respect of any one  Aircraft  will not be secured by any other
Aircraft or, in the case of Leased  Aircraft Notes,  the Lease related  thereto.
Unless and until an  Indenture  Default  with  respect to a Leased  Aircraft has
occurred and is  continuing,  the related Loan Trustee may exercise only limited
rights of the related Owner Trustee under the related Lease.

         Funds,  if any, held from time to time by the Loan Trustee with respect
to any  Aircraft,  prior  to the  distribution  thereof,  will be  invested  and
reinvested by such Loan Trustee. Such investment and reinvestment will be at the
direction of Continental (except, with respect to a Leased Aircraft, in the case
of a Lease Event of Default  under the  applicable  Lease or, with respect to an
Owned  Aircraft,  in the  case of an  Indenture  Default  under  the  applicable



Indenture),  in certain investments described in the applicable  Indenture.  The
net  amount  of any loss  resulting  from any such  investments  will be paid by
Continental.

         Section 1110 of the U.S. Bankruptcy Code provides in relevant part that
the right of lessors, conditional vendors and holders of security interests with
respect to "equipment" (as defined in Section 1110 of the U.S.  Bankruptcy Code)
to take  possession  of such  equipment in compliance  with the  provisions of a
lease,  conditional sale contract or security agreement,  as the case may be, is
not affected by (a) the automatic  stay provision of the U.S.  Bankruptcy  Code,
which  provision  enjoins  repossessions  by  creditors  for the duration of the
reorganization  period,  (b) the provision of the U.S.  Bankruptcy Code allowing
the  trustee  in  reorganization  to use  property  of  the  debtor  during  the
reorganization  period,  (c)  Section  1129 of the U.S.  Bankruptcy  Code (which
governs the confirmation of plans of reorganization in Chapter 11 cases) and (d)
any  power of the  bankruptcy  court  to  enjoin a  repossession.  Section  1110
provides,  however,  in  relevant  part that the right of a lessor,  conditional
vendor or holder of a security interest to take possession of an aircraft in the
event of an event of default may not be exercised for 60 days following the date
of commencement of the reorganization proceedings (unless specifically permitted
by the bankruptcy  court) and may not be exercised at all if, within such 60-day
period (or such longer period consented to by the lessor,  conditional vendor or
holder of a security interest),  the trustee in reorganization agrees to perform
the  debtor's  obligations  that  become due on or after such date and cures all
existing  defaults  (other than  defaults  resulting  solely from the  financial
condition, bankruptcy,  insolvency or reorganization of the debtor). "Equipment"
is defined in Section 1110 of the U.S. Bankruptcy Code, in part, as an aircraft,
aircraft  engine,  propeller,  appliance,  or spare part (as  defined in Section
40102 of Title 49 of the U.S.  Code)  that is  subject  to a  security  interest
granted by,  leased to, or  conditionally  sold to a debtor that is a citizen of
the United  States (as  defined in Section  40102 of Title 49 of the U.S.  Code)
holding  an  air  carrier  operating  certificate  issued  by the  Secretary  of
Transportation pursuant to chapter 447 of Title 49 of the U.S. Code for aircraft
capable of  carrying  10 or more  individuals  or 6,000  pounds of more of cargo
(subject to certain limitations in the case of equipment first placed in service
on or prior to October 22, 1994).

         In connection with any issuance of  Certificates  under this Prospectus
and the  applicable  Prospectus  Supplement,  it is a condition to the Trustee's
obligation  to  purchase  Equipment  Notes with  respect to each  Aircraft  that
outside  counsel to Continental  provide its opinion to such Trustee that (i) if
such Aircraft is a Leased Aircraft, the Owner Trustee, as lessor under the Lease
for such  Aircraft,  and the Loan Trustee,  as assignee of such Owner  Trustee's
rights under such Lease pursuant to the applicable  Indenture,  will be entitled
to the benefits of Section 1110 of the U.S.  Bankruptcy Code with respect to the
airframe and engines  comprising  such  Aircraft or (ii) if such  Aircraft is an
Owned  Aircraft,  the Loan  Trustee  will be entitled to the benefits of Section
1110 with respect to the airframe and engines comprising such Owned Aircraft, in
each  case so long as  Continental  continues  to be a  "citizen  of the  United
States" as defined in Section  40102 of Title 49 of the U.S. Code holding an air
carrier operating certificate issued by the Secretary of Transportation pursuant
to Chapter 447 of Title 49 of the U.S. Code for aircraft  capable of carrying 10
or more  individuals  or 6,000  pounds or more of cargo.  Such  opinion will not
address  the  possible  replacement  of an  Aircraft  after an Event of Loss (as
defined in the Indenture) in the future.



RANKING OF EQUIPMENT NOTES

         Some  of the  Equipment  Notes  related  to one or  more  Aircraft,  as
described in the related Prospectus  Supplement,  may be subordinated and junior
in right of payment to other Equipment  Notes related to the same Aircraft.  The
terms of such subordination, if any, will be described in the related Prospectus
Supplement.

PAYMENTS AND LIMITATION OF LIABILITY

         Each Leased  Aircraft  will be leased by the related  Owner  Trustee to
Continental  for a term  commencing  on the delivery  date thereof to such Owner
Trustee and expiring on a date not earlier than the latest  maturity date of the
related Leased Aircraft Notes, unless previously  terminated as permitted by the
terms of the related Lease. The basic rent and certain other payments under each
such Lease will be payable by  Continental  and will be  assigned by the related
Owner  Trustee  under the  applicable  Indenture  to the related Loan Trustee to
provide the funds necessary to pay principal of,  premium,  if any, and interest
due from such Owner  Trustee  on the Leased  Aircraft  Notes  issued  under such
Indenture.  In  certain  cases,  the basic  rent  payments  under a Lease may be
adjusted,  but each Lease will  provide  that under no  circumstances  will rent
payments  by  Continental  be less than the  scheduled  payments  on the related
Leased Aircraft  Notes.  The balance of any basic rent payment under each Lease,
after  payment of amounts  due on the Leased  Aircraft  Notes  issued  under the
Indenture corresponding to such Lease, will be paid over to the applicable Owner
Trustee.  Continental's obligation to pay rent and to cause other payments to be
made under each Lease will be general obligations of Continental.

         With  respect  to  the  Leased  Aircraft   Notes,   except  in  certain
circumstances  involving  Continental's  purchase of a Leased  Aircraft  and the
assumption of the Leased  Aircraft Notes related  thereto,  the Leased  Aircraft
Notes will not be obligations of, or guaranteed by, Continental. With respect to
the Leased Aircraft Notes, none of the Owner Trustees, the Owner Participants or
the Loan  Trustees  shall be  personally  liable to any  holder  of such  Leased
Aircraft Notes for amounts payable under such Leased Aircraft Notes,  or, except
as provided in the Indentures relating thereto in the case of the Owner Trustees
and the Loan Trustees,  for any liability under such  Indentures.  Except in the
circumstances  referred to above,  all amounts payable under any Leased Aircraft
Notes (other than  payments made in  connection  with an optional  redemption or
purchase by the related Owner Trustee or the related Owner  Participant) will be
made only from (i) the assets  subject to the lien of the  applicable  Indenture
with respect to such Aircraft or the income and proceeds received by the related
Loan Trustee therefrom  (including rent payable by Continental under the related
Lease)  or  (ii)  if so  provided  in the  related  Prospectus  Supplement,  the
applicable Liquidity Facility.

         With respect to the Leased Aircraft Notes, except as otherwise provided
in the applicable Indenture, no Owner Trustee shall be personally liable for any
amount payable or for any statements, representations, warranties, agreements or
obligations  under any such Indenture or under such Leased Aircraft Notes except
for  its  own  willful  misconduct  or  gross  negligence.  None  of  the  Owner
Participants  shall have any duty or  responsibility  under the Leased  Aircraft



Indentures or under such Leased Aircraft Notes to the related Loan Trustee or to
any holder of any such Leased Aircraft Note.

         Continental's obligations under each Owned Aircraft Indenture and under
the Owned Aircraft Notes will be general obligations of Continental.

DEFEASANCE OF THE INDENTURES AND THE EQUIPMENT NOTES IN CERTAIN CIRCUMSTANCES

         Unless otherwise specified in the applicable Prospectus Supplement, the
applicable  Indenture  provides that the obligations of the related Loan Trustee
and, with respect to any Leased  Aircraft  Notes,  the related Owner Trustee or,
with  respect to any Owned  Aircraft  Notes,  Continental  under the  applicable
Indenture  shall be deemed to have been  discharged and paid in full (except for
certain  obligations,  including  the  obligations  to register  the transfer or
exchange of Equipment  Notes,  to replace stolen,  lost,  destroyed or mutilated
Equipment  Notes and to maintain  paying  agencies and hold money for payment in
trust) on the 91st day after the date of  irrevocable  deposit  with the related
Loan Trustee of money or certain  obligations of the United States or any agency
or instrumentality  thereof the payment of which is backed by the full faith and
credit of the United States which, through the payment of principal and interest
in respect  thereof in  accordance  with their terms,  will provide  money in an
aggregate  amount  sufficient to pay when due  (including  as a  consequence  of
redemption  in respect of which  notice is given on or prior to the date of such
deposit)  principal of,  premium,  if any, and interest on all  Equipment  Notes
issued thereunder in accordance with the terms of such Indenture. Such discharge
may occur only if, among other things,  there has been published by the Internal
Revenue Service a ruling to the effect that holders of such Equipment Notes will
not recognize  income,  gain or loss for federal income tax purposes as a result
of such deposit,  defeasance and discharge and will be subject to federal income
tax on the same amount and in the same manner and at the same time as would have
been the case if such deposit, defeasance and discharge had not occurred.

         Upon such  defeasance,  or upon  payment in full of the  principal  of,
premium,  if any, and interest on all Equipment Notes issued under any Indenture
on the maturity  date  therefor or deposit with the  applicable  Loan Trustee of
money  sufficient  therefor  no earlier  than one year prior to the date of such
maturity,  the holders of such Equipment Notes will have no beneficial  interest
in or other rights with respect to the related  Aircraft or other assets subject
to the lien of such Indenture and such lien shall terminate.

ASSUMPTION OF OBLIGATIONS BY CONTINENTAL

         Unless otherwise specified in the applicable Prospectus Supplement with
respect to Leased  Aircraft,  upon the exercise by  Continental  of any purchase
options it may have under the related Lease prior to the end of the term of such
Lease, Continental may assume on a full recourse basis all of the obligations of
the Owner Trustee (other than its obligations in its individual  capacity) under
the Indenture with respect to such Aircraft,  including the  obligations to make
payments in respect of the related Leased Aircraft Notes. In such event, certain
relevant  provisions of the related Lease,  including (among others)  provisions
relating to  maintenance,  possession  and use of the related  Aircraft,  liens,
insurance and events of default will be incorporated  into such  Indenture,  and
the Leased  Aircraft  Notes issued under such Indenture will not be redeemed and



will  continue  to be  secured  by  such  Aircraft.  It is a  condition  to such
assumption  that, if such  Aircraft is  registered  under the laws of the United
States,  an  opinion  of counsel  be  delivered  at the time of such  assumption
substantially  to the effect that the related Loan Trustee under such  Indenture
should,  immediately  following such assumption,  be entitled to the benefits of
Section 1110 of the Bankruptcy Code with respect to such Aircraft (including the
engines related  thereto),  but such opinion need not be delivered to the extent
that the  benefits of such  Section  1110 are not  available to the Loan Trustee
with respect to such Aircraft or any engine related thereto immediately prior to
such assumption.

LIQUIDITY FACILITY

         The related Prospectus Supplement may provide that one or more payments
of  interest  on  the  related   Equipment  Notes  of  one  or  more  series  or
distributions  made by the Trustee of the related  Trust will be  supported by a
Liquidity Facility issued by an institution identified in the related Prospectus
Supplement.  Unless otherwise provided in the related Prospectus Supplement, the
provider  of the  Liquidity  Facility  will have a senior  claim upon the assets
securing the Equipment Notes.

INTERCREDITOR ISSUES

         Equipment  Notes may be issued in different  Classes,  which means that
the Equipment Notes may have different  payment  priorities even though they are
issued by the same borrower and relate to the same Aircraft.  In such event, the
related Prospectus  Supplement will describe the priority of distributions among
such Equipment Notes (and any Liquidity Facilities therefor), the ability of any
Class to exercise and/or enforce any or all remedies with respect to the related
Aircraft  (and,  if the Equipment  Notes are Leased  Aircraft  Notes,  the Lease
related thereto) and certain other intercreditor terms and provisions.


              CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

GENERAL

         Unless otherwise indicated in the applicable Prospectus Supplement, the
following  summary  describes the principal U.S. federal income tax consequences
to  Certificateholders  of  the  purchase,  ownership  and  disposition  of  the
Certificates  offered  hereby and in the  opinion of Hughes  Hubbard & Reed LLP,
special tax counsel to Continental ("Tax Counsel"),  is accurate in all material
respects  with  respect to the matters  discussed  therein.  Except as otherwise
specified,  the summary is addressed to beneficial owners of Certificates ("U.S.
Certificateholders")  that are  citizens  or  residents  of the  United  States,
corporations,  partnerships  or other entities  created or organized in or under
the laws of the  United  States or any state  therein,  or estates or trusts the
income of which is subject to U.S.  federal  income  taxation  regardless of its
source ("U.S.  Persons") that will hold the Certificates as capital assets. This
summary does not address the tax treatment of U.S.  Certificateholders  that may
be subject to special tax rules, such as banks, insurance companies,  dealers in
securities  or  commodities,   tax-exempt  entities,   holders  that  will  hold
Certificates as part of a straddle or holders that have a "functional  currency"
other  than the U.S.  Dollar,  nor does it  address  the tax  treatment  of U.S.



Certificateholders  that do not acquire  Certificates  at the  initial  offering
price as part of the initial offering  thereof.  The summary does not purport to
be a  comprehensive  description  of all of the tax  considerations  that may be
relevant to a decision to purchase Certificates.  This summary does not describe
any tax  consequences  arising  under the laws of any state,  locality or taxing
jurisdiction other than the United States.

         The  summary  is based  upon the tax laws and  practice  of the  United
States as in  effect on the date of this  Prospectus,  as well as  judicial  and
administrative  interpretations thereof (in final or proposed form) available on
or before such date.  All of the foregoing  are subject to change,  which change
could apply  retroactively.  Prospective  investors  should note that no rulings
have been sought from the Internal  Revenue  Service (the "IRS") with respect to
the federal income tax  consequences,  discussed below, and no assurances can be
given  that the IRS  will  not  take  contrary  positions.  The  Trusts  are not
indemnified  for any federal income taxes that may be imposed upon them, and the
imposition  of any such  taxes on a Trust  could  result in a  reduction  in the
amounts  available for  distribution  to the  Certificateholders  of such Trust.
PROSPECTIVE  INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE
FEDERAL,  STATE,  LOCAL AND FOREIGN TAX  CONSEQUENCES  TO THEM OF THE  PURCHASE,
OWNERSHIP AND DISPOSITION OF THE CERTIFICATES.

TAX STATUS OF THE TRUSTS

         In the  opinion of Tax  Counsel,  each Trust  will be  classified  as a
grantor trust for U.S. federal income tax purposes.

TAXATION OF CERTIFICATEHOLDERS GENERALLY

         A U.S.  Certificateholder  will be  treated  as  owning  its  pro  rata
undivided interest in each of the Equipment Notes and any other property held by
the related Trust. Accordingly,  each U.S. Certificateholder's share of interest
paid on the Equipment Notes will be taxable as ordinary income, as it is paid or
accrued, in accordance with such U.S.  Certificateholder's  method of accounting
for U.S. federal income tax purposes,  and a U.S.  Certificateholder's  share of
premium,  if any,  paid on  redemption  of an Equipment  Note will be treated as
capital  gain.  In the event that a Trust is supported by a Liquidity  Facility,
any amounts  received by the Trust under the Liquidity  Facility with respect to
unpaid  interest will be treated for U.S.  federal income tax purposes as having
the same  characteristics  as the payments they replace.  If Continental were to
assume an Owner Trust's obligations under Leased Aircraft Notes, such assumption
would be treated for federal  income tax purposes as a taxable  exchange of such
Leased  Aircraft  Notes,  resulting in  recognition  of gain or loss by the U.S.
Certificateholder.

         Each U.S. Certificateholder will be entitled to deduct, consistent with
its  method  of  accounting,  its pro rata  share of fees and  expenses  paid or
incurred  by the  corresponding  Trust as  provided in Section 162 or 212 of the
Internal  Revenue  Code of 1986,  as  amended  (the  "Code").  Certain  fees and
expenses,  including  fees paid to the Trustee and the provider of the Liquidity
Facility   (if   applicable),   will  be  borne  by   parties   other  than  the
Certificateholders.  It is possible  that such fees and expenses will be treated
as constructively received by the Trust, in which event a U.S. Certificateholder
will be  required  to include in income and will be  entitled  to deduct its pro



rata  share  of  such  fees  and  expenses.  If a U.S.  Certificateholder  is an
individual,  estate or trust, the deduction for such holder's share of such fees
or  expenses  will be  allowed  only to the  extent  that  all of such  holder's
miscellaneous  itemized  deductions,  including such holder's share of such fees
and expenses,  exceed 2% of such holder's adjusted gross income. In addition, in
the  case of U.S.  Certificateholders  who are  individuals,  certain  otherwise
allowable   itemized   deductions  will  be  subject   generally  to  additional
limitations on itemized deductions under applicable provisions of the Code.

EFFECT OF SUBORDINATION OF SUBORDINATED CERTIFICATEHOLDERS

         In the event that any Trust (such Trust  being a  "Subordinated  Trust"
and the related Certificates being "Subordinated  Certificates") is subordinated
in right of payment to any other Trust and the Subordinated  Trust receives less
than the full amount of the receipts of interest, principal or premium paid with
respect to the Equipment  Notes held by it (any shortfall in such receipts being
the  "Shortfall  Amounts")  because  of the  subordination  of such  Trust,  the
corresponding  owners of beneficial  interests in the Subordinated  Certificates
(the  "Subordinated  Certificateholders")  would probably be treated for federal
income tax  purposes  as if they had (1)  received as  distributions  their full
share  of such  receipts,  (2)  paid  over to the  relevant  preferred  class of
Certificateholders  an amount equal to their share of such Shortfall Amount, and
(3) retained the right to  reimbursement of such amounts to the extent of future
amounts  payable to such  Subordinated  Certificateholders  with respect to such
Shortfall Amount.

         Under this analysis,  (1) Subordinated  Certificateholders  incurring a
Shortfall  Amount would be required to include as current income any interest or
other income of the corresponding Subordinated Trust that was a component of the
Shortfall  Amount,  even  though  such  amount was in fact paid to the  relevant
preferred class of Certificateholders,  (2) a loss would only be allowed to such
Subordinated  Certificateholders  when their right to receive  reimbursement  of
such Shortfall Amount becomes  worthless (I.E., when it becomes clear that funds
will  not be  available  from  any  source  to  reimburse  such  loss),  and (3)
reimbursement  of such Shortfall  Amount prior to such a claim of  worthlessness
would not be taxable  income to  Subordinated  Certificateholders  because  such
amount was previously included in income. These results should not significantly
affect  the  inclusion  of income  for  Subordinated  Certificateholders  on the
accrual  method of  accounting,  but  could  accelerate  inclusion  of income to
Subordinated  Certificateholders on the cash method of accounting by, in effect,
placing them on the accrual method.

ORIGINAL ISSUE DISCOUNT

         The Equipment Notes may be issued with original issue discount ("OID").
The Prospectus  Supplement  will state whether any Equipment Notes to be held by
the  related  Trust  will be  issued  with  OID.  Generally,  a holder of a debt
instrument  issued  with OID that is not DE  MINIMIS  must  include  such OID in
income for federal income tax purposes as it accrues,  in advance of the receipt
of the cash attributable to such income,  under a method that takes into account
the compounding of interest.



SALE OR OTHER DISPOSITION OF THE CERTIFICATES

         Upon the sale,  exchange or other disposition of a Certificate,  a U.S.
Certificateholder  generally  will  recognize  capital gain or loss equal to the
difference between the amount realized on the disposition (other than any amount
attributable to accrued  interest which will be taxable as ordinary  income) and
the U.S.  Certificateholder's  adjusted tax basis in the related Equipment Notes
and any other property held by the corresponding Trust. Any gain or loss will be
long-term  capital gain or loss to the extent  attributable  to property held by
the  Trust  for more than one year.  In the case of  individuals,  estates,  and
trusts,  the maximum rate of tax on long-term  capital  gains  generally is 20%,
except that a maximum  rate of 28%  applies to  property  held for more than one
year but not more than 18 months.

FOREIGN CERTIFICATEHOLDERS

         Subject to the  discussion  of backup  withholding  below,  payments of
principal  and  interest  on the  Equipment  Notes  to,  or on  behalf  of,  any
beneficial  owner  of a  Certificate  that  is not a U.S.  Person  (a  "Non-U.S.
Certificateholder")  will  not be  subject  to  U.S.  federal  withholding  tax;
provided, in the case of interest, that (i) such Non-U.S. Certificateholder does
not  actually or  constructively  own 10% or more of the total  combined  voting
power of all classes of the stock of an Owner  Participant or Continental,  (ii)
such Non-U.S. Certificateholder is not a controlled foreign corporation for U.S.
tax purposes that is related to an Owner  Participant or  Continental  and (iii)
either (A) the Non-U.S. Certificateholder certifies, under penalties of perjury,
that  it is not a U.S.  Person  and  provides  its  name  and  address  or (B) a
securities clearing organization, bank or other financial institution that holds
customers'  securities  in the  ordinary  course  of its  trade or  business  (a
"financial institution") and holds the Certificate certifies, under penalties of
perjury,   that   such   statement   has  been   received   from  the   Non-U.S.
Certificateholder  by it or by another  financial  institution and furnishes the
payor with a copy thereof.  Regulations proposed by the Internal Revenue Service
on April 15,  1996,  if  finalized  in their  current  form,  would  modify  the
certification  requirements  described  in clause  (iii) with respect to certain
payments after December 31, 1997.

         Any capital gain realized upon the sale, exchange,  retirement or other
disposition  of a  Certificate  or upon  receipt of premium paid on an Equipment
Note by a Non-U.S.  Certificateholder will not be subject to U.S. federal income
or withholding  taxes if (i) such gain is not effectively  connected with a U.S.
trade or business of the Non-U.S.  Certificateholder  and (ii) in the case of an
individual, such Non-U.S.  Certificateholder is not present in the United States
for 183 days or more in the taxable year of the sale,  exchange,  retirement  or
other disposition or receipt.

BACKUP WITHHOLDING

         Payments  made  on the  Certificates  and  proceeds  from  the  sale of
Certificates  will not be subject to a backup  withholding tax of 31% unless, in
general, the Certificateholder fails to comply with certain reporting procedures
or otherwise  fails to establish  an  exemption  from such tax under  applicable
provisions of the Code.



                              ERISA CONSIDERATIONS

         Unless otherwise indicated in the applicable Prospectus Supplement, the
Certificates may, subject to certain legal  restrictions,  be purchased and held
by an  employee  benefit  plan (a  "Plan")  subject  to Title I of the  Employee
Retirement Income Security Act of 1974, as amended  ("ERISA"),  or an individual
retirement  account or an employee  benefit  plan subject to section 4975 of the
Code.  A fiduciary of a Plan must  determine  that the purchase and holding of a
Certificate  is consistent  with its  fiduciary  duties under ERISA and does not
result in a non-exempt prohibited transaction as defined in section 406 of ERISA
or section 4975 of the Code. Employee benefit plans which are governmental plans
(as defined in section  3(32) of ERISA) and certain  church plans (as defined in
section  3(33) of ERISA) are not subject to Title I of ERISA or section  4975 of
the Code.  The  Certificates  may,  subject to certain  legal  restrictions,  be
purchased and held by such plans.


                              PLAN OF DISTRIBUTION

         Certificates  may be  sold  to  one or  more  underwriters  for  public
offering and sale by them or to investors or other  persons  directly or through
one or more dealers or agents. Any such underwriter, dealer or agent involved in
the offer and sale of the Certificates will be named in an applicable Prospectus
Supplement.

         The Certificates  may be sold at a fixed price or prices,  which may be
changed,  or from time to time at market prices  prevailing at the time of sale,
at prices  related to such  prevailing  market prices or at  negotiated  prices.
Dealer  trading  may  take  place  in  certain  of the  Certificates,  including
Certificates not listed on any securities exchange.  Continental does not intend
to apply for  listing of the  Certificates  on a national  securities  exchange.
Continental  also  may,  from  time to time,  authorize  underwriters  acting as
Continental's  agents  to offer  and sell the  Certificates  upon the  terms and
conditions  as shall be set forth in any  Prospectus  Supplement.  In connection
with the sale of  Certificates,  underwriters  may be  deemed  to have  received
compensation  from  Continental  in  the  form  of  underwriting   discounts  or
commissions and may also receive commissions from purchasers of Certificates for
whom they may act as agent.  Underwriters  may sell  Certificates  to or through
dealers,  and such dealers may receive  compensation  in the form of  discounts,
concessions or commissions from the underwriters  and/or  commissions (which may
be  changed  from  time to time)  from the  purchasers  for whom they may act as
agent.

         If a dealer is used directly by Continental in the sale of Certificates
in respect of which this Prospectus is delivered, such Certificates will be sold
to the dealer, as principal. The dealer may then resell such Certificates to the
public at varying  prices to be determined by such dealer at the time of resale.
Any  such  dealer  and the  terms  of any  such  sale  will be set  forth in the
Prospectus Supplement relating thereto.

         Certificates  may be offered  and sold  through  agents  designated  by
Continental  from time to time.  Any such agent involved in the offer or sale of
the  Certificates in respect of which this Prospectus is delivered will be named
in, and any  commissions  payable by Continental to such agent will be set forth
in, the applicable  Prospectus  Supplement.  Unless  otherwise  indicated in the



applicable  Prospectus  Supplement,  any such  agent  will be  acting  on a best
efforts basis for the period of its appointment.

         Offers  to  purchase   Certificates   may  be  solicited   directly  by
Continental   and  sales  thereof  may  be  made  by  Continental   directly  to
institutional  investors or others who may be deemed to be  underwriters  within
the meaning of the Securities Act with respect to any resale thereof.  The terms
of any such  sales  will be  described  in the  Prospectus  Supplement  relating
thereto.  Except  as set  forth  in the  applicable  Prospectus  Supplement,  no
director,  officer  or  employee  of  Continental  will  solicit  or  receive  a
commission in connection  with direct sales by Continental of the  Certificates,
although  such  persons may respond to inquiries  by  potential  purchasers  and
perform ministerial and clerical work in connection with any such direct sales.

         Any  underwriting  compensation  paid by Continental  to  underwriters,
dealers or agents in  connection  with the  offering  of  Certificates,  and any
discounts,  concessions or commissions  allowed by underwriters to participating
dealers, will be set forth in an applicable Prospectus Supplement. Underwriters,
dealers and agents  participating in the distribution of the Certificates may be
deemed to be  underwriters,  and any discounts and commissions  received by them
and any profit realized by them on resale of the  Certificates  may be deemed to
be   underwriting   discounts  and   commissions   under  the  Securities   Act.
Underwriters,  dealers  and  agents  may  be  entitled,  under  agreements  with
Continental,  to indemnification  against and contribution  toward certain civil
liabilities,   including   liabilities   under  the   Securities   Act,  and  to
reimbursement by Continental for certain expenses.

         Underwriters,  dealers and agents may engage in  transactions  with, or
perform services for, Continental and its subsidiaries in the ordinary course of
business.

         If so indicated in an applicable  Prospectus  Supplement and subject to
existing  market  conditions,  Continental  will  authorize  dealers  acting  as
Continental's  agents to solicit  offers by  certain  institutions  to  purchase
Certificates  at  the  public  offering  price  set  forth  in  such  Prospectus
Supplement  pursuant to Delayed Delivery Contracts  ("Contracts")  providing for
payment and delivery on the date or dates stated in such Prospectus  Supplement.
Each Contract will be for an amount not less than,  and the aggregate  principal
amount of  Certificates  sold  pursuant to Contracts  shall not be less nor more
than, the respective amounts stated in such Prospectus Supplement.  Institutions
with whom Contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutions, but will in all cases be subject
to the approval of Continental.  Contracts will not be subject to any conditions
except  the  purchase  by an  institution  of the  Certificates  covered  by its
Contracts shall not at the time of delivery be prohibited  under the laws of any
jurisdiction  in the  United  States to which such  institution  is  subject.  A
commission indicated in the applicable  Prospectus Supplement will be granted to
underwriters  and  agents  soliciting  purchases  of  Certificates  pursuant  to
Contracts  accepted  by  Continental.  Agents  and  underwriters  will  have  no
responsibility in respect of the delivery or performance of Contracts.



         If an  underwriter  or  underwriters  are  utilized  in the sale of any
Certificates,  the applicable  Prospectus Supplement will contain a statement as
to the intention,  if any, of such  underwriters  at the date of such Prospectus
Supplement to make a market in the Certificates. No assurances can be given that
there will be a market for the Certificates.

         The place and time of delivery for the Certificates in respect of which
this  Prospectus  is delivered  will be set forth in the  applicable  Prospectus
Supplement.


                                 LEGAL OPINIONS

         Unless otherwise indicated in the applicable Prospectus Supplement, the
validity  of the  Certificates  will be passed  upon for  Continental  by Hughes
Hubbard  & Reed LLP,  New York,  New York.  Unless  otherwise  indicated  in the
applicable  Prospectus  Supplement,  Hughes  Hubbard & Reed LLP will rely on the
opinion  of  counsel  for the  Trustee as to  certain  matters  relating  to the
authorization, execution and delivery of such Certificates by, and the valid and
binding effect thereof on, such Trustee.


                                     EXPERTS

         The consolidated  financial  statements  (including financial statement
schedules) of Continental  Airlines,  Inc.  appearing in  Continental  Airlines,
Inc.'s Annual Report (Form 10-K) for the year ended  December 31, 1996 have been
audited  by  Ernst & Young  LLP,  independent  auditors,  as set  forth in their
reports thereon  included  therein and  incorporated  herein by reference.  Such
consolidated  financial  statements  are,  and  audited  consolidated  financial
statements to be included in subsequently filed documents will be,  incorporated
herein by reference in reliance upon reports of Ernst & Young LLP  pertaining to
such consolidated  financial statements (to the extent covered by consents filed
with the  Commission)  given  upon the  authority  of such  firm as  experts  in
accounting and auditing.



                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS


ITEM 14.   OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

         The estimated  expenses in connection  with this  offering,  other than
underwriting discounts and commissions, are:




                                                                         
Securities and Exchange Commission registration filing fee.........    $560,607
Printing and engraving expenses....................................     150,000*
Trustee fees and expenses..........................................      25,000*
Accounting fees and expenses.......................................      60,000*
Rating Agency fees.................................................      60,000*
Legal fees and expenses............................................     200,000*
Miscellaneous......................................................      44,393*
                                                                     -----------

         Total.....................................................  $1,100,000*
                                                                     ===========

- -----------------

* Estimates.




ITEM 15.   INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         The Company's  Certificate of Incorporation and Bylaws provide that the
Company will  indemnify  each of its  directors  and officers to the full extent
permitted by the laws of the State of Delaware and may  indemnify  certain other
persons as  authorized  by the  Delaware  General  Corporation  Law (the "GCL").
Section 145 of the GCL provides as follows:

              "(a) A  corporation  shall have power to indemnify  any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director,  officer,  employee or agent of
the  corporation,  or is or was serving at the request of the  corporation  as a
director, officer, employee or agent of another corporation,  partnership, joint
venture,  trust or other  enterprise,  against  expenses  (including  attorneys'
fees),  judgments,  fines and amounts paid in settlement actually and reasonably
incurred by him in connection  with such action,  suit or proceeding if he acted
in good faith and in a manner he reasonably  believed to be in or not opposed to
the best interests of the corporation,  and, with respect to any criminal action
or proceeding,  had no reasonable cause to believe his conduct was unlawful. The
termination of any action,  suit or proceeding by judgment,  order,  settlement,
conviction,  or upon a plea of nolo contendere or its equivalent,  shall not, of
itself,  create a presumption that the person did not act in good faith and in a
manner  which  he  reasonably  believed  to be in or not  opposed  to  the  best
interests  of the  corporation,  and,  with  respect to any  criminal  action or
proceeding, had reasonable cause to believe that his conduct was unlawful.



              (b) A corporation shall have power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened,  pending or
completed  action or suit by or in the  right of the  corporation  to  procure a
judgment  in its  favor  by  reason  of the fact  that he is or was a  director,
officer,  employee  or agent of the  corporation,  or is or was  serving  at the
request of the corporation as a director,  officer, employee or agent of another
corporation,  partnership,  joint  venture,  trust or other  enterprise  against
expenses (including  attorneys' fees) actually and reasonably incurred by him in
connection  with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the  corporation and except that no  indemnification  shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the Court of  Chancery  or the court in which  such  action or suit was  brought
shall determine upon application that, despite the adjudication of liability but
in view of all  the  circumstances  of the  case,  such  person  is  fairly  and
reasonably  entitled to indemnity for such expenses  which the Court of Chancery
or such other court shall deem proper.

              (c) To the extent that a director, officer, employee or agent of a
corporation  has been  successful  on the merits or  otherwise in defense of any
action,  suit  or  proceeding  referred  to in  subsections  (a) and (b) of this
section,  or in  defense  of any  claim,  issue or matter  therein,  he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.

              (d)  Any  indemnification  under  subsections  (a) and (b) of this
section  (unless  ordered by a court) shall be made by the  corporation  only as
authorized in the specific case upon a determination that indemnification of the
director,  officer,  employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in subsections (a) and (b).
Such determination shall be made (1) by a majority vote of the directors who are
not parties to such action, suit or proceeding,  even though less than a quorum,
or (2) if there  are no such  directors,  or if such  directors  so  direct,  by
independent legal counsel in a written opinion, or (3) by the stockholders.

              (e) Expenses (including attorneys' fees) incurred by an officer or
director in defending  any civil,  criminal,  administrative,  or  investigative
action,  suit or  proceeding  may be paid by the  corporation  in advance of the
final disposition of such action, suit or proceeding upon receipt of undertaking
by or on behalf of such  director  or officer  to repay such  amount if it shall
ultimately  be  determined  that he is not  entitled  to be  indemnified  by the
corporation as authorized in this section.  Such expenses (including  attorneys'
fees) incurred by other  employees and agents may be so paid upon such terms and
conditions, if any, as the board of directors deems appropriate.

              (f) The  indemnification  and advancement of expenses provided by,
or granted  pursuant  to, the other  subsections  of this  section  shall not be
deemed exclusive of any other rights to which those seeking  indemnification  or
advancement  of expenses  may be entitled  under any bylaw,  agreement,  vote of
stockholders or disinterested  directors or otherwise,  both as to action in his
official  capacity  and as to action in  another  capacity  while  holding  such
office.



              (g) A  corporation  shall  have  power to  purchase  and  maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director,  officer, employee or agent of another corporation,  partnership,
joint venture,  trust or other enterprise against any liability asserted against
him and  incurred by him in any such  capacity,  or arising out of his status as
such,  whether  or not the  corporation  would have the power to  indemnify  him
against such liability under this section.

              (h) For purposes of this section,  references to "the corporation"
shall  include,  in  addition  to the  resulting  corporation,  any  constituent
corporation   (including  any  constituent  of  a  constituent)  absorbed  in  a
consolidation  or merger which, if its separate  existence had continued,  would
have had power and authority to indemnify its directors, officers, and employees
or agents,  so that any person who is or was a  director,  officer,  employee or
agent of such  constituent  corporation,  or is or was serving at the request of
such  constituent  corporation  as a  director,  officer,  employee  or agent of
another  corporation,  partnership,  joint venture,  trust or other  enterprise,
shall  stand in the  same  position  under  this  section  with  respect  to the
resulting  or  surviving  corporation  as he would  have  with  respect  to such
constituent corporation if its separate existence had continued.

              (i)  For   purposes  of  this   section,   references   to  "other
enterprises"  shall include employee benefit plans;  references to "fines" shall
include  any excise  taxes  assessed  on a person  with  respect to an  employee
benefit  plan;  and  references  to "serving at the request of the  corporation"
shall  include  any  service as a  director,  officer,  employee or agent of the
corporation  which imposes  duties on, or involves  services by, such  director,
officer,  employee,  or agent with  respect to an  employee  benefit  plan,  its
participants,  or  beneficiaries;  and a person who acted in good faith and in a
manner he  reasonably  believed to be in the  interest of the  participants  and
beneficiaries  of an  employee  benefit  plan shall be deemed to have acted in a
manner "not opposed to the best interests of the  corporation" as referred to in
this section.

              (j) The  indemnification  and advancement of expenses provided by,
or granted  pursuant to, this section  shall,  unless  otherwise  provided  when
authorized or ratified, continue as to a person who has ceased to be a director,
officer,  employee  or agent  and  shall  inure  to the  benefit  of the  heirs,
executors and administrators of such a person.

              (k)  The  Court  of  Chancery  is  hereby  vested  with  exclusive
jurisdiction  to hear and determine all actions for  advancement  of expenses or
indemnification brought under this section or under any bylaw,  agreement,  vote
of stockholders or disinterested  directors, or otherwise. The Court of Chancery
may  summarily   determine  a  corporation's   obligation  to  advance  expenses
(including attorneys' fees)".

         The Certificate of  Incorporation  and Bylaws of the Company also limit
the personal  liability of  directors  to the Company and its  stockholders  for
monetary  damages  resulting from certain  breaches of the directors'  fiduciary
duties. The Certificate of Incorporation of the Company provides as follows:



         "No  Director  of the  Corporation  shall be  personally  liable to the
Corporation  or its  stockholders  for monetary  damages for breach of fiduciary
duty as a Director,  except for liability  (i) for any breach of the  Director's
duty of  loyalty  to the  corporation  or its  stockholders,  (ii)  for  acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation  of  law,  (iii)  under  Section  174 of the  GCL,  or  (iv)  for  any
transaction from which the Director derived any improper  personal  benefit.  If
the GCL is amended . . . to authorize  corporate  action further  eliminating or
limiting the personal  liability of directors,  then the liability of a director
of the  Corporation  shall  be  eliminated  or  limited  to the  fullest  extent
permitted by the GCL, as so amended".

         The Company maintains directors' and officers' liability insurance.


ITEM 16.  EXHIBITS

         Reference is made to the Exhibit Index which  immediately  precedes the
exhibits filed with this Registration Statement, which is incorporated herein by
reference.


ITEM 17. UNDERTAKINGS

         The undersigned Registrant hereby undertakes:

         (1)  To file,  during  any  period  in which  offers or sales are being
              made, a post-effective amendment to this registration statement:

                   (i) To include any prospectus required by Section 10(a)(3) of
              the Securities Act of 1933;

                  (ii) To  reflect in the prospectus any facts or events arising
              after the  effective  date of the  registration  statement (or the
              most recent post-effective amendment thereof) which,  individually
              or in  the  aggregate,  represent  a  fundamental  change  in  the
              information   set   forth   in   the    registration    statement.
              Notwithstanding the foregoing,  any increase or decrease in volume
              of  securities  offered (if the total dollar  value of  securities
              offered  would  not  exceed  that  which was  registered)  and any
              deviation  from  the  low or  high  end of the  estimated  maximum
              offering  range may be reflected in the form of  prospectus  filed
              with the Commission  pursuant to Rule 424(b) if, in the aggregate,
              the  changes  in  volume  and  price  represent  no more than a 20
              percent change in the maximum  aggregate  offering price set forth
              in the  "Calculation of  Registration  Fee" table in the effective
              registration statement; and

                 (iii) To  include  any material information with respect to the
              plan of distribution not previously  disclosed in the registration
              statement  or any  material  change  to  such  information  in the
              registration statement;

         PROVIDED,  HOWEVER,  that paragraphs (1)(i) and (1)(ii) do not apply if
         the information  required to be included in a post-effective  amendment



         by those  paragraphs is contained in periodic reports filed pursuant to
         Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that
         are incorporated by reference in the registration statement.

         (2)  That,  for the  purpose of  determining  any  liability  under the
              Securities Act of 1933, each such  post-effective  amendment shall
              be  deemed  to be a new  registration  statement  relating  to the
              securities offered therein, and the offering of such securities at
              that time  shall be deemed to be the  initial  bona fide  offering
              thereof.

         (3)  To remove from registration by means of a post-effective amendment
              any of the securities  being registered which remain unsold at the
              termination of the offering.

         The  undersigned  registrant  hereby  undertakes  that, for purposes of
determining  any liability  under the Securities Act of 1933, each filing of the
registrant's  annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable,  each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the  registration  statement shall be
deemed to be a new  registration  statement  relating to the securities  offered
therein,  and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

         Insofar as indemnification for liabilities arising under the Securities
Act may be  permitted to  directors,  officers  and  controlling  persons of the
registrant pursuant to the foregoing  provisions,  or otherwise,  the registrant
have been advised that in the opinion of the Commission such  indemnification is
against  public policy as expressed in the  Securities  Act, and is,  therefore,
unenforceable.  In the  event  that a claim  for  indemnification  against  such
liabilities  (other than the payment by the  registrant of expenses  incurred or
paid by a director,  officer or  controlling  person of such  registrant  in the
successful  defense of any  action,  suit or  proceeding)  is  asserted  by such
director,  officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as  expressed  in the  Securities  Act and will be  governed by the final
adjudication of such issue.



                                   SIGNATURES

         Pursuant  to the  requirements  of the  Securities  Act  of  1933,  the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized in the City of Houston, State of Texas, on August 28, 1997.


                                  CONTINENTAL AIRLINES, INC.



                                  By:  /S/ JEFFERY A. SMISEK
                                       -----------------------------------------
                                       Jeffery A. Smisek
                                       Executive Vice President, General Counsel
                                       and Secretary


         Pursuant  to the  requirements  of the  Securities  Act of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities indicated, on August 28, 1997.




        SIGNATURE                                  TITLE

                            

            *                  Chairman of  the  Board, Chief Executive  Officer
- ----------------------------   (Principal Executive Officer) and Director
     Gordon M. Bethune


/S/ LAWRENCE W. KELLNER        Executive Vice President and Chief Financial 
- ----------------------------   Officer
    Lawrence W. Kellner        (Principal Financial Officer)



            *                  Vice President and Controller
- -----------------------------  (Principal Accounting Officer)
      Michael P. Bonds                            


                               Director
- -----------------------------
    Thomas J. Barrack, Jr.


            *                  Director
- ------------------------------
    Lloyd M. Bentsen, Jr.


            *                  Director
- ------------------------------
       David Bonderman


            *                  Director
- ------------------------------
    Gregory D. Brenneman


                               Director
- -----------------------------
       Patrick Foley








                            

            *                  Director
- ------------------------------
    Douglas H. McCorkindale


            *                  Director
- ------------------------------
      George G. C. Parker


            *                  Director
- ------------------------------
       Richard W. Pogue


                               Director
- ------------------------------
     William S. Price III


            *                  Director
- ------------------------------
       Donald L. Sturm


            *                  Director
- ------------------------------
     Karen Hastie Williams


            *                  Director
- ------------------------------
      Charles A. Yamarone


*By:  /S/ SCOTT R. PETERSON
    ---------------------------
    Scott R. Peterson
    Attorney-in-fact








                                  EXHIBIT INDEX


EXHIBIT NO.   EXHIBIT

           
4.1           Form of Pass  Through  Trust  Agreement -- filed as Exhibit 4.1 to
              the Company's  Registration  Statement on Form S-3 (No. 333-31285)
              (the "July 1997 S-3") and incorporated herein by reference

5.1           Opinion of Hughes Hubbard & Reed LLP

12.1          Computation of Ratio of Earnings to Fixed Charges

23.1          Consent of Ernst & Young LLP

23.1          Consent  of Hughes  Hubbard & Reed LLP  (included  in its  opinion
              filed as exhibit 5.1)

24.1          Powers of Attorney

25.1          Statement of Eligibility  of Wilmington  Trust Company on Form T-1
              with  respect  to the Pass  Through  Trust  Agreement  -- filed as
              Exhibit  25.1 to the July  1997  S-3 and  incorporated  herein  by
              reference*


- -----------------

*   The Pass Through Trust  Agreement was previously  qualified  under the Trust
    Indenture  Act of  1939  in  connection  with  the  July  1997  Registration
    Statement.

                                                                     EXHIBIT 5.1

                      OPINION OF HUGHES HUBBARD & REED LLP






Hughes Hubbard & Reed LLP                         One Battery Park Plaza
                                                  New York, New York  10004-1482
                                                  Telephone:  212-837-6000
                                                  Facsimile:  212-422-4726





                                 August 28, 1997



Continental Airlines, Inc.
2929 Allen Parkway
Houston, Texas 77019

                     Re:  Continental Airlines, Inc.
                          Registration Statement on Form S-3
                          ----------------------------------

Ladies and Gentlemen:

         We have acted as your counsel in connection  with the  above-referenced
Registration Statement on Form S-3 (the "Registration Statement") filed with the
Securities  and Exchange  Commission  pursuant to the Securities Act of 1933, as
amended  (the  "Act"),  with  respect to pass  through  certificates  (the "Pass
Through Certificates")  expected to be issued by one or more trusts to be formed
by  Continental  Airlines,  Inc.  (the  "Company").  Such trusts are expected to
acquire  certain  equipment  notes relating to aircraft to be leased or owned by
the Company.  The Pass Though Certificates are expected to be issued and sold by
the  Company  from  time  to time  pursuant  to Rule  415  under  the Act for an
aggregate initial offering price not to exceed  $1,850,000,000 or the equivalent
thereof in one or more foreign currencies or composite currencies.

         The Pass Through  Certificates (the  "Certificates")  will be issued in
one or more series under  separate  Pass Through Trust  Agreements  entered into
between the Company and Wilmington Trust Company,  the trustee thereunder (each,
a "Pass  Through  Trust  Agreement"),  the  form of which  has been  filed as an
exhibit to the  Registration  Statement,  and one or more  supplements  (each, a
"Trust Supplement") relating to each such series.




         We have examined the  Certificate  of  Incorporation  and Bylaws of the
Company and the form of the Pass Through Trust Agreement.  In addition,  we have
examined,  and have  relied as to  matter of fact  upon,  originals  or  copies,
certified  or  otherwise  identified  to our  satisfaction,  of  such  corporate
records,  agreements,  documents and other  instruments and such certificates or
comparable  documents of public officials and of officers and representatives of
the  Company,  and have made such other and  further  investigations  as we have
deemed relevant and necessary as a basis for the opinion hereinafter set forth.

         Based upon and subject to the  foregoing,  we are of the opinion  that,
with  respect  to  each  series  of  Pass  Through  Certificates,  when  (i) the
applicable provisions of the Act and such "Blue Sky" or state securities laws as
may be applicable  shall have been complied  with,  (ii) each Pass Through Trust
Agreement shall have been duly authorized and validly  executed and delivered by
the Company to the trustee  thereunder,  (iii) the Trust Supplement  relating to
each such series has been duly authorized and validly  executed and delivered by
the  Company to such  trustee,  (iv) the Board of  Directors  of the Company has
taken all  necessary  corporate  action to approve the terms of the  offering of
such series of Pass Through  Certificates  and related  matters and (v) the Pass
Through  Certificates  of such  series have been duly  executed,  authenticated,
issued and  delivered  in  accordance  with the  provisions  of the related Pass
Through  Trust  Agreement,  the  related  Trust  Supplement  and the  applicable
definitive purchase,  underwriting or similar agreement approved by the Board of
Directors of the Company and upon payment of the consideration therefor provided
for therein, such series of Pass Through Certificates will be legally issued and
binding obligations of the Company.

         We are  members  of the Bar of the  State  of New  York,  and we do not
express any opinion herein concerning any law other than the law of the State of
New  York,  the  federal  law of the  United  States  and the  Delaware  General
Corporation Law.

         We hereby  consent to the filing of this  opinion as an exhibit to said
Registration  Statement  and we  further  consent  to the use of our name in the
Registration  Statement  under the  caption  "Legal  Opinions".  In giving  this



consent,  we do not thereby  admit that we are in the category of persons  whose
consent is required  under Section 7 of the  Securities Act of 1933, as amended,
or  the  rules  and  regulations  of  the  Securities  and  Exchange  Commission
thereunder.

                                       Very truly yours,

                                       /s/ HUGHES HUBBARD & REED LLP

                                                                    EXHIBIT 12.1

                COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES





CONTINENTAL AIRLINES, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN MILLIONS)



                                         Six      Three     Six     Three                                        |
                                         Months   Months   Months   Months                             4/28/93   |  1/1/93
                                         Ended    Ended    Ended    Ended                              through   |  through
                                         6/30/97  6/30/97  6/30/96  6/30/96   1996     1995    1994    12/31/93  |  4/27/93   1992
                                         -------  -------  -------  -------   ----     ----    ----    --------  |  -------   ----
                                                                                                   
Earnings:                                                                                                        |
  Earnings (Loss) Before Income                                                                                  |
    Taxes, Minority Interest                                                                                     |
    and Extraordinary Items               $ 332    $ 208    $ 301    $ 206   $ 428    $ 310    $(651)   ($ 52)   |  ($977)   ($125)
                                                                                                                 |
  Plus:                                                                                                          |
    Interest Expense (a)                     84       42       89       42     165      213      241      165    |     52      153
    Capitalized Interest                    (14)      (8)      (1)       0      (5)      (6)     (17)      (8)   |     (2)      (6)
    Amortization of Capitalized                                                                                  |
      Interest                                2        1        1        0       3        2        1        0    |      0        0
    Portion of Rent Expense                                                                                      |
      Representative of Interest                                                                                 |  
        Expense (a)                         188       94      178       89     359      360      337      216    |    117      324
                                         ------   ------   ------   ------   -----    -----    -----    -----    |  -----    -----
                                            592      337      568      337     950      879      (89)     321    |   (810)     346
                                         ------   ------   ------   ------   -----    -----    -----    -----    |  -----    -----
Fixed Charges:                                                                                                   |
  Interest Expense (a)                       84       42       89       42     165      213      241      165    |     52      153
  Portion of Rent Expense                                                                                        |
    Representative of                                                                                            |
    Interest Expense (a)                    188       94      178       89     359      360      337      216    |    117      324
                                         -------  -------  -------  -------  -----    -----    -----    -----    |  -----    -----
Total Fixed Charges                         272      136      267      131     524      573      578      381    |    169      477
                                         -------  -------  -------  -------  -----    -----    -----    -----    |  -----    -----
                                                                                                                 |
Coverage Adequacy (Deficiency)            $ 320    $ 201    $ 301    $ 206   $ 426    $ 306    $(667)   $ (60)   |  $(979)   $(131)
                                         =======  =======  =======  =======  =====    =====    =====    =====    |  =====    =====
                                                                                                                 |
Coverage Ratio                             2.18     2.48     2.13     2.57    1.81     1.53      n/a      n/a    |    n/a      n/a
                                         =======  =======  =======  =======  =====    =====    =====    =====    |  =====    =====


- ----------

Note:   A vertical black line is shown in the table above to separate Continental's post-reorganized consolidated financial
        data of Holdings since they have not been prepared on a consistent basis of accounting.

(a)     Includes Fair Market Value Adjustments resulting from the Company's emergence from bankruptcy.

                                                                    EXHIBIT 23.1


                          CONSENT OF ERNST & YOUNG LLP




                         Consent of Independent Auditors


We  consent to the  reference  to our firm under the  caption  "Experts"  in the
Registration   Statement  (Form  S-3)  and  related  Prospectus  of  Continental
Airlines,   Inc.  for  the  registration  of   $1,850,000,000  of  Pass  Through
Certificates and to the  incorporation by reference therein of our reports dated
February 10, 1997,  with respect to the  consolidated  financial  statements and
schedules of  Continental  Airlines,  Inc.  included in its Annual  Report (Form
10-K) for the year  ended  December  31,  1996,  filed with the  Securities  and
Exchange Commission.


                                       /s/ Ernst & Young LLP
                                       
Houston, Texas
August 27, 1997

                                                                    EXHIBIT 24.1


                               POWERS OF ATTORNEY






                                POWER OF ATTORNEY

         The undersigned director and/or officer of Continental Airlines,  Inc.,
a Delaware  corporation  (the  "Company"),  does hereby  constitute  and appoint
Lawrence W. Kellner, Jeffery A. Smisek and Scott R. Peterson, or any of them, as
the undersigned's true and lawful attorneys in-fact and agents to do any and all
things in the undersigned's  name and behalf in the undersigned's  capacity as a
director  and/or officer of the Company,  and to execute any and all instruments
for the  undersigned  and in the  undersigned's  name and capacity as a director
and/or  officer  that such person or persons may deem  necessary or advisable to
enable the Company to comply with the  Securities  Act of 1933, as amended,  and
any rules, regulations or requirements of the Securities and Exchange Commission
in  connection  with  that  certain  shelf  Registration  Statement  on Form S-3
relating to certain of the Company's Pass Through  Certificates  to be issued in
connection  with the  acquisition or refinancing of aircraft (the  "Registration
Statement"),  including specifically, but not limited to, power and authority to
sign for the  undersigned  in the capacity as a director  and/or  officer of the
Company  the  Registration  Statement,  and  any  and  all  amendments  thereto,
including post-effective  amendments, and the undersigned does hereby ratify and
confirm all that such  person or persons  shall do or cause to be done by virtue
hereof.

                                        /s/Gordon M. Bethune
                                        ---------------------------------
                                        (Signature)

                                        Printed Name: Gordon M. Bethune
                                                      -------------------

Dated and effective as of August 22, 1997




                                POWER OF ATTORNEY

         The undersigned director and/or officer of Continental Airlines,  Inc.,
a Delaware  corporation  (the  "Company"),  does hereby  constitute  and appoint
Lawrence W. Kellner, Jeffery A. Smisek and Scott R. Peterson, or any of them, as
the undersigned's true and lawful attorneys in-fact and agents to do any and all
things in the undersigned's  name and behalf in the undersigned's  capacity as a
director  and/or officer of the Company,  and to execute any and all instruments
for the  undersigned  and in the  undersigned's  name and capacity as a director
and/or  officer  that such person or persons may deem  necessary or advisable to
enable the Company to comply with the  Securities  Act of 1933, as amended,  and
any rules, regulations or requirements of the Securities and Exchange Commission
in  connection  with  that  certain  shelf  Registration  Statement  on Form S-3
relating to certain of the Company's Pass Through  Certificates  to be issued in
connection  with the  acquisition or refinancing of aircraft (the  "Registration
Statement"),  including specifically, but not limited to, power and authority to
sign for the  undersigned  in the capacity as a director  and/or  officer of the
Company  the  Registration  Statement,  and  any  and  all  amendments  thereto,
including post-effective  amendments, and the undersigned does hereby ratify and
confirm all that such  person or persons  shall do or cause to be done by virtue
hereof.

                                        /s/Lawrence W. Kellner
                                        ---------------------------------
                                        (Signature)

                                        Printed Name: Lawrence W. Kellner
                                                      -------------------

Dated and effective as of August 22, 1997





                                POWER OF ATTORNEY

         The undersigned director and/or officer of Continental Airlines,  Inc.,
a Delaware  corporation  (the  "Company"),  does hereby  constitute  and appoint
Lawrence W. Kellner, Jeffery A. Smisek and Scott R. Peterson, or any of them, as
the undersigned's true and lawful attorneys in-fact and agents to do any and all
things in the undersigned's  name and behalf in the undersigned's  capacity as a
director  and/or officer of the Company,  and to execute any and all instruments
for the  undersigned  and in the  undersigned's  name and capacity as a director
and/or  officer  that such person or persons may deem  necessary or advisable to
enable the Company to comply with the  Securities  Act of 1933, as amended,  and
any rules, regulations or requirements of the Securities and Exchange Commission
in  connection  with  that  certain  shelf  Registration  Statement  on Form S-3
relating to certain of the Company's Pass Through  Certificates  to be issued in
connection  with the  acquisition or refinancing of aircraft (the  "Registration
Statement"),  including specifically, but not limited to, power and authority to
sign for the  undersigned  in the capacity as a director  and/or  officer of the
Company  the  Registration  Statement,  and  any  and  all  amendments  thereto,
including post-effective  amendments, and the undersigned does hereby ratify and
confirm all that such  person or persons  shall do or cause to be done by virtue
hereof.

                                        /s/Michael P. Bonds
                                        ---------------------------------
                                        (Signature)

                                        Printed Name: Michael P. Bonds
                                                      -------------------


Dated and effective as of August 22, 1997





                                POWER OF ATTORNEY

         The undersigned director and/or officer of Continental Airlines,  Inc.,
a Delaware  corporation  (the  "Company"),  does hereby  constitute  and appoint
Lawrence W. Kellner, Jeffery A. Smisek and Scott R. Peterson, or any of them, as
the undersigned's true and lawful attorneys in-fact and agents to do any and all
things in the undersigned's  name and behalf in the undersigned's  capacity as a
director  and/or officer of the Company,  and to execute any and all instruments
for the  undersigned  and in the  undersigned's  name and capacity as a director
and/or  officer  that such person or persons may deem  necessary or advisable to
enable the Company to comply with the  Securities  Act of 1933, as amended,  and
any rules, regulations or requirements of the Securities and Exchange Commission
in  connection  with  that  certain  shelf  Registration  Statement  on Form S-3
relating to certain of the Company's Pass Through  Certificates  to be issued in
connection  with the  acquisition or refinancing of aircraft (the  "Registration
Statement"),  including specifically, but not limited to, power and authority to
sign for the  undersigned  in the capacity as a director  and/or  officer of the
Company  the  Registration  Statement,  and  any  and  all  amendments  thereto,
including post-effective  amendments, and the undersigned does hereby ratify and
confirm all that such  person or persons  shall do or cause to be done by virtue
hereof.

                                        /s/Lloyd M. Bentsen, Jr.
                                        -----------------------------------
                                        (Signature)

                                        Printed Name: Lloyd M. Bentsen, Jr.
                                                      ---------------------

Dated and effective as of August 22, 1997





                                POWER OF ATTORNEY

         The undersigned director and/or officer of Continental Airlines,  Inc.,
a Delaware  corporation  (the  "Company"),  does hereby  constitute  and appoint
Lawrence W. Kellner, Jeffery A. Smisek and Scott R. Peterson, or any of them, as
the undersigned's true and lawful attorneys in-fact and agents to do any and all
things in the undersigned's  name and behalf in the undersigned's  capacity as a
director  and/or officer of the Company,  and to execute any and all instruments
for the  undersigned  and in the  undersigned's  name and capacity as a director
and/or  officer  that such person or persons may deem  necessary or advisable to
enable the Company to comply with the  Securities  Act of 1933, as amended,  and
any rules, regulations or requirements of the Securities and Exchange Commission
in  connection  with  that  certain  shelf  Registration  Statement  on Form S-3
relating to certain of the Company's Pass Through  Certificates  to be issued in
connection  with the  acquisition or refinancing of aircraft (the  "Registration
Statement"),  including specifically, but not limited to, power and authority to
sign for the  undersigned  in the capacity as a director  and/or  officer of the
Company  the  Registration  Statement,  and  any  and  all  amendments  thereto,
including post-effective  amendments, and the undersigned does hereby ratify and
confirm all that such  person or persons  shall do or cause to be done by virtue
hereof.

                                        /s/David Bonderman
                                        ---------------------------------
                                        (Signature)

                                        Printed Name: David Bonderman
                                                      -------------------

Dated and effective as of August 22, 1997





                                POWER OF ATTORNEY

         The undersigned director and/or officer of Continental Airlines,  Inc.,
a Delaware  corporation  (the  "Company"),  does hereby  constitute  and appoint
Lawrence W. Kellner, Jeffery A. Smisek and Scott R. Peterson, or any of them, as
the undersigned's true and lawful attorneys in-fact and agents to do any and all
things in the undersigned's  name and behalf in the undersigned's  capacity as a
director  and/or officer of the Company,  and to execute any and all instruments
for the  undersigned  and in the  undersigned's  name and capacity as a director
and/or  officer  that such person or persons may deem  necessary or advisable to
enable the Company to comply with the  Securities  Act of 1933, as amended,  and
any rules, regulations or requirements of the Securities and Exchange Commission
in  connection  with  that  certain  shelf  Registration  Statement  on Form S-3
relating to certain of the Company's Pass Through  Certificates  to be issued in
connection  with the  acquisition or refinancing of aircraft (the  "Registration
Statement"),  including specifically, but not limited to, power and authority to
sign for the  undersigned  in the capacity as a director  and/or  officer of the
Company  the  Registration  Statement,  and  any  and  all  amendments  thereto,
including post-effective  amendments, and the undersigned does hereby ratify and
confirm all that such  person or persons  shall do or cause to be done by virtue
hereof.

                                        /s/Gregory D. Brenneman
                                        ----------------------------------
                                        (Signature)

                                        Printed Name: Gregory D. Brenneman
                                                      --------------------


Dated and effective as of August 22, 1997





                                POWER OF ATTORNEY

         The undersigned director and/or officer of Continental Airlines,  Inc.,
a Delaware  corporation  (the  "Company"),  does hereby  constitute  and appoint
Lawrence W. Kellner, Jeffery A. Smisek and Scott R. Peterson, or any of them, as
the undersigned's true and lawful attorneys in-fact and agents to do any and all
things in the undersigned's  name and behalf in the undersigned's  capacity as a
director  and/or officer of the Company,  and to execute any and all instruments
for the  undersigned  and in the  undersigned's  name and capacity as a director
and/or  officer  that such person or persons may deem  necessary or advisable to
enable the Company to comply with the  Securities  Act of 1933, as amended,  and
any rules, regulations or requirements of the Securities and Exchange Commission
in  connection  with  that  certain  shelf  Registration  Statement  on Form S-3
relating to certain of the Company's Pass Through  Certificates  to be issued in
connection  with the  acquisition or refinancing of aircraft (the  "Registration
Statement"),  including specifically, but not limited to, power and authority to
sign for the  undersigned  in the capacity as a director  and/or  officer of the
Company  the  Registration  Statement,  and  any  and  all  amendments  thereto,
including post-effective  amendments, and the undersigned does hereby ratify and
confirm all that such  person or persons  shall do or cause to be done by virtue
hereof.

                                        /s/Douglas H. McCorkindale
                                        -------------------------------------
                                        (Signature)

                                        Printed Name: Douglas H. McCorkindale
                                                      -----------------------

Dated and effective as of August 22, 1997





                                POWER OF ATTORNEY

         The undersigned director and/or officer of Continental Airlines,  Inc.,
a Delaware  corporation  (the  "Company"),  does hereby  constitute  and appoint
Lawrence W. Kellner, Jeffery A. Smisek and Scott R. Peterson, or any of them, as
the undersigned's true and lawful attorneys in-fact and agents to do any and all
things in the undersigned's  name and behalf in the undersigned's  capacity as a
director  and/or officer of the Company,  and to execute any and all instruments
for the  undersigned  and in the  undersigned's  name and capacity as a director
and/or  officer  that such person or persons may deem  necessary or advisable to
enable the Company to comply with the  Securities  Act of 1933, as amended,  and
any rules, regulations or requirements of the Securities and Exchange Commission
in  connection  with  that  certain  shelf  Registration  Statement  on Form S-3
relating to certain of the Company's Pass Through  Certificates  to be issued in
connection  with the  acquisition or refinancing of aircraft (the  "Registration
Statement"),  including specifically, but not limited to, power and authority to
sign for the  undersigned  in the capacity as a director  and/or  officer of the
Company  the  Registration  Statement,  and  any  and  all  amendments  thereto,
including post-effective  amendments, and the undersigned does hereby ratify and
confirm all that such  person or persons  shall do or cause to be done by virtue
hereof.

                                        /s/George G.C. Parker
                                        ---------------------------------
                                        (Signature)

                                        Printed Name: George G.C. Parker
                                                      -------------------

Dated and effective as of August 22, 1997





                                POWER OF ATTORNEY

         The undersigned director and/or officer of Continental Airlines,  Inc.,
a Delaware  corporation  (the  "Company"),  does hereby  constitute  and appoint
Lawrence W. Kellner, Jeffery A. Smisek and Scott R. Peterson, or any of them, as
the undersigned's true and lawful attorneys in-fact and agents to do any and all
things in the undersigned's  name and behalf in the undersigned's  capacity as a
director  and/or officer of the Company,  and to execute any and all instruments
for the  undersigned  and in the  undersigned's  name and capacity as a director
and/or  officer  that such person or persons may deem  necessary or advisable to
enable the Company to comply with the  Securities  Act of 1933, as amended,  and
any rules, regulations or requirements of the Securities and Exchange Commission
in  connection  with  that  certain  shelf  Registration  Statement  on Form S-3
relating to certain of the Company's Pass Through  Certificates  to be issued in
connection  with the  acquisition or refinancing of aircraft (the  "Registration
Statement"),  including specifically, but not limited to, power and authority to
sign for the  undersigned  in the capacity as a director  and/or  officer of the
Company  the  Registration  Statement,  and  any  and  all  amendments  thereto,
including post-effective  amendments, and the undersigned does hereby ratify and
confirm all that such  person or persons  shall do or cause to be done by virtue
hereof.

                                        /s/Richard W. Pogue
                                        ---------------------------------
                                        (Signature)

                                        Printed Name: Richard W. Pogue
                                                      -------------------


Dated and effective as of August 22, 1997





                                POWER OF ATTORNEY

         The undersigned director and/or officer of Continental Airlines,  Inc.,
a Delaware  corporation  (the  "Company"),  does hereby  constitute  and appoint
Lawrence W. Kellner, Jeffery A. Smisek and Scott R. Peterson, or any of them, as
the undersigned's true and lawful attorneys in-fact and agents to do any and all
things in the undersigned's  name and behalf in the undersigned's  capacity as a
director  and/or officer of the Company,  and to execute any and all instruments
for the  undersigned  and in the  undersigned's  name and capacity as a director
and/or  officer  that such person or persons may deem  necessary or advisable to
enable the Company to comply with the  Securities  Act of 1933, as amended,  and
any rules, regulations or requirements of the Securities and Exchange Commission
in  connection  with  that  certain  shelf  Registration  Statement  on Form S-3
relating to certain of the Company's Pass Through  Certificates  to be issued in
connection  with the  acquisition or refinancing of aircraft (the  "Registration
Statement"),  including specifically, but not limited to, power and authority to
sign for the  undersigned  in the capacity as a director  and/or  officer of the
Company  the  Registration  Statement,  and  any  and  all  amendments  thereto,
including post-effective  amendments, and the undersigned does hereby ratify and
confirm all that such  person or persons  shall do or cause to be done by virtue
hereof.

                                        /s/Donald L. Sturm
                                        ---------------------------------
                                        (Signature)

                                        Printed Name: Donald L. Sturm
                                                      -------------------


Dated and effective as of August 22, 1997





                                POWER OF ATTORNEY

         The undersigned director and/or officer of Continental Airlines,  Inc.,
a Delaware  corporation  (the  "Company"),  does hereby  constitute  and appoint
Lawrence W. Kellner, Jeffery A. Smisek and Scott R. Peterson, or any of them, as
the undersigned's true and lawful attorneys in-fact and agents to do any and all
things in the undersigned's  name and behalf in the undersigned's  capacity as a
director  and/or officer of the Company,  and to execute any and all instruments
for the  undersigned  and in the  undersigned's  name and capacity as a director
and/or  officer  that such person or persons may deem  necessary or advisable to
enable the Company to comply with the  Securities  Act of 1933, as amended,  and
any rules, regulations or requirements of the Securities and Exchange Commission
in  connection  with  that  certain  shelf  Registration  Statement  on Form S-3
relating to certain of the Company's Pass Through  Certificates  to be issued in
connection  with the  acquisition or refinancing of aircraft (the  "Registration
Statement"),  including specifically, but not limited to, power and authority to
sign for the  undersigned  in the capacity as a director  and/or  officer of the
Company  the  Registration  Statement,  and  any  and  all  amendments  thereto,
including post-effective  amendments, and the undersigned does hereby ratify and
confirm all that such  person or persons  shall do or cause to be done by virtue
hereof.

                                        /s/Karen Hastie Williams
                                        -----------------------------------
                                        (Signature)

                                        Printed Name: Karen Hastie Williams
                                                      ---------------------


Dated and effective as of August 22, 1997






                                POWER OF ATTORNEY

         The undersigned director and/or officer of Continental Airlines,  Inc.,
a Delaware  corporation  (the  "Company"),  does hereby  constitute  and appoint
Lawrence W. Kellner, Jeffery A. Smisek and Scott R. Peterson, or any of them, as
the undersigned's true and lawful attorneys in-fact and agents to do any and all
things in the undersigned's  name and behalf in the undersigned's  capacity as a
director  and/or officer of the Company,  and to execute any and all instruments
for the  undersigned  and in the  undersigned's  name and capacity as a director
and/or  officer  that such person or persons may deem  necessary or advisable to
enable the Company to comply with the  Securities  Act of 1933, as amended,  and
any rules, regulations or requirements of the Securities and Exchange Commission
in  connection  with  that  certain  shelf  Registration  Statement  on Form S-3
relating to certain of the Company's Pass Through  Certificates  to be issued in
connection  with the  acquisition or refinancing of aircraft (the  "Registration
Statement"),  including specifically, but not limited to, power and authority to
sign for the  undersigned  in the capacity as a director  and/or  officer of the
Company  the  Registration  Statement,  and  any  and  all  amendments  thereto,
including post-effective  amendments, and the undersigned does hereby ratify and
confirm all that such  person or persons  shall do or cause to be done by virtue
hereof.

                                        /s/Charles A. Yamarone
                                        -----------------------------------
                                        (Signature)

                                        Printed Name: Charles A. Yamarone
                                                      ---------------------


Dated and effective as of August 22, 1997