Item 5. Other Events.

On July 1, 2002, Continental Airlines, Inc. issued a press release announcing an after tax special charge of $96 million ($152 million pre-tax) primarily related to the impairment and accrual of lease exit costs of its MD-80 and turboprop fleet, and an after tax charge of $8 million ($12 million pre-tax) to write down its receivable from the U.S. government related to the Air Transportation Safety and System Stabilization Act grant program as a result of the finalization of its application for that grant. Both of these charges were recorded in the quarter ended June 30, 2002. In the release, the Company also reported its June performance and its estimated consolidated breakeven load factor for July 2002. The press release is filed herewith as Exhibit 99.1 and is incorporated herein by reference.

On June 28, 2002, Standard & Poor's lowered its debt ratings for all of Continental's debt securities, except bond-insured obligations. Continental's corporate credit rating was reduced from BB- to B+ and it unsecured credit rating was reduced from B to B-.

Item 7. Financial Statements and Exhibits.

1. Exhibits

1. Press Release

Pursuant to the requirements of the Securities Exchange Act of 1934, Continental Airlines, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

July 1, 2002

EXHIBIT 99.1

Contact: Corporate Communications

Houston: 713.324.5080

Email: corpcomm@coair.com

HOUSTON, July 1, 2002 - Continental Airlines (NYSE: CAL) today reported a June 2002 systemwide mainline jet load factor of 78.7 percent, 0.7 points above last year's June load factor. For June 2002, Continental reported a domestic mainline jet load factor of 77.5 percent and an international mainline jet load factor of 80.5 percent.

Continental also reported an after tax special charge of $96 million ($152 million pre-tax) primarily related to the impairment and accrual of lease exit costs of its MD-80 and turboprop fleet. Continental also recorded an after tax charge of $8 million ($12 million pre-tax) to write down its receivable from the U.S. government related to the Air Transportation Safety and System Stabilization Act grant program as a result of the finalization of its application for that grant. Both of these charges were recorded in the quarter ended June 30, 2002.

Continental reported an on-time arrival rate of 81.5 percent and a completion factor of 99.7 percent for its mainline jet operations in June 2002.

In June 2002, Continental flew 5.5 billion mainline jet revenue passenger miles (RPMs) systemwide and 6.9 billion mainline jet available seat miles (ASMs), resulting in a traffic decrease of 7.8 percent and a capacity decrease of 8.6 percent as compared to June 2001. Domestic mainline jet traffic was 3.2 billion RPMs in June 2002, down 11.1 percent from June 2001, and June 2002 domestic mainline jet capacity was 4.1 billion ASMs, down 11.3 percent from June last year.

Estimated June 2002 mainline jet passenger revenue per available seat mile (RASM) decreased between 5 and 7 percent compared to June 2001 as a result of lower year-over-year yields, slightly offset by higher load factors. For May 2002, RASM declined 6.3 percent as compared to May 2001.

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Continental expects to report it ended the second quarter with a cash balance of approximately $1.3 billion.

On June 28, 2002, Standard & Poor's lowered its debt ratings for all of Continental's debt securities, except bond-insured obligations. Continental's corporate credit rating was reduced from BB- to B+ and its unsecured credit rating was reduced from B to B-.

ExpressJet Airlines, a subsidiary of Continental Airlines doing business as Continental Express, separately reported a load factor of 68.0 percent for June 2002, 0.9 points below last year's June load factor. ExpressJet flew 345.8 million RPMs and 508.7 million ASMs in June 2002, resulting in a traffic increase of 8.5 percent and a capacity increase of 10.0 percent versus June 2001.

This press release contains forward-looking statements that are not limited to historical facts, but reflect the Company's current beliefs, expectations or intentions regarding future events. In connection therewith, please see the risk factors set forth in the Company's 2001 10-K and its other securities filings, which identify important matters such as terrorist attacks, the significant cost of aircraft fuel, labor costs, currency risk, competition and industry conditions, regulatory matters and the seasonal nature of the airline business, that could cause actual results to differ materially from those in the forward-looking statements.

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