SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549


                            FORM 8-K



                         CURRENT REPORT
             Pursuant to Section 13 or 15(d) of the 
                 Securities Exchange Act of 1934



       Date of Report (Date of earliest event reported):  
                          July 22, 1996



                   CONTINENTAL AIRLINES, INC.
     (Exact name of registrant as specified in its charter)



   Delaware                0-09781                 74-2099724
(State or other          (Commission             (IRS Employer
jurisdiction of          File Number)          Identification No.)
incorporation)



2929 Allen Parkway, Suite 2010, Houston, Texas            77019
  (Address of principal executive offices)             (Zip Code)


                         (713) 834-2950
      (Registrant's telephone number, including area code)


Item 5.  Other Events.

On July 22, 1996, Continental Airlines, Inc. issued a press release
announcing that it has prepaid approximately $324 million in
principal amount of indebtedness to affiliates of General Electric
Company.  The Company prepaid the debt using the proceeds of a $320
million secured term loan extended to its Continental Micronesia
subsidiary by a group of banks and other financial institutions.

Attached hereto as Exhibit 99.1, and incorporated herein by
reference, is the Company's July 22, 1996 press release.

Item 7.  Financial Statements and Exhibits.

         (c)  Exhibits

              99.1  Press Release, dated July 22, 1996.
                            SIGNATURE


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.

                                   CONTINENTAL AIRLINES, INC.



                                   By /s/ Jeffery A. Smisek       
                                      
                                      Jeffery A. Smisek
                                      Senior Vice President and
                                        General Counsel

July 22, 1996


                          EXHIBIT INDEX


99.1   Press release, dated July 22, 1996.


CONTINENTAL PREPAYS $324 MILLION
USING BANK GROUP PROCEEDS

     HOUSTON, July 22, 1996 -- Continental Airlines, Inc. (NYSE:
CAI.B and CAI.A) announced today that it has prepaid approximately
$324 million in principal amount of indebtedness to affiliates of
General Electric Company.  The carrier prepaid the debt using the
proceeds of a $320 million secured term loan extended to its
Continental Micronesia subsidiary by a group of banks and other
financial institutions.  In connection with the prepayment,
Continental will take a $5.9 million after tax extraordinary charge
to consolidated earnings ($0.07 per share) in the third quarter
relating to early extinguishment of debt.

     This bank financing saves us approximately $6 million in
interest in the first year based on current rates, and frees up
over $1 billion of collateral at Continental Airlines which was
previously pledged.  We believe this financing will reduce our
future financing costs and broaden our access to the capital
markets, said Larry Kellner, Chief Financial Officer of Continental
Airlines.

     The $320 million term loan was made to the carrier's 91%
indirect owned subsidiary, Continental Micronesia, Inc., is secured
by substantially all the assets of Continental Micronesia, and is
guaranteed by Continental Airlines and its Air Micronesia
subsidiary.  The loan was made in two tranches:  a $180 million
five year amortizing term loan and a $140 million seven year
amortization extended loan.  Each tranche bears interest at a
floating rate.

     Continental Micronesia used the net proceeds of the financing
to prepay $160 million in principal amount of indebtedness and to
pay transaction costs, and Continental used the $136 million in
proceeds received by it as an indirect dividend from Continental
Micronesia, together with approximately $28 million in cash on
hand, to prepay approximately $164 million in principal amount of
indebtedness.  The new financing does not contain any restrictive
covenants at the Continental Airlines level, and none of the assets
of Continental Airlines (other than its stock in Air Micronesia) is
pledged in connection with the new financing.

     Continental is the fifth largest airline in the U.S., offering
more than 2,000 jet and Express departures daily to 136 U.S. and 56
international destinations.  Operating major hubs in Cleveland,
Guam, Houston and Newark, Continental is strategically positioned
for transcontinental travel, and offers extensive service to Latin
America and Europe vis its Houston and Newark gateways. 
Continental was recently ranked the top airline in customer
satisfaction among the nine major U.S. carriers on long-distance
(500+ miles) flights, based on an independent survey of more than
2,600 frequent flyers conducted by J.D. Power and Associates in
conjunction with Frequent Flyer magazine.