Welcome to the Continental Airlines Fourth Quarter and Full Year 2007 Financial Results Conference Call. As a reminder, this conference call is being webcast and recorded, Thursday, January 17 of 2008. I would like to turn the conference over to Ned Walker, Senior Vice President of Corporate Communications and DeAnne Gabel, Director of Investor Relations. First, Mr. Walker, sir, you may begin.

Good morning and welcome everyone. Joining us in Houston today, we have Larry Kellner, our Chairman and Chief Executive Officer, Jeff Smisek, our President and member of the Board of Directors. Jeff Misner, our Executive Vice President and Chief Financial Officer, also Jim Compton, our Executive Vice President of Marketing, Mark Moran, Executive Vice President of Operations, and Gerry Laderman, our Senior Vice President of Finance and Treasurer. Today will be the same as we usually do, Larry will first have the industry and corporate overview. Jeff Smisek then will come in and review Continental’s capacity in revenue and then Jeff Misner will join us and look over our cost structure in the balance sheet. We have allocated the first twenty minutes for executive comments followed by 25 minutes for questions from the analysts and then an additional 15 minutes for media questions. Format is the same as we have used in the past. If you have one question and a quick follow up question, we should be able to accommodate most of everyone. With that, I will turn it over to DeAnne.

As announced yesterday, Continental will record a special non-cash tax charge in the fourth quarter, but has not finalized the amount given the technical nature of the issue. As a result, today the company is presenting its pre-tax results. By mid-February, Continental will finalize the computation of a special non-cash tax charge, and will report its net results in the company's Form 10-K. Earlier today, we issued an updated for investors presenting information relating to our financial and operational outlook for the first quarter or full year 2008. This investor update was included in our filing with the SEC and can be found on our website under the Investor Relations section. Let me give you the usual reminder today that we will be discussing some non-GAAP financial measures such as pre-tax income excluding special items. A reconciliation of the GAAP to non-GAAP financial measures to be discussed can be located on Continental's website at continental.com under the Investor Relations section. In addition, our discussion today may contain forward-looking statements that are not limited to historical facts, but reflect the company's current beliefs, expectations or intentions regarding future events. Our forward-looking statements involve risks and uncertainties that could cause actual results to differ materially. For examples of such risks and uncertainties, please see the risk factors set forth in the company's 2006-10-K, and as well as securities filing. With that, let us get started and turn it over to Larry.

To those of you on the call, good morning and thanks for joining us. As I have often stated, my co-workers are the backbone of our success and I want to star off by thanking them for the dedication and team work, which resulted in Continental reporting a pre-tax profit for the full year as well as for the fourth quarter of 2007. As a result of our 2007 financial performance, I am pleased to say that on this upcoming Valentine’s Day, we will distribute a record of $158 million of profit sharing to our co-workers. That is $47 million more than we distributed last year. On behalf of the entire management team, I want to thank my co-workers for a job well done. For the full year 2007, on a pre-tax basis, we recorded income of $566 million or $542 million excluding previously announced special items. A large improvement over last year. For the Fourth Quarter 2007, excluding special items, Continental reported pre-tax income of $24 million. Our first Fourth Quarter pre-tax profit for the year 2000. including special items, we reported a Fourth Quarter pre-tax profit of $71 million. Operating income for the fourth quarter was $63 million excluding net special items or $80 million including the items. This is our largest Fourth Quarter operating income in more than five years. Considering the fuel price increases cost us more than $200 million over last year’s Fourth Quarter, I am especially pleased with our results. They were achieved by combining strong revenue growth with a continued focus on increasing our efficiency throughout the business and other cost producing initiatives. In addition to solid financial results, the team once again did a great job delivering consistent operational performance. For the full year, we averaged a record of 81.7 mainline load…

We had a great year in 2007 and I want to thank all my co-workers for delivering superb results. We once again had solid top line growth. In 2007, we grew a total revenue by more than a billion dollars to $14.2 billion. That was an 8.4% growth rate, almost double our capacity growth rate. We even had a very good top line growth in the seasonally weaker fourth quarter, with total revenue increasing 11.6% to more than $3.5 billion. During the quarter, mainline RASM was up 6.9% year-over-year driven by a yield increase of 7.6% as the mainline load factor decreased 0.5 point year-over-year to 79.7%. We continue to see year-over-year yield improvement in all our international regions and we saw some nice improvements in the mainline as well, which were up 6.9% year-over-year. During the fourth quarter, we also saw strength in regional yield which were up 9.7% driving regional RASM up 9.8% load factor or about flat year-over-year at 77.3%. Throughout 2007, our team did a great job managing our inventory, pricing our product competitively and taking actions to more appropriately segment business and leisure travelers such as re-instituting the Saturday-night stay requirement in certain markets, all with the result of maximizing our revenue. And of course, you do not get paid if you do not complete the mission. Despite several major winter storms in the mid-west and the Northeast during the quarter, our team delivered a system-wide mainline segment completion factor of 99.2%. Looking ahead to the first quarter, demand throughout all regions remain strong and yields continue to run higher than last year as we have been able to recapture a portion of the rising cost of fuel through increased fares or higher fuel surcharge. Importantly, to be able to do this without experiencing any…

Thank you for joining us this morning. As Larry and Jeff said, 2007 ended up being a great year and we are really happy with the results, particularly given a difficult fuel and operating environment we faced. We are also pleased to post the pre-tax profit for the fourth quarter in the face of a hundred dollar plus per barrel of jet fuel. Additionally, as Jeff mentioned, our team did a great job on the revenue side and I congratulate them, but I also want to add my complements to the team for delivering on the cost side. They did a terrific job as well. The profits went up today as the direct result of the commitment of our entire team to our company, our shareholders and our customers. As DeAnne mentioned, we filed our investor updates this morning, which has our first quarter 2008 guidance. Since the guidance is posted on our website, I will not take the time repeat it all in my comment. However, for the first quarter of 2008, we expect mainline CASM excluding holding fuel rate constant to be up about half a percent year-over year. For the full year 2008, we are targeting consolidated mainline CASM excluding specialized holding fuel rate constant to be down slightly. We continue to work at improving our cost structure and we have taken a lot of cost out of the system over the last few years, but that does not mean we are going to sit back and relax. Last year, in addition to taking advantage of many small, but meaningful opportunities, we also made significant improvements in some maintenance and technology contracts, which we expect together with several smaller initiatives, will save us more than $100 million annually while we get them all fully implemented. Looking forward,…

2008 can prove to be a year of many changes. And as I have said before, just like we have always done, we will act in the best long-term interest of all of our stakeholders. In addition, because it is important not to lose sight of the basics of our business, we will continue to focus on providing clean, safe and reliable air transportation and get better than our competitors. My co-workers make sure we do that everyday, and I want to again thank them for all they do. With that, I will turn the call back over to DeAnne to begin the QA.

With that, we will open the Question and Answer session for the analyst, followed by the Question and Answer session for the media.

(Operator instructions.) Our first question comes from William Greene from Morgan Stanley. William, please go ahead.

I am wondering if you can talk to us, are there any reasons why you would not be able to stay in the Sky Team alliance or in your domestic co-chair when the Delta and Northwest merger were announced?

I think if we would look at it, we will watch how the industry unfolds and always look for kind of what is the best positioning for us. We are very happy with our relationship in the Sky Team and where we are. We have got good partners. We are in that alliance with Delta and Northwestern and the Sky Team as well. So I do not want to speculate with where all the future would go, but I would tell you we are happy with where we are. That is a grouping up here that is all in the Sky Team today.

No, is there something in the agreements that sort of prohibit you from staying in the event of a change of control?

All of those agreements are confidential, Bill, so I do not want to comment on the details of our agreements with the Sky Team period.

Can I ask just a couple of revenue questions? When you go into Heathrow, should we assume that it will be either a drag or eventually, I assume some sort of step up in the trans-Atlantic yields, but when we think about first quarter and second quarter modeling, will that have a noticeable effect, I do not it not too late for first quarter effect, but I do not know about second.

Yes, clearly, if you look at the first quarter, we do not start until March 30 on arrival there. So it is not going to have any impact on the first quarter. We are adding capacity. We will go to pre-flight so if you look fee levels, we will stay pretty close because we have not used to for instance, from Houston 2-777s, but we use 2-76s and a 777 from Houston and then we use 2-75s in Gatwick from New Ark. There will clearly be some transition there. I could not tell you right now whether it would be positive or it would be a slight fix while we are still up there, typically in a new market’s running capacity, we would expect the little pull up in the second quarter, but Heathrow is a little unique so we will just work with that as we get there.

Okay, just lastly, the holiday shift? How much on average does that affect RASM in a quarter?

You are talking about?

The Easter shift?

In fact, it is a relatively small number. During the holidays, obviously with the Tuesday that it fell in; comments is that a lot of traffic moved into January with that Tuesday and kind of that week pulling off more leisure in the past. In terms of Easter going forward, I think that you will see a little of it obviously moving into March in the first quarter domestically. I think, internationally, sometimes it is a shift from the Easter holiday internationally will actually keep it out into April, so I would say it is a net positive Easter moving into March.

Thanks for your help.

Our next question comes from Ray Neidl from Caylon Securities. Ray, please go ahead.

Just to clarify the tax charge for the fourth quarter, I noticed in your guidance that you are going to be booking taxes about 36% going forward, even though most of it is non-cash, in the fourth quarter this year, that tax charge, should we consider that a one time charge or should we consider that as a normal EPS type of charge if that is the case, I calculated, you made about $0.22 for the quarter.

The fourth quarter charge is a one time charge as we explained. Kind of related to some changes in the law with respect to the policy of retirements and so on, so that is kind of a one time charge. Going forward, we will be booking taxes normally as we have done in the past years ago.

Okay, great. Thanks for clarifying that. The other thing is, Larry, if you could just clarify for us the golden bullet that Northwest has. When officially does that terminate? What state does the Delta-Northwest negotiations for merger have to go to before that bullet is terminated, which leaves you free to pursue your own course?

Ray, the golden share, we have a couple of options, it does not terminate, we actually just have the right to repurchase it for I believe six months going forward from there so that the trigger would be definitive documents. It is not the confirmation of the merger we need it to be definitive documents and they would have had to announce the definitive deal before we have the right to redeem the golden share.

And what cost would that be to Continental to redeem it?

A hundred dollars.

Okay, great. Thank you.

Our next question comes from Robert Barry from Goldman Sachs. Robert, please go ahead.

This is actually Chris filling in for Rob. Just wanted to dig a little deeper on the international demands on recognizing your commentary that corporate demand is holding up nicely and both factors are up nicely. If we can dig into the trans-Atlantic and Pacific, you did comment that load factors are down slightly. Is that just a function of getting more aggressive on yield or is there is any clause that perhaps, we are coming to an inflection point considering that trans-Atlantic spend?

As we mentioned in the update, we are basically seeing load factors that are down a bit. We think we will close that gap and we are very happy with the yield trade off that we have out there as the strength in the yield that we saw in the fourth quarter. We do not see anything breaking away from that as we look forward in the first quarter.

Okay, fair enough and then Jeff perhaps on the cost opportunities that you alluded for 2008, you mentioned distribution, you mentioned the most expenses, could you just perhaps flush that out a little bit more detail with a little more granularity?

I mean, in the distribution side, we are of course pursuing the kind of new things to appropriately channel, and so we think there are still some opportunities in that particular area. On the regional side, we are looking at opportunities with Express Jet to see if we can make some enhancements to the contract there, and so we will kind of work those issues as we go forward, we really do not have enough on that. And just across the whole spectrum of cost, there is a number of things that you can do in terms of trying to gain more efficiencies where there is use of technology or other methodologies, and then also, as the company kind of continues to evolve, what was important yesterday may not be as important today and we may have new focus and new things that we want to focus on and so, one of the key is I think, continue to work the cost side, as you start on new opportunities and others become less important, you need to kind of weed those cost up for those other things that are no longer currently as important and sometimes, they have a tendency to kind of get set into place and they are in there and you have to drag them out and get rid of them a little bit, so there is opportunity to that nature as well, so there is just a whole host of things that we can look at and we will continue to do. We have got a lot of metrics that we measure all different departments by and we will kind of continue to learn those and those kind of drive towards efficiencies.

Okay, great. Thank you for your time.

Our next questions comes from Mike Linenberg from Merrill Lynch. Mike, please go ahead.

Two questions, the first is, I look at your week count. It looks like for yearend ’08 versus yearend ’07, you are up about 4%, and that is your mainline fleet, you have indicated that your mainline capacity is going to be up 2% to 3%, and when I look at the airplanes that are coming in and the planes that are going out, it looks like that the planes that are coming in are like 50% larger with these larger 737-800 and 900s coming in, are you getting there because we are looking at the rate on your mainline fleet in 2008 or are you maybe anticipating additional 737-300s or maybe other aircraft that are older coming out the fleet this year?

There is a combination factors. A bit of it is utilization and a bit of it is timing of the aircrafts coming in and aircrafts departing, and there is a little bit work that is still being done and exactly how the schedule is going to shake out, given some of the activity in the northeast border with cap and so on, so we are kind of still working our way through that, but I think there is a little bit on the utilization side and a little bit timing of the deliveries and exits.

Okay, and then just my second question, and maybe I will throw this at you and Jeff as well, in the September 10-Q, it was indicated that you would be spending potentially up to $130 million for slots that he said that your service pattern, it appears you got some pretty good slots there, early arrival and decent time of departure, I think there was a report out there that you may have paid as much as $60 million for a single slot pair, ultimately what you paid, how does that reconcile to the $130? Did you get up to the $130, or was the CapEx number bigger than that? Any color on that front?

I cannot really go into the specifics of what we paid in the individual slot, but I think our commentary earlier was that at that point, that is what we kind of committed to, but I think, in the current year, it is reflected in our CapEx, the numbers that we have provided you so the amount that we are paying is kind of out there, buried I guess in the CapEx, but we cannot really talk in terms of the specifics on any particular pair of slot.

I would add that we are happy where we ended up. We are very positive both in London and to the network on a long-term basis. It was a lot of work, but it was important to us to be well positioned, both in Houston and in Liberty and we think we accomplished that result at a price that was in the same line when we went to the Board originally kind of thinking here is the authorizations we needed and we are able to accomplish that in line with our Board authorizations.

And Mike, if you anybody who has got anymore slots for sale, please give us a call.

Well that was going to be my next question, you are obviously still in the market looking for additional slots.

We will look to build our pattern in Heathrow over time. We think there is significant demand from New York to Heathrow. I think if you look at our competitor’s schedule, you will see that we will still have some opportunities there.

Okay, great and nice job this quarter.

Our next question comes from Jamie Baker from J.P. Morgan.

Jeff, I am under the impression, United might be for sale and they have some Heathrow slots if that helps you out. My real question is a follow up regarding the recent meeting with your top 50 corporate accounts, I am curious, roughly what percentage of revenue they might account for and what industries they are bias to. I am curious for example, how large a role of financial service firms might play in that top 50?

Well, my recollection, I had sit in a portion of the meeting and my recollection is that it was a pretty broad range of corporate customers. There were obviously large representatives from large pharmaceutical companies that we deal with located in New Jersey and the northeast. Some obviously oil and gas companies here at Houston that is really a broad range. I do not recollect the distribution in terms of financial services firms that were represented, and I can imagine with all of the fallouts from sub prime mortgages and all that is going on with the financial service firms right now, everybody else has cut back that they might well be adjusted to travel.

And we can also add that while there is a small percentage if you look at our total revenue across the system, they are much more important when you look at international business first which is the key driver of what we do and so we tend to look at them as a key group, not so much as the percentage of total revenues, but what they drive on our international network and front.

Well, and for what it is worth, I do not want to take attention away from Continental. I was frankly surprised that after renewing corporate travel policies for this year, my employer did not make any substantive changes as it relates to air travel, so for what that is worth, thank you very much. I appreciate it.

Our next question comes from Dan McKenzie from Credit Suisse. Dan, please go ahead.

How much of a benefit if any did Continental get from the New York airspace redesign in the fourth quarter, and I guess, I am just wondering if that is factored into your cost outlook looking ahead?

It started late in the quarter, Dan, and I think it will be very hard to measure because if it is a multi-year process to implement that airspace redesign and the pieces that are started are merely giving us a little ability to vector candidly, we would probably and again, hard to measure the revenue impact, but I can tell you it is a good operational impact and we commend Secretary Peters and the President for opening the military air space. We used that both over Thanksgiving for many flights as well as over the Christmas Holiday for many flights and it gave us another alternative because since it was announced in advance, we could plan for it and that was probably a larger impact to the quarter, but I think when you get to individual operational improvements like that, it is very difficult in a one off-bases to have any certainty in measuring a number that we want to put out there, but I can tell you the military airspace was positive and the airspace redesign on a long term basis will be positive for us and so we are happy to move it forward.

Okay, and then just following up on an earlier fleet question, it looks like Continental is giving back CRJs this year. I am just wondering if you can provide some perspective on what is driving that and whether that is a good run rate going forward?

Yes, some of the CRJs that we operate, we will go ahead and have those removed. We are basically, every year 145 is kind of financial, remove the CRJs and of course they are offset a little bit by some people and hundreds of things that we have coming in as well.

Okay, thanks a lot.

Our next question comes from Gary Chase from Lehman Brothers. Gary, please go ahead. Gary Chase – Lehman Brothers: As you look at the first quarter, at least the way we have it. The easiest revenue comparisons industry wide, I do not know that this is necessarily true for Continental, but the easiest comps industry-wide for revenue are in the first quarter, can you just give us a little more color around how your outlook that you say is strong, is it strictly in your context that you think the momentum will continue there or is it you feel like some of the yield gains that you have been able to achieve in the back half of 2007 will carry into ’08 and you will still be able to get those flat load factors that we are talking about.

I think it is important towards your second point that I think that what we are doing in the year of ’07, there was momentum in the pricing environment, as well also the capacity and so I think that momentum actually carries not just in the first quarter, but actually gets considerably accomplished and moved through the year.

I would point out that we have actually, in the past, we tried very hard to give us much revenue guidance as we can, but further out you go in the year, we have found historically, it is just tougher and tougher for us internally or for you to predict simply because we are good at what we can see in the bookings, so our comments today are some things that you can see through yesterday and we will get a little smarter about how much of the fuel, what impact that has as we go forward in RASM and other areas as we go through the year, but we found it even internally difficult to see far out just because so much of the bookings are currently at 30 days and specifically a lot of high value bookings for the last 30 days. Gary Chase – Lehman Brothers: But Larry, I mean, it sounds like the strength that you are referring to is not just a function of the fact that you think that first quarter last year was a low point and easy comp, is that a fair way to restate what you just said.

I think that is it fair to say, I want to stick to where I was which was, we feel comfortable that while you see lots of reports of an economic slow down, as we look in our bookings, we feel comfortable with our booking levels as of today and I would tell you, we are not doing that at the expense of yields today, so we feel comfortable about our outlook from where we stand and we will keep watching everyday, I can assure you as I have mentioned in my comments that over the holidays, we did see some softness and we paid attention to it, looking back, I believe that had more to do with the Christmas and New Year’s thing in the middle of the week on a Tuesday that it did with the slowing economy, but we will never know, we just did see some softness, but that has come back here over the last ten days. Gary Chase – Lehman Brothers: And Larry, could I ask you just one question too, and then I will let you back to the beach party you were apparently trying to start there, on consolidation, I have heard you talked about this in the past and I think I understand what you are saying, could you just give us a framework for how you are going to think about it, I mean, Continental is not a large airline now relative to some of your competitors, you get better revenue, you are happy with the performance I have heard you say that, so I have to assume that in viewing a shifting landscape, a change in the relative size of Continental is not by itself an important factor for you, is that fair and then could you just sort of take us to how you are going to think about it, and what it is that you are going to look at to determine if doing anything at all is appropriate for Continental?

I think there are two things, one I would disagree somewhat with you, if you do pay attention to the relative size, and I think we would have some concern. We have been working very hard over the last ten years to improve our relative position. We do have excellent hubs in New York and Houston and we have got a hub in Cleveland. We have got a good operation at Guam, but relative size is important in the network business and so I think we would pay attention to our relative size and we are going to watch this. What we see going out in the marketplace, there are lots of speculation in the press and we are just going to have to watch the market as we go forward and watch what our competitors do and watch what we believe our competitors are going to do and make what we believe are the best decisions for us. I cannot tell you because there are so many alternatives and I would just point out to give you a flavor for that. Jeff Misner and John Reiny probably have dozens of models, I can assure you the others are taking a 19% stake and Jet Blue was not one of them, and so there are always surprises in this business, we will keep our eyes on it. We will keep looking forward. If we see something or hear something, we will not hesitate to act aggressively and at the same time, we have got an excellent franchise. I have got great co-workers and we like our position as the industry stands today, but I suspect that if you look forward things will change whether they will change the consolidation part or change because of fuel prices, we will see and we will work to find the best solution for them. It is difficult to speculate because there are so many alternatives. Gary Chase – Lehman Brothers: Okay, appreciate it.

Our next question comes from James Higgins from Soleil Security. James, please go ahead. James Higgins – Soleil Securities: A couple of question, could you give us some color on the strength in your regional RASM in the fourth quarter, where it came from, it really seems to be surging relative to what has been the case earlier in the year.

Regional RASM, Jim? James Higgins – Soleil Securities: Yes. Just where you saw the strength.

In terms of the regional capacity, Jim, we saw a good strength in New York Liberty partly due to a couple of things, two things. One, some of the things had just moved again to grow with the 190 down in New York and so forth as far as comparable comps. In addition, secondly we have been pretty focused on managing the revenue across the system, but also in New York particularly with some of the fences that Jeff alluded to in his comment. So whether if Karen and I stay, three-day minimum stay, the whole point being that we are business of segmentation and the adaptability of the segment of the business versus leisure calls us to optimize the revenue. A lot of that came in particularly in New York where we have that overlap with the regional capacity. We also saw strength obviously in Houston also. It has also begun to also move some of those fences into the marketplace also. James Higgins – Soleil Securities: Great. You have a very good international business product but you lack something that increasingly your competitors are going to, which is the full flat business-class seat. I wonder how you are going to compete going into Heathrow with that current seat and wonder if you have any plans to change it?

One I would tell you at the meeting Jeff Smisek mentioned earlier with our Continental corporate customers. We got two clear messages. One may like a lie-flat seat; two, they did not want to pay anymore for it and they were very clear about the fact that if we were taking seats off the airplane to get a lie-flat seat and expecting to recover that in the fair that was not a good assumption and so as we roll out the 787, announce something with regard to our new international business. We are not ready to do that today. We understand both the demands from the marketplace to continually take that product up a notch, but we also are listening to our customers who have been very clear to us that there is a balancing factor on price and ultimately we have an obligation to our shareholders, to our co-workers and to everybody else to make sure we have business model that works. And so we will make some changes as we roll out the 787 and we intend to roll that through our fleet, but we are not ready to announce today and I think like lie-flat is a great product. But much like the CD old three class cabins going away where everybody used to have a great first class, a business class that look like domestic first and then a coach product. Actually, what we have got in his mini request for today is something that is cheaper than business first, but better than coach and from an operational perspective we will try to find the right balance because we do not want to get back and then try to operate a free class product. James Higgins – Soleil Securities: Sounds like a good idea. And then finally, Southwest is talking a lot about technology called RNP, Required Navigation Performance, which they are saying they think can take several minutes off of their flights. Obviously, you are a longer hull carrier and so the impact might be less because it is all about approach and departure. Is that something that you have looked in and is that something you have given any thought to?

We are working several initiatives with FAA and air traffic on enhancements with RNM and RNP. We have some efforts. We are working on Guam right now, GLS and we will continue to work through these initiatives.

Jim, the upside for us is while we are a longer hull carrier and we fly the heavily congested airspace in New York, we can get some benefits there, they could be significant. James Higgins – Soleil Securities: We think so. Great, thanks very much.

Our last question comes from Frank Boroch, from Bear Stearns, Frank please go ahead. Frank Boroch – Bear Stearns: Good morning, Larry this question is for you. If you had a blank slate today and could establish in parts of the country aside from you are currently are, where would you want to be?

Well, I think as you look at our network, I am going to answer, Frank that a little bit more broadly, we view ourselves as having three things we need to improve. One was we have not had access to Heathrow, which is huge for our corporate customers. That will get fixed in late March, not to the full extent, we want to a little, we will sure be off to a good start. We have not gone to the trans-Pacific service at our 25-787 on order, we will do a lot to help us to fill that gap and increase our trans-Pacific service. We continue to be weak on the West Coast, more south, though I will tell you that the domestic business is not the most profitable thing today. We would be happy to get our domestic system back to break even and so we would be careful about domestic expansion, but if we have a weakness in out network it is more south on the West Coast. Frank Boroch – Bear Stearns: I am just sure thinking about the flight caps in the Northeast. What would it takes for you guys to take to the recognize, slotted at New Ark as an asset on your books.

Since you addressed this to him or me, I will let him answer the accounting side, but I think that typically, where you put slots on your book it would be like Heathrow where we buy them. And, so I think, if you ended with a slot situation in New Ark, you would not put any thing on our books, because we are already in that position today.

We recognize these right now already. These voluntary caps.

I mean, unless we are paying for something then we will have that. Frank Boroch – Bear Stearns: Okay great, thanks, guys.

If you could review the Question and Answer process and once again for the journalists, if we could have one question, a quick follow-up. We should be able to accommodate many people as possible.

(Operator Instructions.) Our first question from Andy Compart from Travel Weekly. Andy, please go ahead. Andy Compart – Travel Weekly: I was just wondering if you could tell me about what level your free-surcharges are at now internationally and if you have one domestically. If you give any sense that is offsetting the fuel cost increase.

It is hard to answer that in the simple way, because surcharges are so different across the system. Obviously, high in the internationally given the length and so forth, and they are also different geographically and internationally also. In the domestic, there is kind of base line right now and again it is a little bit more difficult, because the fuel surcharges on some fares, but it is not all fares. But, generally, it is $10.00 one in a way in US, kind of general sense, because it is a difficult flight because, light pricing over time, they tend to kind be more focused, move somewhat fluid, depending on competition and so forth. Andy Compart – Travel Weekly: Can you say what the range is internationally or are you allowed or able to say how much revenue are you and specifically from the fuel surcharges themselves?

Anywhere from $50.00, in certain countries $100.00, one-way in other countries. Andy Compart – Travel Weekly: Can you separate what the revenue is from the surcharge itself?

No. Andy Compart – Travel Weekly: Okay, so you cannot say how much of the fuel increase or fuel cost that is offsetting.

Yes, we do not look at it that way, obviously we are managing towards this higher fuel costs, but at the end of the day it is kind of a price point that is out. Andy Compart – Travel Weekly: Okay, thanks.

Our next question comes from Mary Schlangenstein, from Bloomberg News. Mary please go ahead.

Earlier, you were talking about the delay on the 787s, and you said that down the road you must be considering what you might need to make. Can you be more specific, in terms of what you might have to consider, do you expect delays in your deliveries at this point?

Yes, we expect our first plane is scheduled originally for March of 2009. We do not expect that plane to arrive in March of 2009 if it is going to be a safe assumption based on what Boeing said. We have three planes coming up in to 2009 and we are adding China in the spring of 2009. Clearly, that will make a great tough summer force in 2009, as we are going to have to take the planes to fly China or something else, likely, as we get a little more color we will be able to adjust that and explain where we are heading, but clearly we will have some challenges for the summer of 2009.

Do you anticipate that you might alter your order to some extent?

I am not going to comment on future orders.

Okay, thank you.

Our next question comes from Bill Hensel from the Houston Chronicle. Bill, please go ahead. Bill Hensel – Houston Chronicle: I wanted to ask, you guys mentioned that you are going to be adding frequencies to Latin America. Could you expand on that a little bit?

We are taking delivery this year of 32 new generation 737 aircraft, 800 and 900 ARs, and we will be flying a number of those aircraft into Latin America. We will be increasing frequency in some markets and we will look to add some other markets as well. We are not in a position announce the decision of that right now, but that is where some of those aircraft will go to.

One, we have already loaded it. It was just pointed. We have gone two times in Panama and we are looking at some frequency in Managua and Guatemala. Bill Hensel – Houston Chronicle: You say you have already done Panama?

Yes. Bill Hensel – Houston Chronicle: Okay, thank you.

Thank you. Our next question comes from Chris Ritter from Reuters. Chris, please go ahead.

I have a follow-up question I guess on the 787 delay. You said it is going to make for a tough summer for you in 2009 and because of the delay, is there any option to get some compensation from Boeing for the delay in terms of either money back on the planes or in terms of better pricing on future orders, anything like that.

Chris I will just give you the general answer. The Boeing is a great partner to us and we will work with them on a long term basis. I do not want to get into our contracts specifically with Boeing, but we will have some challenges in the short term. We recognize those and we will work through those with Boeing for the long term.

Okay, alright. Thanks.

Thank you, our next question comes from Liz Fedor from Minneapolis Star Tribune. Liz, please go ahead.

Good morning. I am sitting just a few miles away from where I know that golden share is sitting in a safe and so if you would like to elaborate anymore on how you feel that place with the consolidation realignment, I would be interested in that. But in particular Mr. Kellner, you indicated earlier in the call you said we are following developments closely. We believe that our competitive position continues to improve, so I am not getting a signal that you are eager to jump into this consolidation game right now. There are others who have laid out very specifically what their principles of consolidation are. Could you say, is it your preference to remain a stand alone carrier that you will only get in this consolidation game if it starts to unfold? If you could elaborate on any of those issues.

Let me just try to answer that and hearing your question and clarifying what I have said for you. We do believe we are very well positioned today and I think we have been pretty clear that we believe our path as an independent carrier if the industry remains as it is puts us in a good position. However, we know that things may change. The golden share does add some complexity to our situation and so if Northwest were to be merging with someone and that golden share was not in play that would change the nature of some of the restrictions on us and would also have changed the fact that the interest would be changing. So you have two facts coming together at once. We need to look at what was happening, where that was and what we thought that meant for us for the future. I think in analyzing those facts before we would be able to comment beyond that. There are so many scenarios and I want to be careful not to speculate but at the same time those who I am talking, my co-workers or were talking to investors or talking to media, it is clear we are paying attention to it and we are going to do what we think is in the best long term interest of our stakeholders. But any speculation on individual situation is difficult. But clearly in the case of Northwest, were they to be involved in a transaction and where the golden share then become redeemable because that would change our circumstances and we need to address that change condition and at that point, address what specifics we then knew and how we are going to respond to them.

Have you had any conversations with any one representing Northwest, regarding the golden share in recent weeks, whether it is a representative or a Northwest executive?

The lawyers are waiving me off there, so I am just going to leave that question as a question.

Would they prefer to answer the question?

No, I think they prefer we do not comment.

Do you have another question?

No, thank you very much.

Thank you, our next question- is from David Jonas from Pro-Media Travel. David, please go ahead. David Jonas –Pro-Media Travel: Just a little thing, you folks could a little bit more about the paperless boarding pass pilot and how that came about and any prospects for expanding that either in Houston or at other airports.

We have been working closely with the TSA. The TSA has the level of security for them, knowing that the boarding pass is a genuine boarding pass. It is very convenient for our customer, especially customers, who are traveling on a return segment of their travel, where they may not have easy access to a printer. They can simply get that bar code on their PDA and use it, not only to get their security, but to check-in, to actually board our aircraft, as well as the gate. We are working with TSA. Right now, we have expanded it, we expect it to be in Boston, also in DC and in New Ark, and we expect that the rollout over the next couple of months, it is just a matter of coordinating with the TSA. I think that you will see that program grow; we believe it will be adapted by other carriers and hopefully, there will be one day where there never will be again any kind of paper in the boarding process.

Okay, great thanks.

Thank you, our next question comes from David Koenig from Associated Press. David, please go ahead.

Okay, thanks. I had a question about the 787s, I think you probably said what you are going to say there, real simple, why did you bail out this week on the $50.00 fuel surcharge?

The chronology of price increase and surcharge are always interesting. We initially went in on the surcharge. We actually went in a much more broader than the initial surcharge increase that United put in. We constantly monitor the competitive situation and as we saw people coming-in, in a much more limited basis, we actually took the opportunity to refuse our filing of that broad-based and go in at a smaller base. So at the end of the day, actually on Tuesday, we were one of the last one in about 35,000 shares on that surcharge as with Northwest. So, all those things, again it is again all fluid. Carriers come in at different points in the process and we are making an independent decision of what is right for us and as we went through that process, we have adapted it and changed the surcharge. At the end of the day, it was not competitively out there.

Okay, so the other folks were wheedling away at the surcharge underneath your feet, basically and you had to do what you did?

Yes, we actually have been obviously doing a lot of things in the revenue, if you go back to the summer of ’06 or even this past summer. We are much broader in surcharge in the system versus the competition. As I mentioned earlier, we actually have surcharges on fare price with other carriers, and told him it is just the fluid process that we are trying to optimize our revenue at a very micro level and a lot of moving pieces with increases like that.

Thanks.

That concludes the Fourth Quarter and Full Year 2007 Financial results briefing. I want to thank, Larry, Jeff, Jeff, Jim, Mark, Jerry for your participation and especially the participation of everyone on the telephone. We will go ahead and conclude at this time and see every one back in April. Thanks so much.

Thank you ladies and gentlemen. This concludes today’s conference. Thank you for participating, you may all disconnect.