CONTINENTAL AIRLINES STATEMENT ON AMERICAN/BRITISH AIRWAYS ALLIANCE

Continental Airlines today issued the following statement in response to this morning's announcement by American Airlines and British Airways that they will seek regulatory approval of a strengthened transatlantic alliance:

"Continental Airlines strongly opposes any alliance between American Airlines and British Airways. Their agreement would increase the two carriers' already dominant position in the U.S.-U.K. market, particularly at London's Heathrow Airport. This grossly anticompetitive alliance would allow these two transatlantic megaplayers to jointly set fares and schedules and would result in increased fares and fewer choices for customers traveling on transatlantic routes. Under their agreement, American and British Airways also plan to share profits on routes where today they compete head to head.

"Nothing has changed in the five years since American Airlines and British Airways initially proposed their alliance. While Heathrow remains a vital center of global business and trade, access and slots from the U.S. remain unattainable by U.S. carriers like Continental.

"Together, American and British Airways already control more than half of the traffic on key routes between the U.S. and Heathrow, and operate monopoly service on at least nine U.S.-London and 16 U.S.-U.K. routes.

"The anticompetitive American-British Airways alliance should never be approved. Additionally, there is no benefit to consumers and the U.S. should not agree to open skies unless there is open access to Heathrow, including guarantees that Continental Airlines and others be allowed to serve Heathrow airport; that a significant number of slots at competitive times be made available and that gate space and facilities be opened to new entrants. This access by new-entrant U.S. carriers must come before any new services are added by British carriers using existing slot portfolios."