EXHIBIT 99.1


The following risk factors are incorporated by reference to pages
35-40 of the Company's prospectus dated July 25, 1997 and filed on
July 29, 1997 pursuant to Rule 424(b) under the Securities Act of
1933, as amended.

Risk Factors Relating to the Company

Leverage and Liquidity

Continental has successfully negotiated a variety of agreements to
increase its liquidity.  Nevertheless, Continental remains more
leveraged and has significantly less liquidity than certain of its
competitors, several of whom have available lines of credit and/or
significant unencumbered assets.  Accordingly, Continental may be
less able than certain of its competitors to withstand a prolonged
recession in the airline industry and may not have the flexibility
to respond to changing economic conditions or to exploit new
business opportunities.

As of March 31, 1997, Continental had approximately $1.8 billion
(including current maturities) of long-term debt and capital lease
obligations and had approximately $1.0 billion of minority
interest, Continental-obligated mandatorily redeemable preferred
securities of subsidiary trust, redeemable preferred stock and
common stockholders' equity.  Common stockholders' equity reflects
the adjustment of the Company's balance sheet and the recording of
assets and liabilities at fair market value as of April 27, 1993 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").

During the first and second quarters of 1995, in connection with
negotiations with various lenders and lessors, Continental ceased
or reduced contractually required payments under various
agreements, which produced a significant number of events of
default under debt, capital lease and operating lease agreements. 
Through agreements reached with the various lenders and lessors,
Continental cured all of these events of default.  The last such
agreement was put in place during the fourth quarter of 1995.

As of March 31, 1997, Continental had $848 million of cash and cash
equivalents, (excluding restricted cash and cash equivalents of $79
million).  Continental has significant encumbered assets.

For 1997, Continental expects to incur cash expenditures under
operating leases relating to aircraft of approximately $624
million, compared to $568 million for 1996, and approximately $232
million relating to facilities and other rentals, compared to $210
million in 1996.  In addition, Continental has capital requirements
relating to compliance with regulations that are discussed below. 
See "- Risk Factors Relating to the Airline Industry - Regulatory
Matters".

As of July 1, 1997, the Company had firm commitments with The
Boeing Company ("Boeing") to take delivery of a total of 124
principally narrowbody jet aircraft during the years 1997 through
2003 with options for an additional 90 aircraft (exercisable
subject to certain conditions).  These aircraft will replace older,
less efficient Stage 2 aircraft and allow for growth of operations. 
In addition, the Company has recently signed a letter of intent
with Boeing to purchase 35 new widebody jet aircraft.  This new
order consists of five firm Boeing 777-200 aircraft and 30 firm
Boeing 767-400ER aircraft, with options for additional 777 and 767
aircraft to be negotiated by the parties.  The new widebody
aircraft will replace Continental's fleet of DC10-10 and DC10-30
aircraft, which will be retired as the new Boeing aircraft are
delivered, and will also be used to expand the airline's
international and transcontinental service.  Ten firm delivery 777
aircraft (including five aircraft the Company already had on order,
the deliveries of which will be accelerated) will be delivered in
September 1998 through May 1999, and the thirty firm delivery 767
aircraft will be delivered starting in mid-2000 through the end of
2004.  In connection with this new order, the Company will obtain
the flexibility to substitute certain aircraft on order with Boeing
and will obtain other benefits.  The new order with Boeing is
subject to the negotiation and execution of definitive
documentation.  It provides that the Company will purchase from
Boeing the carrier's requirements for new jet aircraft (other than
regional jets) over the next twenty years, subject to certain
conditions; provided, however, Boeing has agreed with the European
Commission not to enforce such provision.  The Company requested a
business offer from Boeing which would include the requirements
commitment in order to obtain more favorable terms and flexibility.

The estimated aggregate cost of the Company's firm commitments for
the 124 Boeing aircraft previously ordered and the 35 widebody
aircraft included in the recent Boeing letter of intent is
approximately $7 billion.  The Company has completed or has third
party commitments for a total of approximately $800 million in
financing for its future narrowbody Boeing deliveries, and has
commitments or letters of intent from various sources for backstop
financing for approximately one-fourth of the anticipated
acquisition cost of its future narrowbody and widebody Boeing
deliveries.  The Company currently plans on financing the new
Boeing aircraft with enhanced equipment trust certificates or
similar financing and lease equity, subject to availability and
market conditions.  However, further financing will be needed to
satisfy the Company's capital commitments for other aircraft and
aircraft-related expenditures such as engines, spare parts,
simulators and related items.  There can be no assurance that
sufficient financing will be available for all aircraft and other
capital expenditures not covered by firm financing commitments. 
Deliveries of new Boeing aircraft are expected to increase aircraft
rental, depreciation and interest costs while generating cost
savings in the areas of maintenance, fuel and pilot training.

Continental has also entered into agreements or letters of intent
with several outside parties to lease three, and purchase two, DC-
10-30 aircraft.  The first of such aircraft was purchased on July
18, 1997, and the Company will take delivery of the remaining four
DC-10-30 aircraft in 1997.

In September 1996, Express placed an order for 25 firm EMB-145 50-
seat regional jets, with options for an additional 175 aircraft. 
In June 1997, Express exercised its option to order 25 of such
additional aircraft.  Express now has options for an additional 150
regional jets exercisable at the election of the Company over the
next 12 years.  Neither Express nor Continental will have any
obligation to take such aircraft that are not financed by a third
party and leased to the Company.  Express has taken delivery of
nine of the initial 25 firm aircraft through July 7, 1997 and will
take delivery of the remaining 16 initial firm aircraft through the
second quarter of 1998.  The Company expects to account for all of
these aircraft as operating leases.

On July 18, 1997, Continental entered into a credit agreement with
certain banks that provides for the establishment of a $575 million
credit facility (the "$575 million Credit Facility"), of which
tranches of $275 million and $75 million of principal amount will
be term loans and $225 million will be a revolving credit facility. 
On July 23, 1997, Continental borrowed the $275 million term loan,
the proceeds of which were loaned by Continental to AMI, reloaned
by AMI to CMI and used by CMI to repay its existing secured term
loan described above.  The proceeds of the $75 million term loan
will be used to finance the United Micronesia Development
Association, Inc. ("UMDA") transactions described below.  The $575
million Credit Facility is secured by substantially all of CMI's
assets (other than aircraft subject to other financing
arrangements) but does not contain any financial covenants relating
to CMI other than covenants restricting CMI's incurrence of certain
indebtedness and pledge of assets.  AMI's rights with respect to
its loan to CMI and Continental's rights with respect to its loan
to AMI (as well as Continental's stock in AMI) are pledged as
collateral for loans to Continental under the $575 million Credit
Facility.  In addition, the $575 million Credit Facility contains
certain financial covenants applicable to Continental and will
prohibit Continental from granting a security interest on certain
of its international route authorities.

In late May 1997, the Company entered into a letter of intent with
UMDA, the owner of the 9% minority interest in AMI, to purchase
UMDA's rights to receive future payments under a services agreement
between UMDA and CMI (pursuant to which CMI pays UMDA approximately
1% of the gross revenues of CMI, as defined, through January 1,
2012, which payment by CMI to UMDA totalled $6 million in 1996) and
UMDA's 9% minority interest in AMI, to terminate the Company's
obligations to UMDA under a settlement agreement entered into in
1987, and to terminate substantially all of the contractual
arrangements between the Company, AMI and CMI, on the one hand, and
UMDA on the other hand, for an aggregate consideration of $73
million in cash payable by the Company.  Consummation of the
transactions contemplated by the letter of intent is subject to the
negotiation and execution of definitive agreements and the approval
of the stockholders of UMDA.  A meeting of the stockholders of UMDA
to consider the approval of such transactions has been called for
July 10,1997.  There can be no assurance that the transactions
contemplated by the letter of intent will be consummated.

In June 1997, the Company acquired 10 aircraft previously leased by
it.  The debt financing for the acquisition of the six Boeing 737-
300 aircraft and the four McDonnell Douglas MD-82 aircraft was
funded by the private placement of $155 million of pass through
certificates.  The pass through certificates, which were issued by
separate pass through trusts which acquired equipment trust notes
issued on a recourse basis by Continental, consist of $75 million
of 7.148% Class A certificates, $26 million of 7.149% Class B
certificates, $27 million of 7.206% Class C certificates and $27
million of 7.522% Class D certificates.  The transaction is
expected to decrease aircraft ownership costs by approximately $3
million annually over the next three years, as compared to the
ownership costs the Company would have incurred had it continued to
lease the aircraft.  In addition, aircraft maintenance expense in
the second quarter of 1997 will be reduced by approximately $16
million due to the release of reserves that are no longer required
as a result of the transaction.

In April 1997 Continental entered into a $160 million revolving
credit facility with a group of banks (the "Predelivery Deposit
Revolver") to finance predelivery deposits with respect to the
acquisition of new Boeing 737 and 757 aircraft, which is secured by
the purchase agreements with respect to such aircraft, including
the Aircraft.

In February 1997, the Company began construction of a new hangar
and improvements to a cargo facility at the Company's hub at Newark
International Airport which is expected to be completed in the
fourth quarter of 1997.  The Company expects to finance these
projects, which will cost approximately $21 million, with tax-
exempt bonds by the New Jersey Economic Development Authority.  In
addition, the Company is also planning a facility expansion at
Newark which would require, among other matters, agreements to be
reached with the applicable airport authority.

In March 1997, the Company announced plans to expand its facilities
at its Hopkins International Airport hub in Cleveland.  The
expansion, which will include a new jet concourse for the new
regional jet service offered by Express, as well as other facility
improvements, is expected to cost approximately $120 million, which
the Company expects will be funded principally by the issuance of
a combination of tax-exempt special facilities revenue bonds and
general airport revenue bonds by the City of Cleveland.  In
connection therewith, the Company expects to enter into long-term
leases under which rental payments will be sufficient to service
the related bonds.

In April 1997, the Company announced plans to build a wide-body
aircraft maintenance hangar in Honolulu, Hawaii at an estimated
cost of $24 million.  Construction of the hangar, anticipated to be
completed by the second quarter of 1998, is expected to be financed
by tax-exempt special facilities revenue bonds issued by the State
of Hawaii.  In connection therewith, the Company expects to enter
into long-term leases under which rental payments will be
sufficient to service the related bonds.

In April 1997, the City of Houston (the "City") completed the
offering of $190 million aggregate principal amount of tax-exempt
special facilities revenue bonds (the "IAH Bonds") payable solely
from rentals paid by Continental under long-term lease agreements
with the City.  The IAH Bonds are unconditionally guaranteed by the
Company.  The proceeds form the IAH Bonds will be used to finance
the acquisition, construction and installation of certain terminal
and other airport facilities located at Continental's hub at George
Bush Intercontinental Airport in Houston, including a new automated
people mover system linking Terminals B and C and 20 aircraft gates
in Terminal B into which Continental intends to expand its
operations.  The expansion project is expected to be completed by
the summer of 1999.

In April 1997, Continental redeemed for cash all of the 460,247
outstanding shares of its Series A 12% Cumulative Preferred Stock
held by an affiliate of Air Canada, a Canadian corporation, for
$100 per share plus accrued dividends thereon.  The redemption
price, including accrued dividends, totaled $48 million.

In June 1997, Continental purchased from Air Partners warrants to
purchase 3,842,542 shares of Class B common stock of the Company
for $94 million in cash.

Continental's History of Operating Losses

Although Continental recorded net income of $74 million in the
first quarter of 1997, $319 million in 1996 and $224 million in
1995, it had experienced significant operating losses in the
previous eight years.  In the long term, Continental's viability
depends on its ability to sustain profitable results of operations.

Aircraft Fuel

Since fuel costs constitute a significant portion of Continental's
operating costs (approximately 13.3% for the year ended December
31, 1996 and 14.8% for the three months ended March 31, 1997),
significant changes in fuel costs would materially affect the
Company's operating results.  Jet fuel prices have increased
significantly since December 31, 1995, although such prices have
moderated recently.  Fuel prices continue to be susceptible to
international events, and the Company cannot predict near or
longer-term fuel prices.  The Company enters into petroleum option
contracts to provide some short-term protection (generally three to
six months) against a sharp increase in jet fuel prices.  In the
event of a fuel supply shortage resulting from a disruption of oil
imports or otherwise, higher fuel prices or curtailment of
scheduled service could result.

Labor Matters

The Company has recently begun collective bargaining agreement
negotiations with its Continental Airlines and Express pilots whose
contracts become amendable in July 1997 and October 1997,
respectively.  In addition, the Company's collective bargaining
agreements with its CMI mechanics and mechanic-related employees
became amendable in March 1997.  Negotiations are in progress to
amend this contract.  The Company believes that mutually acceptable
agreements can be reached with all such employees, although the
ultimate outcome of the negotiations is unknown at this time.  The
CMI agent-classification employees' collective bargaining
agreement, which became amendable in March 1997, was ratified and
approved in April 1997.  The agreement, which becomes amendable in
March 2001, provides for an 8.7% increase in wages over a four-year
period.  The CMI flight attendants' contract, which became
amendable in September 1996, was ratified and approved in April
1997 and becomes amendable in June 2000.  The CMI flight
attendants' new contract provides for a 19.6% increase in wages in
the first year of the contract and 4 to 5% increases over
subsequent years.  The Company's mechanics and related employees
recently voted to be represented by the International Brotherhood
of Teamsters.  The Company does not believe that this union
representation will be material to the Company.

Certain Tax Matters

The Company's United States federal income tax return for the year
ended December 31, 1996 is expected to reflect net operating loss
carryforwards ("NOLs") of $2.3 billion that will expire through
2009 and federal investment tax credit carry forwards of $45
million that will expire through 2001.  For financial reporting
purposes, Continental began accruing tax expense on its income
statement during the second quarter of 1996.

The Company had, as of December 31, 1996, deferred tax assets
aggregating $1.3 billion, including $804 million of NOLs.  The
Company recorded a valuation allowance of $694 million against such
assets as of December 31, 1996.  The Company has consummated
several built-in-gain transactions, which resulted in the
realization of tax benefits related to NOLs and investment tax
credit carryforwards attributable to the Company's predecessor that
were previously recorded.  To the extent the Company consummates
additional built-in-gain transactions such benefits will result in
a reduction of the valuation allowance with an offset to
reorganizational value in excess of amounts allocable to
identifiable assets and other intangibles to zero, and thereafter
as an addition to paid-in capital.

As a result of NOLs, the Company will not pay United States federal
income taxes (other than alternative minimum tax) until it has
recorded approximately an additional $1.1 billion of taxable income
following December 31, 1996.  Section 382 of the Internal Revenue
Code ("Section 382") imposes limitations on a corporation's ability
to utilize NOLs if it experiences an "ownership change."  In
general terms, an ownership change may result from transactions
increasing the ownership of certain stockholders in the stock of a
corporation by more than 50 percentage points over a three-year
period.  In the event that an ownership change should occur,
utilization of Continental's NOLs would be subject to an annual
limitation under Section 382 determined by multiplying the value of
the Company's stock at the time of the ownership change by the
applicable long-term tax-exempt rate (which is 5.64% for July
1997).  Unused annual limitation may be carried over to later
years, and the amount of the limitation may under certain
circumstances be increased by the built-in gains in assets held by
the Company at the time of the change that are recognized in the
five-year period after the change.  Under current conditions, if an
ownership change were to occur, Continental's annual NOL
utilization would be limited to approximately $117 million per
year.

Continental Micronesia

Because the majority of CMI's traffic originates in Japan, its
results of operations are substantially affected by the Japanese
economy and changes in the value of the yen as compared to the
dollar.  Appreciation of the yen against the dollar during 1994 and
1995 increased CMI's profitability while a decline of the yen
against the dollar in 1996 reduced CMI's profitability.  As a
result of the recent weakness of the yen against the dollar and
increased fuel costs, CMI's operating earnings declined during the
past three quarters as compared to similar periods a year ago, and
are not expected to improve materially absent a stronger yen or
reduced fuel costs.

To reduce the potential negative impact on CMI's dollar earnings,
CMI, from time to time, purchases average rate options as a hedge
against a portion of its expected net yen cash flow position.  Such
options historically have not had a material effect on the
Company's results of operations or financial condition.  Any
significant and sustained decrease in traffic or yields (including
due to the value of the yen) to and from Japan could materially
adversely affect Continental's consolidated profitability.

Principal Stockholder

On November 21, 1996, Air Partners, L.P., a Texas limited
partnership and major stockholder of the Company ("Air Partners"),
exercised its right to sell to the Company, and the Company
subsequently purchased, for $50 million, warrants to purchase
2,614,379 shares of Class B common stock (representing a portion of
the total warrants held by Air Partners) pursuant to an agreement
entered into earlier in 1996 with the Company.  Also on June 2,
1997, Continental purchased form Air Partners warrants to purchase
3,842,542 shares of Class B common stock of the Company for $94
million.  As of June 3, 1997, Air Partners held approximately 9.4%
of the common equity interest and 40.5% of the general voting power
of the Company.  If all the remaining warrants held by Air Partners
had been exercised on June 3,1997, approximately 14.5% of the
common equity interest and 51.7% of the general voting power of the
Company would have been held by Air Partners.  Various provisions
in the Company's Certificate of Incorporation and Bylaws currently
provide Air Partners with the right to elect one-third of the
directors in certain circumstances; these provisions could have the
effect of delaying, deferring or preventing a change in the control
of the Company.

Risks Factors Relating to the Airline Industry

Industry Conditions and Competition

The airline industry is highly competitive and susceptible to price
discounting.  The Company has in the past both responded to
discounting actions taken by other carriers and initiated
significant discounting actions itself.  Continental's competitors
include carriers with substantially greater financial resources
(and in certain cases, lower cost structures), as well as smaller
carriers with low cost structures.  Airline profit levels are
highly sensitive to, and during recent years have been severely
impacted by, changes in fuel costs, fare levels (or "average
yield") and passenger demand.  Passenger demand and yields have
been affected by, among other things, the general state of the
economy, international events and actions taken by carriers with
respect to fares.  From 1990 to 1993, these factors contributed to
the domestic airline industry's incurring unprecedented losses. 
Although fare levels have increased recently, fuel costs have also
increased significantly.  In addition, significant industry-wide
discounts could be reimplemented at any time, and the introduction
of broadly available, deeply discounted fares by a major United
States airline would likely result in lower yields for the entire
industry and could have a material adverse effect on the Company's
operating results.

The airline industry has consolidated in past years as a result of
mergers and liquidations and may further consolidate in the future. 
Among other effects, such consolidation has allowed certain of
Continental's major competitors to expand (in particular) their
international operations and increase their market strength. 
Furthermore, the emergence in recent years of several new carriers,
typically with low cost structures, has further increased the
competitive pressures on the major United States airlines.  In many
cases, the new entrants have initiated or triggered price
discounting.  Aircraft, skilled labor and gates at most airports
continue to be readily available to start-up carriers.  Competition
with new carriers or other low cost competitors on Continental's
routes could negatively impact Continental's operating results.

Regulatory Matters

In the last several years, the United States Federal Aviation
Administration ("FAA") has issued a number of maintenance
directives and other regulations relating to, among other things,
retirement of older aircraft, security measures, collision
avoidance systems, airborne windshear avoidance systems, noise
abatement, commuter aircraft safety and increased inspections and
maintenance procedures to be conducted on older aircraft.  The
Company expects to continue incurring expenses for the purpose of
complying with the FAA's noise and aging aircraft regulations.  In
addition, several airports have recently sought to increase
substantially the rates charged to airlines, and the ability to
contest such increases has been restricted by federal legislation,
DOT regulations and judicial decisions.

Management believes that the Company benefitted significantly from
the expiration of the aviation trust fund tax (the "ticket tax") on
December 31, 1995.  The ticket tax was reinstated on August 27,
1996, expired on December 31, 1996 and was reinstated again on
March 7, 1997.  Congress is currently considering proposals for
significant revisions to the ticket tax, including the imposition
of taxes on components of air travel not previously taxed.  The
ultimate outcome or effect of any such tax proposals cannot be
determined by the Company at this time.

Additional laws and regulations have been proposed from time to
time that could significantly increase the cost of airline
operations by imposing additional requirements or restrictions on
operations.  Laws and regulations have also been considered that
would prohibit or restrict the ownership and/or transfer of airline
routes or takeoff and landing slots.  Also, the availability of
international routes to United States carriers is regulated by
treaties and related agreements between the United States and
foreign governments that are amendable.  Continental cannot predict
what laws and regulations may be adopted or their impact, but there
can be no assurance that laws or regulations currently proposed or
enacted in the future will not adversely affect the Company.

Seasonal Nature of Airline Business

Due to the greater demand for air travel during the summer months,
revenue in the airline industry in the third quarter of the year is
generally significantly greater than revenue in the first quarter
of the year and moderately greater than revenue in the second and
fourth quarters of the year for the majority of air carriers. 
Continental's results of operations generally reflect this
seasonality, but have also been impacted by numerous other factors
that are not necessarily seasonal, including the extent and nature
of competition from other airlines, fare wars, excise and similar
taxes, changing levels of operations, fuel prices, foreign currency
exchange rates and general economic conditions.