FWP
 

Issuer Free Writing Prospectus
Filed pursuant to Rule 433(d)
Registration No. 333-133187
March 27, 2007
Continental Airlines, Inc. (“Continental”)
(NYSE Symbol: CAL)
Continental is increasing the size of the 2007-1 EETC transaction in order to finance more aircraft. This free writing prospectus sets forth the corresponding material changes to Continental’s Preliminary Prospectus Supplement dated March 27, 2007 (the “Supplement”), relating to the Certificates referred to below, and should be read together with the Supplement and the accompanying Prospectus dated April 10, 2006. The information herein supersedes any inconsistent information set forth in the Supplement.
Aircraft to be Financed:   30 total Aircraft, consisting of 12 Boeing 737-824 and 18 Boeing 737-924ER aircraft, to be selected by Continental from the 39 aircraft described in the Supplement.
             
Aggregate Appraised Aircraft Value (1):   $1,568,874,300     
 
            
Aggregate Face Amount:   $1,146,810,000     
 
            
Initial Amount of Deposits:   $1,146,810,000     
 
            
Securities:
  Class A Pass Through Certificates, Series 2007-1 (“Class A Certificates”)   Class B Pass Through Certificates, Series 2007-1 (“Class B Certificates”)   Class C Pass Through Certificates, Series 2007-1 (“Class C Certificates” and, together with the Class A Certificates and the Class B Certificates, the “Certificates”)
 
            
Face Amount:
  $756,762,000    $221,850,000    $168,198,000 
 
            
Initial LTV
(cumulative) (1):
  48.2%    62.4%    73.1% 
 
            
Highest LTV
(cumulative) (2):
  48.9%    63.3%    73.9% 
 
(1)   Determined as of April 19, 2009, the first Regular Distribution Date after all aircraft expected to be financed pursuant to the offering are scheduled to have been delivered.
 
(2)   See “Loan to Value Ratios” below.

 

 

2

Equipment Notes and the Aircraft
     The 30 Boeing aircraft to be financed pursuant to this offering will consist of 12 Boeing 737-824 aircraft and 18 Boeing 737-924ER aircraft. Such Boeing 737-824 and 737-924ER aircraft will be selected by Continental from among 15 Boeing 737-824 aircraft and 24 Boeing 737-924ER aircraft, respectively, which are scheduled for delivery from January 2008 to March 2009. See “Description of the Aircraft and the Appraisals—The Appraisals” in the Supplement for a description of the 39 aircraft from which Continental may select the 30 aircraft that may be financed with the proceeds of this offering. Set forth below is certain information about the Equipment Notes expected to be held in the Trusts and the aircraft expected to secure such Equipment Notes (assuming for purposes of the chart below that the first 12 Boeing 737-824 aircraft of the 15 Boeing 737-824 aircraft and the first 18 Boeing 737-924ER aircraft of the 24 Boeing 737-924ER aircraft from which Continental may choose are financed hereunder):
                             
        Expected            
    Expected   Manufacturer’s            
    Registration   Serial   Scheduled Delivery   Principal Amount of   Appraised Base
Aircraft Type   Number   Number   Month   Equipment Notes   Value (1)
 
Boeing 737-824
   N87507   31637   January 2008   $ 35,296,000     $ 48,900,000  
Boeing 737-824
   N76508   31638   February 2008     35,296,000       49,000,000  
Boeing 737-824
   N78509   31639   February 2008     35,296,000       49,000,000  
Boeing 737-824
   N77510   32828   April 2008     35,296,000       49,200,000  
Boeing 737-824
   N78511   33458   May 2008     35,296,000       49,300,000  
Boeing 737-824
   N87512   33459   May 2008     35,296,000       49,300,000  
Boeing 737-824
   N87513   31621   June 2008     35,296,000       49,400,000  
Boeing 737-824
   N76514   31626   July 2008     35,296,000       49,500,000  
Boeing 737-824
   N76515   37096   August 2008     35,296,000       49,600,000  
Boeing 737-824
   N76516   31623   August 2008     35,296,000       49,600,000  
Boeing 737-824
   N76517   31628   September 2008     35,296,000       49,700,000  
Boeing 737-824
   N77518   31605   November 2008     35,296,000       49,900,000  
 
                            
Boeing 737-924ER
   N37413   31664   January 2008     40,181,000       55,810,000  
Boeing 737-924ER
   N47414   32827   January 2008     40,181,000       55,810,000  
Boeing 737-924ER
   N39415   32826   February 2008     40,181,000       55,909,000  
Boeing 737-924ER
   N39416   37093   February 2008     40,181,000       55,909,000  
Boeing 737-924ER
   N38417   31665   March 2008     40,181,000       56,000,000  
Boeing 737-924ER
   N39418   31666   March 2008     40,181,000       56,000,000  
Boeing 737-924ER
   N37419   33456   March 2008     40,181,000       56,000,000  
Boeing 737-924ER
   N37420   33457   April 2008     40,181,000       56,092,000  
Boeing 737-924ER
   N27421   37094   April 2008     40,181,000       56,092,000  
Boeing 737-924ER
   N37422   31620   May 2008     40,181,000       56,184,000  
Boeing 737-924ER
   N39423   32829   June 2008     40,181,000       56,273,000  
Boeing 737-924ER
   N38424   33460   June 2008     40,181,000       56,273,000  
Boeing 737-924ER
   N75425   37095   June 2008     40,181,000       56,273,000  
Boeing 737-924ER
   N75426   31622   July 2008     40,181,000       56,365,000  
Boeing 737-924ER
   N37427   37097   September 2008     40,181,000       56,550,000  
Boeing 737-924ER
   N75428   30130   October 2008     40,181,000       56,642,000  
Boeing 737-924ER
   N75429   31633   December 2008     40,181,000       56,825,000  
Boeing 737-924ER
   N77430   37098   December 2008     40,181,000       56,825,000  
 
(1)   The appraised base value of each Aircraft set forth above is the lesser of the average and median values of such Aircraft as appraised by three independent appraisal and consulting firms, projected as of the scheduled delivery month of each Aircraft. These appraisals are based upon varying assumptions and methodologies. An appraisal is only an estimate of value and should not be relied upon as a measure of realizable value. See “Risk Factors—Risk Factors Relating to the Certificates and the Offering—The Appraisals Are Only Estimates of Aircraft Value” in the Supplement. The appraised value of each of the other Boeing 737-824 and 737-924ER aircraft that Continental may choose to finance pursuant to this offering is equal to or higher than the appraised value of each of the Aircraft of the same model listed above. See “Description of the Aircraft and the Appraisals—The Appraisals” in the Supplement.

 

 3
Loan to Aircraft Value Ratios
     The following table sets forth loan to Aircraft value ratios (“LTVs”) for each Class of Certificates as of April 19, 2009 (the first Regular Distribution Date that occurs after all Aircraft assumed to be financed in this Offering are scheduled to have been delivered) and each Regular Distribution Date thereafter. The LTVs for any Class of Certificates for the period prior to April 19, 2009 are not meaningful, since during such period all of the Equipment Notes expected to be acquired by the Trusts and the related Aircraft will not be included in the calculation. The table should not be considered a forecast or prediction of expected or likely LTVs but simply a mathematical calculation based on one set of assumptions. See “Risk Factors—Risk Factors Relating to the Certificates and the Offering—Appraisals and Realizable Value of Aircraft” in the Supplement.
                                             
    Assumed        
    Aggregate   Outstanding Balance (2)   LTV(3)
Regular   Aircraft   Class A     Class B     Class C   Class A   Class B   Class C
Distribution Date   Value(1)   Certificates   Certificates   Certificates   Certificates   Certificates   Certificates
April 19, 2009
   $ 1,568,874,300     $ 756,762,000     $ 221,850,000     $ 168,198,000     48.2%   62.4%   73.1%
October 19, 2009
     1,551,289,440       756,762,000       221,850,000       168,198,000     48.8   63.1   73.9
April 19, 2010
     1,520,747,340       743,360,009       219,920,115       148,867,500     48.9   63.3   73.1
October 19, 2010
     1,503,162,480       729,988,736       217,919,896       129,737,849     48.6   63.1   71.7
April 19, 2011
     1,472,620,380       716,666,409       215,870,732       110,793,416     48.7   63.3   70.8
October 19, 2011
     1,455,035,520       703,393,027       213,772,623       92,010,996     48.3   63.0   69.4
April 19, 2012
     1,424,493,420       690,168,590       211,625,569       73,372,415     48.5   63.3   68.5
October 19, 2012
     1,406,908,560       676,993,099       209,429,569       54,863,067     48.1   63.0   66.9
April 19, 2013
     1,376,366,460       663,866,552       207,184,625       36,470,967     48.2   63.3   65.9
October 19, 2013
     1,358,781,600       650,788,951       204,890,735       18,186,105     47.9   63.0   64.3
April 19, 2014
     1,328,239,500       637,760,295       202,547,899       0     48.0   63.3   N/A
October 19, 2014
     1,310,654,640       624,780,585       200,156,119       0     47.7   62.9   N/A
April 19, 2015
     1,280,112,540       611,849,820       197,715,393       0     47.8   63.2   N/A
October 19, 2015
     1,262,527,680       598,131,283       162,055,583       0     47.4   60.2   N/A
April 19, 2016
     1,231,985,580       584,494,081       133,176,207       0     47.4   58.3   N/A
October 19, 2016
     1,214,400,720       570,938,213       109,511,844       0     47.0   56.0   N/A
April 19, 2017
     1,183,858,620       557,463,679       89,915,632       0     47.1   54.7   N/A
October 19, 2017
     1,166,273,760       544,070,480       73,533,539       0     46.7   53.0   N/A
April 19, 2018
     1,135,731,660       530,758,614       59,720,179       0     46.7   52.0   N/A
October 19, 2018
     1,118,146,800       517,528,083       47,981,302       0     46.3   50.6   N/A
April 19, 2019
     1,087,604,700       504,378,887       37,933,787       0     46.4   49.9   N/A
October 19, 2019
     1,070,019,840       489,783,518       29,277,349       0     45.8   48.5   N/A
April 19, 2020
     1,039,477,740       459,459,463       21,774,225       0     44.2   46.3   N/A
October 19, 2020
     1,021,892,880       392,590,109       15,234,387       0     38.4   39.9   N/A
April 19, 2021
     991,350,780       271,590,366       9,504,638       0     27.4   28.4   N/A
October 19, 2021
     973,765,920       113,669,889       4,460,485       0     11.7   12.1   N/A
April 19, 2022
     943,223,820       0       0       0     N/A   N/A   N/A
 
(1)   We have assumed that the initial appraised value of each Aircraft, determined as described under “—Equipment Notes and the Aircraft” above, declines by approximately 3% per year after the delivery of such Aircraft. Other rates or methods of depreciation may result in materially different LTVs. We cannot assure you that the depreciation rate and method used for purposes of the table will occur or predict the actual future value of any Aircraft. See “Risk Factors—Risk Factors Relating to the Certificates and the Offering—The Appraisals Are Only Estimates of Aircraft Value” in the Supplement.
 
(2)   In calculating the outstanding balances of each Class of Certificates, we have assumed that the Trusts will acquire the Equipment Notes for all Aircraft. Outstanding balances as of each Distribution Date are shown after giving effect to distributions expected to be made on such distribution date.
 
(3)   The LTVs for each Class of Certificates were obtained for each Regular Distribution Date by dividing (i) the expected outstanding balance of such Class together with the expected outstanding balance of each other Class senior in right of payment to such Class after giving effect to the distributions expected to be made on such date, by (ii) the assumed value of all of the Aircraft on such date based on the assumptions described above. For the purposes of these calculations it has been assumed that the first 12 Boeing 737-824 aircraft of the 15 Boeing 737-824 aircraft and the first 18 Boeing 737-924ER aircraft of the 24 Boeing 737-924ER aircraft from which Continental may choose are financed hereunder. The outstanding balances and LTVs of each Class of Certificates will change if the Trusts do not acquire Equipment Notes with respect to all the Aircraft. The LTVs will change if the Trusts acquire Equipment Notes with respect to the other aircraft from which Continental may choose.

 

 

 4
Assumed Amortization Schedule and resulting Pool Factors:
     The following table sets forth the expected aggregate principal amortization schedule for the Equipment Notes held in each Trust (the “Assumed Amortization Schedule”) and resulting Pool Factors with respect to such Trust. The scheduled distribution of principal payments for any Trust would be affected if Equipment Notes with respect to any Aircraft are not acquired by such Trust, if any Equipment Notes held in such Trust are redeemed or purchased or if a default in payment on such Equipment Notes occurs. Accordingly, the aggregate principal amortization schedule applicable to a Trust and the resulting Pool Factors may differ from those set forth in the following table.
                                     
    Class A   Class B   Class C
    Scheduled Principal   Expected   Scheduled Principal   Expected   Scheduled Principal   Expected
Date   Payments   Pool Factor   Payments   Pool Factor   Payments   Pool Factor
Issuance Date
   $ 0.00     1.0000000   $ 0.00     1.0000000   $ 0.00     1.0000000
October 19, 2007
     0.00     1.0000000     0.00     1.0000000     0.00     1.0000000
April 19, 2008
     0.00     1.0000000     0.00     1.0000000     0.00     1.0000000
October 19, 2008
     0.00     1.0000000     0.00     1.0000000     0.00     1.0000000
April 19, 2009
     0.00     1.0000000     0.00     1.0000000     0.00     1.0000000
October 19, 2009
     0.00     1.0000000     0.00     1.0000000     0.00     1.0000000
April 19, 2010
     13,401,991.20     0.9822903     1,929,885.06     0.9913009     19,330,499.86     0.8850730
October 19, 2010
     13,371,272.52     0.9646213     2,000,218.62     0.9822849     19,129,651.62     0.7713400
April 19, 2011
     13,322,327.28     0.9470169     2,049,163.86     0.9730482     18,944,432.59     0.6587083
October 19, 2011
     13,273,382.04     0.9294772     2,098,109.10     0.9635908     18,782,420.28     0.5470398
April 19, 2012
     13,224,436.68     0.9120022     2,147,054.34     0.9539129     18,638,581.14     0.4362264
October 19, 2012
     13,175,491.56     0.8945918     2,195,999.58     0.9440143     18,509,347.26     0.3261814
April 19, 2013
     13,126,546.32     0.8772462     2,244,944.82     0.9338951     18,392,100.35     0.2168335
October 19, 2013
     13,077,601.08     0.8599652     2,293,890.06     0.9235553     18,284,862.24     0.1081232
April 19, 2014
     13,028,655.84     0.8427488     2,342,835.30     0.9129948     18,186,104.66     0.0000000
October 19, 2014
     12,979,710.60     0.8255972     2,391,780.54     0.9022137     0.00     0.0000000
April 19, 2015
     12,930,765.36     0.8085102     2,440,725.78     0.8912120     0.00     0.0000000
October 19, 2015
     13,718,536.50     0.7903823     35,659,809.66     0.7304737     0.00     0.0000000
April 19, 2016
     13,637,202.24     0.7723618     28,879,376.22     0.6002984     0.00     0.0000000
October 19, 2016
     13,555,867.98     0.7544488     23,664,362.88     0.4936301     0.00     0.0000000
April 19, 2017
     13,474,533.72     0.7366433     19,596,212.16     0.4052992     0.00     0.0000000
October 19, 2017
     13,393,199.46     0.7189453     16,382,093.22     0.3314561     0.00     0.0000000
April 19, 2018
     13,311,865.20     0.7013547     13,813,360.26     0.2691917     0.00     0.0000000
October 19, 2018
     13,230,530.94     0.6838717     11,738,876.94     0.2162781     0.00     0.0000000
April 19, 2019
     13,149,196.68     0.6664961     10,047,514.62     0.1709884     0.00     0.0000000
October 19, 2019
     14,595,369.06     0.6472094     8,656,437.54     0.1319691     0.00     0.0000000
April 19, 2020
     30,324,055.14     0.6071387     7,503,123.96     0.0981484     0.00     0.0000000
October 19, 2020
     66,869,353.62     0.5187762     6,539,838.78     0.0686698     0.00     0.0000000
April 19, 2021
     120,999,742.86     0.3588848     5,729,748.84     0.0428426     0.00     0.0000000
October 19, 2021
     157,920,477.48     0.1502056     5,044,153.02     0.0201059     0.00     0.0000000
April 19, 2022
     113,669,888.64     0.0000000     4,460,484.84     0.0000000     0.00     0.0000000
Additional Information
     The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling Morgan Stanley toll-free 1-866-718-1649 (institutional investors)