On Feb. 24, 2005, Standard&Poor's Ratings Services placed its ratings on equipment trust certificates and enhanced equipment trust certificates of Continental Airlines Inc. (B/Negative/--) as part of a broader airline industry review of aircraft-backed debt. The CreditWatch review is prompted by Standard&Poor's concern that a prolonged difficult airline industry environment, characterized by high fuel prices, excess capacity, and intense price competition in the domestic market, has weakened the financial condition of almost all U.S. airlines and increased the risk of widespread simultaneous bankruptcies. In such a scenario, which could be triggered by renewed terrorism, a further spike upward in fuel prices, or a need by airlines to shed costly pension liabilities, holders of aircraft-backed debt could
