Continental Airlines Sells ExpressJet Shares

Continental Airlines Inc., the fourth-largest U.S. airline, has sold almost its entire stake of 4.65 million shares in commuter carrier ExpressJet Holdings Inc.

Continental had been the third-largest holder of Houston- based ExpressJet, with an 8.6 percent stake, according to data compiled by Bloomberg. The airline now holds 625 shares of ExpressJet, Continental said in a regulatory filing today.

The sale completes Continental's planned disposal of ExpressJet shares after an initial offering in 2002. Continental once held a 53 percent ExpressJet stake and said it never intended to be a long-term holder. Continental said the sale proceeds will go toward its pension plans.

ExpressJet does about three-fourths of its flying for Houston-based Continental. Analysts including Merrill Lynch & Co.'s Michael Linenberg have said ExpressJet will lose money on its plan to fly 44 regional jets under its own name starting in April. The airline chose last year to keep 69 regional jets Continental is removing from its fleet.

Fidelity Management is ExpressJet's largest holder with 10 percent of its 54.2 million shares outstanding, according to data compiled by Bloomberg. Continental's employee retirement plan is the second-largest, with slightly less than 10 percent.

Calls to both ExpressJet and Continental weren't immediately returned.

Shares of ExpressJet rose 9 cents to $7.72 at 12:28 p.m. in New York Stock exchange composite trading. The stock has gained 10 percent in the past 12 months.

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