Air Transport Contract

Greg,

A few months ago I explored the idea of creating an Airline Transport
Contract for passenger travel. I discovered that the Air Transport
Association has been keeping statistics such as Revenue Passenger Miles
(RPM), Available Seat Miles (ASM) and theirs yields per industry revenues
since 1945. For instance, this Revenue yield per passenger mile index had a
range of 6.9 cents in 1945 and grew to 8.7 cents in 1979 (the last year of
regulation) and then jumped to 11.0 cents in 1980 and has slowly marched to
13.1 cents in 1998.

I thought perhaps Enron could develop a call option contract on passenger
travel tickets, which would help reduce the approximate $30 to $40 million
Enron pays each year in corporate airline travel. If Enron could
successfully develop this contract with Continental, we could roll it out to
other large corporations and airlines. After corporate acceptance, the ATC
may then become a widely traded contract.

Attached is a conceptual presentation I put together describing the idea. I
have already shown this to Dan Reck and Jean Mrha, who both recommended I
send it off to you. Let me know if you have any questions. Thank you.

Regards

John Allario
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