Purchase Agreement - America West Holdings Corp., America West Airlines, Inc. and Continental Airlines Inc.


                               PURCHASE AGREEMENT

     This Purchase Agreement ("Agreement") is entered into as of this 27th day
of December 2000 by and among America West Holdings Corporation ("Holdings"), a
Delaware corporation, America West Airlines, Inc. ("America West"), a Delaware
corporation, and Continental Airlines, Inc. ("Continental"), a Delaware
corporation.

                                    RECITALS

     Continental owns 158,569 shares of Class A Common Stock, $.01 par value, of
Holdings (the "Shares").

     Holdings desires to purchase from Continental and Continental desires to
sell to Holdings the Shares.

     TPG Partners, L.P., TPG Parallel I, L.P. and Air Partners II, L.P.
(collectively, "TPG"), together with Continental, are parties to that certain
Priority Distribution Agreement, dated as of August 25, 1994 (the "Priority
Distribution Agreement"), a copy of which has been delivered to and reviewed by
Holdings, pursuant to which, among other matters, Continental was granted
certain rights of first refusal with respect to certain securities of Holdings
owned by TPG, as set forth in Section 3 of the Priority Distribution Agreement
(the "Right of First Refusal").

     Holdings desires to assume the rights and obligations of Continental under
the Priority Distribution Agreement, and Continental desires to assign to
Holdings its rights and delegate to Holdings its obligations under the Priority
Distribution Agreement.

     NOW, THEREFORE, the parties hereto, in consideration of the premises and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, agree as follows:

     1.   SALE AND PURCHASE.

          (a)  Acquisition. In reliance upon the representations, warranties,
     covenants and agreements contained herein and upon the terms and subject to
     the conditions hereinafter set forth, Continental hereby sells, assigns,
     transfers, conveys and delivers to Holdings, and Holdings hereby purchases,
     acquires and accepts from Continental, the Priority Distribution Agreement
     and the Shares (the "Acquisition"). As part of the Acquisition, from and
     after the date hereof, Holdings agrees to assume Continental's rights and
     perform its obligations under the Priority Distribution Agreement, and to
     hold Continental harmless from any failure to so perform such obligations.
     Holdings acknowledges that no amounts previously paid or payable to
     Continental under the Priority Distribution Agreement are being assigned to
     Holdings hereunder.
   2
     (b)  Purchasing Price. The consideration for the Acquisition is 
$10,827,532 (the "Purchase Price"), payable by Holdings to Continental as 
provided in paragraph (c) below.

     (c)  Payment of Purchase Price and Delivery of Shares. On the date hereof,
Holdings shall pay the Purchase Price to Continental in cash in United States
Dollars by wire transfer of immediately available funds to the account of
Continental previously designated by Continental to Holdings. Upon receipt by it
of confirmation that the Purchase Price has been so paid, Continental will on
the date thereof deliver to Holdings a certificate or certificates representing
the Shares, duly endorsed for transfer or accompanied by stock powers executed
in blank. The closing of the Acquisition and related transactions shall occur at
the offices of Continental at 1600 Smith Street, Houston, Texas.

2.   REPRESENTATIONS AND WARRANTIES OF AMERICA WEST AND HOLDINGS.

     Each of America West and Holdings hereby jointly and severally represents 
and warrants to Continental that:

     (a)  its execution, delivery and performance of this Agreement do not
violate applicable law, its certificate of incorporation or by-laws or any
material agreement to which it is a party;

     (b)  this Agreement has been duly authorized, executed and delivered by it
and constitutes a valid and binding obligation of it, enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting the enforcement of creditors' rights generally and legal principles of
general applicability governing the availability of equitable remedies (whether
considered in a proceeding in equity or at law or under applicable legal codes);
and

     (c)  except for applicable laws, if any, noncompliance with which could not
reasonably be expected to prevent America West or Holdings from performing their
respective obligations under this Agreement in all material respects, no filing
or registration with, no waiting period imposed by and no authorization of, any
governmental authority is required under any laws applicable to America West or
Holdings to permit America West and Holdings to execute, deliver or perform its
obligations under this Agreement or to consummate the transactions contemplated
hereby.

3.   REPRESENTATIONS AND WARRANTIES OF CONTINENTAL.

     Continental hereby represents and warrants to America West and Holdings
that:

                                       2
   3
          (a)  its execution, delivery and performance of this Agreement do not
     violate applicable law, its certificate of incorporation or by-laws or any
     material agreement to which it is a party;

          (b)  this Agreement has been duly authorized, executed and delivered
     by it and constitutes a valid and binding obligation of it, enforceable
     against it in accordance with its terms, subject to bankruptcy, insolvency,
     fraudulent conveyance, reorganization, moratorium and other similar laws
     relating to or affecting the enforcement of creditors' rights generally
     and legal principles of general applicability governing the availability of
     equitable remedies (whether considered in a proceeding in equity or at law
     or under applicable legal codes);

          (c)  except for applicable laws, if any, noncompliance with which
     could not reasonably be expected to prevent Continental from performing its
     obligations under this Agreement in all material respects, no filing or
     registration with, no waiting period imposed by and no authorization of,
     any governmental authority is required under any laws applicable to
     Continental to permit it to excuse, deliver or perform its obligations
     under this Agreement or to consummate the transactions contemplated hereby;

          (d)  Continental has not assigned, transferred, waived, impaired or
     otherwise encumbered the Priority Distribution Agreement or the Right of
     First Refusal; and

          (c)  Continental owns the Shares of record and beneficially, free and
     clear of liens, attachments, pledges, claims, restrictions, charges,
     encumbrances or security interests of any nature whatsoever ("Liens"),
     other than any Lien arising pursuant to this Agreement or under applicable
     securities laws. Continental has full power and legal right to sell,
     assign, transfer and deliver the Shares, and the delivery to Holdings of
     the Shares pursuant to the provisions of this Agreement will transfer to
     Holdings good and valid title thereto, free and clear of all Liens (other
     than restrictions on transfer pursuant to applicable securities laws).

     4.   NON-EXERCISE. In the event for any reason that the Priority
Distribution Agreement shall be determined by a court of competent jurisdiction
to be non-assignable or if for any other reason the assignment thereof by
Continental to Holdings shall be determined by any court of competent
jurisdiction to be ineffective, in each case without depriving Continental of
the Purchase Price or imposing any additional obligations upon Continental, then
from and after any such determination Continental will not exercise the Right of
First Refusal.

     5.   INDEMNIFICATION.

     (a)  To the fullest extent permitted by applicable law, subject to the
terms of Section 5(c) hereof, each of Holdings and America West, jointly and
severally, will indemnify, defend and hold harmless Continental and its
directors, officers, stockholders, partners, employees, agents, representatives,
successors, transferees and assigns, from 

                                       3




   4
and against all out-of-pocket costs and expenses (including, without limitation,
reasonable legal fees and expenses incurred in connection with AW Claims (as
defined below)), including amounts paid to third parties (which shall be deemed
to include Holdings and its affiliates and America West and its affiliates) in
respect of settlements or judgments resulting from or arising in connection with
claims made by holders, former holders, beneficial owners or former beneficial
owners of securities of Holdings or America West (other than Continental) in
their capacity as holders of such securities, or by, on behalf of or in the name
of Holdings or America West (each, a "AW Claim", and collectively, "AW Claims")
based upon or in connection with this Agreement or the transactions contemplated
hereby, provided, however, that Holdings and America West still have no
obligation hereunder to indemnify Continental or any other Indemnified Party (as
defined below) to the extent, but only to the extent, the AW Claim relates to a
breach by Continental of this Agreement or any other agreement to which
Continental is a party.

     (b) To the fullest extent permitted by applicable law, subject to the terms
of Section 5(c) hereof, Continental will indemnify, defend and hold harmless
Holdings and America West and their respective directors, officers,
stockholders, partners, employees, agents, representatives, successors,
transferees and assigns, from and against all out-of-pocket costs and expenses
(including, without limitation, reasonable legal fees and expenses incurred in
connection with Continental Claims (as defined below)), including amounts paid
to third parties (which shall be deemed to include Continental and its
affiliates) in respect of settlements or judgments resulting from or arising in
connection with claims made by holders, former holders, beneficial owners or
former beneficial owners of securities of Continental (other than Holdings and
America West) in their capacity as holders of such securities, or by, on behalf
of or in the name of Continental (each, a "Continental Claim", and collectively,
"Continental Claims") based upon or in connection with this Agreement or the
transactions contemplated hereby; provided, however, that Continental shall have
no obligation hereunder to indemnify Holdings, America West or any other
Indemnified Party (as defined below) to the extent, but only to the extent, the
Continental Claim relates to a breach by Holdings or America West of this
Agreement or any other agreement to which Holdings or America West is a party.

     (c) For purposes of this Section 5, the term "Indemnifying Party" when used
in connection with a particular AW Claim means Holdings and America West and
when used in connection with a particular Continental Claim means Continental,
which are the persons having an obligation to indemnify with respect to such
Claim pursuant to this Section 5, and the term "Indemnified Party" when used in
connection with a particular Claim means the person (whether one or more) having
the right to be indemnified with respect to such Claim pursuant to this Section
5. As used herein, a "Claim" shall mean an AW Claim or a Continental Claim, as
the case may be. The following procedures will apply to the indemnification
obligations set forth in this Agreement:

     (i) Promptly after receipt of written notice of a Claim involving a third
  party, the Indemnified Party against whom such Claim is asserted will give
  the



                                       4


   5
Indemnifying Party written notice of any such Claim; provided, however, that any
failure or delay in providing such notice to the Indemnifying Party will not
relieve the Indemnifying Party of any obligations under this Section 5 except to
the extent and only to the extent the Indemnifying Party was actually and
materially prejudiced by such delay or failure. The Indemnifying Party will
promptly designate counsel chosen by it and reasonably acceptable to the
Indemnified Party to represent the Indemnified Party in connection with such
Claim and the Indemnifying Party will pay all costs of investigation, litigation
or arbitration incurred in connection with such Claim including, without
limitation, fees and expenses of such counsel. The Indemnifying Party will have
the right to undertake the defense, compromise or settlement of such Claim
(subject to paragraph (ii) below), and the Indemnifying Party will not be liable
for the fees or expenses of separate counsel for the Indemnified Party, unless
the employment of such counsel shall have been authorized in writing by the
Indemnifying Party in connection with the defense of such action or the
Indemnifying Party shall not have employed counsel reasonably satisfactory to
the Indemnified Party to have charge of the defense of such action or, based
upon the written advice of counsel, the Indemnified Party shall have reasonably
concluded that there may be defenses available to it that are different from
those available to the Indemnifying Party or that a material conflict of
interest or material potential conflict of interest exists (in which case the
Indemnifying Party shall not have the right to direct the defense of such action
on behalf of the Indemnified Party), in any of which cases the reasonable fees
and expenses of counsel for the Indemnified Party shall be borne by the
Indemnifying Party and paid as incurred (it being understood, however, that the
Indemnifying Party shall not be liable for the expenses of more than one
separate counsel (other than local counsel) in any one action or series of
related actions in the same jurisdiction representing the Indemnified Parties
who are parties to such action). The Indemnified Party will use its reasonable
efforts to cooperate fully with respect to the defense of any Claim. If after
the passage of a reasonable period of time after notice of any Claim, the
Indemnifying Party has not initiated a defense against such Claim, the
Indemnified Party will have the right, upon written notice to the Indemnifying
Party, to undertake the defense, compromise or settlement of such Claim at any
time prior to settlement, compromise or final determination thereof and any
action so taken by the Indemnified Party with regard to such defense, compromise
or settlement will be deemed to be within the protection afforded by this
Agreement unless a court of competent jurisdiction makes a final determination
that the Indemnified Party is not entitled to indemnification hereunder with
respect to such Claim; provided, however, that any settlement of any such Claim
shall require the prior written consent of the Indemnifying Party, which consent
shall not be unreasonably withheld or delayed.

     (ii) Anything in this Section 5(c) to the contrary notwithstanding, the
Indemnifying Party will not settle or compromise any Claim or consent to the
entry of any judgment that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to the Indemnified Party a full, irrevocable
and unconditional release from all liability in respect of such Claim; provided
that if


                                       5


   6
     the terms of such settlement, compromise or judgment adversely affects any
     of the rights granted to such Indemnified Party herein, the Indemnifying
     Party will not settle or compromise such Claim or consent to the entry of
     judgment without the written consent of the Indemnified Party, which
     consent shall not be unreasonably withheld or delayed. In the event that
     there is more than one Indemnified Party with respect to any Claim, any
     notice contemplated by this Section 5(c) to be given to the Indemnified
     Party will be deemed to be given for purposes hereof if it is given to the
     respective parties hereto. No Indemnifying Party shall be liable for any
     settlement of any Claim effected without its written consent (which consent
     shall not be unreasonably withheld), but if settled with its written
     consent, the Indemnifying Party agrees to indemnify and hold harmless any
     Indemnified Party from and against any loss or liability by reason of such
     settlement.

     6.  MISCELLANEOUS.

         (a) Governing Law. This Agreement shall be governed by, and interpreted
in accordance with, the laws of the State of Delaware (regardless of the laws
that might otherwise govern under applicable principles of conflicts of law).

         (b) Jurisdiction. Any judicial proceeding brought against any of the
parties hereto with respect to this Agreement shall be brought in the United
States District Court for the District of Delaware irrespective of where such
party may be located at the time of such proceeding, and by execution and
delivery of this Agreement, each of the parties hereto hereby consents to the
exclusive jurisdiction of such court and waives any defense or opposition to
such jurisdiction.

         (c) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to constitute an original, but all
of which together shall constitute one and the same document.

         (d) Assignment; No Third-Party Beneficiaries; Amendment. Neither this
Agreement, nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties hereto. This Agreement is
binding upon and for the sole benefit of the parties hereto and their respective
successors and assigns and nothing herein, express or implied, is intended to or
shall confer upon any other person any legal or equitable right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.

         (e) Waiver. Failure by any party to take action against another in case
of the other's noncompliance with obligations or conditions set forth in this
Agreement shall not be interpreted as a waiver for a subsequent noncompliance of
the same or other obligations or conditions. No waiver shall be deemed to have
been made by any party of any of its rights under this Agreement unless the same
is in writing and is signed on its


                                       6
   7
behalf by its authorized representative. Any such waiver shall constitute a
waiver only with respect to the specific matter described in such writing and
shall in no way impair the rights of the party granting such waiver in any other
respect or at any other time.

         (f) INTERPRETATION. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". Any reference to "herein" or
"hereof" or similar terms shall refer to the agreement as a whole rather than to
the individual paragraph or section.

         (g) SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as it is enforceable.

         (h) SPECIFIC PERFORMANCE. The parties hereby acknowledge and agree that
the failure of any party to this Agreement timely to perform its agreements and
covenants hereunder will cause substantial and irreparable injury to the other
parties to this Agreement for which damages, even if available, will not be an
adequate remedy. Accordingly, each of the parties hereto hereby consents to the
granting of equitable relief (including specific performance and injunctive
relief) by any court having jurisdiction over the matter to enforce any party's
obligations hereunder. The parties further agree to waive any requirement for
the securing or posting of any bond in connection with the obtaining of any such
equitable relief, and that this Section 6(h) is without prejudice to any other
rights that the parties hereto may have for any failure to perform this
Agreement. The parties further agree not to assert in any proceeding that
grounds for any equitable relief are not satisfied. The parties acknowledge that
because the obligations imposed on them in this Agreement are special, unique
and of an extraordinary character, the making available of equitable remedies
(including specific performance and injunctive relief) in this Agreement was a
condition to each party's entering into this Agreement.

         (i) NOTICES. Notices, requests and other communications hereunder
to a party shall be in writing and shall be deemed given (x) upon delivery if
personally delivered or (y) three Business Days after being mailed by registered
or certified mail (return receipt requested) or (z) one Business Day after being
delivered by overnight courier or by facsimile (with confirmation) to such party
at its address or facsimile set forth below or such other address or facsimile
as such party may specify by notice to the parties hereto.



                                       7


   8
          If to Continental:

          Continental Airlines Inc.
          1600 Smith Street
          Dept. HQSEO
          Houston, Texas 77002
          Attention:  General Counsel and Chief Financial Officer

          Telephone:  (713) 324-2948
          Facsimile:  (713) 324-2687

          If to Holdings or America West:

          America West Holdings Corporation
          111 West Rio Salado Parkway
          Tempe, Arizona 85281
          Attention: General Counsel
          Telephone:  (480) 693-5785
          Telecopier: (480) 693-5702   

As used herein, a "Business Day" means each Monday, Tuesday, Wednesday, 
Thursday and Friday unless such day shall be a day when financial institutions 
in Houston or Phoenix are authorized by applicable law to close.

     (j)  Entire Agreement. This Agreement constitutes the entire agreement of 
the parties, and supersedes all prior agreements and undertakings, both written 
and oral, among the parties, with respect to the subject matter hereof.

     (k)  Further Assurances. Each of the parties to this Agreement will 
cooperate and use its reasonable efforts to take or cause to be taken all 
reasonable actions, to cooperate reasonably with the other parties hereto with 
respect to such actions, and to do or cause to be done all things reasonably 
necessary or advisable to consummate and make effective the transactions 
contemplated by this Agreement.


                                    *******



                                       8

   9
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.

          CONTINENTAL AIRLINES, INC.

          By: /s/ Jeffery A. Smisek
             -------------------------------
             Name: Jeffery A. Smisek
             Title: Executive Vice President

          AMERICA WEST HOLDINGS CORPORATION

          By: /s/ Stephen L. Johnson
             -------------------------------
             Name: Stephen L. Johnson
             Title: Senior Vice President

          AMERICA WEST AIRLINES, INC.

          By: /s/ Stephen L. Johnson
             -------------------------------
             Name: Stephen L. Johnson
             Title: Senior Vice President


                                        9
 
   10
                                    CONSENT

     Each of TPG Partners, L.P., a Delaware limited partnership ("TPG
Partners"), TPG Parallel I, L.P., a Delaware limited partnership ("Parallel"),
and Air Partners II, L.P., a Texas limited partnership ("APII", and collectively
with TPG Partners and Parallel, "TPG") hereby irrevocably consents to the sale
and assignment by Continental Airlines, Inc. to America West Holdings
Corporation of the Priority Distribution Agreement, and the assumption by
America West Holdings Corporation of Continental's rights and obligations
thereunder, all as contemplated by that certain Purchase Agreement dated as of
December 27, 2000 among Continental Airlines, Inc., America West Holdings
Corporation and America West Airlines, Inc., a copy of which Purchase Agreement
has been provided to and reviewed by TPG.

     Executed as of December 27, 2000.

     TPG PARTNERS, L.P.

     By: TPG Genpar, L.P.

          By: TPG Advisors, Inc.

               By /s/ Richard P. Schifter
                  -----------------------
               Name:
               Title:


     TPG PARALLEL I, L.P.

     By: TPG Genpar, L.P.

          By: TPG Advisors, Inc.

               By /s/ Richard P. Schifter
                  -----------------------
               Name:
               Title:


     AIR PARTNERS, II, L.P.

     By: TPG Genpar, L.P.

          By: TPG Advisors, Inc.

               By /s/ Richard P. Schifter
                  -----------------------
               Name:
               Title:



   11
                 [AMERICA WEST HOLDINGS CORPORATION LETTERHEAD]

                               December 27, 2000

TPG Partners, L.P.
TPG Parallel I, L.P.
Air Partners II, L.P.
301 Commerce Street, Suite 3300
Fort Worth, Texas 76102
Attention: James J. O'Brien

RE: PRIORITY DISTRIBUTION AGREEMENT

Gentlemen:

     America West Holdings Corporation ("Holdings"), America West Airlines, Inc.
and Continental Airlines, Inc. ("Continental") are today entering into a
Purchase Agreement pursuant to which, among other things, Continental is
assigning to Holdings, and Holdings is assuming, the rights and obligations of
Continental under the Priority Distribution Agreement (the "Priority
Distribution Agreement") dated as of August 25, 1994 between the Addressees
(each a "TPG Entity") and Continental. The TPG Entities have consented to that
assignment and assumption. In connection with such assignment and assumption,
and in consideration for the TPG Entities' consent, this letter will confirm the
acknowledgement and agreement of Holdings that:

     1. No payments currently are due to Holdings, and at no time in the future
        will any payments become due to Holdings, under Section 2 of the
        Priority Distribution Agreement.

     2. Holdings will not exercise the rights of first refusal arising under
        Section 3 of the Priority Distribution Agreement (the "Rights of First
        Refusal") in respect of any sale, transfer or other disposition of
        shares of Class A Common Stock, par value $.01 per share, of Holdings by
        any TPG Entity (or any affiliate of any TPG Entity) but, subject to the
        termination provision in Clause 3 below, Holdings shall be entitled to
        exercise the Rights of First Refusal in respect of a sale, transfer or
        other disposition of any of those shares by any other person.

     3. The Priority Distribution Agreement and the Rights of First Refusal
        shall be terminated and no longer be of any force and effect if William
        A. Franke ceases to be Chairman of the Board of Directors of Holdings.
   12
TPG Partners, L.P.
December 27, 2000
Page 2

     Subject to these clarifications and modifications, the Priority
Distribution Agreement, as assigned by Continental and assumed by Holdings,
remains in full force and effect between the TPG Entities and Holdings.

     To confirm your acknowledgement and agreement to the foregoing, please sign
a counterpart of this letter where indicated below and return to the
undersigned.


                                   Very truly yours,

                                   AMERICA WEST HOLDINGS CORPORATION



                                   By: /s/ Stephen L. Johnson
                                       ----------------------
                                   Name:   Stephen L. Johnson
                                   Title:  Senior Vice President
                                                                


ACKNOWLEDGED AND AGREED:

     TGP PARTNERS, L.P.

     By: TPG Genpar, L.P.

          By: TPG Advisors, Inc.

               By: /s/ Richard P. Schifter
                   -----------------------
                   Name:
                   Title:

   13
TPG Partners, L.P.
December 27, 2000
Page 3


          TPG PARALLEL I, L.P.
          
          By: TPG Genpar, L.P.
     
               By: TPG Advisors, Inc.

                    By: /s/ Richard P. Schifter
                        -----------------------
                    Name:
                    Title:


          AIR PARTNERS II, L.P.

          By: TPG Genpar, L.P.

               By: TPG Advisors, Inc.

                    By: /s/ Richard P. Schifter
                        -----------------------
                    Name:
                    Title: