[Butch Cassidy Slept Here]

The DOT, in fining (or settling) with Continental appears to have applied the concept of "agency law." That is, the act of the agent---Express Jet in this instance---is the act of the principal---Continental Air. As the DOT noted, Continental marketed this flight. Continental also allowed its code ("CO") to be used to identify this flight. Thus the DOT was also saying to Continental---'We are holding you responsible for the acts of your contractors.' As an analogy, a similiar principle applies when one hires an accountant to do their Federal income tax. If the accountant makes a mistake, and the IRS imposes penalties and/or interest, YOU are, ultimately, responsible for paying-up. However, in both instances, the "principal" might have the ability to sue the "agent" to recover any losses.

Perhaps the airline people on here might know the answer to this question: Can we expect Express Jet to operate some flights, for free, as compensation to Continental??