Ladies and Gentlemen:

United Airlines executives today revealed the magnitude of their contempt for United employees through a filing with the Securities and Exchange Commission regarding early repayment of loans while planning benefits for shareholders.  It is unacceptable that not a penny of the billions of dollars extracted from United's employees during the airline's bankruptcy has been repaid.  Yet, management sees fit to reward shareholders with new initiatives without giving a passing thought of recognizing the frontline workers who have sacrificed the most to return this airline to economic health.

Following years of exorbitant compensation packages for UAL executives the corporation has disclosed that it is presenting a proposal to lenders and expects a decision later next week on an amendment to its existing credit agreement.  As it did with the compensation schemes for its executives, United is seeking to renegotiate its agreements with its lenders.

If approved, United will pay down $350 million of the loan early and will get the flexibility to implement up to $500 million of shareholder initiatives.  Management has stated that the UAL Board of Directors would determine the timing and form of any shareholder initiative and "the amendment would also provide the company with flexibility for further shareholder initiatives by making additional term loan pre-payments".  Comments from the corporation define "shareholder initiatives" as dividends and buybacks.

It is worth noting that in the 20 months following bankruptcy, United has reduced its total net debt by $2.7 billion, including a $1.6 billion reduction of on and off balance sheet debt in the first three quarters of 2007.  The corporation is far ahead of schedule for repaying its bankruptcy debts to J.P. Morgan and Citicorp loan which is not due until February 1, 2014.  For the first nine months of 2007 alone United has generated more than $2 billion in operating cash flow. 

According to its third quarter earnings report UAL had $5 billion in cash and short-term investments on hand.  UAL's executives have made it clear that the company would use any cash in excess of $3 billion to improve its balance sheet and benefit shareholders, possibly through measures such as a stock repurchase while also considering selling lucrative assets.

We reiterate that immediate tangible improvements to compensation and quality of work life are critical for United's sustained success.  The executives have yet to understand that what's good for workers is good for the passengers, good for the shareholders and good for the airline. 

The reality is, no one does better unless everyone does better.

In Solidarity, 

Greg Davidowitch, President
United Master Executive Council