Let me start this week’s message with an update on the union coalition. In the today’s edition of NewsReal, the company issued the following comments:

“United Airlines applauds the ongoing commitment of the unions to the coalition process and believes that substantial progress continues to be made with them on agreeing to a framework for updating our business plan with the Air Transportation Stabilization Board.  Agreement on the framework being discussed by the coalition and United will greatly enhance the ability to conduct bilateral negotiations on a fast-track basis with the individual labor groups.

“The International Association of Machinists has said that it will continue to coordinate with the other labor groups at United. It also will pursue its specific discussions with United, which is important since the meaningful participation by all the unions is critical to success in this process. Now is truly the moment for all of us who are committed to United to step forward and work swiftly toward a positive resolution of the issues in front of us.”

With that said, I ask for your continued patience. As we continue to work with the union leaders, we are also working with the ATSB review board. Despite all of the distractions, we must stay focused on safety and operating a reliable airline that keeps our customers coming back to United.

We continue to run a great airline. The Department of Transportation ratings are out for August. Although we didn’t make the number one position among the major carriers, as we did in July, we exceeded last year’s August performance in all of the DOT’s measurements. This is great news for our company and our customers. Once again, thank you for all of your efforts in keeping United a leader in the industry!

Okay, now I’ll move on and talk about United Express, Star Alliance and code share carriers. While on the road the last few weeks, I received several questions about our marketing partnerships and, I’d like to like to provide some clarification and education about the differences in these relationships. Let’s start with United Express…

United, partnered with United Express, gives us expanded market presence throughout the United States and Canada. Our express carriers, Air Wisconsin, Atlantic Coast and Skywest Airlines, provide feeder traffic into our hubs. These carriers are independently operated and United has no ownership in any of the companies. We pay the express carriers a pre-negotiated fee per each departure based on aircraft and city pair flown. We also pay an incentive if the Express carrier achieves defined completion, on-time: 00, mishandled bag, and repurchase intent operational goals. United negotiates with the Express carriers where to fly, what to fly, when to fly and what the fares will be. United gets all the revenue from each flight. In 2001, United Express helped generate over $2.3 billion in revenue for United and contributed almost $700 million to United’s bottom line.

The express carriers operate regional jets and turbo prop aircraft. They serve routes that complement our routes, but do not necessarily have the traffic demand for larger airplanes. The express carrier may be the sole provider in a market or they sometimes complement existing United service. When a sole provider, United Express gives our customers the service they need to connect into our hub system. Express service can also complement our service by providing service during off-peak times when there is not enough demand to fill a larger plane.

It’s important to understand that United Express flying plays a valuable part in our overall route structure. When we are unable to turn a profit in a city… our choice is to pull out completely and lose the feed, or replace the flying with an Express carrier, which can be profitable. We work closely with our express carriers to ensure the right-sized airplanes are placed in markets that best support our customers’ travel needs and to maintain United market presence. Over 25,000 customers a day connect from United Express to mainline United.

United employees handle reservations for United Express, and at stations with both United and United Express flying, United employees handle the check-in process in the main terminals. Although we’ve periodically closed some of our smaller, unprofitable stations and replaced the flying with United Express, our goal was not to eliminate the jobs of United employees, but to place the right service in the market. When employees have been affected by station closings, we’ve worked with them to place them in other positions.

Now let’s talk about Star Alliance… Star Alliance gives us the ability to expand our global presence and to reach customers in more international markets both through code share flights and through growth in our own network. Partnered with these carriers, United’s approximately 2,000 flights per day increases to more than 10,000 flights per day. In today’s market where many carriers have suspended service, Star Alliance gives our customers access to more cities, resulting in increased revenue for United. As a matter of fact and to the best of our ability, we have measured net profit gains through the alliance in excess of $200 million per year. Code share with the alliance carriers gives us access to routes that are not readily available to U.S. carriers due to bilateral restrictions. It also allows the carriers to complement each other’s network without over-saturating a market with too many seats and not enough demand.

Here’s an example: Although seasonally popular, air service from the U.S. to Budapest, Hungary is limited. It would be very difficult for United to gain rights into Budapest and for the route to be profitable on a year-round basis. Through Star Alliance, our customers can enjoy service via Frankfurt with United and Lufthansa.

More recently, United gained daily frequency into Viet Nam through Star Alliance. This gives us significant presence in a quickly growing market.

These are just a couple of examples of how Star Alliance enhances our route network.

And finally, let’s talk about code share outside of Star Alliance. As you know, the Department of Transportation just concluded its review of the United and US Airways code share agreement. Much like Star Alliance, this agreement gives our customers unparalleled choices and convenience. Where Star Alliance expands our international network, the US Airways routes complement flying within the U.S. and the Caribbean. We have reciprocal agreements with all of our marketing partners for non-revenue travel, frequent flyer programs and club access. Our customers enjoy one-stop check-in and a more seamless travel experience when flying with our partners. I encourage you to take a look at united.com for more information.

As I close this week’s message, I’d like to recognize Chicago-based flight attendant Patrick Laffey for going above and beyond the call of duty on a recent flight between Seattle and O’Hare. One of our customers wrote in to commend Patrick for his efforts. Here’s the story… The customer required some assistance when walking long distances. Upon arrival at O’Hare, she was alone and nobody was available to provide immediate assistance. To help out, Patrick personally escorted the customer to baggage claim. The customer was most appreciative of Patrick’s caring and gallant manner. She also stated that United is the greatest and her favorite airline. Through the actions of employees like Patrick, she’ll continue to fly her favorite airline. A seemingly small action such as this made quite an impression. Thank you Patrick! That’s it for this week’s message. Thanks for dialing in and I look forward to talking to you next week.