Good morning everyone. This is Patti Carson and welcome to FLT-LINE for Tuesday, March 18.

As you may have heard, to remain in compliance with its debtor-in-possession loan
requirements, the company yesterday filed an 1113(c) motion to reject its collective bargaining agreements. The company emphasized that its priority would be to continue negotiating with our unions, but that it had to file the motion Monday to ensure that the necessary cost savings would be in place by early May.
The cost savings are absolutely critical to United's ability to meet the requirements of our debtor-in-possession (or DIP) financing. The company said that meeting those requirements necessitates permanent wage concessions, as well as addressing issues such as benefits, work rules, and "scope clauses" that presently restrict our ability to compete and pursue strategic initiatives.

Additionally, the company announced a significant drop in revenue as bookings declined in advance of a potential war with Iraq, saying that we must take immediate steps to offset the negative financial effects we're experiencing. Please know that the company is actively engaged in an industry effort led by the Air Transport Association to seek wartime relief and financial assistance from the United States government to offset the disproportionate impact of any war on the airline industry and on United. United will also approach our debtor-in-possession lenders to seek relief.

If the company is unable to gain sufficient relief within the next 30 days, additional
temporary pay reductions of at least nine percent across-the-board for all employee groups may become necessary. United would work with international locations to ensure that those employees participate in a fair and equitable manner in accordance with local laws. If war occurs, United is prepared to reduce capacity as circumstances necessitate, and may require additional wage relief -- again, on a temporary basis.

Speaking of the possible wage cuts, Glenn Tilton noted that while United’s revenue
picture stabilized in the first three months after the Chapter 11 filing, the company
experienced a significant drop in travel and bookings in advance of a possible war with Iraq. He added that United would do everything possible to avoid a temporary
reduction in employee wages.

I know that this is a lot of news to digest, and particularly sobering in the context of a potential conflict with Iraq. The best thing any of us can do is continue to stay informed and to focus on the things that we can influence in our lives.
You can find more information on the company’s 1113c motion, including a large
question and answer section, on United’s Restructuring site, which is available from the SkyNet home page. I encourage you to learn as much as you possibly can about what is happening.