Hi, it's Glenn, and I'm calling from Shanghai, China, where I have just completed a very positive series of meetings with some of our key partners in the Pacific.

I want to talk to you today about the progress that we have made here, and I have asked Mark Schwab, our vice president for the Pacific, to join me and highlight the tremendous opportunities that we have in this region.

These past few days I have had the opportunity to meet with our Shanghai employees, our customers, the media, government officials, alliance partners and others. We have highlighted the good work that United is doing in spite of the industry's many challenges.

As I said in a speech here to maintenance industry executives, a systemic change is underway in our industry. Each significant event that we have faced in the last several years -- 9-11, SARS, the war in Iraq -- was only part of a larger story. Rather than dealing with a cyclical downturn, we are faced with a fundamental, customer-driven change in the value proposition for air travel.

The industry's overcapacity, coupled with the transparency enabled by the Internet, has led to the lowest fares in more than 10 years. Whether fuel prices recede or not, and they show no signs of doing so, our customers' willingness to pay only for what they value will not change.

These new realities are permanent, and they require us at United to respond.

That is why we are complementing the basic business of running an airline using our competitive advantage to bring value to new types of customers. We are doing this at United Services, where we can leverage our experience, and while we increase productivity and quality.

And as we announced last week, United is in the process of a fleet optimization program, deploying our assets to better-performing routes. This is having a fundamental and positive impact on our international presence, where we have a position of strength.

Here in the Pacific, we have some significant new opportunities to expand our international leadership. Our presence in the region is not new. We entered China almost 20 years ago, and we are the largest U.S. carrier in China.

What is new is how we use this presence to expand strategically.

Mark Schwab and his organization are very focused on this. And I'd like him to tell you more about it.

Mark: Thanks, Glenn.

As Glenn said, knowing the potential in the Pacific region, we have been planning and building our route network here, and we are now in a position to further leverage our strength.

Demand for travel this year in the market is the strongest it's been since the year 2000. Load factors have been at 85 percent during the past 12 months on our Asia-Pacific routes, and the high demand has allowed us to maintain a strong fare structure.

Because of our strong service history here – which is exemplified, for example, by Pudong Airport's 94 percent on-time performance year-to-date -- and the robust market demand in the market, we are able to expand under-served markets like Shanghai, where we are about to launch our new Chicago-Shanghai service.

This follows the addition of other Asia routes, including new San Francisco and Beijing service, and new Chicago-Osaka service, where the load factors on both these routes have been very strong.

Soon, we will launch new service to Vietnam, and we will expand beyond Japan from our key hubs in San Francisco and Chicago. We are also hoping to launch new service between Guangzhou in China and San Francisco. Our Star Alliance partners in the region continue to expand our network and product offering to frequent flyers on both sides of the globe.

All of us in the Asia Pacific region are working hard to execute this strategic expansion, and we are looking forward to pursuing new market opportunities as they arise.

Glenn: Thanks, Mark. What I have seen in Asia, and what Mark and his team are accomplishing, is the type of work we will be doing throughout the company, as we continue our focus on pursuing our strongest businesses and their opportunities.

While we move forward with that work, we must also continue to deal decisively with our challenges.

We have already discussed the need for over 1 billion dollars in additional cost reductions, above the potential of pension termination and replacement cash savings. And given the current jet fuel prices and revenue forecasts, we believe that our additional cost savings may have to be increased substantially, and we are currently discussing that target with all of our key stakeholders.

We all recognize the considerable challenges that we face, and your operational performance in this environment has been consistently outstanding. Our customers continue to be pleased with your performance.

As I said in Shanghai, we know that starting from a strong base of experience and presence does not guarantee future success.

We have to, and we are, earning the right to be around for many, many years to come.

So until the next call, keep your heads up, stay focused, and stay United.