Hello, this is Jane Allen with an update for Friday, April 16, 2004.

This week, I have great news to report about the company's first-quarter Success Sharing results for customer satisfaction and our March Marketrak results. I also want to talk about why United overbooks flights and what the company is doing to resolve recent problems with denied boardings.

First, I am very pleased to let you know that we have exceeded our first-quarter Success Sharing goal for customer definite intent to repurchase or DIR, and that this result triggers a payment to our employees under the Success Sharing plan. For the first quarter, 38.8 percent of our most frequent fliers told us in Marketrak surveys that they definitely intend to choose United for their next flight. This means employees will receive a Success Sharing payment for customer satisfaction, together with a payment for achieving our first-quarter goal for on-time :00 departure performance. You will receive these payments around April 30th in the same form that you receive your normal pay. I want to recognize everyone in the Onboard Division--both on the front lines and behind the scenes-for doing such a great job in achieving our Success Sharing goals. Thanks to you for your hard work, teamwork, customer focus and consistency in delivering excellent service to our external and internal customers.

I want to focus for a moment on our March Marketrak results, which were very strong. Our North America meal rating for March, which is one of the drivers of customer intent to repurchase, jumped a remarkable six points from February to March from 33.9 to 39.9. That's our best North America March meal rating ever! Clearly, the introduction of our new hot food and new service elements in United First and United Business were a major driver of this result, but our United Economy rating also rose significantly. Congratulations to our Food and Beverage team members who worked so hard in designing and introducing these terrific new food services to our customers. The ratings clearly show that our customers truly appreciate the enhancements. And thanks to our flight attendants for providing great service in delivering these enhanced offerings to our customers. Our international meal rating for March was up nearly 1 point, and we expect to see significant improvement in these ratings as well when our international meal enhancements are introduced in our premium cabins in May.
As to flight attendant ratings, our international rating in March was 59.2, and year-to-date our rating is 60.5, which puts us 2.8 points above our annual goal. In North America, our March rating was 58.9, and year-to-date our rating is 60.0, which puts us 1.3 points above our annual goal. Clearly, as our load factors increase, so will the challenges you face each day in serving our customers well. I want to recognize and thank you for the great work you have done in March and in the first quarter, and encourage you to keep your focus on consistently delivering safe, reliable and attentive service to our customers as we roll into the second quarter.

On another topic, United experienced some significant denied boardings from mid-February to early April. I know that may of you felt the impact when serving customers who unfortunately had to wait for a later flight. Thank you for providing the best possible service in these trying situations. In many, many cases, your positive interactions with these customers turned their negative perceptions around. I'd like to explain why this problem occurred and what steps we are taking to fix the problem.

All network airlines and most low-cost carriers overbook flights and will continue to do so because of the number of customers who cancel their reservations or simply don't show up for their flight. Due to this cancellation and no-show factor, without some level of overbooking of full flights, United would lose millions and millions of dollars of revenue. Our Inventory Management team uses historic data to determine how many seats to sell on our flights in order to generate the greatest revenue, while balancing the risk of denied boardings. Inventory Management combines this historic data with current information in each market, such as when spring break falls in a particular market or whether there is a special event in a market that will drive more demand than the historical data would indicate. This system has worked well for many years. But because 2003 was such an unusual with SARS and the Iraq war, the normal historic comparisons were difficult. To account for this in setting 2004 inventory levels, Inventory Management dramatically lowered the expected cancellation and no-show rate from what we saw last year. Despite that reduction from last year's levels, the actual cancellation and no-show rates for the period from mid-February to the beginning of April were even lower than we forecasted.

While having more customers show up for our flights than we forecast is good news, it unfortunately resulted in many more denied boardings than we expected -particularly in early April on flights to and from Florida and out of Europe. We immediately took steps to minimize the disservice to our customers. For example, in Paris on April 2nd, 3rd and 4th, we upgauged three 767s to 777s. In London that week, we upgauged a 777 to a 747 and added a 747 extra section.

We also took action to avoid further denied boardings. We upgauged some additional flights and in some cases, moved customers from critical flights to other flights ahead of time. As a result, we saw a dramatic drop in denied boardings after April 6. Longer term, Inventory Management, ISD and Airport Operations are working to develop better data-earlier-so we can minimize denied boardings. The company also will provide more advance notice to airport employees when denied-boarding situations develop, and offer support such as buffer flights for passengers left at the gate. I hope this explanation helps you understand why the company overbooks flights, and what we have done to minimize recent problems. I appreciate the work you have done with our customers who were impacted by denied boardings and your support as we work to improve this process.

Well, that's it for this week. Thanks for listening and have a great week.