Hi, it’s Glenn. It’s July 12, and I’m calling from Chicago.

As we all know, we are active in discussions with the financial community about securing the financing that we need to exit bankruptcy. As that process moves forward, it will become clearer as to what’s necessary to attract financing for the company. Throughout our restructuring, we have consistently said that we need to adapt to a very difficult, challenging and dynamic marketplace.

One thing we know is certain, and we have said this for quite some time: To be competitive for the long haul, we need to maintain a relentless focus on continuous improvement – in costs, in revenue management, and in everything that we do.

Today, I’ve asked Pete McDonald, our chief operating officer, to join me on the call and to speak to what we are going to do to control costs across the operation today and into the future. So Pete, I’ll turn the call over to you.

Pete McDonald:
Thanks, Glenn. We’ve made good progress in reducing our costs and improving efficiency. But the reality is we’re not yet where we need to be. We need to dig deeper on costs and get much more efficient – and that’s become even more important with the competitive pressures increasing, and fuel prices as high as they are.

What we’re talking about is bringing United to its full potential. We have the ability to do much better in the future than we are today virtually everywhere in the company. That means making improvements that build our business and allow us to get everything possible out of our assets, which really are the best in the industry.

As Glenn said a few weeks ago on this call, we’ve identified or already launched a number of cost and revenue improvement initiatives beyond what was in our business plan.

We’re going to have to go even further on costs and take a harder look at how we can improve – how we have to improve – the way we work every day. But, we can’t do it by comparing ourselves to ourselves two years ago. We’re looking at how the competition does things. And, we’re going to take action to match or exceed their performance.

We’ve just completed a benchmarking study, a comparison of our cost management and revenue production against our competition. And that study revealed some areas where we don’t operate as efficiently as our competitors.

Our biggest areas of opportunity are in Airport Operations, Aircraft Maintenance and lowering the cost of sales. So, we’ve launched a number of projects in those three areas.

United Services – our maintenance and engineering division – is transforming the way its people work and reducing costs to market-competitive levels. For example, the division is expanding its Lean initiatives. It’s working with key suppliers and vendors to improve our purchasing of aircraft parts and materials. And along with Flight Operations and other divisions, United Services is lowering fuel costs and increasing the efficiency of our aircraft by reducing weight.

In Airport Operations, there is also significant work being done. We’ve got teams in place that are evaluating all of our work practices on the ground, particularly our ramp activities. And we’re looking at the way we allocate manpower and work assignments for all airport ground employees.

In the United Express operation, we’ve begun work on several projects that we expect to contribute close to $100 million in savings and revenue improvement. That’s in addition to what we’ve already achieved by renegotiating our partner contracts and transferring ground handling to our partners.

Finally, our cost of sales – which is the cost of selling and distributing tickets to our customers – also represents an opportunity for improvement as compared to our competitors. We’ve recently finalized a new agreement with a major online travel agency, and we’re implementing a technology that directly ties our host system with the Orbitz system. Both significantly reduce our annual distribution costs.

And that’s just the beginning. I’ll say it again: We’re looking across the company at everything we do, because we’ve got a long way to go before we’re really cost-competitive.

There are opportunities for large savings in some areas. But, as the examples I gave you today show, every initiative counts, especially when you add them all up.

Cost-consciousness is something everyone at United must focus on. It has to become a permanent part of what we think about every day, just like meeting our on-time performance goals. This isn’t about short-term fixes – it’s about an ongoing process.

You’re going hear more details in the coming weeks from me, as well as from the officers and managers in your areas.

I’ll just close by saying that while we do all of this, we still have to get the planes out on time and give our customers the experience they expect. And we need to do that consistently well and with safety always our top priority.

Based on the performance that you have turned in over the last 18 months, I have no doubt that you’re all up to the task. With that, back to you, Glenn.

Glenn Tilton:
Thanks, Pete. I want to underscore a couple of your key messages.

At United, we all need to be constantly aware of how we can work smarter, better and more cost-efficiently. The marketplace demands it of us. We need to move forward to drive improvement that enables all of us to do so.

So, while Pete talked today about the operations of the company, we are also taking a hard look at headquarters. And we are taking measures at headquarters to lower costs, streamline processes, and eliminate redundancies and inefficiencies.

There is clear accountability for every officer, director and manager at United around the issue of cost efficiency and effectiveness. United has the potential for significant improvement as Pete said. We’re going to do this, and we’re going to do this the right way.

With that, I’d like to close the call by congratulating everyone for helping United exceed our reliability goal for the second quarter. It was a tough quarter, and you overcame a tremendous amount of obstacles to ensure that our planes departed on time for our customers.

That kind of continuing reliability and dependability inspires customer confidence in United, and it gives us a competitive advantage as we work hard to close the gap in the areas of our business where we are not yet today competitive.

Thank you for joining the call, and I’ll talk with you soon. Meanwhile, keep your heads up and stay United.