It's Monday, the 31st of October, and we're recording this call as we announce United's financial results for the third quarter.

Dave Wing, our vice president and controller, is joining me on the call to talk about the results and what they mean for the company.

We have established a great deal this quarter in both our restructuring and in our business.

We have largely completed United"s restructuring work and we are on schedule to emerge from Chapter 11 in early February as we have announced.

We continue to deliver solid operational results for our customers and we are further improving the customer experience with new premium products such as explus, which we introduced this quarter.

United’s progress is also clear in the financial results that we're reporting today, and I am going to turn the call over to Dave so he can tell you more about our results.

So, David, over to you...

DAVE:

Thanks, Glenn.

In the third quarter, we reported an operating profit of $165 million, which is a quarter of a billion dollars of operating profit improvement from the third quarter of last year. And, these results were reported in a quarter in which fuel prices reached truly historic levels of almost $2 a gallon. An operating profit improvement of that magnitude, in such a challenging fuel price environment, suggests that there were several points of strength behind the numbers.

We have been consciously reducing United’s mainline capacity, and it has been declining throughout the year - mainline ASMs, including Ted, were down about 5 percent in the third quarter.

At the same time, our mainline traffic was down by a smaller amount -- about 3 percent -- so we reported a very strong load factor of 83.9 percent for the third quarter, which is up by almost 2 points from last year. So, that means we had more customers on our flights on average, and that was a very significant point of strength for the quarter.

Our mainline passenger revenues grew by more than $150 million between years, that was up almost 5 percent in dollars, even though we flew 5 percent fewer ASMs in our mainline system. And we therefore achieved almost 11 percent more mainline passenger revenue per ASM year-over-year, which was a strong improvement.

In fact, United’s unit passenger revenue growth is above the industry average for carriers who have reported so far... and that number was 8.6 percent so far for the third quarter.

Double-digit revenue growth is a powerful multiplier for profitability. One way to look at the power of unit revenue growth is to calculate how much revenue would have been foregone, if United’s mainline system had shrunk 5 percent – as it did – but unit revenues had been the same as they were last year. That shortfall would have been over $300 million dollars! So there is a very meaningful payoff for United when we raise the bar and improve our performance metrics.

At the same time that the mainline system has been right-sizing, our regional affiliate flying has expanded. Regional affiliate revenue also grew by over $150 million during the third quarter, and that rate of revenue growth was a lot more than the mainline system – about 33 percent year-over-year.

Our mainline unit operating expense, excluding fuel, was another significant point of strength for the quarter. Our CASM, excluding fuel, was 7.11 cents, that was down more than 5 percent as compared to the same period last year. And, it is noteworthy that this improvement was accomplished during a period of capacity decline, and therefore absent the advantage of growth.

A five percent unit cost improvement may not sound like a lot, but when you consider that this differential saved United some $140 million in non-fuel operating expenses in the third quarter – then it becomes apparent that this is another important point of strength.

It’s also interesting to look back a few years at United to really understand just how far we have come. The last year that United reported a full-year operating profit was 2000. And in that year, United’s CASM, excluding fuel, was 8.62 cents. As we said, our performance in the third quarter was 7.11 cents -- and that's a full 18 percent better than the year 2000.

When you think about what that improvement in unit cost means to United, it is a tremendous difference. Using third quarter 2005 ASMs, that difference in unit cost amounts to over $500 million in relative operating profit improvement.

Fuel expense did become the largest line of expense for United in the third quarter – $1.1 billion for the mainline system, or almost 25 percent of total operating expense, and $1.3 billion if we include fuel expense for our regional affiliates. Fuel price continues to be one of United’s most significant challenges, with higher prices driving over $400 million of increased fuel expense for the company in the third quarter.

United reported $1.8 billion in reorganization expenses in the third quarter. Most of this was non-cash and resulted from the completion of a deal for the restructuring of a large group of aircraft. This deal was approved by the court in late September, and, together with all of the other fleet restructurings that we have completed, is expected to save United an average of $850 million annually between 2003 and 2008.

As we have said before, we expect to report additional significant…but non-cash…restructuring charges of this type between now and our exit from bankruptcy.

Overall, we were pleased with our financial performance for the quarter, but we and the industry overall still have significant challenges ahead.

Back to you, Glenn…

GLENN:

Thanks very much, Dave. I appreciate it, and I'm sure everybody on the call does as well.

As I have said on the call before, United has earned the opportunity to compete with the leading network carriers…and our third quarter results make it clear that we are doing just that -- solid revenue and CASM improvements.

Continuous improvement across the board, and a focus on how well we execute against every element of our business will make the difference between success and failure at United. We know there is more work to do – and we also know there is more opportunity to be gained – as we make our company more competitive in everything that we do.

Everything we have talked about on these calls over the last several months – FIT improvements on the ramp and at our ticket counters, the LEAN program to streamline maintenance, Buy-on-Board meals, fuel efficiency training for pilots, the introduction of p.s. and Ted service – all the sustainable improvements we have made across the enterprise contribute to United’s improved financial performance, as Dave has just shared with us.

And as he said, the airline industry is going to continue to face challenges. This is a highly competitive industry with external issues that impact the business... United will continue to respond to such circumstances and opportunities as they present themselves to us.

As one company, we will continue to move ahead, doing what is best for us…what is best for our customers, our employees and our investors.

That's all for now on this call. I will be speaking with you again soon. Until then, stay focused on our customers and on one other…and stay united.