Hello, this is Jane Allen with an Update for Friday, May 13, 2005.

There were a number of critical developments this week in bankruptcy court that I want to talk about with you. In addition, I want to share our earnings results for the first quarter.

As you have undoubtedly heard, on Tuesday, Bankruptcy Judge Wedoff approved United's agreement with the PBGC. Under the agreement, the PBGC may initiate the termination of all of United's defined benefit pension plans according to its normal processes. The Bankruptcy Court found that by entering into the agreement, United did not violate its collective bargaining agreements, the Bankruptcy Code or the Railway Labor Act.

In making his decision Judge Wedoff said, "Bankruptcy in general, and in this case in particular, involves choosing the least bad of the unfortunate choices. The least bad of the unfortunate choices here has got to be the one that keeps an airline functioning, that keeps people employed, that pays creditors the most they can be paid . . . as an alternative to what certainly is the worst choice, a shutdown of a company that results in the loss of employment and a loss of benefits and pay. . . ."

This decision clearly is extremely difficult for all of our retirees and for our employees, who have been doing extraordinarily good work throughout this restructuring. It's not an outcome that anyone hoped for, but it's critical to the future of United as it strengthens the financial platform we need to attract exit financing, get out of bankruptcy and compete effectively.

The termination of a plan by the PBGC does not mean that no benefits will be paid. It simply means that the PBGC will assume responsibility for making payments to all eligible plan participants, subject to PBGC payment rules and limits. Eligible employees will receive a PBGC pension as well as a pension from applicable replacement pension plans. United has already negotiated replacement pension plans with ALPA, PAFCA and TWU, and is developing a replacement plan for SAM employees. The company has also been negotiating with the AFA, AMFA and IAM for a replacement pension plan for the employees represented by these unions.

After the PBCG takes over a pension plan, it reviews the records of the company's pension plans to determine what benefits each retiree will ultimately receive. In general, how much each retiree receives in payment from the PBGC depends on a number of factors. You can read more about these in the May 13 edition of NewsReal. Specific to flight attendants, 99 percent of flight attendants who are currently retired would not experience any reduction in their benefits.

On average, United's flight attendants have retired at age 56. Although active flight attendants' benefits would be lower if they retire at age 56 under the PBGC rules, most flight attendants could lessen the impact of termination in terms of the amount of benefits they receive per month after retirement by working past this age.

Regarding timing, at some point soon, possibly by the end of the month, we expect that the PBGC will take the formal steps that are necessary prior to the agency assuming the administration of the pension plans. Once the PBGC takes the plans, all information about the pension plans will come from the agency, including information about what benefits individuals will receive.

Since this is such an important issue to us all, I encourage you to visit SkyNet or the PBGC's Web site, www.pbgc.gov for more information. And the company will be distributing information about this process on an on-going basis.

Moving on, you may have seen that we reported a first-quarter operating loss of $250 million, which was slightly worse than first -quarter 2004. These financial results actually reflect the strides we are making despite the challenges we face, including the high cost of fuel. We were cash flow positive, and we continued to reduce costs. In addition, by shifting our focus to international markets, we also improved our revenue performance. This is tangible evidence that while fuel costs remain very high, our business plan is working.

Lastly, in Section 1113(c) Bankruptcy Court trial that began Wednesday on the IAM and AMFA contracts, the judge heard testimony on several issues, including the impact of fuel on United's business plan, United's financial model, how the company arrived at its allocation targets for costs savings across employee groups in the most recent 1113 process, United's Success Sharing program and prospects for exit financing. The 1113(c) trial is scheduled to resume Monday. The AFA is not part of the 1113(c) trial because the bankruptcy judge's decision on the pension agreement dealt with the only open issue on the AFA contract.

I know that there is a lot going on and it is difficult to escape the events swirling around us. I have heard from our customers how much they appreciate your continued focus on their safety and service. During these very difficult times, we greatly appreciate that you have remained remarkable throughout them.

That's all I have for today. Thank you for listening, fly safely, and I'll talk with you again next week.