October 16, 2006 – Update on Impact of Hawaii Earthquake; Leadership Meeting Focuses on Customers, Employees and Investors

Hi, it's Glenn. It's Monday, it's the 16th of October, I'm calling from Chicago. Before I talk to you about the Leadership team meeting last week in Chicago, I have asked Alex Marren to give us all an update on the earthquake in Hawaii and the impact on our operations, our employees and our customers.

So, Alex, thank you. I'll turn the call over to you.

ALEX:

Thanks, Glenn.

As many of you may know, a strong earthquake struck Hawaii on Sunday morning at approximately 7 a.m. local time. While reports of damage continue to evolve, we do know that there have been widespread power outages throughout the islands, and the governor has declared a state of emergency.

At this time, we haven't had any reports of injuries among approximately 1,500 United employees who work or reside in Hawaii. We've been reaching out to these employees, although contact has been a little difficult through both line-based and cellular telephone. As a result, we've set up a toll free number – 866-825-9084 – for employees to let us know their status. We encourage any employee who has not had contact with their supervisor since Sunday morning to please call this number.

From a customer perspective, we have been proactive in our efforts to take care of those affected by the earthquake. To date, there have been 22 total cancellations primarily due to power outages and related infrastructure issues. On Sunday, we operated approximately 40 percent of our 24 scheduled daily flights from Hawaii. Based on current information from our airports as well as key government agencies, we expect to resume normal operations to all of our Hawaii locations -- Maui, Kona, Lihue and Honolulu. We also plan possible extra flying to accommodate the high volumes of customers from this market. To provide additional flexibility to our customers, we also issued a revised ticket policy regarding travel to and from the islands that will be in effect through October 18.

Regarding the airports, there are no reports of major damages at any of the four locations from which we operate in Hawaii.

I'd like to thank the folks from the various functional groups at United that quickly respond and always come together in a situation such as this. We have the structure, communication network and processes in place to deal with disruptions when they occur. This enables us to make the best decisions to assure a safe operation for our customers and employees.

I'd especially like to thank our people in Hawaii who are doing a tremendous job in challenging conditions to assist our customers. And we're all thankful that everyone and their families appear to be safe and accounted for.

Thanks, and back to you, Glenn.

GLENN:

Thanks very much, Alex. On behalf of everybody, we appreciate the rapid response.

As I mentioned, last week, nearly 400 of our leaders participated in a full day of meetings and presentations following our board of directors meeting nearly two weeks ago in Washington, D.C.

It was a good opportunity to review our business plan and much of the significant work that is underway throughout the company to improve our competitive position.

Throughout the day, leaders representing every part of the organization presented the details of our plan and major initiatives, and led discussions.

The now-familiar diagram of three intersecting circles, representing the need to balance the needs of each of our constituent groups, our customers, our employees and our investors, provided the framework for our discussions.

We focused on our performance agenda; Pete, John, Jake and Graham talked about improving our customer experience, optimizing our revenues and reducing our costs.

We also focused on our scorecard. A comparison with our competitors... on specific customer, operating and financial metrics... which set up discussions throughout the day and provided insight into the considerable opportunity that we have to drive performance by improving execution and focusing on our core operations.

We split into three smaller groups that rotated through cross-functional team presentations that centered on our customers, employees and our investors.

The customer discussion started with commentary from several of our premium customers -- where we're meeting their expectations and where we can improve. It was clear that consistent delivery of the basics, every day, is most important to everyone; while having a differentiated experience for premium customers is key to retaining their business and their loyalty.

We examined examples of work being done across the company to raise our delivery performance, such as lobby check in, boarding, awards and upgrades; and we discussed metrics that will further track our progress. Ralf Ruckelshausen, Dennis Cary, Charlie Ahmes and Graham Atkinson participated in this session.

Our ability to deliver on the needs of our customers starts and ends with all of us. Jane Allen and Joanne Calabrese led our employee discussion in which we talked about what we plan to do to provide the tools and the training needed to work more consistently across all groups to affect this outcome.

Recognizing the contributions and impact we all have on the customer experience underscores the importance of the investment we are going to make in our people.

Balancing the needs of our investors was the third part of our discussion. Robert Sahadevan, Kathy Mikells and Greg Taylor reviewed what is expected by our investors and the importance of delivering on our commitment to them, which formed the basis of this discussion. This links back to our opening session and what it'll take to deliver on our performance agenda, focusing on the core.

Foundational to all of this is our commitment to continuous improvement. We heard here from Bill Norman, from Cindy -- relative to her experiences at O'Hare -- Jeff Foland about teams working together across the organization. Jeff particularly focused on the transformation of the Sales organization, all using CI tools to redesign processes that are improving customer outcomes. Garry and Srisu joined this group to frame it for us.

This clearly reinforced the opportunity to be gained by cross-functional teams that are driving measurable improvement in both service and financial performance. In doing so, it fosters both teamwork and a sense of community, necessary for us to work as one company.

We had good insight, participation from managers across the company with the customer being at the front and center.

The comprehensive program also provided numerous opportunities for leaders to talk frankly about obstacles that we all face to our success, and lessons we have learned along the way.

Importantly, Sean Donohue, Scott Dolan and Greg Taylor led the concluding discussion on how the company will measure success and the role that each of us plays in order to deliver upon the results that we expect.

As I said, it was an excellent meeting. It was energizing to recognize the opportunity we have to create a new history for our company and for ourselves as one company. What we achieve from this point forward is up to each of us, and I am confident in the capability and the commitment of the management team to lead the organization as we seize this opportunity.

You will be hearing and seeing more about our discussions and our material and information from the meeting. I expect to invite managers from various divisions and functional groups to join me on calls to talk about our progress and lessons learned going forward and their impressions of the material delivered during the meeting. Until then, stay focused on our customers and on one another... and stay united.