December 21, 2006 – 2006 in review

Hi, it's Glenn.  It's Thursday, the 21st of December and I'm calling from O'Hare.  As we approach the end of 2006, I want to take the opportunity of this call to review the year and our accomplishments. 

It has been a very good year for your company.  After putting our restructuring behind us, we focused on our core business.  Despite having to contend with fuel at record levels, we posted two consecutive quarters of profit.  We have a record amount of cash in the bank and are planning to pay down one billion dollars worth of debt early next year.  We are flying our aircraft more hours than we ever have in the history of the airline.  We have redeployed those aircraft into markets where we can produce a higher margin.  We are working smarter and we are working better, as we introduce continuous improvement processes across our system and we're more productive across all groups.  Most important, as we are performing effectively on the fundamentals of our business, we are putting more thought and energy into improving the service that we provide to our customers.

Said very simply, we have made the right decisions to use our assets wisely, to manage in a volatile industry and respond to the competitive challenges that come our way. 

For more on the work that all of us have done to make 2006 a solid year of performance at United, I've asked Peter McDonald, our chief operating officer, to join me on today's call.  So, Peter, I'll now turn the call over to you....

Pete: 
Thanks, Glenn.  We've been working across the airline throughout 2006 to improve our performance.  Today, I'd like to focus on accomplishments that define the effort all of us in Operations and around the company are making to generate better results, control costs and ensure we are providing the best possible service to our customers.

Early in 2006, we began implementing resource optimization, tightening turns and allowing the company to add flights to the schedule to generate more revenue from existing gates and aircraft.  We have now implemented resource optimization at all five hubs and are getting the full benefit of a more efficient schedule.  While we saw some impact to our operational performance in the early months of the year, we have rebounded as the year has progressed and are getting back to where we expect to be.  

In the DOT rankings for October – the most recent available – we were second of the six major U.S. carriers in departure zero and third in arrival 14. 

The statistics tell part of the story.  Our customers' experiences through the Thanksgiving holiday and leading up to Christmas also have shown that we are taking a different approach to our operation.  Through both periods, we outpaced last year's performance.  We accomplished the improvement by balancing the needs of our operation, planning ahead and making sure we are prepared to deliver the service our customers expect when the demands on the airline and our employees are heaviest. 

The active collaboration between the field and headquarters in the planning and execution of both resource optimization and holiday operations played a big role in our success.  In fact, collaboration of employees across the operating groups and the headquarters and field organizations drove many of our accomplishments in 2006 and will be important to our efforts to continue to improve in 2007.  As I talk to you today, the quality of the planning and execution is apparent in our response to the Denver snowstorm.

We had some important wins in groups other than Operations in 2006.  The Sales division focused its efforts on several major Chicago area corporations, with the goal of switching long-time American customers to United.  By year-end, our Sales employees had succeeded in moving Motorola, Allstate and Baxter – all significant efforts that mean millions of dollars in revenue for the company. 

In addition, we're exceeding our revenue goals for Economy Plus and our international launches between Dulles and Kuwait City and Narita have both started strong and are performing better than we expected. 

These are just some examples of our successes and great work all of our people across the company have turned in through the course of 2006.  Overall, thanks to everyone's efforts, we're meeting the goals of our performance agenda: improving service to our customers, reducing our costs and optimizing our revenue.  I want to personally thank all of you for your great work this year.  Glenn, back to you...

Glenn:

Thanks, Pete.  We have indeed accomplished a great deal in 2006.

As I said in my most recent message, we will be subject to foolish headlines that mischaracterize our company and our intentions as we go forward.  We are quite simply focused on the opportunities that present themselves, and we will continue to make the best choices for our company and for all of our constituents and stakeholders.  That having been said, we have created a very strong company, one that can be fully competitive pursuing our existing business plan. 

I want to thank all of you for your contributions to our solid performance and I wish you and your families all the best this holiday season and into the new year.

That's all for now.  I'll be talking to you again soon.  Until then, stay focused on our customers, and, of course, on one another...and stay united.