EYE-ON-UA
May 8, 2006– First Quarter Earnings

Hi, it's Glenn, and it's Monday, the 8th of May. I am joined today on the call by Jake Brace, our chief financial officer.

Today, we are announcing our first quarter results and hosting our first analyst call following our emergence from Chapter 11. This marks an important milestone for all of us at United, as well as for our investors and our customers.

We have often said on this call that the work that we did in restructuring positioned us as a much stronger company. Indeed, the $23 billion gain in the first quarter “sums up” the magnitude of those three plus years of hard work.

That work required a discipline and a rigor that will now apply to our operations and our financial performance, across every aspect of the organization, as we take the company forward to the next level.

As Jake will tell you, the $23 billion is not an indicator of our post-reorganization financial performance. And, as we have often said, for the real measure of the company, everyone should focus on our results excluding special charges.

We are, today, on a good, solid financial footing. We ended the quarter with a strong total cash balance of $4.5 billion, assisted by $400 million of positive operating cash flow.

We saw an improvement in operating margin, with our overall revenue up 14 percent, with controllable costs for the quarter not yet reflecting United operating at our most efficient level…and I will talk more about that at the end of this call.

Now, I will turn the call over to Jake, who will discuss in greater detail the financial results we are announcing today. Jake, over to you…

JAKE:

Thanks, Glenn.

Excluding the large non-cash gains that Glenn mentioned, for the first quarter, we posted a net loss, a bottom-line loss, of $306 million -- a performance that is essentially the same as last year's. Our operating earnings -- that is, our earnings before interest and taxes -- improved by $79 million, driven by a strong revenue performance that overcame cost increases, particularly fuel costs, which rose $314 million.

Fuel price for the quarter averaged $1.95 per gallon, compared to $1.47 last year. And, while we did see about $9 million benefit from hedging, fuel continues to be a tremendous challenge.

Overall, while we are pleased with the improvement in operating earnings, we are not pleased that the improvement was all on the revenue side of the equation. If you exclude fuel, our unit costs rose 3 percent year over year.

Our results were also affected by: fresh start accounting, a process a company must go through when it exits bankruptcy, which drove non-cash cost increases; and increases in salaries and related costs, mainly associated with the stock-based compensation expense. We also saw rising purchased services and aircraft maintenance costs.

We are dissatisfied with our controllable cost performance and, clearly, we have to do better. It is critical that we keep our costs under control regardless of the reason they increase.

We have a number of programs under way to continue to reduce our costs and drive efficiency through the organization. We have $300 million in reductions already in our plan for 2006 and have committed to an additional $400 million in 2007 and beyond.

To meet this commitment, we are building on the success of our continuous improvement efforts in Airports, Cargo and Maintenance to capture additional savings in back-office functions like finance, HR and IT. We have committed to streamlining operations and corporate functions to further reduce overhead spending. We also expect to reduce marketing and sales expenses.

As Glenn said, while we do have more work to do, we are on solid financial footing. We generated more than $400 million in operating cash flow during the quarter. We have total cash of $4.5 billion including $3.6 billion of unrestricted cash -- the largest cash balance in the history of the company. We have limited debt payments in the near future and a modest capital spending requirement.

So, overall, we have the foundation and the tools we need to make the improvements necessary in the short term. And we are well-positioned to succeed in a competitive industry over the longer term.

Back to you, Glenn…

GLENN:

Thanks, Jake.

As we all know, we are providing our customers the products and services that they value, and we will continue to differentiate United in the marketplace as we go forward. We're deploying our assets better today than we have in the past, and as a result, we are seeing improvement in our revenues. We're going to do more, focusing on our customers and improving service while we continue to keep our pressure on cost reduction.

We know that we have to do more in reducing our costs, and will be driving improvement and efficiency across the organization. As I said last week on the call, we're going to take a very hard look at everything that we do. We'll be reducing overhead spending for general and administrative and back office across United by streamlining functions, improving processes and eliminating unnecessary work.

This is going to be a year of very significant work. We have a clear plan and we are now fully focused on execution and on continuously improving.

That's it for now; I'll be talking to you again soon. Until then, stay focused on our customers and on one another, and stay United.