May 15, 2006- Optimizing Airports and Cargo

Scott Dolan, senior vice president of Airport Operations and Cargo, joins me today to discuss the consolidation of Airport Operations and Cargo and the opportunity we have to improve processes and standardized work – all to drive for a better outcome for customers, investors and ourselves.

Glenn Tilton:

Hi, it's Glenn, and it's Monday the 15 th of May. I am joined today in Chicago by Scott Dolan, our senior vice president of Airport Operations and Cargo.

The call today follows previous calls discussing our work to improve performance and drive efficiencies in every aspect of the business at United all across the organization.

I have asked Scott to talk about the consolidation of Airport Operations and Cargo, and how we will be moving forward to optimize our operations within his expanded area of responsibility.

So now over to you Scott.

Thanks, Glenn.

As some of you know, I've been with United for two years, focused on increasing the contribution cargo made to the corporation. A large part of our success has involved aligning the processes and work of the ramp and mail and freight operations. My initial focus was on Cargo, and that has now been expanded to Airport Operations.

I've learned a lot about this company, its processes and our people in the last two years. I also bring my experience from Atlas Air, Polar Air Cargo and General Electric. As the COO of Atlas and Polar I learned a great deal about airline operations, and at GE I was involved in GE's continuous improvement initiatives, primarily focused around the Six Sigma quality program.

There are many similarities between what our Cargo team has been focused on and what the Airport Operations team has been working on. In both areas, we are improving our service to customers, ensuring we meet the needs of the people who support us.

Going forward, we'll be drilling down on three key initiatives:

• Developing the right metrics around what our customers expect;
• The power of standard work;
• And delivering better service, reliability and consistency in the most cost-competitive manner possible.

Our new division's priorities are simple and line up this way:

• Safety, always number one;
• Second, working in support of United's core business strategy of delivering distinct products and services that serve passenger and Cargo customers -- in a way that maximizes margins for premium products;
• And third, fully embracing continuous improvement – not as a short-term effort, but a way of life to improve service and reduce costs.

The key is standardized work. That means doing the same task in a consistent way to improve the outcome for customers and ourselves. We will also need to ensure all of our daily efforts and new projects contribute to safety, and support our core business strategy and continuous improvement. We must ensure non-value added work that does not support these priorities is eliminated. In addition we need to simplify how we operate and make sure headquarters is supporting the field by striking the right balance between station accountability and WHQ initiatives.

The combination of Airport Ops and Cargo will allow us to do much more in streamlining our operations and work processes, driving more efficiency and ultimately delivering better products and services geared to our various customers' needs on the passenger and Cargo side of the business.

We'll be working to give our team all the tools they need, to do their best work ... like ground equipment, more reliable ECUs, and better lobby and gate printers. It also means more training, better communications, and more transparency around the reasons certain business decisions are made, including better information flowing between all of us.

Standard work, as I said, is the key. Standard work reduces complexity and creates more consistency. Reduced complexity will help minimize the added costs of providing premium products and services. Consistency will give us standards and well-run operations that don't get thrown off when the slightest change or obstacle occurs.

Standard work also allows continuous improvement. It gives us a baseline for evaluation and measurement. Going forward, we can measure performance to specific standards and strive every day to improve upon these levels.

As we make these changes, our success will hinge on whether we can all accept a higher sense of accountability. Like transparency, this will be a two-way street. All of us will need to be accountable to our customers and each other for everything we do. By working together, we will improve the airline for our customers, ourselves and our investors.

This new challenge is filled with opportunity, but we need to be focused on execution to realize the benefits. Also it is critical we work across divisions successfully and break down walls between divisions that have existed in the past. I look forward to working with all of you in the coming months.

Thanks Glenn. Back to you.

Glenn:

Thanks Scott. Much appreciated.

As Scott said, we need a clear consistent focus on the few key initiatives that will deliver sustainable performance improvement.

As I said on this call a few weeks ago, those who will succeed in the future will be those who show the way, pave a new path forward and demonstrate that which is possible. Scott brings the right combination of insight and discipline to that very work.

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