United Airlines

1
United Airlines

• Restructuring.
• Not Losing Sight of the Customer Maintaining
  Competitive Advantage

2
Safe Harbor Statement

• Safe Harbor Statement under the Private
  Securities Litigation Reform Act of 1995 Certain
  statements included in this presentation are
  forward-looking and thus reflect the Companys
  current expectations and beliefs with respect to
  certain current and future events and financial
  performance. Such forward-looking statements are
  and will be, as the case may be, subject to many
  risks and uncertainties relating to the
  operations and business environments of the
  Company that may cause actual results to differ
  materially from any future results expressed or
  implied in such forward-looking statements.
  Factors that could significantly affect net
  earnings, revenues, expenses, unit costs and
  profit improvements include, without limitation,
  the following the Companys ability to continue
  as a going concern the Companys ability to
  operate pursuant to the terms of the DIP
  Financing the Companys ability to obtain a
  federal loan guarantee from the ATSB our ability
  to obtain court approval with respect to motions
  in the Chapter 11 proceeding prosecuted by it
  from time to time the Companys ability to
  develop, prosecute, confirm and consummate one or
  more plans of reorganization with respect to the
  Chapter 11 Cases risks associated with third
  parties seeking and obtaining court approval to
  terminate or shorten the exclusive period for the
  Company to propose and confirm one or more plans
  of reorganization, the potential adverse impact
  of the Chapter 11 Cases on the Companys
  liquidity or results of operations the
  appointment of a Chapter 11 trustee or conversion
  of the cases to Chapter 7 the costs and
  availability of financing the Companys ability
  to execute its business plan the Companys
  ability to attract, motivate and/or retain key
  employees the Companys ability to attract and
  retain customers demand for transportation in
  the markets in which the Company operates
  general economic conditions the effects of any
  hostilities or act of war or any terrorist
  attack the ability of other air carriers with
  whom the Company has alliances or partnerships to
  provide the services contemplated by the
  respective arrangements with such carriers the
  costs and availability of aircraft insurance the
  costs of aviation fuel the costs associated
  with security measures and practices competitive
  pressures on pricing (particularly from
  lower-cost competitors) government legislation
  and regulation and other risks and uncertainties
  set forth from time to time in UALs reports to
  the United States Securities and Exchange
  Commission. Consequently, the forward-looking
  statements should not be regarded as
  representations or warranties by the Company that
  such matters will be realized. The Company
  disclaims any intent or obligation to update or
  revise any of the forward-looking statements,
  whether in response to new information,
  unforeseen events, changed circumstances or
  otherwise.

3
Background on United
4
United Airlines

• The worlds second largest airline
• Largest US based international carrier
• Second largest Frequent Flyer Program with more
  than 40 million members
• Provides 14 of U.S. domestic industry capacity
• Founding member of Star Alliance, largest
  international airline alliance
• More than 3,500 flights a day on a route network
  that spans the globe
• Fleet age averages among the youngest in the
  industry at 10 years

5
Domestic network links 5 key hubs
Slide 6
6
International network links over 27 countries
Slide
7
A Perfect Storm

• United, has faced an amazing number of events in
  recent time..
• 9/11
• Recession
• Iraq war
• SARS
• Industry overcapacity
• Record high fuel prices
• Irrational pricing in the industry
• Hypergrowth in particular regional areas

Industry Is Undergoing A Permanent Structural
Change
8
Restructuring United
9
Tough choices required a balanced approach
10
UA has accomplished significant savings over 3
years

• New Labor Agreements Reduced Costs 32
• Reduced Workforce by 38, Productivity Increased
  25
• Renegotiated Aircraft Leases Reduced Costs Over
  900M
• Business Transformation Office Initiatives
  Reduced Costs 508M
• Over 600M in Pension Costs Eliminated
• TOTAL Annual Savings -- 7B

11
Cost Management Labor Costs
12
Cost Management Aircraft Fleet
Reducing fleet by 94 aircraft
900 Million
13
UAs restructuring has maintained the key
strength schedule breadth and depth
14
and has maintained UA leadership in key Hubs
15
Focusing on the Customer
16
UA developed a Portfolio of products services
17
Significant time energy has been invested in UAX

• Bankruptcy process allowed UA to renegotiate with
  all Express partners to save over 350M
• 1113 Labor negotiations allowed United change
  of scope to increase overall number and size of
  Regional Jet aircraft
• Regional Jets, 50 70 seats will be an
  significant component of UAs fleet and capacity
  planning
• 2001 96 regional jet aircraft
• 2005 238 regional jet aircraft

18
We launched Ted to combat LCC incursions
19
Ted Will Grow From 47 To 56 Aircraft, Serving 36
Markets
Teds success can be seen by its continued growth
MDW/ORD
RNO
IAD

DEN
SFO



LAS


LAX/ONT

PHX
MSY


MCO

TPA
FLL/MIA/PBI
RSW
SJD
SJU
CUN
PVR
20
We continue to add to our global Alliance network

• Excellent carrier reputation
• UA/SA code share expected November 1, 2005
• Completes STAR presence in African sub-continent

• UA/TP code share already in place
• Provides access to additional Northern Africa
  markets
• TAP/Varig a unique value proposition for STAR

• LX/LH Merger provides unique opportunity
• UA/LX code share expected October 30, 2005
• Probable candidate for joining A - United and
  Lufthansa Transatlantic Joint Venture

21
No other alliance reaches this global offering...
22
For South African and United
23
the network will be a truly differentiating
strength
24
The portfolio allowed UA to adapt adjust

• The evolution of the portfolio has allowed United
  to adjust and adapt its product offering to the
  marketplace to capture untapped revenue sources

25
Additionally, UA took time to improve our products
26
p.s. - launched to attract high yield NA
customers
12 UF / 26 UB / 72 UE configuration 12 United
First Class new Lie-Flat Avio Seats _at_ 68
pitch 26 United Business Class BE Aerospace (our
UB International Seat) _at_ 54 pitch 72 United
Economy Plus Seats _at_ 34 pitch
27
We changed our brand image to reflect the
positive work UA has completed throughout
restructuring
28
We communicated good news to United customers
29
and nearly won an Emmy for our advertising
30
Exiting Bankruptcy
31
UA is ready to compete and emerge from bankruptcy

• Competitive cost structure in place
• Balance sheet de-leveraged
• Excess capacity eliminated
• Assets refocused on strongest markets
• Portfolio of products diversified
• Complex governance eliminated
• Management and labor focused on the customer and
  the bottom line

32
Our balanced scorecard highlights UAs good work
?
?
?
33
Moving forward

• Whatever the future may hold, Uniteds efforts in
  restructuring the company have build a solid
  leadership foundation were ready.
• Possible Merger and Acquisition Activity
• Swiss/Lufthansa
• USAirways / America West
• Air China / Cathay Pacific
• Foreign Competitive Increases / Regional
  Hyper-Growth / Technology
• India Middle East
• New Entrants / LCC
• B777 Longest Flight A380 Largest Aircraft
• Regulatory Changes
• US-EU talks
• USA Canada Open Skies Agreement
• Continued Economic Challenges
• USA Delta, Northwest and Independence Air
• Fuel Prices

34
Thank You