This summary is based on the third quarter fiscal 2008 earnings call conducted by UAL Corp. (KMX) on October 21, 2008.

Management:

- Chairman, President & CEO: Glenn Tilton
- COO: John Tague
- CFO: Kathryn Mikells

Key Investors Issues

- The firm reported a net loss of $779 million or $6.13 a share.
- Revenue marginally increased to $5.6 billion from $5.5 billion in the prior year.

Year to Date Highlights:

- Revenues were up 3.5% to $15.6 billion.
- The firm realized a loss of $4 billion or $32.34 a share from profits of $456 million or $3.82 a share in 2007.

Third Quarter Highlights

The firm reported a net loss of $779 million or $6.13 a share from a profit of $334 million or $2.82 a share in 2007 due to a consolidated cash fuel bill that was some $946 million higher than last year, more than a 60% increase.

- The current lower fuel prices may have a significant positive impact on future profitability.
- Operating revenue increased by 0.7% to $5.6 billion from $5.5 billion in the prior year.
- RASM increased by 5.7% year-over-year, and consolidated RASM increasing by 5.3%.
- The impact of the Mileage Plus accounting was $27 million reduction in revenue year-over-year or a half point reduction in the mainline RASM growth rate.
- This was primarily due to the change in our exploration policy from 36 months to 18 months for inactive Mileage Plus accounts which added about $50 million of non-cash revenue to the companies consolidated passenger revenue for the third quarter of 2007.

Cargo and other revenue of $451 million were up 3%, helped by higher yield.

- Average mainline cash jet fuel expense was $3.77 per gallon, up from $2.22 a year ago. - Mainline CASM excluding fuel was flat on a 4% decline in mainline capacity.
- Salaries decreased $25 million as a result of reduced profit sharing expenses in 2008, and the effects of management and staff reductions.
- Regional affiliate expense increased $131 million year-over-year due to a $142 million increase in regional fuel expense.
- Aircraft maintenance materials and outside repairs decreased $39 million, primarily due to lower volumes year-over-year.

Landing fees and rents increased $21 million as a result of the timing of an annual credit and distribution expenses decreased $30 million as a result of cost reduction efforts.

- Debt reduction and refinancing efforts continue to contribute to lower interest expense year-over-year, with interest expense down $30 million or about 19%.
- This was offset by a $47 million decline in interest income due to both lower yields on cash, as well as a lower average cash balance compared to last year.
- The largest cash infusion came from closing the amendments to the Mileage Plus credit card agreement and credit card processing agreement.
- The airliner generated negative operating cash flow of $387 million which includes the $600 million in cash received from Chase from a one-time bonus and advanced purchase of miles.

Revenue Drivers:

- Firm produced an absolute consolidated PRASM of $0.1302 which continues to produce a significant premium to the industry and enabled it to generate consolidated passenger revenue growth of 1.4%, despite capacity reductions of 3.6%.
- Consolidated PRASM was up 5.2% driven by a 7.1% increase in yield, partially offset by a drop of 1.6 points in load factor.
- Domestic market performance was solid, benefiting from a 6.2% reduction in mainline capacity.

Mainline domestic PRASM was up 6.5% driven by a strong yield increase of 7%, improving significantly in September as a result of the capacity reductions.

- International PRASM was up 4.2% year-over-year on capacity decline of 0.8%.
- In the Pacific region, China including Hong Kong experienced year-over-year unit revenue growth but was hurt by recent industry capacity additions of 15% and a tightening of the business and visitor visa issuance by the Chinese government.
- In response to the slower unit revenue growth in China, UAL has down gauged a number of flights from the US to China from 747s to 777s, and starting this winter, will reduce the frequency of Washington, D.C. to Beijing flight to less than daily.

In Germany, the firm will be discontinuing service this month from Los Angeles to Frankfurt, and will be reducing from two flights to one flight per day in the San Francisco to Frankfurt market.

- All in with these international capacity changes, the firm will be eliminating 7% to 8% of international capacity in 2009.

Operational Metrics:

- For the first half of October, the company had a completion rate of 99.4%, up 1.1 points from last year and an arrival 14 rate at 86% up over eight points from last year.
- Customer surveys show that customer satisfaction has doubled onboard the new international premium products versus the product it replaces.
- Recent customer satisfaction measurements are up 35% from summer levels.

Strategic Insights: