United Largely Completes Lease Restructure

10th Aug 2005

UAL Corporation
announced today that the Company has largely
completed its aircraft restructuring effort, saving United approximately
$300 million annually. The contractual savings associated with the agreement-
in-principle reached with the Public Debt Group, which is subject to
approval from the U.S. Bankruptcy Court, when coupled with previous
restructurings, will result in the company reducing its fleet costs by
approximately $850 million in average annual savings through contractual
changes and strategic fleet reductions since entering Chapter 11. This
agreement leaves only one transaction left to be restructured, covering 14
aircraft, which is also in process.“This agreement, if approved by the Bankruptcy Court, overcomes one of the
last remaining hurdles in United’s restructuring and upcoming emergence from
Chapter 11,” said Jake Brace, Chief Financial Officer. “Coupled with the
pending restructuring of the 14 aircraft whose junior notes we have purchased
and whose senior notes we intend to purchase, this agreement would resolve all
outstanding aircraft lease issues and provide substantial savings in aircraft
fleet costs needed to support United’s business plan. By significantly
lowering our aircraft costs while preserving our global network, we can
continue to provide our customers with superior service and reliability.”
  The agreement with the PDG enables the restructuring of financings
covering 105 aircraft remaining in United’s fleet, and resolves all potential
claims associated with these aircraft. In addition to significantly reducing
aircraft fleet costs for United, the agreement would secure United’s long-term
use of those aircraft previously under negotiation with the PDG. Those PDG
transactions that no longer have aircraft in United’s fleet have also agreed,
subject to Bankruptcy Court approval, to a resolution of their administrative
claims against the Company.
  The Company intends to file a motion requesting approval of the PDG
agreement with the Bankruptcy Court in the next couple of weeks, to be
scheduled for a hearing in early to mid-September.


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