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UNITED AIRLINES ANNOUNCES MAJOR COST-REDUCTION PROGRAM TO ENSURE LONG-TERM FUTURE

 CHICAGO, Jan. 6 /PRNewswire/ -- United Airlines announced today significant cost-cutting measures to help to ensure that the company returns to profitability despite the ongoing economic pressures and industry turmoil, which have led to staggering financial losses for U.S. airlines over the last three years. United's cost-reduction plan will reduce its expenses by $400 million.
 Through the first three quarters of 1992, UAL Corporation (NYSE: UAL) , parent of United Airlines, has posted a net loss of $165.9 million. This loss follows a 1991 net loss of $331.9 million. UAL also expects to post a large fourth quarter loss. In addition, as previously announced, the company has pending a massive charge for retiree medical costs.
 "The airline industry's ills are well-documented, and the factors needed to stabilize this industry simply have not occurred," said United Chairman and Chief Executive Officer Stephen M. Wolf. "The fundamental flaws in our industry are still pervasive and threaten our long-term financial health. Many of our competitors are operating indefinitely under bankruptcy law protection, which enables them to compete from a court-approved lowered cost base, resulting in serious financial harm to the balance of the non-bankrupt industry.
 "This chaotic environment leaves us no choice but to take considerable and difficult steps to reduce our losses and ensure the long-term viability of United," he emphasized. "We owe it to our shareholders, our customers and our employees."
 Last month, United announced it had entered into negotiations with The Boeing Company, its principal aircraft supplier, to reduce significantly its 433 aircraft on order and option. The airline also began reviewing the accelerated retirement of its B747-SP fleet.
 "We plan to take major steps to reduce our costs wherever possible and still remain focused on our mission to establish United as the world's premier global airline," Wolf said.
 United's cost-reduction measures include:
 -- Employee layoffs -- "Clearly the most painful of all steps is the necessity to reduce the number of employees at all levels of the company by approximately 2,800," Wolf said. In addition, approximately 1,900 people will not be hired in 1993 as previously anticipated. The first group to be affected are 251 flight attendant trainees, who will not be offered employment. Employees whose positions are not affected by the elimination of programs or services can volunteer for layoff, subject to the needs of the operation.
 -- Salary reductions -- All United officers and affected members of U.S. management will take a 5 percent reduction in salary. Additionally, the board of directors will take a 10 percent reduction in their fees.
 -- Employee cost reduction -- All remaining United employees worldwide, either directly or through their representatives, will be asked to participate in similar sacrifices to reduce United's operating expenses on a long-term basis in order to help to ensure their security and continue United in its current form.
 -- Flight schedule reduction -- United will reduce its domestic schedule, close stations and cancel plans to fly certain previously announced international routes.
 -- Aircraft retirement -- United will accelerate the retirement of its older aircraft, which will lead to the grounding of 40 aircraft in 1993.
 -- Capital-spending reductions -- Although aircraft will be the largest component, all expenditures connected with facilities, equipment, other projects and upgrade programs will be reduced.
 -- Companywide expense reduction -- Consistent with all safety and legal requirements, every other expense item is being evaluated to determine how it contributes to the company's profitability, according to Wolf.
 "We are acutely aware of the impact these painfully necessary actions will have on our employees," Wolf said. "Although our major competitors already have implemented substantial reductions in personnel, we have long hoped we could avoid such an eventuality. We are, however, committed to ensuring that United Airlines returns to profitability."
 United said it will announce additional details about its cost- cutting program as decisions are finalized this month.
 -0- 1/6/93
 /CONTACT: Joe Hopkins, 708-952-5770, or night, 708-952-4088, or (investors) Paela Hanlon, 708-952-7501, all of United Airlines/
 (UAL)


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Date:Jan 6, 1993
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