UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ~~For the quarterly period ended March 31, 2004~~

For the quarterly period ended March 31, 2005

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ~~For the transition period from __________ to __________~~

For the transition period from __________ to __________

Commission file number 33-21220*

UNITED AIR LINES, INC. (Exact name of registrant as specified in its charter)

(Exact name of registrant as specified in its charter)

Delaware	36-2675206
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

Location: 1200 East Algonquin Road, Elk Grove Township, Illinois 60007
Mailing Address: P. O. Box 66100, Chicago, Illinois 60666
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (847) 700-4000

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

	Outstanding at
Class	~~April~~May 3013, ~~2004~~2005
Common Stock ($5 par value)	205

* Registrant is the wholly owned subsidiary of UAL Corporation (File 1-6033). Registrant became subject to filing periodic reports under the Securities Exchange Act of 1934 as a result of a public offering of securities which became effective June 3, 1988 (Registration Nos. 33-21220 and 22-18246).

United Air Lines, Inc. and Subsidiary Companies Report on Form 10-Q For the Quarter Ended March 31, 2005

For the Quarter Ended March 31, 2004

Index

PART I.		FINANCIAL INFORMATION			Page No.

	Item 1. Financial Statements

			Condensed Statements of Consolidated Financial Position (Unaudited) - as of March 31, 2005 and December 31, 2004	3

			Statements of Consolidated Operations (Unaudited) - for the three months ended March 31, 2005 and 2004	5

			Condensed Statements of Consolidated Cash Flows (Unaudited) - for the three months ended March 31, 2005 and 2004	6

			Notes to Consolidated Financial Statements (Unaudited)	7

		Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		21

		Item 3. Quantitative and Qualitative Disclosures About Market Risk		32

		Item 4. Controls and Procedures		33

PART II.		OTHER INFORMATION

		Item 6. Exhibits		34

Signatures		35

Exhibit Index		36

Index
PART I.		FINANCIAL INFORMATION			Page No.
	Item 1. Financial Statements
			Condensed Statements of Consolidated Financial Position (Unaudited) - as of March 31, 2004 and December 31, 2003	3
			Statements of Consolidated Operations (Unaudited) - for the three months ended March 31, 2004 and 2003	5
			Condensed Statements of Consolidated Cash Flows (Unaudited) - for the three months ended March 31, 2004 and 2003	6
			Notes to Consolidated FinancialStatements (Unaudited)	7
		Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		17
		Item 3. Quantitative and Qualitative Disclosures About Market Risk		25
		Item 4. Controls and Procedures		26
PART II.		OTHER INFORMATION
		Item 6. Exhibits and Reports on Form 8-K		27
Signatures		28
Exhibit Index		29

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

United Air Lines, Inc. and Subsidiary Companies (Debtor and Debtor-in-Possession) Condensed Statements of Consolidated Financial Position (Unaudited) (In Millions)

(Debtor and Debtor-in-Possession)


	March 31	December 31
Assets	2005	2004

Current assets:
Cash and cash equivalents	$ 1,389	$ 1,248
Restricted cash	864	856
Short-term investments	24	32
Receivables, net	1,147	941
Related party receivable	252	239
Deferred income taxes	122	117
Inventories, net	211	234
Prepaid fuel expense	255	187
Prepaid expenses and other	357	260
	4,621	4,114

Operating property and equipment:
Owned	17,553	17,730
Accumulated depreciation and amortization	(5,718)	(5,623)
	11,835	12,107

Capital leases	2,724	2,708
Accumulated amortization	(677)	(653)
	2,047	2,055
	13,882	14,162

Other assets:
Investments	22	22
Intangibles, net	379	380
Pension assets	233	665
Aircraft lease deposits	525	540
Prepaid rent	70	71
Other, net	751	782
	1,980	2,460

	$20,483	$20,736

Condensed Statements of Consolidated Financial Position (Unaudited)

(In Millions)

	March 31	December 31
Assets	2004	2003
Current assets:
Cash and cash equivalents	$ 1,365	$ 1,163
Restricted cash	661	657
Short-term investments	8	52
Receivables, net	954	837
Related party receivables	-	8
Income tax receivables	-	4
Deferred income taxes	35	26
Inventories, net	207	264
Prepaid expenses and other	425	409
	3,655	3,420
Operating property and equipment:
Owned	17,948	17,953
Accumulated depreciation and amortization	(5,257)	(5,108)
	12,691	12,845
Capital leases	2,721	2,721
Accumulated amortization	(581)	(555)
	2,140	2,166
	14,831	15,011
Other assets:
Investments	45	47
Intangibles, net	382	382
Pension assets	904	904
Aircraft lease deposits	488	679
Prepaid rent	78	79
Other, net	651	663
	2,548	2,754
	$21,034	$21,185

See accompanying Notes to Consolidated Financial Statements.

United Air Lines, Inc. and Subsidiary Companies (Debtor and Debtor-in-Possession) Condensed Statements of Consolidated Financial Position (Unaudited) (In Millions)

(Debtor and Debtor-in-Possession)


	March 31	December 31
Liabilities and Stockholder's Equity	2005	2004

Current liabilities:
Current portions of long-term debt and
capital lease obligations	$ 902	$ 903
Advance ticket sales	1,828	1,361
Accrued salaries, wages and benefits	1,664	2,098
Accounts payable	652	599
Related party payable	235	478
Fuel purchase commitments	255	187
Other	1,623	1,321
	7,159	6,947

Long-term debt and capital lease obligations	310	301

Other liabilities and deferred credits:
Deferred pension liability	1,289	2,333
Postretirement benefit liability	1,915	1,920
Deferred income taxes	335	330
Other	982	938
	4,521	5,521

Liabilities subject to compromise	17,665	16,162

Commitments and contingent liabilities (See note)

Stockholder's equity:
Common stock at par	-	-
Additional capital invested	4,152	4,152
Retained deficit	(8,791)	(7,779)
Accumulated other comprehensive loss	(3,296)	(3,331)
Receivables from affiliates	(1,237)	(1,237)
	(9,172)	(8,195)

	$20,483	$20,736

Condensed Statements of Consolidated Financial Position (Unaudited)

(In Millions)

	March 31	December 31
Liabilities and Stockholder's Equity	2004	2003
Current liabilities:
Current portions of long-term debt and
capital lease obligations	$ 630	$ 689
Advance ticket sales	1,669	1,330
Accrued salaries, wages and benefits	2,100	2,292
Accounts payable	505	492
Related party accounts payable	307	211
Other	1,056	968
	6,267	5,982
Long-term obligations under capital leases	158	163
Other liabilities and deferred credits:
Deferred pension liability	4,976	4,747
Postretirement benefit liability	1,973	1,924
Deferred income taxes	157	150
Other	290	288
	7,396	7,109
Liabilities subject to compromise	13,908	14,084
Commitments and contingent liabilities (See note)
Stockholder's equity:
Common stock at par	-	-
Additional capital invested	1,603	1,603
ESOP capital	3,988	3,988
Retained deficit	(7,381)	(6,839)
Accumulated other comprehensive loss	(3,290)	(3,290)
Receivables from affiliates	(1,615)	(1,615)
	(6,695)	(6,153)
	$21,034	$ 21,185

See accompanying Notes to Consolidated Financial Statements.

United Air Lines, Inc. and Subsidiary Companies (Debtor and Debtor-in-Possession) Statements of Consolidated Operations (Unaudited) (In Millions)

(Debtor and Debtor-in-Possession)

	Three Months Ended
	March 31
	2005	2004
Operating revenues:
Passenger -United Airlines	$ 2,916	$ 2,991
Passenger - Regional Affiliates	524	440
Cargo	172	148
Other	304	335
	3,916	3,914
Operating expenses:
Salaries and related costs	1,031	1,249
Aircraft fuel	805	603
Regional affiliates	645	551
Purchased services	360	352
Landing fees and other rent	233	231
Aircraft maintenance	219	185
Depreciation and amortization	212	229
Cost of sales	136	191
Aircraft rent	121	138
Commissions	77	81
Other	316	303
	4,155	4,113

Loss from operations	(239)	(199)

Other income (expense):
Interest expense	(112)	(123)
Interest capitalized	(5)	-
Interest income	4	10
Non-operating special charges	-	(13)
Reorganization items, net	(718)	(130)
Miscellaneous, net	58	9
	(773)	(247)

Loss before income taxes and equity in losses of
affiliates	(1,012)	(446)
Credit for income taxes	-	-
Loss before equity in losses of affiliates	(1,012)	(446)
Equity in losses of affiliates	-	(3)
Net loss	$(1,012)	$ (449)

Statements of Consolidated Operations (Unaudited)

(In Millions)

	Three Months Ended
	March 31
	2004	2003
Operating revenues:
Passenger - United Airlines	$ 2,933	$ 2,548
Passenger - Regional Affiliates	293	-
Cargo	148	164
Other	252	395
	3,626	3,107
Operating expenses:
Salaries and related costs	1,241	1,524
Aircraft fuel	603	571
Commissions	93	73
Purchased services	352	335
Aircraft rent	138	202
Landing fees and other rent	231	239
Depreciation and amortization	228	232
Regional affiliates	374	-
Cost of sales	187	362
Aircraft maintenance	185	118
Other	297	319
	3,929	3,975
Loss from operations	(303)	(868)
Other income (expense):
Interest expense	(123)	(147)
Interest capitalized	-	1
Interest income	22	16
Equity in losses of affiliates	(3)	-
Non-operating special charges	-	(137)
Reorganization items, net	(130)	(249)
Miscellaneous, net	(6)	(1)
	(240)	(517)
Loss before income taxes	(543)	(1,385)
Credit for income taxes	-	-
Net loss	$ (543)	$(1,385)

See accompanying Notes to Consolidated Financial Statements.

United Air Lines, Inc. and Subsidiary Companies (Debtor and Debtor-in-Possession) Condensed Statements of Consolidated Cash Flows (Unaudited) (In Millions)

(Debtor and Debtor-in-Possession)

	Three Months
	Ended March 31
	2005		2004
Cash and cash equivalents at beginning
of period	$ 1,248		$ 1,646

Cash flows provided by operating activities	257		385

Cash flows provided (used) by reorganization activities:
Reorganization items, net	(718)		(130)
Pension curtailment	433		-
Increase in liabilities	244		93
Other	11		-
	(30)		(37)

Cash flows provided (used) by investing activities:
Additions to property and equipment		(13)		(60)
Proceeds on disposition of property and
equipment		22		7
Increase in restricted cash		(8)		(4)
Decrease in short-term investments		8		44
Increase in related party receivables		-		(4)
Other, net		(3)		(5)
		6		(22)

Cash flows provided (used) by financing activities:
Repayment of DIP Financing		(4)		(62)
Repayment of long-term debt		(55)		(44)
Principal payments under capital
lease obligations		(28)		(169)
Decrease in advances/loans with affiliates		(5)		(4)
Aircraft lease deposits, net		-		148
		(92)		(131)

Increase in cash and cash equivalents		141		195

Cash and cash equivalents at end of period,
excluding restricted cash		$ 1,389		$ 1,841

Cash paid during the period for:
Interest (net of amounts capitalized)		$ 102		$ 157

Non-cash transactions:
Net unrealized gain (loss) on investments		$ -		$ (1)

Condensed Statements of Consolidated Cash Flows (Unaudited)

(In Millions)

	Three Months
	Ended March 31
	2004	2003
Cash and cash equivalents at beginning
of period	$ 1,163	$ 718
Cash flows from operating activities	392	(223)
Cash flows from reorganization activities:
Reorganization items, net	(130)	(249)
Write off of Company lease certificates	-	215
Increase in liabilities	93	24
	(37)	(10)
Cash flows from investing activities:
Additions to property and equipment	(60)	(36)
Proceeds on disposition of property and
equipment	7	6
Increase in restricted cash	(4)	(66)
Decrease in short-term investments	44	119
Increase in related party receivables	(4)	(1)
Other, net	(5)	(32)
	(22)	(10)
Cash flows from financing activities:
Proceeds from DIP Financing Repayment of DIP Financing	- (62)	92 -
Repayment of long-term debt	(44)	(65)
Principal payments under capital
lease obligations	(169)	(53)
Decrease in advances/loans with affiliates	(4)	(10)
Aircraft lease deposits, net	148	1
	(131)	(35)
Increase (decrease) in cash and cash equivalents	202	(278)
Cash and cash equivalents at end of period,
excluding restricted cash	$ 1,365	$ 440
Cash paid during the period for:
Interest (net of amounts capitalized)	$ 157	$ 103
Non-cash transactions:
Net unrealized gain (loss) on investments	$ (1)	$ (2)

See accompanying Notes to Consolidated Financial Statements.

United Air Lines, Inc. and Subsidiary Companies Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited)

The Company

United Air Lines, Inc. ("United," "we," "our" or the "Company") is a wholly owned subsidiary of UAL Corporation ("UAL").

Interim Financial Statements

We prepared the consolidated financial statements shown here as required by the Securities and Exchange Commission ("SEC"). Some information and footnote disclosures normally included in financial statements that meet generally accepted accounting principles have been condensed or omitted as permitted by the SEC. We believe that the disclosures presented here are not misleading. The financial statements include all adjustments (which include only normal recurring adjustments, reorganization items and other special charges described below) that are considered necessary for a fair presentation of our financial position and operating results. ~~These financial statements should be read together~~ ~~with the information included in our most recent Annual Report on Form 10-K for the year 2003.~~

Certain prior year financial statement items have been reclassified to conform to the current year's presentation. These financial statements should be read together with the information included in our most recent Annual Report on Form 10-K for the year 2004.

Effective first quarter 2005, our financial statements reflect reclassifications associated with a corporate reorganization of the entities under common control. Prior periods have been reclassified to conform to the current year's presentation. For further details, see "Related Party Transactions" in the Notes to the Consolidated Financial Statements.

Voluntary Reorganization Under Chapter 11

Bankruptcy ~~Proceedings~~Considerations. On December 9, 2002 (~~the~~ "Petition Date"), UAL, United and 26 direct and indirect wholly owned subsidiaries filed voluntary petitions to reorganize their businesses under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division (the "Bankruptcy Court"). The Bankruptcy Court is jointly administering these cases as "In re: UAL Corporation, et al., Case No. 02-B-48191." The consolidated financial statements shown here include certain subsidiaries that did not file to reorganize under Chapter 11. The assets and liabilities of these subsidiaries are not considered material to the ~~Consolidated Financial~~ ~~Statements~~consolidated financial statements.

As required by the Bankruptcy Code, the United States Trustee for the Northern District of Illinois ~~has~~ appointed on December 13, 2002 an official committee of unsecured creditors (the "Creditors' Committee"). The Creditors' Committee and its legal representatives ~~have~~ have a right to be heard on all matters that come before the Bankruptcy ~~Court~~ Court concerning our reorganization. There can be no assurance that the Creditors' Committee will support our positions or our plan of reorganization, ~~and~~ and any disagreements between the Creditors' Committee and us could protract the Chapter 11 process, hinder our ability to operate during the Chapter 11 process, and delay our emergence from Chapter 11.

With the exception of our non-filing subsidiaries, we continue to operate our businesses as "~~debtors~~debtor-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and applicable court orders. In general, as ~~debtors~~debtor-in-possession, we are authorized under Chapter 11 to continue to operate as an ongoing business, but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court.

All vendors are being paid for all goods furnished and services provided after the Petition Date in the ordinary course of business. However, under Section 362 of the Bankruptcy Code, actions to collect most of our pre-petition liabilities are automatically stayed, (except for liabilities relating to certain qualifying aircraft, aircraft engines and other aircraft-related equipment that are leased or subject to a security interest or conditional sale contract). Under Section 1110 of the Bankruptcy Code, actions to collect such aircraft-related pre-petition liabilities are automatically stayed for 60 days ~~only~~after the Petition Date (the stay of such actions in our ~~automatic~~case ~~stay~~ ended on February 7, 2003), except under two conditions: (a) the debtor may extend the 60-day period by agreement with the relevant financier and with court approval; or (b) the debtor may agree to perform all of the obligations under the applicable lease or financing and cure any defaults as required under the Bankruptcy Code. If neither of these conditions is met, the lessor or financier may demand the return of the aircraft ~~or take possession of the property~~ and enforce any of its contractual rights or remedies to sell, lease or otherwise retain or dispose of such ~~equipment~~property.

We have negotiated with ~~lessors~~our aircraft lessors and lenders to restructure existing financings to reduce aircraft ownership costs to better reflect current market rates~~. To date~~, weand we have reached agreements in principle to restructure transactions with respect to a ~~substantial~~ majority of our financed aircraft. ~~There~~However, ~~can~~the beneed nofor ~~assurance,~~further ~~however~~cost reductions due to difficult changes in the airline industry, ~~that~~substantially higher ~~those~~fuel ~~tentative~~prices ~~arrangements~~and the continuing weak revenue environment has required ~~will~~us beto ~~successfully~~re-examine ~~converted~~these agreements and to ~~final~~seek ~~contracts~~to renegotiate certain of those financings. To the extent we are unable to ~~finalize~~restructure ~~these~~any ~~agreements,~~financings that ~~there~~we ~~can~~believe beare nounaffordable ~~assurance~~under ~~that~~our revised business plan, we may ~~will~~face bethe ~~able~~possibility tothat ~~reach~~one ~~new~~or ~~agreements~~more atlessors ~~comparable~~or ~~economics~~lenders ormay ~~that~~seek ~~financiers~~to repossess ~~will~~a ~~not~~significant ~~repossess~~number of aircraft. ~~Either~~We ofalso ~~these~~will ~~outcomes~~need to finalize those agreements in principle, ~~although~~and ~~unlikely~~to the extent we are unable to do so, we may likewise face the possibility of repossessions. In either case, the loss of a significant number of aircraft could ~~have~~result in a material adverse affect on our financial and operational performance.

We ~~have~~are ~~also~~currently ~~rejected~~in ordiscussions ~~abandoned~~over ~~certain~~a ~~surplus~~significant number of aircraft with a group of mostly public-market financiers to ~~adjust~~renegotiate ~~our~~an ~~fleet~~agreement ~~size~~in ~~and~~principle ~~composition~~reached in the summer toof ~~more~~2004 ~~closely~~from ~~match~~which ~~market~~we ~~demand.~~subsequently Inwithdrew ~~addition,~~due asto ~~part~~the ofneed ~~on-going~~for ~~negotiations~~further ~~with~~cost ~~financiers,~~reductions. While we ~~have~~believe ~~converted~~we ~~many~~can ~~long-term~~ultimately ~~financing~~reach ~~arrangements~~a mutually acceptable ~~into~~restructuring ~~short-term~~for ~~operating~~the ~~leases~~continued ~~and,~~use inof ~~several~~these ~~instances~~aircraft at affordable rates, the ~~re-acquired~~financiers have demanded the return of certain aircraft and there can ~~previously~~be ~~rejected~~no assurance that these aircraft aswill ~~circumstances~~be ~~warranted~~available for our continued use.

~~Under~~Previously, ~~Section~~the ~~365~~Bankruptcy Court ofhad enjoined the ~~Bankruptcy~~ ~~Code,~~repossession weof ~~may~~six ~~assume,~~B737 ~~assume~~ and ~~assign,~~eight orB767 ~~reject certain executory~~aircraft. ~~contracts~~On ~~and~~May ~~unexpired~~6, ~~leases~~2005, ~~including~~the ~~leases~~Seventh Circuit Court of ~~real~~Appeals ~~property,~~ordered ~~subject~~the Bankruptcy Court to vacate the ~~approval~~temporary ofrestraining ~~the~~order ~~Bankruptcy~~("TRO") ~~Court~~issued ~~and~~in ~~certain~~November 2004 ~~other~~preventing ~~conditions~~the repossession of these aircraft. ~~Currently,~~Dissolution of the ~~our~~TRO ~~Section~~will ~~365~~affect ~~rights~~only tothe ~~assume,~~eight ~~assume~~B767 ~~and~~aircraft ~~assign,~~as orUnited ~~reject~~has ~~unexpired~~since rejected leases offor ~~non-residential~~the ~~real~~six ~~estate~~B737s ~~expiring~~that onwere ~~the~~previously ~~earlier~~subject ofto ~~the~~it. ~~date~~The Company ofis ~~termination~~exploring ofall ~~our~~legal ~~exclusive~~and ~~period~~business options to ~~file~~decrease athe ~~plan~~risk ofthat ~~reorganization~~this ~~(currently,~~would ~~June~~disrupt ~~30,~~our ~~2004)~~ongoing oroperations. ~~the~~However, ~~date~~if we ofdo not successfully negotiate a ~~disclosure~~solution ~~statement~~with ~~hearing in~~the ~~connection~~financiers, ~~with~~our aoperational ~~proposed~~and ~~plan~~financial performance ofcould ~~reorganization~~be adversely affected.

InWe ~~general,~~have ifalso werejected ~~reject an executory contract, unexpired lease~~ or ~~aircraft, it is treated as a~~ ~~pre-petition~~abandoned ~~breach of the lease or contract in question and, subject to~~ certain ~~exceptions,~~surplus ~~relieves~~aircraft ~~us of performing any future obligations but entitles the lessor or contract counterparty~~ to aadjust ~~pre-petition~~our ~~general unsecured~~fleet ~~claim~~size ~~for damages caused by such deemed breach~~ and ~~accordingly,~~composition ~~the~~to ~~counterparty~~more ~~may~~closely ~~file~~match amarket ~~claim against us for such damages. As a result~~demand, ~~liabilities~~ ~~subject to compromise have increased,~~ and are ~~likely~~continuing tothis ~~increase~~process to inachieve ~~the future, as~~ a ~~result~~reduced fleet of ~~damage~~455 ~~claims~~aircraft ~~created~~in by2005. ~~our~~In ~~rejection of various aircraft~~addition, ~~executory~~as ~~contracts~~part ~~and unexpired leases. Generally,~~of ifongoing wenegotiations ~~assume~~with ~~an aircraft financing agreement~~financiers, ~~executory contract or unexpired lease~~ we ~~are~~have ~~required~~converted tosome ~~cure most existing defaults under such contract~~long-term orfinancing ~~lease.~~arrangements Weinto ~~expect~~operating ~~that~~leases ~~the~~of ~~assumption~~a ofreduced ~~certain~~term ~~executory~~and, ~~contracts~~in ~~and~~several ~~unexpired~~instances, ~~leases~~re-acquired ~~may~~previously ~~convert~~rejected ~~liabilities~~aircraft ~~currently shown~~ as ~~subject~~circumstances ~~to compromise to liabilities not subject to compromise~~warranted.

WeUnder ~~are currently seeking modifications to our retiree medical benefit obligations under~~ Section ~~1114~~ 365 of the Bankruptcy Code., Wewe ~~have~~may ~~proposed~~assume, ~~modifications~~assume ~~which~~and ~~would make~~assign, ~~the~~or ~~medical~~reject ~~benefit~~certain ~~plan~~executory contracts ofand ~~those~~unexpired ~~who~~leases, ~~retired~~including ~~before~~leases ~~July~~of 1real property, ~~2003~~subject to the ~~same~~approval asof the ~~medical~~Bankruptcy ~~benefit~~Court ~~plan~~and ~~provided~~certain toother ~~employees~~conditions. ~~who retire after~~By ~~that~~order ~~date.~~of ~~We have also proposed an increase in~~ the ~~amount~~Bankruptcy ~~of contributions that most individuals who retired before July 1~~Court, ~~2003~~our ~~would~~Section ~~have~~365 torights ~~pay towards their medical benefits. While we are currently working with retiree representatives~~ to ~~achieve consensual agreements~~assume, ~~such an outcome is not~~assume ~~assured.~~and Ifassign, weor doreject ~~not~~unexpired ~~reach~~leases ~~consensual~~of ~~agreements,~~non-residential wereal ~~will~~estate ~~seek Bankruptcy~~expire ~~Court~~on ~~approval~~the earlier of ~~such~~the ~~modifications.~~date ~~The~~of ~~Bankruptcy~~termination ~~Court~~of ~~has~~our ~~issued~~exclusive ~~an order~~period ~~requiring us~~ to file a ~~motion~~plan ~~seeking~~of toreorganization ~~modify retiree benefits by May 21~~(currently, ~~2004,~~July ~~with a hearing to follow beginning June 11~~1, ~~2004,~~2005) ifor ~~consensual modifications~~the ~~have not been reached by such~~ date. ~~There~~of ~~can~~the ~~be no assurance,~~conclusion ~~however,~~of ~~that~~a ~~the~~disclosure ~~Bankruptcy~~statement ~~Court~~hearing ~~will~~in ~~adhere~~connection towith ~~this~~a ~~schedule~~proposed orplan ~~approve~~of ~~such modifications~~reorganization.

ToIn ~~successfully~~general, ~~exit~~if ~~Chapter~~we reject ~~11,~~an weexecutory ~~must~~contract ~~obtain~~or ~~confirmation~~unexpired bylease, ~~the~~it ~~Bankruptcy~~is ~~Court~~treated ofas a ~~plan~~pre-petition breach of ~~reorganization. A~~the ~~plan~~lease ofor ~~reorganization~~contract ~~would,~~in ~~among~~question ~~other things~~and, ~~resolve~~subject ~~our~~to ~~pre-petition~~certain exceptions, ~~obligations~~relieves ~~and~~us ~~other~~of ~~liabilities~~performing ~~subject~~any tofuture ~~compromise~~obligations. However, ~~set~~such ~~forth~~a ~~our~~rejection ~~revised~~entitles ~~capital~~the ~~structure~~lessor ~~and~~or ~~establish~~contract ~~our~~counterparty ~~corporate~~to ~~governance~~a ~~subsequent~~pre-petition general tounsecured ~~exit~~claim ~~from~~for ~~bankruptcy.~~damages Wecaused ~~are~~by ~~currently~~such ~~operating~~deemed ~~under~~breach anand ~~"exclusive~~accordingly, ~~period"~~the ~~which~~counterparty ~~expires~~may ~~June~~file ~~30,~~a ~~2004,~~claim ~~during~~against ~~which~~us wefor ~~are~~such ~~the~~damages. ~~only~~As ~~party~~a result, ~~permitted~~liabilities subject to ~~file~~compromise aare ~~plan~~likely ofto ~~reorganization.~~change ~~The~~in ~~decision~~the future as a toresult ~~when~~of ~~we will~~damage ~~file~~claims acreated ~~plan~~by ofour ~~reorganization~~rejection ~~depends~~of onvarious ~~the~~aircraft, executory ~~timing~~contracts and ~~outcome~~unexpired ~~of numerous~~leases. ~~other~~Generally, ~~ongoing~~if ~~matters~~we inassume ~~the~~an ~~Chapter~~aircraft financing 11agreement, ~~process.~~executory Wecontract ~~expect~~or ~~to file~~unexpired alease ~~plan~~we ofare ~~reorganization~~required to ~~that~~cure ~~provides~~existing ~~for~~defaults ~~UAL's~~under ~~emergence~~such ~~from~~contract ~~bankruptcy, but~~or ~~there~~lease. ~~can~~We beexpect nothat the ~~assurance~~future ~~that~~assumption ~~the~~of ~~Bankruptcy~~certain ~~Court~~executory ~~will~~contracts ~~confirm~~and aunexpired leases ~~plan~~may ofconvert ~~reorganization~~liabilities orcurrently ~~that~~shown ~~any~~as ~~such~~subject ~~plan~~to ~~will~~compromise beto ~~implemented~~liabilities not ~~successfully~~subject to compromise.

~~DIP~~To ~~Financing.In connection~~successfully ~~with~~emerge ~~the~~ from Chapter 11 ~~filings~~, ~~the Company arranged a debtor-~~in~~-possession secured~~ ~~financing~~addition ~~("DIP~~to ~~Financing").~~obtaining ~~The~~exit ~~DIP Financing consists of two facilities~~financing, athe ~~$300~~Bankruptcy ~~million facility provided by Bank One N.A. ("Bank One~~Court ~~Facility")~~must ~~and~~confirm a ~~$1.2~~plan ~~billion~~of ~~facility~~reorganization, ~~provided~~the byfiling ~~J.P.~~of ~~Morgan~~which ~~Chase~~will ~~Bank,~~depend ~~Citicorp~~on ~~USA,~~the ~~Inc.,~~timing ~~Bank One, N.A.,~~ and ~~The~~outcome ~~CIT Group/Business Credit, Inc. ("Club Facility"). As~~ of ~~March~~numerous ~~31,~~ongoing ~~2004,~~matters ~~we had $240 million~~ in ~~outstanding borrowings under~~ the ~~Bank~~Chapter ~~One Facility and $362 million under the Club~~11 ~~Facility~~process. ~~Repayment~~We ofexpect ~~the~~to ~~Bank~~file ~~One~~a ~~Facility~~plan ~~began~~of inreorganization ~~March~~that ~~2004~~provides ~~and~~for ~~will~~United's beemergence ~~completed~~from bybankruptcy ~~July~~later ~~2004.~~in ~~While~~2005, ~~the~~but ~~Club~~there ~~Facility~~can ~~matures~~be onno ~~July 1, 2004,~~assurance wethat ~~are currently in negotiations with~~ the ~~Club~~Bankruptcy ~~Facility~~Court ~~lenders~~will toconfirm ~~extend and~~a ~~modify~~plan ~~certain terms~~ of ~~the~~reorganization ~~agreement~~or ~~to more favorable terms as a~~that ~~reflection~~any ofsuch ~~our~~plan ~~improved~~will ~~financial~~be ~~condition~~implemented successfully.

The reorganization plan will determine the rights and claims of various creditors and security holders. At this time, it is not possible to predict accurately the effect of the Chapter 11 reorganization process on our business, nor can we make any predictions concerning how each of these claims will be valued in the bankruptcy proceedings.

Financial Statement Presentation. We have prepared the accompanying consolidated financial statements in accordance with American Institute of Certified Public Accountants' Statement of Position 90-7 ("SOP 90-7"), "Financial Reporting by Entities in Reorganization Under the Bankruptcy Code," and on a going-concern basis, which assumes continuity of operations, realization of assets and satisfaction of liabilities in the ordinary course of business.

SOP 90-7 requires that the financial statements ~~separate~~for periods subsequent to a Chapter 11 filing separate transactions and events that are directly associated with the ~~restructuring~~ reorganization from the ongoing operations of the business. Accordingly, all transactions (including, but not limited to, all professional fees, realized gains and losses, and provisions for losses) directly ~~related to~~associated with the reorganization and restructuring of the business are reported separately in the financial statements. ~~The~~For ~~Statements~~the ~~of Consolidated Financial Position distinguish pre~~three-~~petition~~month ~~liabilities~~periods ~~subject~~ending toMarch ~~compromise both~~31, ~~from~~2005 ~~those~~and ~~that are not subject to compromise as well as from all~~2004, ~~post-petition~~we ~~liabilities.~~recognized ~~Liabilities subject to compromise are reported at~~ the ~~amounts~~following ~~expected~~reorganization toexpenses bein ~~allowed~~our byfinancial ~~the Bankruptcy Court, even if~~statements: ~~they may be settled for lesser amounts.~~

In addition, as a result of the Chapter 11 filings, the realization of assets and the satisfaction of liabilities (without substantial adjustments and/or changes in ownership) are subject to uncertainty. While operating as debtors-in-possession under the protection of Chapter 11 and subject to approval of the Bankruptcy Court and the terms of the applicable DIP Financing covenants, or otherwise as permitted in the ordinary course of business, we may sell or dispose of assets (including aircraft) and liquidate or settle liabilities for some amounts other than those reflected in the consolidated financial statements. Further, our plan of reorganization could materially change the amounts and classifications in the historical consolidated financial statements.

(In millions)	Three Months Ended March 31
	2005	2004
Curtailment charges	$ 433	$ -
Aircraft rejection charges	244	121
Professional fees	44	34
Severance and employee retention	7	7
Interest income	(7)	(4)
Other	(3)	(28)
	$ 718	$ 130

~~Pursuant~~Aircraft torejection ~~the Bankruptcy~~charges ~~Code,~~are wenon-cash ~~have~~costs ~~filed~~that ~~schedules~~include ~~with the Bankruptcy Court identifying~~ our ~~assets~~ ~~and~~estimate ~~liabilities as~~ of ~~the Petition Date, while our creditors have been able to file proofs of claim with the Bankruptcy Court. The total amount of~~ claims ~~filed~~resulting ~~with~~from ~~the Bankruptcy Court far exceeds our estimate~~United's ofrejection ~~ultimate liability. We believe that many~~ of ~~these~~certain ~~claims~~aircraft ~~are~~leases ~~invalid because they are duplicative, are based upon contingencies that have not occurred, or are otherwise overstated. Differences in amount between claims filed by creditors~~ and ~~liabilities~~return ~~shown in our records are being investigated and resolved in connection with our claims resolution process. That process has commenced and, in light~~ of ~~the~~aircraft ~~number~~as ofpart ~~claims asserted, will take~~of ~~significant time to complete. For this reason,~~ the ~~ultimate~~bankruptcy ~~number and allowed amounts of such claims cannot yet be determined~~process.

~~New~~ As ~~Accounting~~we ~~Pronouncements~~restructure -aircraft financings ~~Consolidation~~as permitted by Section 1110 of ~~Variable~~the ~~Interest~~Bankruptcy Code, our policy ~~Entities~~is to reflect the revised lease rates in aircraft rent once we have signed definitive term sheets for the financing.

~~Issued~~In inthe ~~January~~first ~~2003,~~quarter ~~Financial~~of 2005, ~~Accounting~~we ~~Standards~~recognized ~~Board~~a ~~Interpretation~~pension ~~No.~~curtailment ~~46,~~charge ~~"Consolidation~~ of ~~Variable Interest~~$433 ~~Entities"~~million ~~("FIN~~associated ~~46")~~with a ~~and~~motion ~~subsequently~~filed ~~revised~~by ~~in December 2003 with~~ the ~~Financial~~Pension ~~Accounting~~Benefit ~~Standards~~Guaranty ~~Board~~Corporation ("~~FASB~~PBGC") ~~interpretation of~~to ~~FIN~~involuntarily 46terminate (~~"FIN~~on ~~46R")~~March 11, ~~requires the "primary beneficiary" of a variable interest entity ("VIE"~~2005) ~~to include~~ the ~~VIE~~Company's ~~assets,~~defined ~~liabilities and operating results~~benefit inpension ~~its~~plan ~~consolidated~~for ~~financial~~covered ~~statements.~~members ~~FIN~~of 46certain ~~also~~represented ~~requires~~ground ~~the disclosure~~employees. ofBased ~~information~~upon ~~about~~ the ~~VIE's~~involuntary ~~assets~~nature ~~and~~of ~~liabilities and~~ the ~~nature,~~termination ~~purpose and activities~~ of ~~consolidated~~this ~~VIEs~~plan inand its ~~financial statements. Additionally,~~ ~~FIN~~direct ~~46R~~relationship ~~requires~~to ~~disclosure~~the ofCompany's ~~information~~reorganization, ~~about~~ the ~~nature,~~2005 ~~purpose and~~curtailment ~~activities~~charge ~~for~~is ~~unconsolidated~~classified ~~VIEs~~as ~~in which~~ a ~~company~~reorganization ~~holds a significant variable interest~~expense.

~~Certain~~The ~~legal~~Condensed ~~entities established~~Statements ~~by various governmental municipalities for the purpose~~ of ~~issuing~~Consolidated ~~special facility~~Financial ~~revenue~~Position ~~bonds~~distinguish ~~are~~pre-petition ~~not~~ liabilities subject to ~~the~~compromise ~~provisions~~from ofboth ~~FIN~~those ~~46R.~~pre-petition ~~Also, certain~~liabilities ~~entities~~that ~~with which the Company has capacity purchase agreements~~ are ~~not consolidated as these arrangements are not considered VIEs, but~~ ~~rather businesses as defined by FIN 46R, or because United is~~ not ~~considered the~~subject ~~primary~~to ~~beneficiary~~compromise ofand ~~the~~from ~~VIE~~post-petition liabilities. ~~We have also evaluated our interests~~Liabilities insubject ~~VIEs including those related~~ to ~~financing~~compromise ~~and~~are ~~leasing~~reported ofat ~~aircraft~~the ~~and certain~~amounts ~~fuel~~expected ~~consortia arrangements that are used~~ to ~~maintain~~be ~~fuel storage~~allowed ~~and~~by ~~distribution facilities. We have concluded that while~~ the ~~Company~~Bankruptcy ~~holds interests in these VIEs~~Court, weeven ~~are~~if ~~not~~they ~~the~~may ~~primary~~be ~~beneficiaries~~settled offor ~~these VIEs~~lesser amounts.

~~The~~In ~~provisions~~addition, ofas ~~FIN~~a ~~46R~~result ~~were~~of ~~effective~~the ~~immediately~~Chapter ~~for~~11 ~~any~~filing, ~~interest~~the inrealization aof ~~VIE~~assets ~~acquired~~and ~~after~~satisfaction ~~January~~of 31liabilities, ~~2003~~without substantial adjustments and/or ~~beginning~~changes in ~~the~~ownership, are ~~fourth~~subject ~~quarter~~to uncertainty. While operating as debtor-in-possession under the protection of ~~2003~~Chapter ~~for~~11 ~~any~~and ~~interest~~subject into approval of the Bankruptcy aCourt ~~VIE~~and ~~that~~the ~~was~~terms ~~acquired~~of ~~before~~the ~~February~~applicable 1debtor-in-possession secured financing ("DIP Financing") covenants, ~~2003.~~or ~~The~~otherwise ~~FASB~~as ~~deferred~~permitted in the ordinary ~~effective~~course ~~date~~ of ~~FIN~~business, ~~46R~~we tomay ~~the~~sell ~~first~~or ~~quarter~~otherwise dispose of ~~2004~~assets (including aircraft) and liquidate or settle liabilities for ~~any~~some amounts other ~~interests~~than inthose areflected ~~VIE~~in ~~acquired~~the ~~before~~consolidated ~~February~~financial 1statements. Further, ~~2003.~~the forthcoming Asplan of ~~March~~reorganization ~~31,~~could ~~2004,~~materially wechange ~~have adopted~~the ~~FIN 46~~ amounts and ~~FIN~~classifications ~~46R~~in ~~with~~the nohistorical ~~impact~~consolidated ~~to our~~ financial statements.

~~United~~Pursuant ~~has~~to ~~120~~the ~~aircraft operating~~Bankruptcy ~~leases~~Code, ~~where~~we have filed schedules with the ~~lease~~Bankruptcy ~~contains~~Court aidentifying ~~fair~~our assets ~~market~~and ~~value~~liabilities ~~purchase~~as ~~option.~~of ~~These leases~~the ~~are~~Petition ~~subject~~Date, while our creditors have been able to file proofs of claim with the Bankruptcy Court and ~~will~~we ~~become~~expect new ~~effective~~claims ~~upon~~to be filed in the ~~acceptance~~future. Approximately 13,000 proofs of claim ~~the~~(including ~~leases~~late-filed byclaims) ~~United~~have ~~and~~been ~~confirmation~~filed ofso far with the ~~plan~~Bankruptcy Court ofrequesting ~~reorganization~~payments from United. InThrough the claims resolution process ~~addition,~~we have identified many claims which we believe should be disallowed by the ~~Company~~Bankruptcy ~~has~~Court, 94for ~~operating~~a ~~leases~~number of reasons such as our identification of claims that are duplicative, have ~~either~~been ~~fixed~~amended ~~price~~ or ~~fair~~superseded ~~market~~by ~~value~~later filed ~~purchase~~claims, ~~options~~are ~~the~~without ~~majority~~merit, ofor ~~which~~are ~~the~~otherwise ~~Company~~overstated. We have filed ~~expects~~omnibus objections to ~~renegotiate~~many ~~under~~of ~~the~~these ~~Section~~claims ~~1110~~and ~~process~~will continue to file additional objections. ~~United~~As ~~does~~of ~~not~~March 31, 2005, approximately 5,000 of the total claims ~~guarantee~~have either been withdrawn by the ~~residual~~claimants ~~value~~or ofdisallowed ~~these~~by ~~aircraft~~the Bankruptcy Court.

As of March 31, 2005, approximately 8,000 proofs of claim totaling $31.4 billion remain filed with the Bankruptcy Court. The remaining amount of the proofs of claim filed continues to far exceed our estimate of ultimate liability. Differences in amount between claims filed by creditors and liabilities shown in our records continue to be investigated and resolved in connection with our claims resolution process. While we have made significant progress to date, we expect this process to continue for some time and believe that further resolution of claims will enable us to determine with more precision the likely range of creditor distributions under a proposed plan of reorganization. We have recorded liability amounts for the claims that can be reasonably estimated and which we believe are probable of being allowed by the Bankruptcy Court and we have classified these as liabilities subject to compromise in the attached Condensed Statements of Consolidated Financial Position.

We will continue to evaluate existing and new claims filed and will make adjustments, as appropriate. To date, such adjustments have been material and we anticipate that future adjustments will be material as well. At this time, the ultimate number and allowed amount of such claims cannot be determined, due primarily to the uncertainties of the Chapter 11 process, and the in-progress state of our investigation and resolution of submitted claims.

DIP Financing. In connection with the Chapter 11 filings, the Company arranged DIP Financing. As of March 31, 2005, the DIP Financing consisted of a $1.0 billion facility of which $900 million was available due to a $100 million reserve for collateral maintenance and liquidation expenses. The facility included a revolving credit and letter of credit facility of $200 million and a term loan of $800 million, and is scheduled to mature on September 30, 2005. We have the option of borrowing under the DIP Financing at an interest rate of the prime rate plus 3.5% or LIBOR plus 4.5% plus mutually agreed upon fees. As of March 31, 2005, we had outstanding borrowings of $859 million at a rate of 7.5%. In addition, letters of credit were issued under the DIP Financing in an aggregate amount equal to $37 million. We are required to maintain a minimum unrestricted cash balance of $750 million with the possibility of a reduction to $600 million if certain EBITDAR milestones are met.

The terms of the DIP Financing include covenants that require us to satisfy ongoing monthly financial requirements, including minimum EBITDAR thresholds, limitations on capital expenditures and minimum unrestricted cash. Failure to comply with these covenants would constitute an event of default under the DIP Financing and allow the lenders to accelerate the loan. For the month of January 2005, we obtained a waiver from the lenders under the DIP Financing with respect to the defaults and events of default created as a result of our failure to comply with the EBITDAR covenant during such time. The Company complied with the EBITDAR covenant in February, March and April, 2005.

The terms of the DIP Financing also contain a financial covenant which does not permit us to make payments which are not materially consistent with our business plan, unless the lenders otherwise consent based on approval of a modified business plan. To preserve the Company's liquidity, our business plan does not provide for contributions to our defined benefit pension plans.

Effective April 28, 2005, we entered into an agreement with the DIP Financing lenders to waive certain events of default and to modify certain terms of the DIP Financing. The modified DIP Financing (i) includes certain technical amendments to the definition of EBITDAR, (ii) requires the delivery of an updated business plan on or before July 31, 2005, (iii) increases the Company's flexibility to lease and sublease a limited number of engines, and (iv) makes certain other technical modifications.

Borrowing availability is determined by a formula based on a percentage of eligible assets. The eligible assets consist of certain previously unencumbered aircraft, spare engines, spare parts inventory, certain flight simulators and quick engine change kits. The underlying value of such assets may fluctuate periodically due to prevailing market conditions and fluctuations in value may have an impact on the borrowing availability under the DIP Financing. Availability may be further limited by additional reserves imposed by the lending banks in their commercially reasonable discretion.

The DIP Financing is guaranteed by UAL and all filing subsidiaries and is secured by first priority liens on all unencumbered present and future assets and by junior liens on all other assets, other than certain specified assets, including assets which are subject to financing agreements that are entitled to the benefits of Section 1110 and to the extent such financing agreements prohibit such junior liens.

New Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 123 (Revised 2004), "Share-Based Payment" ("SFAS 123R") which establishes standards for accounting for transactions in which an entity obtains employee services in exchange for stock options or share-based payments. SFAS 123R requires that the compensation cost (as measured by the fair value of the equity or liability instruments issued) relating to share-based payment transactions be recognized in financial statements. This statement replaces SFAS No. 123, "Accounting for Stock-Based Compensation," and supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees." Currently we account for stock options under APB Opinion No. 25 as permitted by SFAS No. 123. SFAS No. 123R is effective for the first interim or annual reporting period of the Company's first fiscal year that begins after June 15, 2005. The Company will recognize compensation expense for its participation in stock-based compensation plans for the portion of outstanding awards for which the employee service has not yet been rendered, based on the grant date fair value of those awards calculated under SFAS 123R. We anticipate the adoption of SFAS 123R will not have a material impact on our financial statements while we are in bankruptcy.

In March 2005, the FASB issued FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations - An Interpretation of FASB Statement No. 143 ("FIN47"). FIN47 clarifies the term conditional asset retirement obligation as used in SFAS No. 143 and addresses the diverse accounting practices that have developed with respect to the timing of liability recognition for legal obligations associated with the retirement of a tangible long-lived asset when the timing and (or) method of settlement of the obligation are conditional on a future event. In addition, FIN47 clarifies that an entity is required to recognize a liability for the fair value of a conditional asset retirement obligation when incurred if the liability's fair value can be reasonably estimated. FIN47 is effective no later than the end of fiscal year ending December 31, 2005. Currently, we are evaluating the impact of FIN47 on our financial statements.

Stock Option Accounting

WeAt ~~account~~March ~~for~~31, 2005, we had certain stock-based employee compensation plans. We account for these plans under Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees.," We("APB ~~have~~25") ~~not~~and ~~incurred~~related ~~any~~ Interpretations. No stock-based employee compensation cost for stock options is reflected in our financial statements as provided under APB 25, as all options granted under the plans had an exercise price equal to the market value of the underlying common stock on the date of grant.

If compensation cost for stock-based employee compensation plans had been determined using the fair value recognition provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," ~~the~~we ~~Company's net loss~~ would have ~~been~~ reported our net loss as the pro ~~forma~~ forma amounts shown below:

(In millions)	Three Months
	Ended March 31
	2004	2003
	2005	2004
Net loss, as reported	$ (~~543~~1,012)	$ (~~1,385~~449)
Less: Total compensation expense determined under
fair value method	(21)	(52)
	$ (545)	$ (1,390)
	$ (1,013)	$ (451)

Income Taxes

Beginning in the third quarter of 2002, we established a valuation allowance against our net deferred tax asset. Thus, United has a zero percent effective tax rate for ~~both~~the three ~~2003~~month periods ended March 31, 2005 and 2004. As of March 31, ~~2004~~2005, our valuation allowance totaled $23.5 1 billion. Further, we have determined that it is more likely than not that our gross deferred tax assets, net of valuation allowances at March 31, ~~2004~~ 2005, will be realized through the reversals of existing deferred tax credits.

Retirement and Postretirement Plans

InOur ~~December~~net ~~2003,~~periodic ~~the FASB~~benefit ~~revised~~cost ~~Statement~~included ofthe ~~Financial~~following ~~Accounting~~components ~~Standards No. 132, "Employers' Disclosures about Pensions and Other Postretirement Benefits" ("SFAS 132") effective~~ for ~~all~~the ~~interim~~three ~~periods~~month ~~following December 15, 2003. SFAS 132 revises employers' disclosures about pension plans and other postretirement benefit plans including disclosures made in interim~~ periods. ~~While it does~~ended ~~not~~March ~~change the measurement or recognition of those plans~~31, it2005 ~~requires~~and ~~additional~~2004: ~~interim disclosures as detailed below.~~

Our net periodic benefit cost included the following components for the three months ended March 31:

(In millions)	Pension Benefits		Other Benefits
	2005	2004		2005	2004
Service cost	$ 38	$ 58		$ 12	$ 11
Interest cost	221	198		35	50
Expected return on plan assets	(182)	(180)		(2)	(2)
Amortization of prior service cost
including transition obligation/(asset)	8	20		(38)	(25)
Curtailment charge	433	-		-	-
Settlement gain	(15)	-
Recognized actuarial (gain)/loss	47	27		26	28
Net periodic benefit costs	$ 550	$ 123		$ 33	$ 62

(In millions)	Pension Benefits		Other Benefits
	2004	2003		2004	2003
Service cost	$ 58	$ 99		$ 11	$ 30
Interest cost	198	275		50	80
Expected return on plan assets	(180)	(242)		(2)	(3)
Amortization of prior service cost
including transition obligation/(asset)	20	31		(25)	(20)
Recognized actuarial (gain)/loss	27	25		28	36
Net periodic benefit costs	$ 123	$ 188		$ 62	$ 123

Historically, the Company has maintained a nonqualified supplemental retirement plan for management employees who have benefits under the tax-qualified pension plan that cannot be paid due to Internal Revenue Code limits on compensation or benefits. In June 2003, we terminated all participation and benefit payments under the nonqualified plan for those participants who had terminated employment with the Company prior to December 9, 2002. Effective February 28, 2005, we terminated the nonqualified supplemental plan for all remaining participants and recorded a settlement gain of $15 million.

We On March ~~are~~11, ~~currently~~2005, ~~required~~the PBGC filed a complaint against the Company in the U.S. toDistrict ~~contribute~~Court ~~approximately~~for ~~$725~~the ~~million~~Eastern District of Virginia to ~~our~~seek ~~pension~~the ~~plans~~involuntary termination of the Ground Employees' Plan. Participants in ~~2004~~this ~~after~~defined ~~giving~~benefit ~~consideration~~pension toplan include United's mechanics and related employees represented by the ~~estimated~~Aircraft ~~impact~~Mechanics ofFraternal Association ("AMFA"); United's ramp and stores, food services, and security officer employees represented by the ~~Pension~~International ~~Funding~~Association ~~Equity~~of Machinists and Aerospace Workers ("IAM"); ~~Act~~and ~~enacted~~a insmall ~~April~~number ~~2004.~~of Weretired ~~made~~flight ~~$17~~dispatchers. ~~million~~The inPBGC ~~contributions~~is toseeking ~~our~~to ~~plans~~assume inpension ~~the~~responsibility ~~three~~with ~~months~~benefit ~~ended~~accruals terminated effective March 3111, ~~2004~~2005. ~~and~~The Company recorded a $~~110~~433 million inpension ~~contributions~~curtailment tocharge in the ~~plans~~first onquarter ~~April~~of ~~15,~~2005 ~~2004~~relating to the PBGC's involuntary termination action.

Effective July 2004, the Company ceased making contributions to its qualified defined benefit pension plans to preserve its liquidity and does not anticipate making further contributions. We believe that in order to obtain exit financing and successfully reorganize and emerge from Chapter 11 bankruptcy proceedings, it will be necessary to terminate and replace all of our defined benefit pension plans.

Restricted Cash

At March 31, ~~2004~~2005, United had $~~661~~864 million in restricted cash, primarily representing security for worker compensation obligations, security deposits for airport leases and reserves with institutions that process ~~the~~our credit card ticket sales. There can be no assurance that these institutions will not require additional levels of security deposits or reserve holdbacks. The Company's was notified in the second quarter of 2005 that one such institution processing credit card ticket sales plans to increase their level of reserve holdbacks.

Liabilities Subject to Compromise

Liabilities subject to compromise refers to ~~obligations~~both secured and unsecured obligations which will be accounted for under a plan of reorganization, including claims incurred prior to the Petition Date. They ~~result~~represent ~~from~~the estimated amount expected to be allowed on known or potential claims to be resolved through the Chapter 11 process, and remain subject to future adjustments arising from negotiated settlements, actions of the Bankruptcy Court, rejection of executory contracts and unexpired leases, the determination as to the value of any collateral securing claims, proofs of claim or other events. To date, such adjustments, as reflected in reorganization expense, have been material and we anticipate that future adjustments will be material as well. ~~Payment terms for these amounts will~~ ~~be established in connection with the Chapter 11 process.~~

AtDifferences ~~March~~between ~~31,~~liability amounts ~~2004,~~ we ~~had~~have estimated and claims filed by our creditors are being investigated and the Bankruptcy Court will make a final determination of the allowable claims. The determination of how these liabilities ultimately will be treated cannot be made until the Bankruptcy Court approves a plan of reorganization. We will continue to evaluate the amounts of these liabilities through the remainder of the Chapter 11 process. To the extent that we identify additional amounts subject to compromise, ofwe ~~$13~~recognize them accordingly.9 ~~billion~~As ~~consisting~~a result, the amounts of: liabilities subject to compromise are subject to change.

	(In millions)
	Long-term debt, including accrued interest	$ 7,539
	Aircraft-related accruals and deferred gains	3,302
	Capital lease obligations, including accrued interest	1,783
	Intercompany payables and loans	261
	Accounts payable	295
	Other	728
		$ 13,908

At March 31, 2005, we had liabilities subject to compromise of $17.7 billion consisting of the following:

United Express

	(In millions)
	Long-term debt, including accrued interest	$ 7,016
	Qualified defined benefit pension plans	3,980
	Aircraft-related accruals and deferred gains	3,637
	Capital lease obligations, including accrued interest	1,744
	Accounts payable	287
	Intercompany payables and loans	266
	Other	735
		$ 17,665

United has marketing agreements under which independent regional carriers, flying under the United Express ("UAX") name, feed passengers to other United-branded flights. During the second half of 2003, we reached agreements with several UAX carriers, including Air Wisconsin Airlines Corporation, Mesa Air Group, SkyWest Airlines and Trans States Airlines to operate select portions of our United Express service.

Historically, we paid our UAX partner carriers on a fee-per-departure basis and included the revenues derived from them in passenger revenue, net of expenses. However, the long-term agreements we are currently entering into with these and other UAX carriers change the previous fee-per-departure arrangement to a fixed rate and capital reimbursement arrangement. Thus, in accordance with Emerging Issues Task Force No. 01-08, "Determining Whether an Arrangement Contains a Lease" ("EITF 01-08"), we have concluded that the revised agreements are leases.

EITF 01-08 is effective for new arrangements or arrangements modified after the beginning of the third quarter of 2003. Accordingly, based on the terms in the new agreements, we have begun recording revenues and expenses related to these UAX carriers at gross, rather than net. As we were not able to negotiate a comparable, market-based arrangement with Atlantic Coast Airlines ("ACA"), revenues and expenses related to ACA will continue to be reflected net in passenger revenues for the duration of our relationship with ACA. (See "United Express - Atlantic Coast Airlines" in Management's Discussion and Analysis of Financial Condition and Results of Operations for an update on the United Express relationship with ACA.)

Amounts included in passenger revenues for the three-month period (which represent only the ACA relationship in 2004, and all UAX carriers in the prior year) were:

	Net revenues (net expenses)
(In millions)	Three Months
	Ended March 31
	2004	2003
United Express revenues	$ 147	$ 309
United Express expenses	(177)	(404)
Net amount in passenger revenues	$ (30)	$ (95)

Segment Information

~~United~~We ~~has~~have afive ~~global~~reportable ~~route~~segments ~~network~~that ~~designed~~reflect tothe ~~transport~~management ~~passengers~~of ~~and~~our ~~cargo~~business: ~~between destinations in~~ North America, the Pacific, the Atlantic, ~~and~~ Latin America. ~~These~~and ~~regions constitute~~UAL ~~United's~~Loyalty ~~four~~Services, ~~reportable~~LLC ~~segments~~("ULS"). For internal management and decision-making purposes, we have allocated ~~revenues~~ expenses and ~~expenses~~revenues (as incorporated in our consolidated financial statements) to these segments as follows:

(In millions)	Three Months Ended March 31, ~~2004~~2005
	United Air Lines, Inc.				~~Reportable~~	Inter-	United
	North			Latin	~~Segment~~	segment	Consolidated
	America	Pacific	Atlantic	America	~~Total~~ULS	Elimination	Total
Revenue	$ 2,~~422~~394	$ ~~624~~693	$ 461	$ ~~119~~125	$ ~~3,626~~243	$ -	$ 3,916
Loss before
Intersegment revenue	59	20	14	4	-	(97)	-
reorganization items	$ (360)	$ (18)	$ (28)	$ (7)	$ (413)
Earnings (loss) before
reorganization items	$ (304)	$ (26)	$ (41)	$ (17)	$ 94	$ -	$ (294)

(In millions)	Three Months Ended March 31, ~~2003~~2004
	United Air Lines, Inc.				~~Reportable~~	Inter-	United
	North			Latin	~~Segment~~	segment	Consolidated
	America	Pacific	Atlantic	America	~~Total~~ULS	Elimination	Total
Revenue	$ 2,~~005~~542	$ ~~577~~609	$ ~~411~~451	$ ~~114~~116	$ ~~3,107~~196	$ -	$ 3,914
Loss before
Intersegment revenue	66	17	12	3	-	(98)	$ -
special charges
Earnings (loss) before
and reorganization items	$ (687)	$ (150)	$ (117)	$ (45)	$ (999)
reorganization items	$ (331)	$ (10)	$ (23)	$ (6)	$ 64	$ -	$ (306)

	Three Months Ended
	March 31
(In millions)	2004	2003
Total loss for reportable segments	$ (413)	$ (999)
Special charges	-	(137)
Reorganization items, net	(130)	(249)
Total loss before income taxes	$ (543)	$ (1,385)

Beginning in the third quarter of 2004, our Statements of Consolidated Operations reflect reclassifications of regional carrier revenue and expenses in order to provide better presentation of results of operations for United Airlines mainline and United Express (Regional affiliates). Prior periods have been reclassified to conform to the current year's presentation. The effect of these reclassifications on reportable segments for the first quarter of 2004 from amounts previously reported on our Form 10-Q was an increase of $177 million to North America revenue.

~~Other~~ A ~~Comprehensive~~reconciliation ~~Income~~of the total amounts reported by reportable segments to the applicable amounts in the consolidated financial statements follows:

Total comprehensive income (loss):	Three Months
	Three Months Ended
	Ended March 31
	March 31
(In millions)	~~2004~~2005	~~2003~~2004
Net loss	$ (543)	$ (1,385)
Total loss for reportable segments	$ (294)	$ (306)
Unrealized gains (losses)	-	4
Special items	-	(13)
Total comprehensive loss	$ (543)	$ (1,381)
Reorganization items, net	(718)	(130)
Total loss before income taxes	$ (1,012)	$ (449)

~~Reorganization~~ United's ~~Items~~dedicated revenue-producing assets (primarily aircraft) generally can be deployed in any of its reportable segments, while ULS had $1.2 billion in total assets as of March 31, 2005.

InComprehensive ~~connection~~Income ~~with our Chapter~~(Loss) ~~11 filings, we recognized $130 million of largely non-cash reorganization expenses in the first quarter 2004 and $249 million in the first quarter 2003.~~

	Three Months
	Ended March 31
(In millions)	2004	2003
Aircraft rejection charges	$ 121	$ -
Transfer of lease certificates	-	215
Professional fees	34	34
Severance and employee retention	7	-
Interest income	(4)	(3)
Other	(28)	3
	$ 130	$ 249

Accumulated other comprehensive income (loss) is comprised of the following:

Aircraft rejection charges include our estimate of claims resulting from United's rejection of certain aircraft financing obligations (and return of the associated aircraft) as part of the bankruptcy process.

(In millions)	Minimum	Unrealized	Total
	Pension	Gains (Losses)	Comprehensive
	Liability	on Derivatives	Income (Loss)
Balance at December 31, 2004	$ (3,311)	$ (20)	$ (3,331)
Current year net change	-	35	35
Balance at March 31, 2005	$ (3,311)	$ 15	$ (3,296)

InSpecial ~~the first quarter of 2003,~~Items we renegotiated certain off-balance sheet leases as part of the Section 1110 process. Under the terms of the revised leases, we surrendered our investment in the junior portion of the original lease debt to the original equity participant. As a result, our investment in the corresponding lease certificates was reduced to zero, resulting in a $215 million non-cash charge in reorganization items.

~~Special~~ During ~~Charges~~the first quarter of 2004, we incurred a $13 million charge in non-operating expense for the write-down of certain non-operating B767 aircraft.

On April 1, 2003, Air Canada filed for protection under the Companies' Creditors Arrangement Act ("CCAA") of the Canada Business Corporation Act. During the first quarter of 2003, the Company recorded a non-operating special charge of $137 million in connection with Air Canada's CCAA filing. The charge included $46 million for the impairment of our investment in Air Canada preferred stock and $91 million to record a liability resulting from our guarantee of Air Canada debt. We consider this liability to be a pre-petition obligation and accordingly, have classified it in liabilities subject to compromise.

Reconciliation of Accruals

In the period following September 11, 2001, we recorded an accrual of $162 million to reflect our estimate of the early termination fees associated with certain contracts. This obligation has yet to be resolved, and therefore ~~remains~~continues to be included in ~~our overall~~ liabilities subject to compromise in its entirety. ~~Following is a reconciliation of~~ ~~activity related to the accruals for early termination fees as of March 31, 2004 (liabilities are included in subject to compromise):~~

	(In millions)	Early termination fees
	Balance at December 31, 2003	$ 162
	Accruals	-
	Payments	-
	Balance at March 31, 2004	$ 162

Aircraft Fuel Hedging

~~Related~~ Aircraft ~~Party~~fuel ~~Transactions~~represented 19% and 15%, respectively, of our total operating expenses for the three month periods ended March 31, 2005 and 2004.

~~United~~During ~~recognized~~ the ~~following~~second quarter ~~amounts~~of ~~related~~2004, we began to ~~transactions~~implement ~~with~~a ~~UAL~~strategy ~~Loyalty~~to ~~Services~~hedge a portion of our price risk related to projected jet fuel requirements, ~~Inc~~primarily using collar options. The collars (~~"ULS"~~only some of which were designated as cash flow hedges) involve the purchase of fuel call options with the simultaneous sale of fuel put options with identical expiration dates. Those contracts designated as hedges are recorded at fair value, with the changes in ~~2004~~fair value, to the extent they are effective, recorded in other comprehensive income until the underlying hedged fuel is consumed. To the extent that the designated hedges are ineffective, gain or loss is recognized currently. The fair value of each designated hedge is determined by the use of standard option value models using commodity-related assumptions derived from prices observed in underlying markets. For those contracts not designated as hedges, the related gain or loss is recognized currently as an element of non-operating income. In the first quarter of 2005, the Company recognized $41.5 million ($3.8 million relating to the options' time-value and ~~2003:~~$2.7 million as a result of ineffective hedges) in non-operating income from ineffective hedges and from contracts not designated as hedges of fuel purchases.

(in millions)	Three Months
	Ended March 31
	2004	2003
Revenues	$ 82	$ 93
Commission expense and purchased services	(13)	(12)
Interest income	12	11

We have hedged approximately 12% of our remaining 2005 projected fuel requirements at an average price of $1.24 per gallon, excluding taxes. We are currently hedged through December 31, 2005. The current fair value of our designated hedge position is approximately $38.3 million as of March 31, 2005 and is included in other comprehensive income. We expect that this entire amount, to the extent it remains effective, will be recognized into earnings within the next nine months as a reduction to fuel expense. We plan to continue to hedge future fuel purchases as circumstances and market conditions allow.

As a result of the bankruptcy filing, all intercompany accounts receivable were reclassified to United's equity and all intercompany accounts payable were reclassified to liabilities subject to compromise as of the Petition Date.

Commitments and Contingencies

~~United~~In ~~has~~addition ~~certain~~to ~~contingencies~~common commercial ~~resulting~~lease ~~from~~transactions, ~~litigation~~we ~~and~~have ~~claims~~entered ~~(including~~into ~~environmental~~numerous ~~issues)~~long-term ~~encountered~~agreements into ~~the~~lease ~~ordinary~~certain ~~course~~airport ofand ~~business.~~maintenance ~~Management~~facilities ~~believes,~~that ~~after~~are ~~considering~~financed through atax-exempt ~~number~~special offacilities ~~factors,~~revenue ~~including~~bonds (~~but~~"municipal ~~not limited to~~bonds") ~~the~~and ~~views of legal~~issued ~~counsel,~~by ~~the~~various ~~nature~~local ofmunicipalities ~~contingencies~~ to ~~which~~build weor ~~are~~improve ~~subject~~airport and ~~prior~~maintenance ~~experience, that the ultimate disposition of these contingencies will not materially affect the Company's consolidated financial position or results of operations~~facilities.

WeDuring ~~record~~2003, ~~liabilities~~we ~~for~~filed four ~~legal~~complaints ~~and~~for ~~environmental~~declaratory ~~claims~~judgment ~~against~~and uscorresponding inmotions ~~accordance~~for ~~with generally~~temporary ~~accepted~~restraining ~~accounting~~orders ~~principles.~~concerning ~~These~~United's ~~amounts~~municipal ~~are~~bond ~~recorded~~obligations ~~based~~for ~~on our~~facilities ~~assessments~~at ofDenver ~~the~~International ~~likelihood~~Airport of("DEN"), ~~their~~John ~~eventual settlements~~F. ~~The~~Kennedy ~~amounts~~International ofAirport ~~these~~("JFK"), ~~liabilities~~San ~~could~~Francisco ~~increase~~International orAirport ~~decrease~~("SFO"), inand ~~the~~Los ~~near term, based~~Angeles onInternational ~~revisions~~Airport ~~to estimates relating to the various claims~~("LAX"). In ~~addition, as~~each ~~a result of the bankruptcy filing~~case, aswe ofsought ~~the~~clarification ~~Petition Date, virtually~~of ~~all~~our ~~pending~~obligations ~~litigation~~to ispay ~~stayed,~~principal and ~~absent~~interest ~~further~~under ~~order of~~ the ~~Bankruptcy~~applicable municipal ~~Court~~bonds, noand ~~party,~~the ~~subject~~protection toof ~~certain~~our ~~exceptions,~~rights ~~may~~concerning ~~take~~related ~~any~~airport ~~action, again~~lease ~~subject~~agreements toat ~~certain~~the ~~exceptions,~~applicable ~~to recover on pre-petition claims against us~~airports. ~~Accordingly, we have classified certain of these liabilities as liabilities~~ ~~subject to compromise.~~

~~The~~On ~~Company~~March ~~anticipates~~30, ~~that~~2004, the Bankruptcy ~~its~~Court ~~liability~~granted ~~from~~our ~~claims~~motions ~~arising~~for ~~from~~summary judgment with respect to the ~~events~~JFK, SFO ofand ~~September~~LAX 11municipal bonds, ~~2001~~holding that our payment obligations related ~~will~~to bemunicipal ~~significant;~~bonds ~~however,~~financing weairport ~~believe~~improvements ~~that,~~at these sites are not obligations arising under ~~federal~~"leases" ~~law~~pursuant to Section 365 of the Bankruptcy Code. Based on this ruling, ~~our~~the ~~liability~~outstanding $248 million in principal in ~~will~~connection bewith ~~limited~~these tomunicipal ~~our~~bonds ~~insurance~~is ~~coverage~~considered pre-petition debt and the applicable accrued rent has been classified as liabilities subject to compromise.

AtIn ~~March~~our 31adversary proceeding involving DEN, ~~2004~~however, ~~commitments for~~ the ~~purchase~~Bankruptcy ofCourt ~~property~~did ~~and~~not ~~equipment,~~grant ~~principally~~our ~~aircraft,~~motion ~~approximated~~for $1summary judgment.6 ~~billion~~Rather, ~~after~~the ~~deducting~~Bankruptcy ~~advance~~Court ~~payments.~~found ~~Our~~that ~~current~~our ~~commitments~~payment obligations ~~would~~for ~~require~~ the ~~payment~~municipal ofbonds anfinancing ~~estimated~~airport ~~$0.1~~improvements ~~billion~~at inDEN ~~2004,~~(which ~~$0.4 billion~~represents inapproximately ~~each of 2005 and 2006,~~ $~~0.5~~261 ~~billion~~million in ~~2007~~principal) ~~and~~are ~~$0.2~~obligations ~~billion~~arising ~~in 2008~~under ~~and~~a ~~thereafter,~~true ~~primarily~~lease. ~~for~~We ~~the~~have ~~purchase~~appealed ofthe ~~A319,~~adverse ~~A320~~ruling ~~and~~of ~~B777~~the ~~aircraft.~~DEN proceeding, Itbut isin ~~likely~~accordance ~~that~~with the ~~amount~~Bankruptcy ~~and~~Court's ~~timing~~order, ofwe ~~these~~have ~~obligations~~paid ~~will~~$45 ~~change,~~million ~~and~~into ~~could~~escrow ~~potentially~~for bethe ~~eliminated~~April in2003, ~~their~~October ~~entirety. Additionally~~2003, ~~the disposition~~April of2004, ~~advance~~October ~~payments~~2004 and toApril ~~the~~2005 ~~manufacturers~~interest ofpayments ~~$161~~due ~~million~~for ~~is subject to~~ the ~~ultimate~~DEN ~~outcome~~municipal ~~of these discussions~~bonds.

The defendants in the JFK, SFO and LAX adversary proceedings also appealed the Bankruptcy Court's ruling in the U.S. District Court for the Northern District of Illinois ("District Court"). In November 2004, the District Court reversed the Bankruptcy Court's ruling and held in favor of the defendants in the SFO adversary proceeding. In January 2005, the District Court affirmed the Bankruptcy Court's ruling with respect to the DEN adversary proceeding and reversed the Bankruptcy Court's ruling with respect to the LAX adversary proceeding. On February 18, 2005, the District Court affirmed the Bankruptcy Court's ruling in the Company's favor in the JFK adversary proceeding.

The Company has appealed the District Court's ruling with respect to the SFO, LAX and DEN adversary proceedings to the United States Court of Appeals, Seventh Circuit, and the defendants have appealed the ruling in the Company's favor in the JFK matter. The outcome of these matters is uncertain and, therefore, the ultimate treatment of these municipal bond obligations in reorganization is uncertain. In accordance with the Bankruptcy Court's order, we have paid $10 million into escrow for the April 2003, May 2003, October 2003, November 2003, April 2004, May 2004, October 2004, November 2004 and April 2005 interest payments due for the LAX municipal bonds, and $22 million for the April 2003, October 2003, April 2004, October 2004 and April 2005 interest payments for the SFO municipal bonds.

Similarly, in September 2003, we filed a complaint for declaratory judgment for all seven municipal bond issues (which represents approximately $601 million in principal) relating to our facilities at Chicago O'Hare International Airport ("O'Hare"), seeking, among other things, a declaration that a certain cross-default provision in the O'Hare airport lease is unenforceable. On February 15, 2005, the Bankruptcy Court approved an agreement ("O'Hare Settlement Agreement") resolving the disputes between United, the trustees and the bondholders that in effect reduces the Company's indebtedness related to these bond issues from approximately $601 million to approximately $150 million. The City of Chicago, a party to these adversary proceedings, is not a party to the O'Hare Settlement Agreement.

The O'Hare Settlement Agreement requires the indenture trustees and certain designated bondholders to waive any existing defaults with respect to the bonds, and not to seek any further payment on account of the bonds beyond the consideration set forth in the O'Hare Settlement Agreement. It requires UAL, in connection with the confirmation of its plan of reorganization, to relinquish any claims to certain unused construction fund monies (which currently total approximately $65 million) and to issue convertible debt to the counterparties in the O'Hare Settlement Agreement, upon emergence from bankruptcy of the reorganized UAL Corporation, having a par value of $150 million.

As of March 31, 2005, the Company had paid into escrow cash payments totaling approximately $22 million related to interest due on three of the seven O'Hare municipal bonds for semi-annual interest payments that are purported to come due during the pendency of the Chapter 11 reorganization. As part of the O'Hare Settlement Agreement, these escrow funds, less the legal fees of the trustees and certain holders, will be remitted back to the Company.

United has certain contingencies resulting from litigation and claims (including environmental issues) incident to the ordinary course of business. Management believes, after considering a number of factors, including (but not limited to) the views of legal counsel, the nature of contingencies to which we are subject and prior experience, that the ultimate disposition of these contingencies will not materially affect the Company's consolidated financial position or results of operations.

We record liabilities for legal and environmental claims against us in accordance with GAAP. These amounts are recorded based on our assessments of the likelihood of their eventual settlements. The amounts of these liabilities could increase or decrease in the near term, based on revisions to estimates relating to the various claims. In addition, as a result of the bankruptcy filing, as of the Petition Date, virtually all pending litigation is stayed, and absent further order of the Bankruptcy Court, no party, subject to certain exceptions, may take any action, again subject to certain exceptions, to recover on pre-petition claims against us. Accordingly, we have classified certain of these liabilities as liabilities subject to compromise.

The Company anticipates that its liability from claims arising from the events of September 11, 2001 will be significant; however, we believe that, under the Air Transportation Safety and System Stabilization Act of 2001, our liability will be limited to our insurance coverage.

At March 31, 2005, commitments for the purchase of property and equipment, principally aircraft, approximated $1.7 billion, after deducting advance payments. Since September 11, 2001, we have reached agreements with the aircraft manufacturers enabling us to delay or cancel delivery of future orders. Since resetting our fleet plan is critical to our overall restructuring, we continue to hold discussions regarding these deliveries. Our current commitments would require the payment of an estimated $0.1 billion in 2005, $0.1 billion in 2006, $0.4 billion in 2007, $0.5 billion in 2008 and $0.6 billion in 2009 and thereafter primarily for the purchase of A319 and A320 aircraft. It is likely that the amount and timing of these obligations will change, and could potentially be eliminated in their entirety. Additionally, the disposition of advance payments to the manufacturers of $116 million is subject to the ultimate outcome of these discussions.

In March 2005, the Bankruptcy Court approved an agreement which eliminated the obligation to accept delivery of one remaining B777 aircraft and allowed United to use a significant portion of the approximately $45 million in associated advance payments for other purposes. Therefore, this commitment has been excluded from the obligations and advance payments disclosed above.

Related Party Transactions

On March 21, 2005, the Bankruptcy Court approved a corporate restructuring that (a) moved Confetti, Inc. as a subsidiary of ULS to a subsidiary of MyPoints.com, Inc. ("MyPoints"), (b) moved MyPoints as a subsidiary of ULS to a subsidiary of UAL, and (c) moved ULS as a subsidiary of UAL to a subsidiary of United. This change in ownership was accounted for as a restructuring of entities under common control and all assets and liabilities transferred have been stated at net book values and all prior periods presented have been reclassified. This restructuring resulted in a decreased net loss of $94 million for three-months ended March 31, 2004. In addition, the restructuring resulted in a change in classification of operating revenues that are associated with our Mileage Plus program as follows:

Increase/(decrease)	Three Months Ended
	March 31
(In millions)	2004
Operating revenues:
Passenger - United Airlines	$ 28
Other	(28)
Total operating revenues	$ -

As of result of the bankruptcy filing, we reclassified all pre-petition intercompany accounts receivable to equity and all pre-petition intercompany accounts payable to liabilities subject to compromise.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Chapter 11 ~~Reorganization~~Restructuring Efforts

OnThe ~~December~~following 9,sections ~~2002, UAL,~~describe ~~United~~details ~~and~~of 26restructuring ofefforts ~~its~~underway ~~subsidiaries~~by ~~filed~~the ~~voluntary~~Company ~~petitions~~in tothe ~~reorganize~~areas of ~~their~~labor ~~businesses~~agreements, ~~under~~defined ~~Chapter~~benefit 11pension ofplans, ~~the~~aircraft ~~United~~financings, ~~States~~future operating ~~Bankruptcy~~fleet ~~Code. For~~redeployment ~~further~~and ~~details~~reductions, ~~regarding~~municipal bond obligations, and the ~~Chapter~~ongoing 11bankruptcy ~~Cases,~~claims ~~see~~resolution process. See "Voluntary Reorganization Under Chapter 11" in the Notes to Consolidated Financial Statements. Infor ~~addition,~~further ~~specific~~ information ~~pertaining~~on ~~to our bankruptcy filing may be obtained through~~ the ~~website~~reorganization ~~www~~process.~~pd-ual.com.~~

WeLabor ~~are working towards emerging~~Restructuring. ~~from~~Effective ~~Chapter~~January 111, in2005, the ~~summer~~Company ofreduced ~~2004.~~the ~~That~~compensation ~~timing depends upon, among other things, establishment~~ of ~~our post~~its non-~~exit~~represented ~~capital~~salaried ~~structure~~ and ~~financing, as~~management ~~well~~employees ~~as the timely~~ and ~~successful~~announced ~~confirmation~~changes to benefits and ~~implementation~~productivity ~~of a~~for ~~plan~~this ~~of reorganization~~group. The ~~rights~~combination ~~and claims~~ of ~~various~~lower ~~creditors and~~salaries, ~~security~~benefit ~~holders~~changes ~~will~~and ~~also~~workforce bereductions ~~determined~~are byexpected ~~the plan. At this time, it is not possible~~ to ~~predict~~provide ~~accurately~~ the ~~effect of the Chapter 11 reorganization~~Company ~~process~~with onapproximately ~~our~~$112 ~~business,~~million ~~nor~~of ~~can~~$725 wemillion ~~make any predictions concerning how certain claims will be valued~~ in ~~the~~targeted ~~bankruptcy~~average ~~proceedings. However, we~~annual ~~currently~~labor ~~believe that UAL's presently outstanding equity securities will have no value~~ and ~~expect~~benefit ~~that~~cost ~~those securities will be canceled under any proposed plan of reorganization. For this reason~~savings, weother ~~urge~~than ~~that caution be exercised with respect to existing and future investments in any UAL equity security~~pensions.

WeOn ~~are~~January ~~currently~~31, ~~operating~~2005, the ~~under~~Bankruptcy anCourt ~~"exclusive~~approved ~~period~~amended collective bargaining agreements ("CBAs") between ~~which~~the ~~expires~~Company ~~June~~and ~~30,~~the ~~2004,~~Association ~~during~~of ~~which~~Flight weAttendants ("AFA"), the ~~are~~Air Line Pilots Association ("ALPA"), the ~~only~~Professional ~~party~~Airline ~~permitted~~Flight toControl Association ~~file~~("PAFCA"), aand ~~plan~~the ofTransport ~~reorganization.~~Workers WeUnion ~~believe~~("TWU") (all of ~~the~~whom ~~additional~~had ~~time~~ratified ~~will~~such ~~ensure~~amendments) that ~~our~~are ~~plan~~expected ofto ~~reorganization~~provide ~~reflects~~approximately ~~the~~$130 ~~actual~~million, ~~outcome~~$181 ofmillion, ~~issues~~$2.8 ~~critical~~million toand ~~our~~$0.2 ~~restructuring~~million, ~~including our~~respectively, ~~pending~~in ~~application~~average ~~for~~annual asavings ~~federal~~through ~~loan~~2009 ~~guarantee~~ from ~~the~~changes ~~Air~~in ~~Transportation Stabilization~~salaries, ~~Board~~work ~~("ATSB")~~rules and benefits, ~~Section~~other ~~1114~~than ~~proposed~~pensions. ~~changes~~Together towith ~~retiree~~savings expected from ~~medical~~salaried ~~benefits~~and management employees, ~~Section~~all ~~1110~~expected ~~aircraft~~savings ~~financing~~realized ~~restructuring~~to ~~efforts,~~date ~~municipal~~for ~~bond~~labor ~~obligations~~groups ~~and~~represents approximately 60% of the ~~claims~~$725 ~~resolution~~million ~~process~~target.

~~Federal~~ The ~~Loan~~ALPA, ~~Guarantee.~~PAFCA Inand ~~December~~TWU ~~2003,~~contracts also weinclude ~~updated~~contingent ~~our application~~commitments ~~for~~to aissue, ~~federal~~respectively, ~~loan~~$550 ~~guarantee~~million, $0.4 ~~from~~million ~~the~~and ~~ATSB~~$24,000 in ~~conjunction~~convertible ~~with receiving~~notes ~~conditional~~upon ~~commitments~~the ~~from~~emergence ~~J.P.~~of ~~Morgan Chase Bank and Citicorp~~the ~~USA,~~Company ~~Inc.,~~from ~~for~~bankruptcy $2in ~~billion~~the inevent ~~exit~~the ~~financing.~~groups' ~~These~~defined ~~conditional~~benefit ~~commitments~~pension ~~expire~~plans onare ~~June~~terminated. ~~30,~~These ~~2004~~groups ~~and~~have ifagreed ~~necessary we expect~~ to, ~~but~~eliminate ~~have~~any noCBA ~~assurances~~requirement weto ~~can~~maintain, ~~extend~~and ~~that~~not ~~date~~to ~~should~~oppose ~~the~~efforts ~~ATSB~~by ~~require~~the ~~additional~~Company ~~time~~ to ~~review~~terminate, their ~~our~~respective ~~application~~defined benefit pension plans.

~~Based~~The onAFA, ~~our~~ALPA, ~~projected~~PAFCA, ~~future~~and ~~liquidity~~TWU ~~needs,~~agreements weeach ~~believe~~contain ~~that~~termination $2rights ~~billion~~for is the ~~amount~~respective ~~needed to optimally~~union. ~~run~~Among ~~our~~other ~~operations~~things, ~~and~~all ~~would~~provide ~~enable~~that usthe tounions ~~achieve~~can ~~and~~terminate ~~maintain~~the agreement (upon a ~~level~~ failure of ~~liquidity~~the ~~comparable~~Company to ~~that~~cure ofwithin ~~the~~twenty ~~rest~~days) ofif the ~~airline industry, thereby~~Company ~~enabling~~fails us to ~~effectively~~obtain ~~compete.~~specified ~~Absent~~levels anof ~~ATSB~~average ~~loan~~annual ~~guarantee,~~savings ~~our~~from all other ~~ability~~union togroups ~~access~~and the ~~capital~~Company's ~~markets~~salaried isand ~~highly~~management ~~uncertain~~employees. AsAdditionally, the ofPAFCA and TWU agreements each provide that the ~~date~~Company can terminate the agreements if a court of ~~this~~competent ~~filing,~~jurisdiction enters a final order that the ~~ATSB~~Company ~~has~~is not ~~yet~~entitled ~~reached~~to aterminate ~~decision~~the ondefined ~~our~~benefit ~~application~~pension plans covering that employee group.

~~Retiree~~On ~~Medical~~April ~~Benefits.As part of the Chapter 11 process~~8, ~~we are also seeking~~2005, ~~under~~the ~~Section 1114~~AFA ofserved ~~the~~notice ~~Bankruptcy Code,~~ to ~~modify~~ the ~~medical~~Company ~~benefits~~of wetheir ~~currently~~intention ~~provide~~ to ~~our~~exercise ~~approximately~~this ~~35,000 retired employees who retired before July 1,~~termination ~~2003~~provision. WeAlthough ~~have proposed modifications which would make~~ the ~~medical~~Company ~~benefit plan~~believes ofthat ~~those who retired before July 1, 2003~~ the ~~same~~union ashas ~~the~~no ~~medical~~right ~~benefit plan now provided~~ to ~~employees who retire after that date. We have also~~ ~~proposed~~terminate ~~that~~this ~~most individuals who retired before July 1~~amendment, ~~2003~~the ~~would~~parties have to ~~pay~~agreed ~~increased contributions towards their coverage. We estimate that these modifications would enable us~~ to ~~realize~~resolve ~~over~~the ~~$250 million in cash~~matter ~~savings~~through ~~over~~expedited ~~five years~~arbitration. ~~While we are currently working with retiree representatives~~ to achieve consensual agreements, this outcome is not assured. If we do not reach consensual agreements, we will seek Bankruptcy Court approval of such modifications. The Bankruptcy Court has issued an order requiring us to file a motion to modify retiree benefits by May 21, 2004, with a hearing to follow beginning June 17, 2004, if consensual modifications have not been reached by such date. There can be no assurance, however, that the Bankruptcy Court will adhere to this schedule or approve such modifications.

~~Section~~We ~~1110~~were ~~Aircraft Restructuring.~~unable ~~Under~~to ~~Section~~reach ~~1110~~ratified agreements ofon ~~the~~amended ~~Bankruptcy~~CBAs ~~Code we have negotiated~~ with ~~lessors~~the ~~and~~employees ~~lenders~~represented toby ~~restructure~~IAM ~~existing~~and ~~financings to reduce aircraft~~AMFA. ~~ownership~~As ~~costs~~such, toon ~~better~~January ~~reflect~~6, ~~current~~2005, ~~market~~the ~~rates.~~Bankruptcy ToCourt ~~date,~~approved wethe ~~have~~Company's ~~reached~~1113(e) ~~agreements~~motion inseeking ~~principle~~interim ~~with~~savings ~~respect~~from toIAM. aThe ~~substantial~~Bankruptcy ~~majority~~Court's oforder, ~~our~~effective ~~financed~~through ~~aircraft.~~April ~~There can be no assurance~~11, ~~however~~2005, ~~that~~and ~~those tentative~~which ~~arrangements~~has ~~will~~now bebeen ~~successfully converted to final contracts.~~extended Tothrough ~~the~~May ~~extent~~31, we2005, ~~are~~requires ~~unable~~a totemporary ~~finalize~~pay ~~these~~rate ~~agreements,~~reduction ~~there~~for ~~can be~~IAM-represented noemployees ~~assurance~~of ~~that~~11.5%, weelimination ~~will~~of bea ~~able~~scheduled toMay ~~reach~~1 ~~new~~increase ~~agreements~~in ~~at comparable~~hourly ~~economics~~pay orrates, ~~that~~and ~~financiers~~provides ~~will~~that ~~not~~these ~~repossess~~employees ~~aircraft.~~will ~~Either~~receive 70% of ~~these~~the pay ~~outcomes,~~they ~~although~~would ~~unlikely,~~normally ~~could~~ have areceived ~~material~~for ~~adverse~~sick ~~affect~~days ~~on our financial and operational performance~~taken.

InLikewise, ~~accordance~~on ~~with~~January ~~Section~~31, ~~1110~~2005, of the Bankruptcy ~~Code,~~Court weapproved ~~have~~the ~~also~~Company's ~~rejected~~1113(e) ormotion ~~abandoned certain~~seeking ~~surplus~~interim ~~aircraft~~savings tofrom ~~adjust our fleet size and composition to more closely match market demand~~AMFA. AsThe ~~part~~Bankruptcy ofCourt's ~~ongoing negotiations~~order, weeffective ~~have also, on~~through ~~occasion,~~May ~~subsequently re-acquired rejected aircraft~~31, ~~under favorable financing arrangements~~2005, torequires ~~optimize~~a ~~our~~temporary ~~overall~~pay ~~cost~~rate ofreduction ~~aircraft~~for ~~ownership, support~~AMFA-represented ~~operational~~employees ~~needs and/or to take advantage~~ of ~~marketplace opportunities~~9. In8% ~~addition,~~and wethat ~~have~~these ~~converted~~employees ~~many~~receive ~~longer-term~~75% ~~financing~~of ~~arrangements into short-term operating leases, and reduced~~ the ~~outstanding~~pay ~~obligations~~they ~~and~~would ~~payment~~normally ~~termson~~have ~~other~~received ~~aircraft~~for ~~financings.~~sick ~~Through~~days ~~this process~~taken, ~~we expect~~up to ~~achieve cash savings of approximately $900 million annually over~~ the ~~next~~first ~~five~~15 ~~years~~days. ~~(See "Voluntary Reorganization Under Chapter 11" of~~ ~~the Notes to Consolidated Financial Statements for details on Section 1110 of the Bankruptcy Code.)~~

~~Municipal~~These ~~Bond~~interim ~~Obligations.~~ cost savings Atordered ~~March~~by ~~31,~~the ~~2004,~~Bankruptcy weCourt ~~had~~will ~~approximately~~provide ~~$1.7~~the ~~billion~~Company inwith ~~special facilities~~additional ~~revenue~~time ~~bonds~~to ~~("municipal~~attempt ~~bonds")~~to ~~outstanding~~resolve ~~that~~the ~~were~~longer-term ~~issued~~cost onsavings ~~behalf~~it needs from both ofIAM ~~United~~and AMFA and to ~~build~~work ortogether ~~improve~~to ~~airport-related~~resolve ~~facilities~~pension issues. ~~The~~Since the Company ~~leases facilities~~was atunable ~~airports~~to ~~pursuant~~reach toratifiable ~~lease~~long-term agreements ~~where~~with ~~municipal~~both ~~bonds~~IAM ~~funded~~and atAMFA, ~~least~~the ~~some~~Company proceeded to trial under Section 1113(c) of the ~~airport-related~~Bankruptcy Code, ~~projects~~which began on May 11, 2005 in the Bankruptcy Court.

~~During~~The ~~2003~~AFA, weAMFA ~~filed~~and ~~four~~IAM have ~~complaints~~indicated ~~for~~that ~~declaratory~~they ~~judgment~~may ~~and~~seek ~~corresponding~~to ~~motions~~engage ~~for~~in ~~temporary~~self-help activities due to the ~~restraining~~settlement ~~order~~agreement ~~concerning~~reached ~~municipal~~with ~~bonds~~the ~~issued~~PBGC ~~for~~(see ~~facilities~~"Pensions" atbelow ~~the~~for further ~~Denver~~details) ~~International~~and/or ~~Airport,~~ the ~~New~~Bankruptcy ~~York~~Court's ~~City~~ruling -in ~~John~~the F.Section ~~Kennedy~~1113(c) ~~International~~proceedings. ~~Airport~~Such ~~("JFK"),~~self-help ~~the~~could ~~San~~adversely ~~Francisco~~affect ~~International~~the ~~Airport~~Company's ~~("SFO"),~~operations and/or ~~the~~customer ~~Los~~demand ~~Angeles~~for ~~International~~the ~~Airport~~Company's ~~("LAX").~~products Inand ~~each~~services. ~~case,~~The weCompany ~~sought~~believes ~~clarification~~that ofsuch ~~our~~actions ~~obligations~~would ~~under~~violate both the ~~applicable~~Railway ~~municipal~~Labor ~~bonds,~~Act and the ~~protection~~Bankruptcy ofCode ~~our~~and ~~rights~~will ~~concerning~~pursue ~~related~~all ~~airport~~available ~~lease~~legal ~~agreements~~remedies atto ~~the~~defend ~~applicable~~itself against ~~airport~~disruptions.

On ~~March~~May 3016, ~~2004~~2005, ~~the~~United ~~Bankruptcy~~and ~~Court~~AMFA ~~granted~~reached ~~our~~a ~~motions~~consensual tentative agreement outside of Bankruptcy Court providing for ~~summary~~wage ~~judgment~~reductions ~~with~~and ~~respect~~other tocontractual ~~the~~modifications ~~JFK,~~to their ~~SFO~~existing ~~and~~CBA. ~~LAX~~The ~~municipal~~tentative ~~bonds,~~agreement ~~holding~~will ~~that~~provide ~~our~~the ~~payment~~Company ~~obligations~~with ~~related~~approximately to$96 ~~airport~~million ~~improvements~~in ataverage ~~these~~annual ~~sites~~savings ~~are~~from ~~not~~changes ~~obligations~~in ~~arising~~salaries, ~~under~~work rules ~~"leases"~~and ~~pursuant~~benefits, toother ~~Section~~than ~~365~~pensions ofover ~~the~~its ~~Bankruptcy~~five ~~Code~~year term. ~~Based~~The ~~on this~~agreement ~~ruling~~provides, among other things, for the ~~outstanding~~issuance of $~~248~~40 million in ~~principal~~convertible notes ~~and~~upon ~~interest~~the emergence of the Company from bankruptcy in ~~connection~~the event their ~~with~~defined ~~these~~benefit ~~bonds~~pension plan is ~~considered~~terminated. ~~pre-petition~~The ~~debt~~agreement also eliminates any CBA requirement to maintain, and not to oppose efforts by the Company to terminate, their respective defined benefit pension plans. The ~~rights~~agreement is ~~and~~subject ~~claims~~to ratification by AMFA membership which is expected to be completed ofon ~~these~~May ~~bondholders~~31, ~~therefore~~2005. If the tentative agreement is ratified, ~~will~~it beis ~~determined~~also bysubject to ~~our~~Bankruptcy ~~plan~~Court ofapproval. ~~reorganization~~In the event that the membership does not ratify the tentative agreement, the parties would explore various alternatives such as returning to negotiations, returning to the Bankruptcy Court or engaging in self-help.

InThe ~~our~~1113(c) ~~adversary~~trial ~~proceeding~~with respect ~~involving~~to the ~~Denver~~IAM ~~airport,~~is ~~however~~proceeding, ~~the~~but ~~Bankruptcy~~at ~~Court~~the ~~did~~same ~~not~~time ~~grant our motion for summary judgment. Rather,~~ the ~~Bankruptcy~~Company ~~Court~~continues ~~found that our payment obligations related~~ to ~~airport improvements at the Denver airport~~ ~~(which~~engage ~~represents~~in ~~approximately~~active ~~$261~~negotiations ~~million of debt) are obligations arising under a true lease. In accordance~~ with the ~~Bankruptcy~~IAM ~~Court's order, we paid $27 million into escrow (pending the outcome of our appeal) for the April 2003, October 2003 and April 2004 interest payments related~~ to ~~the Denver~~reach ~~airport~~a ~~municipal~~consensual ~~bonds~~agreement.

In ~~April~~recognition ~~2004,~~of ~~the defendants~~savings inprovided ~~the~~throughout ~~SFO and JFK adversary proceedings appealed~~ the ~~Bankruptcy~~bankruptcy ~~Court's ruling~~case, ~~and~~the weCompany ~~expect~~has ~~the~~agreed ~~defendants~~to inprovide each ~~the~~employee ~~LAX~~group ~~adversary~~a ~~proceeding~~portion ~~to do~~of the ~~same. Also~~equity, insecurities ~~April,~~or ~~United~~other ~~appealed the Bankruptcy Court's ruling~~consideration ~~with~~provided ~~regard~~ to ~~the~~general ~~Denver~~unsecured ~~airport.~~creditors Atunder ~~the~~any ~~time~~plan of ~~this filing, the Bankruptcy~~reorganization ~~Court~~proposed ~~has~~or ~~transferred~~supported by the ~~SFO,~~Company. ~~JFK~~Each ~~and~~employee ~~Denver~~group ~~appeals~~is to ~~the~~receive a ~~Federal~~distribution ~~District Court~~based ~~for~~on the ~~Northern~~value ~~District~~ of ~~Illinois.~~cost ~~The~~savings ~~District~~provided ~~Court~~by ~~has~~that ~~not set a schedule for these appeals~~group.

~~Similarly,~~Pensions. As of inDecember ~~September 2003~~31, we ~~filed~~2004 ~~a complaint for declaratory judgment for all seven municipal bond issues relating to~~ our ~~facilities~~projected atminimum ~~Chicago~~pension ~~O'Hare~~funding ~~International~~obligation ~~Airport~~between ~~("O'Hare")~~2005 ~~(which~~and ~~represents~~2010 was approximately $~~601~~4.9 ~~million~~billion infor ~~debt),~~our ~~seeking, among~~defined ~~other~~benefit ~~things~~pension plans, aeven ~~declaration~~after ~~that~~giving aconsideration ~~certain~~to ~~cross-default provision in~~ the ~~O'Hare~~temporary ~~airport~~pension ~~lease~~funding relief isprovided ~~unenforceable.~~by At the ~~time~~Pension ofFunding ~~this~~Equity ~~filing, the~~Act ~~Bankruptcy~~of ~~Court has not ruled on this matter~~2004. ~~While~~Effective ~~that case is pending~~July ~~and~~2004, ~~as ordered by~~ the ~~Bankruptcy~~Company ~~Court,~~ceased wemaking ~~have~~contributions ~~paid~~to ~~into~~its ~~escrow~~qualified ~~payments~~defined ~~totaling~~benefit ~~$15~~pension ~~million~~plans ~~related~~ to ~~the~~preserve ~~O'Hare~~its ~~municipal~~liquidity ~~bonds~~and ~~for~~does ~~March,~~not ~~April,~~anticipate ~~May,~~making ~~September,~~further ~~October and November of 2003 and for March and April of 2004~~contributions.

~~Pending~~On ~~the~~November ~~Bankruptcy~~30, ~~Court's~~2004, Independent ~~ruling~~Fiduciary Services, weInc. ~~are~~("IFS"), ~~unable~~the toindependent ~~predict~~fiduciary ~~what,~~appointed ifby the ~~any~~Company, ~~action~~filed ~~might~~a bemotion ~~taken~~ in the ~~future~~Bankruptcy byCourt ~~either~~requesting the ~~bondholders~~allowance of ora ~~the~~$288 ~~airport~~million ~~authorities~~to as$993 amillion ~~result of~~administrative ~~United's~~claim ~~failure~~against tothe ~~pay~~Company for ~~these~~unpaid ~~O'Hare~~minimum ~~contractual~~funding ~~obligations~~contributions. ~~However~~On March 18, 2005, the Bankruptcy weCourt ~~believe~~ruled that ~~the~~only ~~Bankruptcy~~those ~~Court's~~contributions ~~orders~~arising ~~substantially~~from ~~reduce~~pension ~~the~~benefits ~~risk~~associated ofwith ~~any~~service ~~declared~~performed ~~default~~ by ~~providing~~participants usin anthe ~~opportunity~~post-petition period towould ~~make~~be ~~required payments~~considered ~~and~~an ~~preserve~~administrative ~~our~~claim. ~~rights~~IFS ~~under~~is ~~the~~appealing ~~leases~~this decision.

~~Claims Resolution Process.~~ AsWe ~~permitted~~believe ~~under~~that ~~the~~in ~~bankruptcy~~order ~~process,~~to ~~our~~obtain ~~creditors~~exit ~~have~~financing ~~filed~~and ~~proofs~~successfully reorganize ofand ~~claim~~emerge ~~with~~from ~~the~~Chapter ~~Bankruptcy~~11 ~~Court.~~bankruptcy ~~The~~proceedings, ~~total~~it ~~amount~~will ofbe ~~such claims filed~~necessary ~~far~~to ~~exceeds~~terminate ~~our~~and ~~estimate~~replace all of ~~ultimate~~our ~~liability.~~defined Webenefit ~~believe~~pension ~~that~~plans. ~~many~~To ofthis ~~these~~end, ~~claims~~on ~~are~~April ~~invalid~~22, ~~because~~2005, ~~they~~the ~~are~~Company ~~duplicative,~~and ~~are~~the ~~based~~PBGC ~~upon~~entered ~~contingencies which have~~into ~~not~~a ~~occurred,~~global settlement ~~have~~agreement ~~been~~which ~~amended~~provides orfor ~~superseded~~the bysettlement ~~later~~and ~~filed~~compromise ~~claims,~~of orvarious ~~are~~disputes ~~otherwise~~and ~~overstated.~~controversies ~~Differences~~with inrespect ~~amount~~to ~~between~~four ~~claims~~defined ~~filed~~benefit bypension ~~creditors~~plans ~~and~~of ~~liabilities~~United, ~~shown~~including inthe ~~our~~United ~~records~~Pilot ~~are~~Pension ~~being~~Plan, ~~investigated~~Flight ~~and~~Attendant ~~resolved~~Pension inPlan, ~~connection~~Ground ~~with~~Employees' ~~our~~Pension ~~claims~~Plan ~~resolution~~and ~~process.~~the ~~While we~~Management, ~~have~~Administrative ~~made~~and ~~significant~~Public ~~progress~~Contact toPension ~~date~~Plan (collectively, wethe ~~expect this process to continue~~"Pension ~~for~~Plans"). ~~some~~In ~~time~~addition, ~~and~~in ~~believe~~accordance ~~that~~with ~~further~~requests ~~reductions~~by tocertain creditors, the ~~claims~~Company ~~register will~~negotiated ~~enable~~modifications usand clarifications to ~~determine~~the ~~with~~terms ~~more~~of the ~~precision~~settlement ~~the~~agreement ~~likely~~in ~~range~~the beginning of ~~creditor distributions~~May, ~~under~~2005. aThe ~~proposed~~Bankruptcy Court ~~plan~~approved ofthe ~~reorganization.~~settlement Atagreement ~~this~~on ~~time~~May 10, ~~the~~2005. The AFA ~~ultimate~~has ~~number~~filed ~~and~~an ~~allowed~~appeal ~~amount~~ of ~~such~~the ~~claims~~Bankruptcy ~~cannot~~Court's beapproval ~~determined~~of the settlement.

Upon the receipt of the approvals required under the settlement agreement, the PBGC and the Company will execute termination and trusteeship agreements with respect to each of the Pension ~~Legislation~~Plans. As previously mentioned, the termination date for the Ground Employees' Pension Plan will be March 11, 2005, while termination dates for the other plans will be as specified in the settlement agreement. As of the date specified in the termination and trusteeship agreement for each of the Pension Plans, the PBGC will become the statutory trustee of those plans, and the Company will have no further duties or rights with respect to the plans.

OnUnder ~~April~~the ~~10,~~settlement ~~2004~~agreement, the ~~President signed~~Company ~~into~~has ~~law~~agreed ~~the~~to ~~Pension~~propose ~~Funding~~a ~~Equity~~plan ~~Act~~ of ~~2004~~reorganization ~~(the~~that ~~"Act"). The Act~~ provides ~~temporary pension funding relief~~ for ~~U.S. companies by replacing~~ the ~~interest~~distribution ~~rate on the discontinued 30-year Treasury bond with a rate based on a composite~~ of long-term corporate bonds for years 2004 and 2005, which lowers required pension funding obligations (for United as well as for most companies that sponsor defined benefit pension plans) during these two years. In addition, the ~~Act~~following ~~permits~~consideration ~~airlines and steel companies~~ to ~~elect~~ ~~to pay reduced Deficit Reduction Contributions for their under-funded defined benefit pension plans, which has~~ the ~~effect of deferring a portion~~PBGC: ~~of our previously scheduled 2004 and 2005 pension funding obligations to future years.~~

In $500 ~~total,~~million ~~the~~in ~~Act~~principal ~~reduced our~~amount ~~minimum~~of ~~required~~6% ~~pension~~senior ~~funding~~subordinated ~~obligations~~unsecured ~~from~~notes to ~~$1.1~~be ~~billion~~issued to ~~$0.7 billion~~the inPBGC ~~2004.~~no Itlater ~~may~~than ~~also change~~ the ~~pattern~~bankruptcy ofexit ~~our~~date; ~~2005 to 2008 contributions~~maturing ~~depending~~25 onyears ~~future~~from ~~economic~~issuance ~~conditions,~~date; ~~asset~~with ~~returns, and~~ interest ~~rates. However,~~payable ~~our~~in ~~overall~~kind ~~expected~~(notes ~~funding~~or ~~contributions over the 2004 to 2008~~common ~~time~~stock) ~~period~~through ~~remains~~2011 ~~unchanged~~(and atthereafter ~~approximately~~in ~~$4.1~~cash) ~~billion.~~in ~~Significant future~~semi-annual ~~changes to~~ installments; the ~~Company's~~notes ~~demographic~~will ~~mix,~~rank ~~funded~~pari ~~status,~~passu ~~regulatory requirements,~~with ~~projected~~all ~~obligations~~current and ~~expected~~future ~~benefit~~UAL ~~disbursements~~or United ~~could~~senior ~~also~~unsecured ~~impact~~debt; ~~future~~and ~~funding~~be ~~decisions.~~callable Asat aany ~~result,~~time ~~actual~~at ~~future contributions~~100% ~~may~~of ~~differ~~par ~~materially~~value.

In 5,000,000 ~~light~~shares of 2% convertible preferred stock to be issued to the PBGC ~~passage~~no later than the bankruptcy exit date, at a liquidation value of ~~the~~$100 ~~Act~~per share, weconvertible ~~withdrew~~at ~~our~~any ~~applications~~time ~~for~~following ~~certain~~the ~~pension~~second ~~funding~~anniversary of ~~waivers,~~the issuance date into common stock of the reorganized Company at a ~~which~~conversion ~~were~~price ~~filed~~equal to 125% of the average closing price of the common stock during the first 60 days following exit from bankruptcy; with dividends payable in ~~October~~kind ~~2003~~semi-annually; the preferred stock will rank pari passu with all current and future UAL or United preferred stock; and be redeemable at any time at $100 par value at the ~~Internal~~option ~~Revenue~~of ~~Service.~~the issuer; and being non-transferable until two years after the issuance date.

~~United~~ $500 ~~Express~~million in principal amount of 8% senior subordinated unsecured notes contingently issuable to the PBGC in up to eight equal tranches of $62.5 million (with no more than two tranches issued on a single date), beginning with the fiscal year ending December 31, 2009 and ending with the fiscal year ending December 31, 2017 in which there is an issuance trigger date. Issuance is triggered when, among other things, the Company's EBITDAR exceeds $3.5 billion over the prior twelve months, provided that issuance would not cause a default under any other securities then existing. Each issued tranche would mature 15 years from its respective issuance date; with interest payable in cash in semi-annual ~~Atlantic~~installments; ~~Coast~~the ~~Airlines~~notes will rank pari passu with the notes to be issued to ALPA under the January 2005 Letter of Agreement between ALPA and United, and be callable at any time at 100% of par value. For more information on the terms of the settlement agreement, see the Company's Form 8-K filed with the SEC on April 28, 2005.

The distribution of these securities to the PBGC is subject to a "safety valve" provision that allows for modifications to the terms of the securities to the extent that such terms are materially impairing, hindering or delaying the Company's ability to obtain the necessary financing to exit bankruptcy.

OnThe ~~April~~settlement ~~2, 2004, the Company~~agreement ~~and~~requires ~~Atlantic~~that ~~Coast~~any ~~Airlines,~~defined ~~Inc.~~contribution ~~("ACA")~~plan ~~agreed~~proposed to ~~end~~be ~~our~~provided ~~United Express~~by ~~("UAX")~~the ~~relationship~~Company ~~and~~to ~~entered~~its ~~into~~employees afollowing ~~formal~~the ~~transition~~termination ~~agreement~~of ~~providing for~~the anPension ~~orderly~~Plans shall ~~transition~~be ofsubject ~~UAX~~to ~~flying~~the ~~and~~PBGC's ~~ground~~consent, ~~handling~~such ~~operations between~~consent ~~June~~not 3to ~~and~~be ~~August~~unreasonably withheld. 4,The ~~2004.~~Company Onfurther ~~April~~agrees ~~16,~~not ~~2004,~~to ~~the~~establish ~~Bankruptcy~~any ~~Court~~ERISA-qualified ~~approved~~defined ~~both~~benefit ~~the~~pension ~~rejection~~plan offor ~~our~~five ~~United~~years ~~Express~~after ~~agreement~~the ~~with~~date ~~ACA~~of ~~and~~ the ~~transition~~Company's exit ~~agreement~~from bankruptcy.

AsAdditionally, ~~part~~the ofCompany has ~~our~~agreed ~~transition~~ to propose a plan, weof ~~will~~reorganization ~~replace~~that ~~ACA~~provides ~~with~~the PBGC with a ~~combination~~single ofpre-petition ~~six~~general ~~regional~~unsecured ~~airlines~~unfunded ~~(and~~liability claim arising ~~some~~from ~~United~~the ~~Airlines~~termination ~~mainline~~of ~~service)~~the Pension Plans. At United's option, ~~who~~the PBGC will ~~also~~assign ~~assume~~45% ~~ground-handling responsibilities~~of atthe ~~Chicago~~distribution ~~O'Hare,~~it ~~Washington~~receives ~~Dulles~~from ~~and~~this ~~the~~claim ~~spoke~~as ~~cities.~~directed Toby ~~support~~United; ~~this~~provided ~~transition,~~that weUnited's ~~are~~direction ~~expanding~~of ~~our~~this ~~relationship~~assignment ~~with~~must ~~current~~be ~~UAX~~(1) ~~partners~~consistent ~~Air~~with ~~Wisconsin~~the ~~Airlines~~best ~~Corporation~~interests of general unsecured creditors, (2) ~~Mesa~~subject ~~Air~~to ~~Group~~at ~~and~~least ~~SkyWest Airlines.~~10 Webusiness ~~have~~days ~~also~~prior ~~entered~~notice ~~into~~to ~~new~~the ~~agreements~~Creditor's Committee and after consultation with ~~Chautauqua~~the ~~Airlines~~Committee, ~~Republic~~ ~~Airlines~~ and ~~Shuttle~~(3) ~~America~~subject to Bankruptcy ~~operate~~Court ~~thirty-two~~approval ~~regional~~under ~~jets~~the best interest of creditors' test in ~~and~~a ~~ten~~de ~~turbo-prop~~novo ~~aircraft~~review. ~~under~~If United does not comply with the ~~United~~above, ~~Express~~the ~~brand~~distribution will be directed to the unsecured creditors.

Since the settlement agreement shall be deemed to have settled and released any claims by the PBGC on its own behalf or on behalf of the Pension Plans arising from or related to any minimum funding obligations (subject to certain terms and conditions), it also provides for United to terminate the IFS agreement, and for the PBGC to support the Company's actions in certain circumstances.

Section 1110 Aircraft Restructuring. All vendors are being paid for all goods furnished and services provided after the Petition Date in the ordinary course of business. However, under Section 362 of the Bankruptcy Code, actions to collect most of our pre-petition liabilities are automatically stayed, except for liabilities relating to certain qualifying aircraft, aircraft engines and other aircraft-related equipment that are leased or subject to a security interest or conditional sale contract. Under Section 1110 of the Bankruptcy Code, actions to collect such aircraft-related pre-petition liabilities are automatically stayed for 60 days after the Petition Date (the stay of such actions in our case ended on February 7, 2003), except under two conditions: (a) the debtor may extend the 60-day period by agreement with the relevant financier and with court approval; or (b) the debtor may agree to perform all of the obligations under the applicable lease or financing and cure any defaults as required under the Bankruptcy Code. If neither of these conditions is met, the lessor or financier may demand the return of the aircraft and enforce any of its contractual rights or remedies to sell, lease or otherwise retain or dispose of such property.

We have negotiated with our aircraft lessors and lenders to restructure existing financings to reduce aircraft ownership costs to better reflect current market rates, and we have reached agreements in principle to restructure transactions with respect to a majority of our financed aircraft. However, the need for further cost reductions due to difficult changes in the airline industry, substantially higher fuel prices and the continuing weak revenue environment has required us to re-examine these agreements and to seek to renegotiate certain of those financings. To the extent we are unable to restructure any financings that we believe are unaffordable under our revised business plan, we may face the possibility that one or more lessors or lenders may seek to repossess a significant number of aircraft. We also will need to finalize those agreements in principle, and to the extent we are unable to do so, we may likewise face the possibility of repossessions. In either case, the loss of a significant number of aircraft could result in a material adverse affect on our financial and operational performance.

We are currently in discussions over a significant number of aircraft with a group of mostly public-market financiers to renegotiate an agreement in principle reached in the summer of 2004 from which we subsequently withdrew due to the need for further cost reductions. While we believe we can ultimately reach a mutually acceptable restructuring for the continued use of these aircraft at affordable rates, the financiers have demanded the return of certain aircraft and there can be no assurance that these aircraft will be available for our continued use.

Previously, the Bankruptcy Court had enjoined the repossession of six B737 and eight B767 aircraft. On May 6, 2005, the Seventh Circuit Court of Appeals ordered the Bankruptcy Court to vacate the TRO issued in November 2004 preventing the repossession of these aircraft. Dissolution of the TRO will affect only the eight B767 aircraft as United has since rejected leases for the six B737s that were previously subject to it. The Company is exploring all legal and business options to decrease the risk that this would disrupt our ongoing operations. However, if we do not successfully negotiate a solution with the financiers, our operational and financial performance could be adversely affected.

We have also rejected or abandoned certain surplus aircraft to adjust our fleet size and composition to more closely match market demand, and are continuing this process to achieve a reduced fleet of 455 aircraft in 2005. In addition, as part of ongoing negotiations with financiers, we have converted some long-term financing arrangements into operating leases of a reduced term and, in several instances, re-acquired previously rejected aircraft as circumstances warranted.

Redeployment and Reduction of Fleet. On October 6, 2004, the Company announced a plan to expand its international route network, redeploying aircraft to more profitable routes and reducing the overall size of its mainline fleet. These actions are part of the Company's ongoing strategy to adjust fleet size and route mix to current market conditions, which continue to be intensely competitive. Fundamental changes in our industry demand that we take aggressive steps now to implement this plan to ensure that we remain competitive. In the first quarter of 2005, we reduced our mainline operating fleet by 31 aircraft as compared to December 31, 2004.

In addition, on April 22, 2005, the Bankruptcy Court approved an agreement to transition to other regional carriers all flying operations currently performed for the Company by United Express carrier Air Wisconsin Airlines Corporation ("AWAC"). This transition will be completed by early 2006. The Company does not anticipate that this change will adversely affect its United Express operations. Under this transition agreement, AWAC refunded approximately $22 million to the Company in April 2005.

On May 13, 2005, the Company announced that it reached a five-year agreement with United Express carrier Mesa Air Group to operate 30 replacement aircraft under the United Express name, beginning in the fall of 2005.

Municipal Bond Obligations. As a result of our bankruptcy filing, we are not permitted to make payments on unsecured pre-petition debt. We have been advised that our municipal bonds may be unsecured (or in certain instances, partially secured) pre-petition debt. At March 31, 2005, we had approximately $1.7 billion outstanding in municipal bonds that were issued on behalf of United to finance the construction of improvements at airport-related facilities. For further details, see "Commitments and Contingencies" in the Notes to the Consolidated Financial Statements.

Claims Resolution Process. As permitted under the bankruptcy process, our creditors have filed proofs of claim with the Bankruptcy Court and we expect new claims to be filed in the future. Through the claims resolution process we have identified many claims which we believe should be disallowed by the Bankruptcy Court, for a number of reasons such as our identification of claims that are duplicative, have been amended or superseded by later filed claims, are without merit, or are otherwise overstated. We have filed omnibus objections to many of these claims and will continue to file additional objections. For further details, see "Voluntary Reorganization Under Chapter 11 - Financial Statement Presentation" in the Notes to the Consolidated Financial Statements.

Results of Operations

~~Summary~~Over ofthe ~~Results. The~~past ~~air~~several ~~travel~~years, the ~~business~~Company isand ~~subject~~the toairline ~~seasonal~~industry ~~fluctuations.~~have ~~United's~~been ~~operations are~~faced ~~often~~with ~~adversely~~severe ~~affected~~business challenges ~~by winter weather~~ and ~~our~~fundamental ~~first-~~changes ~~and~~in ~~fourth-quarter results~~the ~~normally~~airline ~~reflect~~industry ~~reduced~~that ~~travel~~have ~~demand. Historically, operating~~produced ~~results~~material ~~are~~adverse ~~better~~impacts inon ~~the~~our ~~second~~results ~~and~~of ~~third quarters. However~~operations, infinancial ~~the periods~~position ~~since~~and ~~the~~liquidity. ~~September~~We 11reported ~~terrorist~~losses ~~attacks~~from ~~(which~~operations ~~has~~of ~~also~~$239 ~~seen~~million ~~the~~and ~~eruption~~$199 ofmillion, ~~hostilities~~respectively, infor ~~Iraq as well as~~ the ~~emergence~~quarters ofended ~~the~~March ~~SARS~~31, ~~epidemic~~2005 ~~in Asia)~~and ~~overall customer demand~~ 2004, and ~~hence~~we ~~revenue~~reported ~~(as~~net ~~well~~losses asof ~~typical~~$1.0 ~~seasonality patterns)~~billion ~~have~~and ~~been~~$449 ~~severely~~million ~~disrupted~~for ~~across~~ the ~~airline~~same respective ~~industry~~periods.

~~Not~~Operating ~~unexpectedly,~~revenues wefor ~~experienced~~the ~~under-performance~~airline industry in ~~revenues~~general, ~~following~~as ~~the~~well ~~Chapter~~as 11for ~~filings~~the inCompany, ~~December~~have been adversely ofimpacted ~~2002.~~by ~~This~~a ~~under-performance~~variety ~~accelerated~~of factors in the ~~first~~last ~~quarter~~few ofyears. ~~2003~~Such factors have asincluded ~~weak~~from time to time unfavorable general economic conditions,; the terrorist ~~outbreak~~attacks of ~~war~~September in11, ~~Iraq~~2001 and ~~aggressive fare~~fears ~~competition~~of ~~with~~further ~~low-cost~~terrorist activities; ~~competitors~~enhanced ~~contributed~~airport tosecurity ameasures 9%which ~~drop~~have inincreased airport ~~passenger~~inconvenience ~~unit~~and ~~revenue~~produced insome ~~the~~negative ~~first~~customer ~~quarter~~reaction; ~~of 2003 versus~~ the ~~same period~~enactment of ~~2002~~federal ~~(as~~taxes ~~compared~~on ticket sales to afund 4%those ~~drop~~new ~~for~~security measures; the outbreak ~~airline~~of ~~industry~~Severe ~~overall).~~Acute ~~Throughout the~~Respiratory ~~balance~~Syndrome ofin early 2003, weand ~~implemented~~subsequent fears aof ~~number~~other outbreaks of ~~marketing,~~communicable ~~sales,~~diseases; ~~inventory~~and the growth of low-cost ~~management~~carriers ~~and~~in ~~pricing~~the ~~actions~~United toStates ~~restore~~placing ~~customer~~further ~~confidence,~~downward ~~stimulate demand~~pressures ~~and~~on ~~increase~~revenues by ~~revenue.~~forcing Asus ato ~~result~~compete ofwith ~~these~~discounted ~~actions,~~fares weoffered ~~out~~by low-~~performed the~~cost ~~industry~~ airlines in ~~yield,~~a ~~load~~growing ~~factor~~percentage ~~and~~of ~~passenger~~the ~~unit~~markets ~~revenue~~we ~~growth~~serve. ~~performance during~~These ~~the~~and ~~first~~other ~~quarter~~adverse factors ofcaused ~~2004,~~United asmainline passenger ~~unit~~ revenue ~~grew~~per byrevenue ~~14%,~~passenger onmile ato 1%decline ~~increase~~from in13.3 ~~capacity,~~cents asin ~~compared~~2000 to(the alast 6%year ~~increase~~we ~~for~~reported ~~the~~an ~~overall~~operating ~~airline~~profit) ~~industry~~to 10.8 cents in 2004.

In the first quarter of 2005, United ~~had~~mainline anpassenger ~~operating~~revenue ~~loss~~was 10.8 cents per revenue passenger ofmile, ~~$(303)~~or ~~million~~4% lower than it was in the first quarter of 2004,. aPassenger ~~$565~~load factor ~~million~~improved ~~improvement over~~from 75.3% in the first quarter of ~~2003~~2004 to 78.2% ~~United's~~in ~~net~~the same ~~loss~~quarter of 2005. These results reflect a 2% reduction in system capacity between quarters. As announced in the ~~first~~fourth quarter of 2004, ~~was~~the ~~$(543)~~Company continues ~~million,~~to ~~compared~~shift capacity from domestic to ~~$(1.4)~~international ~~billion~~markets inand it ~~the~~believes ~~same~~that ~~period~~its actions to address overcapacity domestically are beginning ofto ~~2003~~produce unit revenue improvements in that segment.

~~During~~Our ~~the~~operating ~~third~~expenses ~~quarter~~have offluctuated ~~2003,~~as we ~~began~~have ~~recording~~sought ~~revenues~~to restructure our obligations in bankruptcy, adjust our mainline and ~~expenses~~regional ~~related~~carrier operating capacity to ~~certain~~match marketplace demand, and cope with historically high jet fuel prices throughout recent years. United mainline operating cost per available seat mile increased ~~Express~~from ~~carriers~~10.6 atcents ~~gross~~in 2000 to 12.0 cents in 2001, ~~rather~~and ~~than~~then ~~net~~declined to 10.2 cents ~~See~~by "2004. In spite of significant accomplishments in restructuring our operating expenses, including significant contributions from employees and creditors through the bankruptcy process, high fuel costs have had a significant adverse affect on unit operating costs, particularly in more recent periods. In the first quarter of 2005, United ~~Express~~mainline operating cost per available seat mile ("CASM") was 10.3 cents per available seat mile, or less than 1% higher than it was in the first quarter of 2004. ~~Notes~~The increase in fuel prices between quarters added approximately six tenths of a cent to ~~Consolidated~~the ~~Financial~~first ~~Statements~~quarter 2005 CASM, as compared to the first quarter of 2004.

~~The~~In ~~first~~the ~~quarter~~summer of 2004, ~~results~~we ~~include~~identified a further $~~130~~2 ~~million~~billion in ~~reorganization~~required ~~items~~future ~~recorded~~annual incash ~~connection with~~savings ~~our~~(to ~~bankruptcy~~be ~~proceedings~~fully ~~and~~realized ~~$13~~in ~~million~~fiscal ~~(included~~year ~~in Miscellaneous, net~~2007) that we believe are necessary to ~~write-down~~qualify ~~certain~~for ~~non-operating~~exit ~~aircraft~~financing and to ~~their~~emerge ~~net~~from ~~realizable~~reorganization later in ~~value~~2005. ~~The~~We ~~first~~are ~~quarter~~using ~~2003~~all ~~results~~means ~~included~~available ~~$249~~to ~~million~~us in ~~reorganization~~the bankruptcy process ~~items~~to asimplement ~~well~~changes asto our CBAs to enable us to achieve approximately $~~137~~725 million ofin ~~non-cash~~average ~~asset~~annual ~~impairments~~labor ~~related~~savings to toward the ~~bankruptcy~~$2 ~~filing~~billion ofgoal. We ~~our~~are ~~Star~~seeking ~~Alliance~~operational ~~partner~~savings ~~Air~~and ~~Canada.~~the ~~See~~termination ~~"Special~~and replacement ~~Charges"~~of indefined ~~the~~benefit ~~Notes~~pension plans to ~~Consolidated~~achieve ~~Financial~~the ~~Statements~~remainder of the $2 billion savings target.

~~Specific~~Summary ~~factors~~of ~~affecting~~Results. ~~our~~The ~~consolidated~~air travel business is subject to seasonal fluctuations. Our operations can ~~for~~be ~~the~~impacted by adverse weather and our first- and fourth-quarter ofresults normally ~~2004~~reflect ~~are~~reduced ~~described~~travel demand. Historically, results of operations ~~below~~are better in the second and third quarters.

~~First~~The ~~Quarter~~first ~~2004~~quarter 2005 results ~~Compared~~include ~~with~~$718 ~~First~~million ~~Quarter~~in ~~2003. Operating~~reorganization ~~revenues~~items ~~increased~~recorded in connection with ~~$519~~our ~~million~~bankruptcy ~~(17%)~~proceedings. ~~driven~~The byfirst quarter 2004 results included a 6%favorable out-of-period ~~rise~~adjustment into ~~traffic~~passenger ~~and~~mainline 9%revenue ~~increase~~of in$60 ~~yield~~million, on$130 ~~slightly~~million ~~higher~~in ~~capacity.~~reorganization ~~The~~items ~~following~~as ~~analysis~~well byas ~~market~~$13 ismillion ~~based~~to write-down oncertain ~~information~~non-operating ~~reported~~aircraft to ~~the~~their ~~U.S.~~net ~~Department~~realizable ~~of Transportation:~~value.

	Increase (Decrease)
	Available Seat	Revenue Passenger Miles	Revenue Per Revenue
	Miles (Capacity)	(Traffic)	Passenger Mile (Yield)
Domestic	2%	4%	9%
Pacific	(2%)	11%	9%
Atlantic	2%	10%	15%
Latin America	(13%)	(2%)	16%
System	1%	6%	9%

First Quarter 2005 Compared with First Quarter 2004. Operating revenues increased $2 million. Passenger mainline revenues declined $75 million due to a 4% decrease in yield partially offset by a 2% increase in traffic. In addition, passenger revenues in the first quarter of 2004 included a $60 million favorable adjustment. The following analysis by market is based on information reported to the U.S. Department of Transportation:

Cargo revenues decreased $16 million (10%) largely due to a 16% decrease in cargo ton miles. Other operating revenues decreased $143 million (36%) primarily as the result of a $160 million decline in fuel sales to third parties. Passenger revenues were increased by an out of period adjustment of approximately $60 million.

2005	System	Domestic	Pacific	Atlantic	Latin
Passenger revenues (in millions)	$ 2,916	$ 1,789	$ 604	$ 407	$ 116

Increase (Decrease) from 2004:
Passenger revenues (in millions)	(75)	(209)	89	27	18
Passenger revenues (percent)	(2.5%)	(10.5%)	17.3%	7.1%	18.4%

Available seat miles (capacity)	(1.9%)	(9.6%)	16.0%	4.2%	18.3%
Passenger load factor	3.9%	8.1%	(5.2%)	-	(2.3%)
Revenue passenger miles (traffic)	1.9%	(2.2%)	9.9%	4.2%	15.6%
Revenue per revenue passenger mile (yield)	(4.2%)	(6.5%)	4.3%	(0.1%)	(6.5%)

~~Operating~~Cargo ~~expenses~~revenues ~~decreased~~increased $4624 million (116%) ~~and~~largely ~~United's~~due ~~mainline~~to ~~unit~~a ~~cost~~14% ~~(operating~~increase ~~expenses,~~in ~~excluding regional~~cargo ~~affiliates~~ton ~~costs per available seat mile) decreased 11%~~miles. ~~Salaries~~Other ~~and~~operating ~~related~~revenues ~~costs~~ decreased $~~283~~31 million (199%) primarily due to ~~productivity improvements~~a ~~enabled by new labor agreements for all employee groups. Aircraft~~decrease ~~fuel~~of ~~increased~~ $3273 million ~~(6%)~~in ~~due~~United toAirlines ~~rising~~Fuel ~~fuel~~Corporation ~~prices. Aircraft rent decreased $64 million~~ (~~32%~~"UAFC") ~~due~~fuel ~~to the restructuring of aircraft financings under Section 1110 of the Bankruptcy Code. Cost of~~ sales ~~decreased $175~~ ~~million (48%) due~~ to ~~lower~~third ~~fuel~~parties, ~~sales.~~partially ~~Aircraft~~offset ~~maintenance~~by ~~increased $67 million (57%) due to~~ increases in ~~purchased~~third ~~maintenance,~~party ~~including contracted~~ maintenance ~~and maintenance materials. This increase is largely driven~~ byrevenues ~~higher levels of outsourcing~~ and isMileage ~~slightly~~Plus ~~offset~~mileage ~~by lower salary costs~~sales. ~~In line with higher commissionable revenues, commission expense~~ ~~increased $20 million (27%).~~

~~Other~~Operating ~~non-operating~~expenses ~~expense~~increased ~~amounted to~~ $~~110~~42 million in(1%) ~~the first quarter of 2004, compared to $131 million in the first quarter of 2003, excluding non-operating special charges~~ and ~~reorganization~~mainline ~~items.~~unit ~~Inclusive~~cost ~~of non-~~(operating ~~special charges and reorganization items~~expenses, ~~other non-operating expense amounted to $240 million~~excluding inregional ~~the~~affiliates ~~first~~costs ~~quarter~~per ofavailable ~~2004,~~seat ~~compared~~mile) toincreased ~~$517 million in the first quarter of 2003~~0. ~~For details on the special charges and reorganization items, see "Reorganization Items" and "Special Charges" in the Notes to Consolidated Financial Statements~~5%.

(In millions) Operating expenses:	Increase/(Decrease) from 2004	Percentage Change
Salaries and related costs	(218)	(17.5%)	(a)
Aircraft fuel	202	33.5%	(b)
Regional affiliates	94	17.1%	(c)
Purchased services	8	2.3%
Landing fees and other rent	2	0.9%
Aircraft maintenance	34	18.4%	(d)
Depreciation and amortization	(17)	(7.4%)
Cost of sales	(55)	(28.8%)	(e)
Aircraft rent	(17)	(12.3%)	(f)
Commissions	(4)	(4.9%)
Other	13	4.3%
Total	42	1.0%

(a) Decreased primarily due to cost savings associated with lower salary rates and lower full-time equivalent employees.

(b) Increased primarily as a result of a 36% increase in the average cost of fuel (including tax and hedge impact) partially offset by a 2% decrease in consumption.

(c) Increased primarily as a result of greater volumes of United Express regional carrier flying, partially offset by new flying and ground handling contract savings.

(d) Increased due to higher levels of maintenance activity, including contracted maintenance and maintenance materials.

(e) Decreased primarily due to lower third-party fuel sales by UAFC.

(f) Decreased due to restructuring of aircraft lease obligations and fleet reductions.

Other non-operating expense amounted to $55 million in the first quarter of 2005, compared to $104 million in the first quarter of 2004, excluding non-operating special items and reorganization items. In the first quarter of 2005, the Company recognized a non-operating gain of $42 million in miscellaneous, net to record the impact of non-designated and ineffective fuel hedges. Inclusive of non-operating special items and reorganization items, other non-operating expense amounted to $773 million in the first quarter of 2005, compared to $247 million in the first quarter of 2004. For details on the special items and reorganization items, see "Reorganization Items" and "Special Items" in the Notes to Consolidated Financial Statements.

Liquidity and Capital Resources

~~United's~~ The ~~total~~matters ofdescribed in ~~cash~~"Liquidity and Capital Resources," ~~cash~~to the extent that they relate to ~~equivalents~~future ~~and~~events ~~short-term~~or ~~investments~~expectations, ~~including~~may ~~restricted~~be ~~cash,~~significantly ~~was~~affected by the Chapter $211 reorganization process.0 ~~billion~~Those atproceedings ~~March~~involve, 31or may result in, various ~~2004~~restrictions on the Company's activities, ~~compared~~limitations toon ~~$1.9~~financing, and ~~billion~~may atrequire ~~December~~Bankruptcy 31Court and Creditors' Committee approval for various matters, and may create uncertainty as to ongoing relationships ~~2003~~with vendors, suppliers, customers and others with whom we may conduct or seek to conduct business.

AsGenerally, ofunder ~~March~~the ~~31,~~Bankruptcy Code ~~2004,~~most ~~we had~~of ~~$661~~a ~~million~~debtor's inliabilities ~~restricted~~must ~~cash,~~be ~~primarily~~satisfied ~~representing~~in ~~security~~full ~~for~~before the ~~worker~~debtor's ~~compensation~~stockholders ~~obligations,~~can ~~security~~receive ~~deposits~~any ~~for~~distribution ~~airport~~on ~~leases~~account ~~and~~of such shares. ~~reserves~~The ~~with~~rights ~~institutions~~and ~~that~~claims ~~process~~of our ~~sales.~~various ~~Prior~~creditors toand ~~2002,~~security weholders ~~met~~will ~~many~~be ofdetermined ~~these~~by ~~obligations~~the ~~through~~confirmed ~~surety~~plan ~~bonds~~of orreorganization. aIt ~~secured~~is ~~letter~~likely ~~of credit~~that ~~facility;~~pre-petition ~~however,~~unsecured ~~such~~claims ~~facilities~~against ~~are~~the ~~more~~Company ~~difficult~~will tobe ~~access and have~~substantially ~~become~~impaired ~~largely~~in ~~unavailable~~connection towith usour reorganization. AsAt athis ~~result,~~time we ~~may~~can bemake no ~~required~~prediction toconcerning ~~post additional~~how ~~cash~~each ~~collateral~~of tothese ~~support~~claims ~~such~~will ~~obligations~~be valued in the bankruptcy ~~future~~proceedings.

~~During~~United's ~~the~~total ~~first three months~~ of ~~2004~~cash, ~~we generated $455 million of~~ cash ~~from operations excluding a~~ ~~$63~~equivalents ~~million~~and ~~retro~~short-~~wage~~term ~~payment~~investments, ~~for~~including ~~IAM-~~restricted ~~and~~cash, ~~AMFA-represented employees~~was ($~~392~~2.3 ~~million~~billion ofat ~~cash~~March ~~from operations inclusive of the retro-wage payment). Overall~~31, ~~total cash and cash equivalents rose by $202 million during the quarter~~2005, as compared to ~~a net cash outflow of~~ $~~278~~2.1 ~~million~~billion ~~during~~at ~~the same~~December ~~period~~31, ~~in 2003~~2004.

~~During~~As ~~the~~of ~~first~~March ~~three~~31, ~~months of 2004~~2005, we had ~~contributed~~ $17864 million ~~(and~~in ~~then~~restricted cash, an ~~additional~~increase of $~~110~~8 million on ~~April~~as ~~15)~~compared to ~~towards~~December ~~our~~31, 2004. ~~pension~~Restricted ~~obligation.~~cash Weprimarily ~~are~~represents ~~required~~cash collateral to ~~contribute~~secure workers' compensation obligations, security deposits for airport aleases ~~further~~and ~~$600~~reserves ~~million~~with ininstitutions ~~2004~~that toprocess our ~~pension~~credit ~~plans~~card ticket sales. ~~For~~Prior ~~further~~to ~~details see~~2003, ~~"Retirement~~we ~~and~~met ~~Post-Retirement~~many ~~Plans"~~of these obligations (which were smaller in ~~the~~amount) ~~Notes~~through surety bonds or secured letters of credit; however, such facilities are currently largely unavailable to ~~Consolidated~~us. As a result, we ~~Financial~~may ~~Statements~~be required to post significant additional cash collateral to meet such obligations in the future.

~~Property additions, including~~ An ~~aircraft~~institution ~~and~~that ~~aircraft~~processes ~~spare~~our ~~parts,~~credit ~~amounted~~card toticket ~~$60~~sales ~~million.~~notified In the ~~first~~Company ~~three~~during ~~months~~the ofsecond ~~2004,~~quarter weof ~~re-acquired~~2005 ~~two~~that ~~B737,~~it ~~one~~planned ~~B757,~~to ~~and~~increase ~~one~~its ~~B777 aircraft~~cash ~~(all~~holdback ofto ~~which~~secure ~~were~~advanced ~~previously~~ticket ~~rejected)~~sales ~~and~~in ~~rejected~~accordance ~~two~~with ~~B737,~~the ~~one~~terms ~~B747~~of ~~and~~its ~~one~~merchant ~~B777~~agreement. The ~~under~~Company ~~Section~~does ~~1110~~not ofbelieve ~~the~~that ~~Bankruptcy~~this ~~Code.~~increase in Inrestricted ~~addition,~~cash ~~two B767~~will ~~aircraft~~be ~~were~~material ~~transferred~~ to ~~non-operating~~its ~~status~~expected future liquidity.

~~Financing~~Operating ~~activities included~~Activities. ~~principal~~For ~~payments~~the ~~under~~quarter ~~debt~~ended ~~and~~March ~~capital~~31, ~~lease~~2005, ~~obligations~~we ofgenerated ~~$44~~cash ~~million~~flow from operations ~~and~~of $~~169~~257 million, ~~respectively.~~a ~~These~~$128 ~~amounts~~million ~~represent~~decrease ~~payments made under Section 1110 elections for aircraft-secured obligations which are currently classified~~ as ~~liabilities~~compared ~~subject~~ to ~~compromise. During the first quarter of 2004, we made~~ $62385 million in operating ~~principal~~cash ~~and~~flows ~~interest~~generated ~~payments~~in ~~towards the DIP Financing~~2004.

We ~~expect~~contributed to$127 ~~spend~~million towards anour ~~estimated~~pension funding obligations in 2004, but made no cash contributions $0in 2005.1 ~~billion~~We ~~during~~currently ~~the~~anticipate ~~remainder~~that ofwe ~~2004~~will ~~for~~not ~~the~~make ~~purchase~~any offurther ~~property~~cash pension contributions, and ~~equipment.~~believe Atthat ~~March~~it ~~31,~~will ~~2004,~~be ~~commitments~~necessary for the ~~purchase~~Company to ofterminate ~~property~~ and ~~equipment,~~replace ~~principally~~its ~~aircraft,~~defined ~~approximated~~benefit ~~$1.6~~pension ~~billion,~~plans ~~after~~to ~~deducting~~obtain exit ~~advance~~financing ~~payments~~and successfully emerge from bankruptcy. ~~For~~Detailed ~~further~~information regarding ~~details,~~our ~~see~~pension plans is included in "~~Commitments~~Retirement and ~~Contingencies"~~Postretirement Plans" in the Notes to Consolidated Financial Statements.

Investing Activities. Cash generated from investing activities was $6 million in 2005 compared to cash flows used in investing activities of $22 million in 2004. The change from 2004 to 2005 primarily reflects fewer short-term investment conversions to cash, decreased property additions (including aircraft and aircraft spare parts) and increased proceeds from aircraft sales and other property. In the first quarter of 2005, the Company sold two B727, four B737 and two B767 aircraft, transferred four B767 aircraft to non-operating status and rejected (and/or returned to the lessor) 27 B737 aircraft under Section 1110 of the Bankruptcy Code.

Financing Activities. Cash flows used in financing activities were $92 million in 2005 and $131 million in 2004. In the first quarter of 2005, we made principal payments under debt and capital lease obligations of $55 million and $28 million, respectively. The decrease in principal payments on capital lease obligations was related to aircraft rejections under Section 1110. In addition, we made $4 million in principal payments on the DIP Financing.

We expect to spend an estimated $100 million in 2005 for the purchase of property and equipment. At March 31, 2005, commitments for the purchase of property and equipment, principally aircraft, approximated $1.7 billion, after deducting advance payments. For further details, see "Commitments and Contingencies" in the Notes to the Consolidated Financial Statements.

At March 31, 2005, we had a total of $859 million in debt outstanding under the DIP Financing and $37 million in letters of credit. We believe that the existing DIP Financing, together with other sources of cash, such as from operations, will be adequate to provide for our projected future liquidity needs through our emergence from bankruptcy.

With the historically high fuel prices and continuing weak revenue environment, we have continued to restructure our costs to achieve a business plan that will permit the Company to qualify for exit financing for our projected future liquidity needs upon emergence from bankruptcy. This exit financing, together with other available cash and cash flows from future operations, is expected to provide us with adequate levels of liquidity necessary for our ongoing operations and to service our restructured fixed obligations. We expect that in order for the Company to qualify for exit financing, we will be required to comply with financial covenants, and that this financing would be approved as part of an overall plan of reorganization. However, the Company cannot guarantee that this financing will be obtained, or that a plan of reorganization will be approved or implemented successfully.

Outlook

Information regarding guidance for United's ~~2004~~2005 outlook can be obtained from the UAL Corporation's Quarterly ~~Report~~ report on Form 10-Q for the quarter ended March 31, ~~2004~~2005.

Certain statements throughout Management's Discussion and Analysis of Financial Condition and Results of Operations are forward-looking and thus reflect the Company's 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 our operations and business ~~environments~~ environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Factors that could cause ~~significantly~~actual ~~affect~~results ~~load~~to ~~factor~~differ ~~and~~materially ~~capacity~~from these forward-looking statements include, without limitation, the following: our ability to continue as a going concern; our ability to ~~operate~~comply ~~pursuant~~with to the terms of the DIP Financing~~; risks~~ ~~associated with (i) third parties seeking and obtaining court approval to terminate~~ or ~~shorten~~negotiate ~~our~~modifications ~~exclusive period to propose and confirm one~~ or ~~more~~amendments ~~plans~~thereto ofas ~~reorganization, for the appointment of a Chapter 11 trustee or to convert the cases to Chapter 7 cases, and (ii) other legal proceedings associated with the Chapter 11 process~~necessary; our ability to obtain court approval with respect to motions in the Chapter 11 proceeding prosecuted by us from time to time; our ability to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 ~~process~~cases; risks associated with third parties seeking and obtaining court approval to terminate or shorten our exclusive period to propose and confirm one or more plans of reorganization; the potential adverse impact of the Chapter 11 ~~filings~~cases on our 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; our ability to execute our business plan; our ability to attract, motivate and/or retain key employees; our ability to attract and retain customers; demand for transportation in the markets in which we operate; general economic conditions; the effects of any hostilities or act of war or any terrorist attack; the ability of other air carriers with whom we have 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; labor costs; competitive pressures on pricing (particularly from lower-cost competitors) and on demand; government legislation and regulation; ~~and~~the ability of the Company to maintain satisfactory labor relations;any disruptions to operations due to any potential actions by our labor groups; weather conditions; and other risks and uncertainties set forth from time to time in ~~our~~United's 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. We disclaim 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For information regarding our exposure to certain market risks, see Item 7A. Quantitative and Qualitative Disclosures About Market Risk in United's Annual Report on Form 10-K for the year ~~2003~~2004.

Interest Rate Risk -

(In millions, except average contract rates)	Notional	Average	Estimated
	Amount	Contract Rate	Fair Value
			(Pay)/Receive*
Interest rate swap	$ 130	7.56%	$ (29)

*EstimatedPrice ~~fair~~Risk ~~values~~(Aircraft ~~represent~~Fuel) ~~the~~- ~~amount~~When market conditions indicate risk reduction is achievable, United ~~would~~enters into fuel option contracts to reduce its price ~~pay/receive~~risk onexposure ~~March~~to ~~31,~~jet ~~2004~~fuel. The option contracts are designed to ~~terminate~~provide protection against increases in the ~~contracts~~price of aircraft fuel. As market conditions change, so may United's hedging program.

		March 31, 2005
(In millions, except average contract rates)	Notional	Average	Estimated
	Amount	Contract Rate	Fair Value
			(Pay)/Receive*
Purchased call options - Heating oil	$ 250	$ 1.24/gal	$ 80
Sold put options - Heating oil	(211)	1.05/gal	-

*Estimated fair values represent the amount United would pay/receive on March 31, 2005 to terminate the contracts.

Item 4. Controls and Procedures

An evaluation was carried out under the supervision and with the participation of the Company's management, including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the Company's disclosure controls and procedures as of March 31, ~~2004~~2005. Based on that evaluation, the Company's management, including the CEO and CFO, has concluded that the Company's disclosure controls and procedures are effective. During the first quarter of ~~2004~~2005, there was no change in the Company's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 6. Exhibits A ~~and~~list ~~Reports~~of onexhibits included as part of this Form 810-KQ is set forth in an Exhibit Index that immediately precedes such exhibits. ~~(a)~~SIGNATURES Pursuant ~~Exhibits~~to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this quarterly report on Form 10-Q for the quarter ended March 31, 2005 to be signed on its behalf by the undersigned thereunto duly authorized on the 20th day of May, 2005.

AUNITED ~~list~~AIR ofLINES, ~~exhibits~~INC. ~~included~~By: as/s/ ~~part~~Frederic ofF. ~~this~~Brace ~~Form~~Frederic ~~10-Q~~F. isBrace ~~set~~Executive ~~forth~~Vice ~~in an~~President ~~Exhibit~~and ~~Index~~Chief ~~that~~Financial ~~immediately~~Officer ~~precedes~~(principal ~~such~~financial ~~exhibits~~officer) By: /s/ David M. Wing David M. Wing Vice President and Controller (principal accounting officer)

(b) Reports on Form 8-K

Form 8-K dated January 27, 2004 attaching the Company's Monthly Operating Report for the period December 1, 2003 through December 31, 2003.

Form 8-K dated January 27, 2004 attaching the Company's quarterly and annual earnings release.

Form 8-K dated February 26, 2004 attaching the Company's Monthly Operating Report for the period January 1, 2004 through January 31, 2004.

Form 8-K dated March 25, 2004 attaching the Company's Monthly Operating Report for the period February 1, 2004 through February 29, 2004.

UNITED AIR LINES, INC. By: /s/ Frederic F. Brace Frederic F. Brace Executive Vice President and Chief Financial Officer (principal financial officer) By: /s/ M. Lynn Hughitt M. Lynn Hughitt Vice President and Controller (principal accounting officer)

Exhibit Index

Exhibit No.	Description

12.1	Computation of Ratio of Earnings to Fixed Charges
31.1	Certification of the Principal Executive Officer Pursuant to 15 U.S.C. 78m(a) or 78o(d) (Section 302 of the Sarbanes-Oxley Act of 2002)
31.2	Certification of the Principal Financial Officer Pursuant to 15 U.S.C. 78m(a) or 78o(d) (Section 302 of the Sarbanes-Oxley Act of 2002)
32.1	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)
32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)

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