FROM PILOTS SECTION 1114 COMMITTEE

After United proposed to modify retiree medical benefits,
representatives from the AFA, IAM, TWU, PAFCA, IFPTE, the Salaried and
Management Committee and the Pilots Committee formed a Coalition to meet
and negotiate with United as provided under the Bankruptcy Code. 
Agreement was reached between United and the Coalition on June 9, 2004.

Below is a very brief summary of the Agreement.  The Committee will very
soon be mailing to retirees a copy of the agreement, a more detailed
description of the new plan and some examples of how the plan will
affect retirees.

DRUGS:  Mail order drugs at $16 for generic and $48 for name brand, with
NO annual increases.

PPO Plan:  Retirees will join actives in the Company's PPO Plan, with
deductibles at $250 single/$500 family and annual our of pocket maximums
at $1,500 single/$3,000 family, 80%/20% cost sharing and unlimited
lifetime maximum. 

Pre-Medicare:  Monthly payments using existing percentage cost sharing
to continue, plus a surcharge.  For charges from  providers not in PPO
network cost sharing to be at 60%/40% with lifetime $500,000 per person
maximum.  Maintenance of benefits vs. coordination of benefits will
apply.

Post-Medicare:  Monthly payments using existing percentage cost sharing
to continue until it reaches 50%/50% and then stay at 50%/50% through
2010, plus a surcharge.  Control of increases in years after 2010 to a
maximum of 4 ½ %/year.  Maintenance of benefits vs. existing
coordination of benefits.  This means that with Medicare as primary
payer, out of pocket $1,500 per person limit must be reached before
United begins contributing at 80%/20% cost sharing.

Surcharge:  A surcharge will be added to insurance charges: in 2004 @
$22/person/month for pre-Medicare, $16/person/month for post-Medicare,
increasing annually to $32.23/$23.44 in 2010, and then at capped @ 4
½%/year.

Life Insurance:  Company paid life insurance will be canceled.  The
savings from this cancellation been applied to reduce the cash that
would have come additional retiree medical payments.  The Medicare Part
D  Drug Plan credit will also be applied.

This new plan is more costly to retirees than our existing plan.  It is
far better than what was proposed by the Company. Cost escalation is
controlled by fixing the drug costs and limiting future monthly cost
increases.