United Retires 100 Planes, Kills Ted

4 June 2008

Pressured by the climbing cost of fuel, United Airlines will remove 100 of its oldest and least fuel-efficient jets from its mainline fleet, including 30 previously announced Boeing 737s, and reduce its mainline domestic capacity in the fourth quarter 2008 by 14% year over year.

United is also eliminating its low-fare carrier Ted, reconfiguring that fleet’s 56 A320s to include United First class seats. The reconfiguration of the Ted aircraft will begin in spring 2009 and be completed by year-end 2009.

The company expects to retire all of its 94 B737s, provided it can work out terms with certain lessors, and six Boeing 747s. Over the 2008 and 2009 period, cumulative mainline domestic capacity will be reduced between 17% and 18% and cumulative consolidated capacity between 9% and 10%.

When complete, the fleet reduction is expected to lower the company’s average fleet age to 11.8 years. The majority of schedule changes related to the elimination of 30 B737s previously announced are currently reflected in reservation systems. Further changes related to the retirement of an additional 50 aircraft by year end will be reflected in these systems in the near future. Schedule changes will be principally accommodated through modest reductions of underperforming markets and through frequency reductions while retaining a commitment to all five US hubs.

About 80 planes are expected to be out of the system by the end of 2008, with the other 20 coming out by the end of 2009.

As United reduces the size of its operation, it is further reducing staff. United expects to reduce the number of salaried and management employees and contractors by 1,400-1,600, including the previously announced 500 employee reduction by year-end, and the company will determine the number of front-line employee furloughs as it finalizes the schedule over the next month.