United MEC message
 

October 6, 2005

Dear Fellow Pilot:

Although the news media have turned their attention to the travails of other
airlines, your MEC remains actively engaged on items of interest that
pertain to all United pilots. I want to update you on several of those
items.

United has stated publicly that it intends to exit bankruptcy on or around
Feb. 1, 2006. That date is a target. Neither the MEC or I are currently
aware of anything that will cause that to measurably change. As a strong
affirmation of its intent and ability to exit bankruptcy, United today
announced that it has secured exit financing commitments from both JPMorgan
and Citigroup for approximately $3 billion. There will undoubtedly be
public posturing by various groups raising concerns about aspects of United's
exit plan, but none of these concerns will have any significance to
materially delay the targeted February 2006 exit date.

As per our agreement, upon exit or shortly thereafter, we will receive the
funds currently being accrued since June 1, 2005 into our 6% C Plan. We
also will receive stock as provided in both the 2003 contract and the 2005
bankruptcy Letter of Agreement, and allocated as per previous MEC direction.
The proceeds from the convertible notes will be allocated approximately six
months after exit, and the MEC continues working through allocation model
issues. Once the MEC determines both the eligibility and allocation
parameters, we will inform you. I encourage you to attend council meetings
and let your local representatives know your thoughts.

There is a related issue you should be aware of: Not only will union and
non-contract employees receive stock, senior management also will receive
stock. While no one knows what that allocation will be, one only has to
look to the history of companies emerging from bankruptcy to clearly see
that senior management allocations can be significant, and often in amounts
that appear excessive. I can assure you that ALPA, the other unions and a
number of stakeholders will be aggressive in their efforts to mitigate
excessive distributions.

Many of you have questioned the impact on United of recent bankruptcy
filings by Delta and Northwest and the rumored filings by other airlines.
While it is far too early to even hazard a guess, it is clear from Delta's
and Northwest's public statements, as well as industry pundits' comments,
that there will be significant downward pressure on those airlines'
contractual provisions and pensions. Both companies have stated their intent
to downsize their fleets. While at first blush this may appear to be a
positive for us, this industry has rarely demonstrated rational behavior.
We can anticipate someone else jumping into markets when others leave. The
competitive pressures on United will not abate.

Much speculation centers on industry consolidation in conjunction with the
above issues. Your CEO has been vocal about his beliefs, and others are
making similar statements. Again, while there is a lot of speculation, we
have no indication of any imminent activity involving anyone other than the
recent US Airways and America West merger. It would, however, be the height
of irresponsibility for your MEC to ignore any early warning signals. As a
result, the MEC has received briefings from our advisors and ALPA
professional staff on the industry and the impact of any future
consolidation, whether or not it involves United. Your MEC has full
resources at its disposal to not only defend your contract and United's
position in the marketplace, but to aggressively and forcefully resist any
attempt to allow further economic distress to come to this pilot group given
all that we have sacrificed.

On another front, many of you may have seen pilots conducting informational
picketing at several of our terminals. ALPA-represented pilots from Trans
States Airlines (TSA) have been picketing to protest their inability to
reach agreement with Trans States' management over operation of 70 seat
aircraft to be flown as a United Express carrier. The current TSA pilot
agreement does not include language to preclude alter-ego flying by the
Trans States holding company. For several reasons, the TSA pilots recently
rejected a tentative agreement that would have provided that protection.
The TSA pilots are informationally picketing in an effort to bring TSA
management back to the bargaining table for further negotiations. As it now
stands, the 70 seat aircraft operated by the Trans States holding company
will be flown by GoJet (whose pilots are not currently represented by ALPA),
and the 50 seat aircraft operated by the Trans States holding company will
continue to be flown by TSA pilots represented by ALPA.

While many challenges await us as we approach bankruptcy exit, one constant
that remains is our contract. I have made it clear to the Company that this
union intends to hold management to the letter of our collective bargaining
agreement. We've invested too much -- and have sacrificed far more than our
fair share -- to tolerate management ignoring protections afforded us by our
contract. The fact that your MEC Grievance Committee is conducting more
System Boards of Adjustment than any time in the past speaks volumes as to
our commitment to demand contractual compliance from the Company.

A major weapon in holding the Company to their agreements is contract
knowledge and understanding among our members. We are in the process of
providing two important documents to allow each of you to review key
components of our contract. An updated "Contract Legality Guide" and a
"Contract Education and Audit Guide" will be available at domiciles in the
coming days, handed out by ALPA volunteers as part of our ongoing contract
education process. I urge you to study these documents and carry them in
your flight bag. This is your contract. Use these guides to understand your
rights and to help us enforce your agreement.

I cannot encourage you enough to get involved with your union. Former House
Speaker Thomas P. "Tip" O'Neill once stated that "all politics are local."
We can expand Speaker O'Neill's famous quote a step further by saying that
at ALPA, all influence is local. We are a grassroots union. The power and
influence of our union is entrenched at the local council level. Your voice
is important to our future and our profession. Unless you get involved with
your local council, your voice will not be heard. Attend meetings. Write or
call your local representatives. Regularly monitor the communications of
your local council as well as those of the MEC.

This is your union. Don't let others speak for you.

Fraternally,

Captain Mark Bathurst
Chairman, UAL-MEC