Excerpts of comments by Kathryn Mikells, vice president of Investor Relations, United Airlines.
How We Stack Up Competitively:
"...the question that I get asked most frequently by our investors is "How does United stack up versus peers, and what changes are we making in the business to get back to profitability?" The simple answer is: we stack up quite well, with financial performance competitive with other network carriers and a relatively strong liquidity position, and, importantly, we are taking aggressive actions to improve profitability.
In 2007, our pretax margin was about 3%, better than American, roughly equivalent to Delta and just a percentage point behind Continental. Much has been said about our roughly half-billion-dollar first-quarter loss. While disappointing, our results were driven by a $618 million year-over-year increase in fuel expense. All of the network carriers are in the same boat. All reported a similar increase in fuel costs, all lost money in the first quarter, and all saw their margin fall year-over-year. United saw its pre-tax margin deteriorate by roughly 5-6 percentage points in the first quarter compared with the same time in 2007. Continental came in a little better than we did, with their pre-tax margin deteriorating 4-5 percentage points. All the other network carriers' margin results were on par or worse than ours; Delta saw a 5-6 point reduction in pre-tax margin, while American dropped by 7 points, Northwest by 10 points and US Airways saw the largest decline with their pre-tax margin declining almost 12 percentage points
So why all the buzz about our first quarter loss? While all the network carriers lost money, our loss was higher than theirs. Why? Because our first and fourth quarter performance is always worse than most peers and is offset by better-than-average second and third quarter performance. Over a full year, seasonality equals out, and as our full-year 2007 performance well demonstrates, our financial results are competitive overall. During the winter quarters, many of our peers benefit from the capacity that they have flying to Central and Latin America, as well as north-south capacity flying along the East Coast. In contrast, the strength of United's transcon network and our leading position on the West Coast gives us a boost in the summer months that bridge across the second and third quarters.
We are reducing domestic capacity substantially. We are using the pricing power we enable through capacity discipline to support fare initiatives, seeking to pass along the higher commodity costs to customers. And we are accelerating our efforts to unbundle products and services to provide more choice for our customers and to generate more revenue as they pay for the products that they use and value. All told, we expect these initiatives to generate $600 million in revenue by next year.
We are also reducing our non-fuel costs and cutting our planned capital spending this year by $200 million.
The work we have done to strengthen the airline and improve our balance sheet puts us in a better position to address the current industry challenges that we face. We ended last quarter with $2.9 billion in unrestricted cash, on par with our network peers. Importantly, we have more than $3 billion in unencumbered assets allowing us to raise capital if needed, in stark contrast to some of our peers that have already leveraged most of their assets. This fiscal responsibility extends to our position relative to new aircraft. Because we have no new aircraft on order, unlike many of our peers, our capital requirements are relatively modest over the next few years. As part of our balance sheet restructuring, we smoothed out our required debt payments, and since our exit, we have reduced debt by some $2.8 billion. Two weeks ago, we renegotiated the financial covenants required by our $1.5 billion credit facility, making it easier for us to maintain compliance, and giving us the flexibility we need to execute against our plan. All of this means that we have a strong liquidity position and more modest demands on our cash over the next few years versus most of our peers-better positioning United, our company, to withstand the difficult environment we now face.
So just to wrap up, we are well positioned to manage through this tough environment:
* Our financial performance is competitive
* Our cash balance is comparable and we have more unencumbered assets than most, giving us more flexibility to raise money if we need it
* Finally, we are not sitting still, our action plan is aggressive and it's well under way"
United is toxic business for US, and unions won't stand this mess! 
