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UAL Cort. Reports Record First-Quarter Fully Distributed Net Earnings.

* First-quarter fully distributed earnings per share grew to a record $1.68 despite the continued economic turmoil in Asia and the effects of the U.S. excise tax on year-over-year comparisons.

* Fully distributed unit cost declined 4 percent, helped by the company's ongoing cost-control efforts and a decrease in the average price of fuel.

CHICAGO, April 22 /PRNewswire/ --
UAL Corporation (NYSE: UAL), the holding company whose primary subsidiary is United Airlines, today reported solid first-quarter net earnings despite continued weakness in Asian markets during the quarter and the effects of the U.S. excise tax, which was not in effect for most of first quarter 1997.

In accordance with Generally Accepted Accounting Principles (GAAP), 1998 first-quarter net earnings were $61 million ($0.34 per share) on operating earnings of $123 million. In comparison, first-quarter 1997 net earnings were $105 million ($0.92 per share), and operating earnings were $194 million.

Fully Distributed Basis Results

The company also reported that on a pro forma, fully distributed basis (see below for further explanation of the methodology), first-quarter net earnings were $218 million, up 1 percent over first-quarter 1997's fully distributed net earnings of $215 million. Fully distributed operating earnings were $381 million compared to $378 million in the previous year. On a fully distributed basis, earnings per share were $1.68, a 4 percent increase over earnings per share of $1.61 in first quarter 1997.

Chairman's Comments

"United's record fully distributed results demonstrate that we can successfully weather periods of turbulence," said Gerald Greenwald, chairman and chief executive officer of UAL Corporation. "Despite the continued weakness in Asia and the effects of the U.S. excise tax, our fully distributed net earnings improved over 1997's strong first-quarter performance. We attribute these positiveresults to the effectiveness of our response to the Asian revenue shortfall, lower fuel costs, and the continued dedication and cost-consciousness of United's more than 92,000 employees worldwide. I'd like to thank all of the United team for their contribution to the quarter's success."

Operating Revenues

Operating revenues for the quarter decreased almost 2 percent to $4.055 billion from $4.121 billion in 1997. Available seat miles increased 2 percent. Total revenue per available seat mile (unit revenue) decreased almost 4 percent to 9.83 cents, due to a 2.7 point decrease in load factor to 67.2 percent while yield (passenger revenue per passenger mile) remained flat. The company's cargo operations continued their stellar revenue performance of the past several quarters. At $215 million, cargo revenue was up a healthy 10 percent over 1997. Other revenue of $275 million was 8 percent lower than 1997, due to the sale of Apollo Travel Services.

Operating Expenses

Fully distributed operating expenses decreased almost 2 percent from $3.743 billion in 1997 to $3.674 billion. Fully distributed operating expenses per available seat mile (unit cost) declined 4 percent to 8.90 cents from 9.27 cents a year ago. Benefiting the quarter's cost performance was a 21 percent drop in the average price of fuel for the quarter as well as the company's cost-control efforts. Excluding fuel, fully distributed unit cost decreased by 1 percent.


The company expects the major trends that affected the first quarter to continue for the full year. Fuel prices are assumed to continue to be lower than in the prior year. A strong economy is expected to produce healthy demand for U.S. travel. Industry capacity increases in international markets and the economic situation in Asia are forecast to adversely affect international revenue performance.

Consistent with our previous statements, the company expects to improve year-over-year fully distributed earnings per share for each of the next three quarters. While year-over-year improvement in second quarter earnings is expected to be slightly less than indicated by the current First Call consensus estimate of $3.07 per fully distributed share, the company expects to slightly exceed the current full-year 1998 First Call earnings consensus of $10.26 per fully distributed share.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Information in the Outlook section of this press release is forward- looking, and actual results could differ materially from expected results. Factors that could significantly affect revenue and fully distributed earnings per share include: industry capacity decisions, the airline pricing environment, fuel prices, the success of the company's cost-control efforts, actions of the U.S., foreign and local governments, the Asian economic environment and travel patterns, foreign currency exchange rate fluctuations, the economic environment of the airline industry and the general economic environment.


While UAL Corporation reports its earnings under GAAP -- Generally Accepted Accounting Principles -- a more complete understanding of UAL Corporation's performance may be gained by viewing the results on a pro forma, fully distributed basis. This presentation considers all ESOP shares that will be issued to employees over the course of the ESOP period to be immediately outstanding, thus "fully distributed." Consistent with this presentation, the "ESOP compensation expense" -- which reflects the commitment of stock to employees -- is excluded from fully distributed expenses and ESOP convertible preferred stock dividends are not deducted from earnings attributable to common stockholders. No adjustments are made to fully distributed earnings to reflect future salary increases.

The web page address for UAL Corp. and United Airlines is

                     (In Millions, Except Per Share)

                                          Three Months Ended
                                March 31, 1998            March 31, 1997

                             GAAP         "Fully      GAAP     "Fully
                              Basis   Distributed"(A)   Basis Distributed"(A)


    Operating revenues      $4,055        $4,055       $4,121        $4,121

    Operating expenses
     (excluding ESOP
     compensation expense)  (3,674)       (3,674)      (3,743)       (3,743)
    ESOP compensation expense (258)          N/A         (184)          N/A

    Operating earnings         123           381          194           378
    Non-operating expense      (27)          (27)         (23)          (23)

    Earnings before income
     taxes and distributions
     on preferred securities    96           354          171           355
    Provision for income taxes  34           135           65           139

    Earnings before
     distributions on
     preferred securities       62           219          106           216
    Distributions on
     preferred securities, net  (1)           (1)          (1)           (1)

    Net earnings                61           218          105           215

    Preferred stock
     dividends and other       (26)           (3)         (20)           (2)

    Earnings attributable to
     common shareholders       $35          $215          $85          $213


    Average common shares
     assumed outstanding      57.3          57.3         58.8          58.8
    ESOP preferred shares
     assumed outstanding      43.1          69.3         31.6          70.3
    Other                      1.9           1.8          2.7           2.8

    Total shares assumed
     outstanding             102.3         128.4         93.1         131.9


    Net earnings            $ 0.34        $ 1.68       $ 0.92        $ 1.61

    (1)  "Fully distributed" earnings and earnings per share are pro forma
presentations which consider all ESOP shares which will ultimately be released
to employees by the end of the ESOP period to be immediately outstanding.
Therefore the ESOP compensation expense has been excluded from fully
distributed earnings and ESOP convertible preferred stock dividends have not
been deducted from earnings attributable to common shareholders.  No
adjustments are made to fully distributed earnings to reflect future salary

                 (In Millions, Except Per Share)

    (In accordance with GAAP)             Three Months Ended March 31

                                           1998     1997     % Change
    Operating revenues:
      Passenger                          $3,565   $3,626       -1.7
      Cargo                                 215      195      +10.3
      Other operating revenues              275      300       -8.3

                                          4,055    4,121       -1.6

    Operating expenses:
      Salaries and related costs          1,309    1,240       +5.6
      ESOP compensation expense             258      184      +40.2
      Aircraft fuel                         441      554      -20.4
      Commissions                           317      364      -12.9
      Purchased services                    337      307       +9.8
      Aircraft rent                         233      237       -1.7
      Landing fees and other rent           203      218       -6.9
      Depreciation and amortization         191      176       +8.5
      Aircraft maintenance                  156      138      +13.0
      Other operating expenses              487      509       -4.3
                                          3,932    3,927       +0.1

    Earnings from operations123      194      -36.6

    Other income (expense):
      Interest expense                      (80)     (69)     +15.9
      Interest capitalized                   26       24       +8.3
      Interest income                        16       12      +33.3
      Equity in earnings of affiliates       22       25      -12.0
      Miscellaneous, net                    (11)     (15)     -26.7
                                            (27)     (23)     +17.4

    Earnings before income taxes and
     distributions on preferred
     securities                              96      171
    Provision for income taxes               34       65
    Earnings before distributions on
     preferred securities                    62      106
    Distributions on preferred
     securities, net of tax                  (1)      (1)
    Net earnings                         $   61   $  105

      Per share, basic                   $ 0.60   $ 1.45
               $ 0.34   $ 0.92

    Consolidated Notes
    (1)  UAL Corporation is a holding company whose principal subsidiary is
         United Air Lines, Inc.

    (2)  "ESOP compensation expense" represents the estimated average fair
          value of ESOP convertible preferred stock committed to be released
          to employees for the period, net of amounts used to satisfy dividend
          requirements for previously allocated ESOP convertible preferred
          shares, under Employee Stock Ownership Plans.  The fair value of
          ESOP convertible preferred stock is estimated based on the market
          value of UAL's common stock.  The average market price of UAL's
          common stock was $88 per share during the first quarter of 1998
          versus a 1997 first quarter average price of $61 per share.

    (3)   Per share amounts were calculated after providing for dividends on
          preferred stock, including ESOP convertible preferred stock, of $25
          and $19 million, respectively, in the 1998 and 1997 first quarters.
          Basic per share amounts were based on weighted average common shares
          outstanding.  Diluted per share amounts include potential common
          shares including ESOP shares committed to be released.  Average
          shares used in the computations are as follows:

                                  1998           1997

          Basic                   57.3           58.8
          Diluted                102.3           93.1


                                        Three Months Ended March 31

                                         1998     1997     % Change

         (In Millions)

    Operating revenues                     $4,044   $4,109       -1.6
    Operating expenses (excluding ESOP
      compensation expense)                 3,669    3,736       -1.8
    ESOP compensation expense                 258      184      +40.2
                                            3,927    3,920       +0.2
    Earnings from operations (in
     accordance with GAAP)                 $  117   $  189      -38.1


    Revenue passengers (in thousands)      19,326   19,694       -1.9

    Revenue passenger miles (in
     millions)                             27,722   28,169       -1.6

    Available seat miles (in millions)     41,256   40,316       +2.3

    Passenger load factor (percent)          67.2     69.9    -2.7 pt.

    Breakeven passenger load factor
     excluding ESOP charges (percent)        60.1     62.7    -2.6 pt.

    Revenue per passenger mile (cents)      12.77    12.80       -0.2

    Operating revenue per available
     seat mile (cents)                       9.83    10.19       -3.5

    Operating expenses excluding ESOP
     charges per available seat mile (cents) 8.90     9.27       -4.0

    Average price per gallon of jet fuel
     (cents)                                 61.7     78.3      -21.2

    Number of aircraft in operating
     fleet at end of period                   572      566

    Number of employees at end of period
     (thousands)                             92.6     86.4       +7.2

   Note:  Revenue and expenses associated with  United's dedicated  freighter
operations are included in the calculations of unit revenue and unit cost.
However, dedicated freighter operations do not increase available seat miles,
which is used as the denominator in the calculation of unit revenue and unit
cost.  The inclusion of these revenue and expenses do not have a material
effect on unit revenue and unit cost.

SOURCE  United Airlines
    -0-                             04/22/98
    /CONTACT: Corporate Communications, Richard Martin, 847-700-2597, Joe
Hopkins, 847-700-5770, or Tony Molinaro, 847-700-4971, or Investor Relations,
Clifford Hew, 847-700-7501, all for United Airlines/

CO:  United Airlines
ST:  Illinois

-- CGW012 --
9373 04/22/98 08:14 EDT

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