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UAL Cort. Reports Record Second-Quarter Earnings Despite Asian Economic Challenge

* Despite the continued economic turmoil in Asia, the company produced record second-quarter earnings per share of $3.24 on a fully distributed basis, up 15 percent year-over-year.

* The strong performance points to United's success in effectively managing its business within challenging economic environments.

* The company's ongoing cost-control efforts, as well as lower fuel costs, shaved over 2 percent off the fully distributed year-over-year unit cost.

CHICAGO, July 22 /PRNewswire/ --

UAL Corporation (NYSE: UAL), the holding company whose primary subsidiary is United Airlines, today reported record second-quarter net earnings and earnings per share.

In accordance with Generally Accepted Accounting Principles (GAAP), 1998 second-quarter net earnings of $282 million broke the quarterly record set last year, with operating earnings also setting a second-quarter record at $470 million. In comparison, second-quarter 1997 net earnings were $242 million on operating earnings of $412 million. Second-quarter earnings per share were $2.44 versus last year's record earnings of $2.31 per share.

Fully Distributed Results

The company also reported that, on a pro forma, fully distributed basis (see below for further explanation of the methodology), second-quarter net earnings were a second-quarter record $418 million, up 11 percent from second- quarter 1997 fully distributed net earnings of $376 million. Fully distributed operating earnings for the quarter rose 10 percent to $702 million versus $638 million in 1997. Fully distributed earnings per share were $3.24, a 15 percent increase over second quarter 1997 earnings per share of $2.82.

Chairman's Comments

"We are pleased with United's strong second-quarter performance," said Gerald Greenwald, chairman and chief executive officer of UAL Corporation. "Despite the continued turbulence in Asia, we produced record net earnings once again, which tells us that our efforts to redefine the way we do business are working. We're proving that we can manage the business astutely in both positive and negative environments.

"Our proactive and timely response to the Asian economic situation has helped us curb the effects of the region's turmoil on our business. Our disciplined efforts to keep costs under control helped reduce our fully distributed unit cost for the quarter, yet at the same time we were able to continue our efforts to improve customer service," added Greenwald. "We are making significant strides, in great part thanks to the efforts of United's 94,000 employees."

Operating Revenues

Operating revenues for the quarter increased 1.4 percent over 1997, from $4.38 billion to $4.44 billion. Available seat miles increased 2.4 percent; however, total revenue per available seat mile (unit revenue) decreased 1.2 percent to 10.29 cents compared to 10.42 cents a year ago. The unit revenue change was partly due to a slight decrease in yield (passenger revenue per passenger mile) to 12.58 cents from 12.59 cents a year ago.

Passenger revenue rose 2.4 percent to $3.95 billion from $3.85 billion in second quarter 1997, and cargo revenue increased 4.2 percent to $224 million versus $215 million in 1997.

Other revenue declined 14 percent, reflecting the sale of Apollo Travel Services last year.

Operating Expenses

Fully distributed operating expenses were unchanged from second quarter 1997 at $3.74 billion. Fully distributed operating expenses per available seat mile (unit cost) decreased 2.4 percent to 8.71 cents versus 8.92 cents a year ago.

The company's ongoing cost-control efforts helped the cost performance for the quarter, as did the 14 percent lower average price of fuel. Excluding fuel cost, fully distributed unit cost decreased by 0.6 percent.

n.b.: 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 http://www.ual.com.

                   UAL CORPORATION AND SUBSIDIARY COMPANIES
                       EARNINGS AND EARNINGS PER SHARE
                       (In Millions, Except Per Share)

                                              Three Months Ended
                                    June 30, 1998           June 30, 1997
                              GAAP        "Fully         GAAP        "Fully
                             Basis     Distributed"(A)  Basis  Distributed"(A)

    EARNINGS
    Operating revenues     $ 4,442       $ 4,442      $ 4,382       $ 4,382
    Operating expenses
      (excluding ESOP
      compensation expense) (3,740)       (3,740)      (3,744)       (3,744)
    ESOP compensation
      expense                 (232)          N/A         (226)          N/A

    Operating earnings         470           702          412           638
    Non-operating expense      (41)          (41)         (24)          (24)

    Earnings before income
      taxes and distributions
      on preferred securities  429           661          388           614
    Provision for income
      taxes                    146           242          145           237

    Earnings before distributions
      on preferred securities  283           419          243           377
    Distributions on preferred
      securities, net           (1)           (1)          (1)           (1)
    Net earnings               282           418          242           376

    Preferred stock dividends
      and other                (25)           (2)         (19)           (3)
    Earnings attributable
      to common
      shareholders            $257          $416         $223          $373

    SHARES
    Average common shares
      assumed outstanding     57.9          57.9         59.3          59.3
    ESOP preferred shares
      assumed outstanding     45.7          68.9         34.4          70.1
    Other                      1.7           1.7          2.9           2.9
    Total shares assumed
      outstanding            105.3         128.5         96.6         132.3

    PER SHARE, DILUTED:

    Net earnings             $2.44         $3.24        $2.31         $2.82

    (A)  "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
increases.

                   UAL CORPORATION AND SUBSIDIARY COMPANIES
                       EARNINGS AND EARNINGS PER SHARE
                       (In Millions, Except Per Share)

                                              Six Months Ended
                                    June 30, 1998          June 30, 1997
                              GAAP        "Fully         GAAP        "Fully
                             Basis    Distributed" (A)  Basis   Distributed"(A)

    EARNINGS
    Operating revenues     $ 8,497       $ 8,497      $ 8,503       $ 8,503
    Operating expenses
      (excluding ESOP
      compensation expense) (7,414)       (7,414)      (7,487)       (7,487)
    ESOP compensation
      expense                 (490)          N/A         (410)          N/A

    Operating earnings         593         1,083          606         1,016
    Non-operating expense      (68)          (68)         (47)          (47)

    Earnings before income
      taxes and distributions
      on preferred securities  525         1,015          559           969
    Provision for income
      taxes                    179           375          209           375

    Earnings before distributions
      on preferred securities  346           640          350           594
    Distributions on preferred
      securities, net           (3)           (3)          (3)           (3)
    Net earnings               343           637          347           591

    Preferred stock dividends
      and other                (52)           (6)         (38)           (5)
    Earnings attributable to
      common shareholders     $291          $631         $309          $586

    SHARES
    Average common shares assumed
      outstanding             57.6          57.6         59.0          59.0
    ESOP preferred shares
      assumed outstanding     44.4          69.1         33.0          70.2
    Other                      1.8           1.7          2.8           2.7
    Total shares assumed
      outstanding            103.8         128.4         94.8         131.9

    PER SHARE, DILUTED:
    Net earnings             $2.80         $4.91        $3.26         $4.44

    (A)  "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
increases.

                   UAL CORPORATION AND SUBSIDIARY COMPANIES
              STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
                       (In Millions, Except Per Share)

    (In accordance with GAAP)             Three Months Ended June 30
                                       1998            1997      % Change
    Operating revenues:
      Passenger                      $3,948          $3,854          +2.4
      Cargo                             224             215          +4.2
      Other operating revenues          270             313         -13.7
                                      4,442           4,382          +1.4

    Operating expenses:
      Salaries and related costs      1,300           1,228          +5.9
      ESOP compensation expense         232             226          +2.7
      Aircraft fuel                     435             495         -12.1
      Commissions                       328             386         -15.0
      Purchased services                376             310         +21.3
      Aircraft rent                     219             235          -6.8
      Landing fees and other rent       228             224          +1.8
      Depreciation and amortization     192             174         +10.3
      Aircraft maintenance              141             157         -10.2
      Other operating expenses          521             535          -2.6
                                          +0.1

    Earnings from operations            470             412         +14.1

    Other income (expense):
      Interest expense                  (93)            (71)        +31.0
      Interest capitalized               30              26         +15.4
      Interest income                    14              11         +27.3
      Equity in earnings of affiliates   21              22          -4.5
      Miscellaneous, net                (13)            (12)         +8.3
                                        (41)            (24)        +70.8

    Earnings before income taxes and
      distributions on preferred
      securities                        429             388         +10.6
    Provision for income taxes          146             145          +0.7
    Earnings before distributions on
      preferred securities              283             243         +16.5
    Distributions on preferred securities,
      net of tax                         (1)             (1)
    Net earnings                       $282            $242         +16.5
    Per share, basic:                 $4.43           $3.77
    Per share, diluted:               $2.44           $2.31

    See accompanying notes.

                   UAL CORPORATION AND SUBSIDIARY COMPANIES
              STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
                       (In Millions, Except Per Share)

    (In accordance with GAAP)               Six Months Ended June 30
                                       1998            1997      % Change
    Operating revenues:
      Passenger                      $7,514          $7,481          +0.4
      Cargo                             439             410          +7.1
      Other operating revenues          544             612         -11.1
                                      8,497           8,503          -0.1

    Operating expenses:
      Salaries and related costs      2,609           2,468          +5.7
      ESOP compensation expense         490             410         +19.5
      Aircraft fuel                     876           1,049         -16.5
      Commissions                       645             750         -14.0
      Purchased services                713             617         +15.6
      Aircraft rent                     452             472          -4.2
Landing fees and other rent       431             442          -2.5
      Depreciation and amortization     383             350          +9.4
      Aircraft maintenance              297             295          +0.7
      Other operating expenses        1,008           1,044          -3.4
                                      7,904           7,897          +0.1

    Earnings from operations            593             606          -2.1

    Other income (expense):
      Interest expense                 (173)           (140)        +23.6
      Interest capitalized               56              50         +12.0
      Interest income                    30              23         +30.4
      Equity in earnings of affiliates   43              48         -10.4
      Miscellaneous, net                (24)            (28)        -14.3
                                        (68)            (47)        +44.7
    Earnings before income taxes and
      distributions on preferred
      securities                        525             559          -6.1
    Provision for income taxes          179             209         -14.4
    Earnings before distributions on
      preferred securities              346             350          -1.1
    Distributions on preferred
      securities, net of tax             (3)             (3)
    Net earnings                       $343            $347          -1.2

    Per share, basic:                 $5.05           $5.23
    Per share, diluted:               $2.80           $3.26

    See accompanying notes.

    Consolidated Notes
    (A)  UAL Corporation is a holding company whose principal subsidiary is
United  Air Lines, Inc.
    (B)  "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 $84 per share during the second quarter of
1998 versus $74 per share during the 1997 second quarter.  The average price
during the six-month period ending June 30, 1998, was $86 per share versus $68
per share for the same six-month period in 1997.
    (C)  Per share amounts were calculated after providing for dividends on
preferred stock, including ESOP convertible preferred stock, of $25 million in
the 1998 second quarter, $19 million in the 1997 second quarter, $51 million
in the 1998 six-month period ending June 30 and $38 million in the 1997 six-
month period ending June 30.  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 were as follows:

                                          1998            1997
                                              (In Millions)
    Second quarter:
    Basic                                 57.9            59.3
    Diluted                              105.3            96.6

    Six-month period:
    Basic                                 57.6            59.0
    Diluted                              103.8            94.8

                UNITED AIR LINES, INC AND SUBSIDIARY COMPANIES

                                          Three Months Ended June 30
                                       1998            1997      % Change
    FINANCIAL SUMMARY (UNAUDITED)
    (in millions)

    Operating revenues               $4,431          $4,372          +1.3
    Operating expenses (excluding
      ESOP compensation expense)      3,738           3,742          -0.1
    ESOP compensation expense           232             226          +2.7
                                      3,970           3,968+0.1
    Earnings from operations
      (in accordance with GAAP)        $461            $404         +14.1

    OPERATING STATISTICS

    Revenue passengers (in
       thousands)                    21,941          21,279          +3.1
    Revenue passenger miles
      (in millions)                  31,164          30,397          +2.5
    Available seat miles
      (in millions)                  42,939          41,937          +2.4
    Passenger load factor (percent)    72.6            72.5        +0.1 pt.
    Breakeven passenger load
      factor excluding ESOP
      charges (percent)                59.7            60.5      -0.8 pt.
    Passenger revenue per
      passenger mile (cents)          12.58           12.59          -0.1

    Operating revenue per available
      seat mile (cents)               10.29           10.42          -1.2
    Operating expenses excluding
      ESOP charges per available
      seat mile (cents)                8.71            8.92          -2.4
    Average price per gallon
      of jet fuel (cents)              58.0            67.4         -13.9
    Number of aircraft in operating
      fleet at end of period            571             574
    Number of employees at
      end of period (thousands)        94.1            89.0          +5.7

    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 revenues and expenses do not have a material
effect on unit revenue and unit cost.

                UNITED AIR LINES, INC AND SUBSIDIARY COMPANIES

                                          Six Months Ended June 30
                                       1998            1997      % Change
    FINANCIAL SUMMARY (UNAUDITED)
    (in millions)

    Operating revenues               $8,475          $8,481          -0.1
    Operating expenses (excluding
      ESOP compensation expense)      7,407           7,478          -0.9
    ESOP compensation expense           490             410         +19.5
                                      7,897           7,888          +0.1
    Earnings from operations
      (in accordance with GAAP)        $578            $593          -2.5

    OPERATING STATISTICS
    Revenue passengers (in
      thousands)                     41,267          40,973          +0.7
    Revenue passenger miles
      (in millions)                  58,886          58,566          +0.5
    Available seat miles
      (in millions)                  84,196          82,254          +2.4
    Passenger load factor
      (percent)                        69.9            71.2         -1.3 pt.
    Breakeven passenger load
      factor excluding ESOP
      charges (percent)                59.9            61.6         -1.7 pt.
    Passenger revenue per
      passenger mile (cents)          12.67           12.69          -0.2
    Operating revenue per available
      seat mile (cents)               10.07           10.31          -2.3
    Operating expenses excluding ESOP
      charges per available
      seat mile (cents)                8.80            9.09          -3.2
    Average price per gallon
      of jet fuel (cents)              59.8            72.8         -17.9
    Number of aircraft in
      operating fleet at end
      of period                         571             574
    Number of employees at
      end of period (thousands)        94.1            89.0          +5.7

    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 revenues andexpenses do not have a material
effect on unit revenue and unit cost.

SOURCE  UAL Corporation
    -0-                             07/22/98
    /CONTACT:  Andy Plews, 847-700-2679, Joe Hopkins, 847-700-5770, or Tony
Molinaro, 847-700-4971, all for UAL Corporation/
    /Web site:  http://www.ual.com/
    (UAL)

CO:  UAL Corporation
ST:  Illinois
IN:  AIR
SU:  ERN





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