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United to Aquire 

United Newsreal, May 24, 2000


Dear Fellow Employee: 
I want to share with you an important announcement  we are making today about an agreement that will strengthen our position as the leader in our industry and provide for even greater growth and success in the future.  This morning, we are announcing that the boards of directors of United and USAirways have approved a definitive merger agreement between the two companies, in which United would acquire all of the stock of USAirways. Because United is the acquiring carrier, the combined company would operate under the United name. 
I am confident that this announcement will generate considerable interest, discussion and speculation in the media in the days ahead.  That's why I wanted you to hear the news from your company directly, and immediately, regarding the overall dimensions of  this agreement. 
The acquisition of USAirways, which is subject to regulatory and other approvals, will deliver significant benefits to millions of customers and  hundreds of communities throughout the United States and the world.  Our plan is to create the first truly global airline -- an airline that serves 49 states in the U.S. and approximately 170 destinations worldwide, with eight hubs in Charlotte, Chicago, Denver, Los Angeles, Philadelphia, Pittsburgh, San Francisco and Washington, D.C.; and key international gateways in Frankfurt, London, Miami, Tokyo, Toronto, Chicago, Washington, D.C., Los Angeles, San Francisco, Charlotte and Philadelphia. 
The combined company will have some 145,000 employees worldwide, and serve customers on more than 4,600 daily flights to approximately 170 destinations in 32 countries and territories around the world.  We are planning to offer 64 new daily non-stop flights in the U.S. and 29 new daily non-stop international flights, and to serve all cities now served by USAirways. 
As a result of the transaction, we do not expect any furloughs from either United or USAirways.  We intend to honor all union contracts. 
Those who were here in 1995 will recall that at that time we looked into the possibility of acquiring USAirways.  Based on our review and other factors, including employee objections, we decided not to pursue that transaction.  I am confident that the combination we have agreed to now will work -- and  will work to the benefit of our employees, customers and shareholders. 
The post-merger United network will offer customers the convenience of a single airline for all their travel needs: short-haul as well as long-haul; east-west as well as north-south; Pacific and Atlantic crossings as well as access to multiple destinations in Latin America -- all with one ticket, one baggage check-in and one frequent flier program. 
Here are some other key features of the agreement: 
  • Among the major U.S. carriers, the combination of United and USAirways offers the least overlap in terms of both coverage and operations.  However, in recognition of the competitive issues connected with this transaction, United plans to divest significant USAirways assets to maintain and enhance airline competition in the Washington, D.C., area. 
  • However, United plans to retain certain USAirways assets at Washington Reagan National Airport, including the USAirways Shuttle service to New York and Boston, and the assets necessary for United to fly to Pittsburgh, Charlotte and Philadelphia from Washington Reagan. 
  •  In connection with the planned divestiture, United has entered into a memorandum of understanding with Robert Johnson, a Washington, D.C., businessman, under which Johnson, United and USAirways will agree to negotiate an agreement whereby Johnson would buy the divested USAirways assets and create a new airline. 
You undoubtedly will have a number of questions concerning this announcement -- both today and in the days ahead.  While the answers to every question may not be known immediately, we will provide as much information as we have at hand, just as quickly as we can -- and share the answers to other questions as soon as the information is known. 
To help expedite this flow of information, we also will include regular news and updates on the agreement here in NewsReal and in SkyNet.  A new SkyNet site will include the text of this NewsReal, a Q&A document and a link to the "Ask the Leaders" page, which is an easy way for you to send in any comments or questions you may have.  While I can't promise that we will answer all of your questions individually, we will do our best to get you the answers you need.  In addition, officers will be conducting employee briefings, starting today. 
I look forward to working and communicating with all of you in the days and weeks ahead, as this agreement become a reality and solidly positions United for future growth and success. 
                                                                Jim Goodwin