By Glenn F. Tilton, Chairman, President and CEO, UAL Corp. and United Airlines

Good morning. At United, we passionately believe that it is time to fly.

Despite the complexity of traveling today -- the delays and increased security, people are starting to travel again. We have a genuine opportunity – together – to seize this moment and capitalize on early signs of a rebound in travel and tourism. That is, of course, why we’re here this week.

So, on behalf of the Star Alliance and United Airlines, I’d like to thank you for inviting me to talk with you today. I’d also like to thank Bill Norman for his kind introduction. It has indeed been an interesting eighteen months. I would like to acknowledge the essential role the Travel Industry Association of America plays in our industry and country by organizing international Pow Wow every year.

I also want to take a moment to thank Mayor Hahn, his tourism team and the City of Los Angeles for being such outstanding hosts. You remind us all what a vibrant, exciting city Los Angeles is. And, of course, I want to recognize Jaan Albrecht, the CEO of Star Alliance – the major sponsor of this year’s Pow Wow. It will be my pleasure to introduce Jaan at the end of my comments today.

As you may know, United is a founding member of Star Alliance. And whatever your home market may be, Star is a major player – whether in Japan, Germany, Brazil or one of the 100 plus other countries that we serve.

United and our Star Alliance partners can bring your customers to the U.S.A. from almost any corner of the globe. The city of Los Angeles is a great example of this global reach. LA is a hub city for United and for the Star Alliance. Ten Star Alliance members, provide almost three hundred non-stop daily flights to LA from five continents. This accounts for 30 percent of the flight activity at Los Angeles International Airport.

Just this morning United announced our intention to begin direct air service to Vietnam via Hong Kong. When approved, this would be the first service by an American carrier in nearly thirty years. And, importantly, Star offers the most comprehensive route network in this country.

Difficult Travel Environment

I know that many of you in the audience today traveled halfway around the globe to be here – hopefully on a member of the Star Alliance. Through both personal and professional experience, you know just how much things have changed in the last few years. Although our individual experiences have been different, we have all been through a very difficult few years: the tragic events of September 11; the war in Iraq; the outbreak of SARS; persistent and continuing security concerns. The negative environment has been devastating to travel and tourism worldwide.

The headlines whether on BBC or CNN and the morning newspapers – provide potential customers with a constant barrage of reasons why they should not travel internationally. Or, why it is not time to fly. Security is one of the most difficult challenges. Steps designed to protect people and make travel safer often create problems and perceptions that stop people from traveling. They create disincentives to travel. But there is one critical fact none of us should ever lose sight of: our customers having experienced the joy of travel, do not want to be denied the opportunity to travel.

Whether for leisure or business… to see family or visit a place they have never been before … to open new business opportunities or strengthen old relationships… When it is a good experience, they want to travel. The mission for all of us here at Pow Wow is to encourage them to do so.

We have to make it as convenient and comfortable as possible for our customers: to book travel; to get a visa if necessary; to move through the airport, customs, and immigration; to make connections to their final destinations. And we have to do so collectively as an industry and as individual companies……. We are in this together.

United’s Efforts

I am here today to tell you that United and our Star Alliance partners are ready to do our part. We, at United, faced some incredibly demanding business challenges in addition to those that threatened all of us. We had to completely restructure our company and make major changes in the way that we do business.

Standing here with you today, I can tell you that we have made tremendous progress. We have taken $5 billion out of our annual cost structure – that is roughly one-third of United’s 2002 annual operating budget……A critical foundation for financial viability and ensuring our ability to compete. It is these tough cost actions that provide us with the cash savings that allow us to reinvest in our business. A dollar saved is a dollar we can reinvest in our customers. We are improving our aircraft interiors and have launched a new look for our aircraft, leaving the old gray behind in favor of a vibrant new livery, bringing our portfolio of products clearly under one strong United brand. For the first time in years, we have launched a new advertising campaign – "It’s time to fly" – to connect with travelers and encourage them to get back out into the world. And we have made running an excellent airline and customer satisfaction the shared goals of all 62,000 employees at United.

Our employees are personally invested in continuous improvement of United’s performance and service. And that is a powerful thing. Over the past year, in the middle of a dramatic restructuring, United has delivered the best on-time performance and customer satisfaction ratings in our history.

Even as we have pursued these difficult tasks, we have maintained our status as America’s largest international carrier, offering an unbeatable global route network, fully integrated into Star …. the world’s best airline alliance.

What does this mean for all of you and for this industry? It means we are back in the game, able to compete for your business more effectively than ever, at a time when cost is a critical factor. It means we now have the flexibility to adapt quickly to new market opportunities that you are helping to create, matching the right product to new or changing demand. It means we are boosting revenue for our company and we want to help boost yours. It means that we are doing everything in our power to deliver a great travel experience for every passenger we fly.

But no single company however, in this industry is going to overcome all the barriers to travel on its own. There are many issues remaining for the industry on a global basis, they must be resolved by the industry on a global basis. The people here at Pow Wow are the people who can have a huge impact on bringing down the barriers to travel, who can solve travelers’ problems and now is the time for us to solve them. It is time to fly.

Challenges and Solutions

We can start by overcoming one of the most daunting challenges you and your customers face: getting into the United States in the first place. New security initiatives make the U.S., its citizens, and our visitors safer. That’s a good thing. We welcome this effort. And so do people who are traveling to America. But keeping people safe by keeping them away is not the right answer.

That’s why we support delaying implementation of the rule requiring visitors to obtain new, machine-readable passports for the 27 countries in the Visa Waiver Program. Without the delay, the Visa Waiver Program effectively will have ended. Travel to America from Europe – the visa applications system itself – would be thrown into great disarray. The trade-off is that, at the end of September, travelers from these 27 countries are required to use the US-VISIT process. It includes photographing and fingerprinting visitors to track entry and exit. And, many people will assume that it will be a major inconvenience. The reality is that it causes only minimal delay. We need to get ahead and effectively communicate on this issue.

United is joining the TIA to help launch a coordinated, proactive education campaign. We will use our marketing and direct customer channels to inform travelers exactly what this change means for them, and what it does not mean and how they will be affected. United and Star participated in the original deployment of this new technology. We will continue to help make it run smoothly with minimal impact on travelers.

But what of the rest of the world? In Latin America, Asia and the majority of countries around the globe, new in-person interviews will continue to be required for travel visas. Today, the State Department personnel are overwhelmed. They simply cannot handle the demand. With the TIA, we are urging the State Department to increase funding and assign additional personnel to visa-issuing posts. Of course, there is a larger issue. Security cannot be improved effectively one country at a time. That means we need standardization of procedures and policies across borders.

Standardization will speed travel, reduce duplication in security inspection and improve security overall. To move this initiative forward, Star Alliance is volunteering to test the process of standardization. We will work closely with national security agencies worldwide to establish acceptable airport security procedures. We will implement tests, analyze the results and try to establish standards for the global community. We can take the initiative to show governments and our customers that standardization can work.

What Else Can Be Done?

These steps are all about eliminating barriers to travel. But a big part of our collective mission is to simply make travel easier – and more enjoyable. There are some issues that the aviation industry in particular is working on.

Star Alliance is creating more and better airport technology throughout our network in 2004. But we’re going further. For example, Star is freeing international travelers from the inconvenience of paper tickets – we are rolling out interline e-tickets among all our partners over the next twelve months. Passengers on Star Alliance will be able to travel around the world – and back again, on a route of their choosing – holding a single, convenient e-ticket.

Travel planning also has to become easier. Consider Star Conventions Plus. Specific products designed to help event organizers and travel professionals simplify travel to conferences around the world.

And we must offer you more innovative products that will attract more international customers to the U.S. In your Pow Wow briefing materials there is information on Star Alliance’s enhanced North American Airpass. Together with our sponsorship of this year's Pow Wow events, we are announcing enhancements to the Airpass at our press conference following lunch.

International Cooperation

As I said earlier, we are in this together – we must do the work together. In many of your countries, cooperation is organized and financially supported by the national government. Australia is a very good example. The Australian government plays a highly visible and successful role in promoting travel within its borders. In fact, United signed a new cooperation agreement with Australia just last month.

When government at national or local levels does invest, we need to demonstrate that it has been a good investment. We must also act on our own initiative to create partnerships that promote, advertise and market international travel to this country. United has aligned itself with tourist boards, both domestically and abroad in support of the strategy of "success through tourism partnerships."

For instance: In 2003, United created a Global Sweepstakes promotion -- partnering with the Chicago Convention & Tourism Bureau, the California Trade & Tourism Commission, I Love New York City and Capital Region USA. We received over 6000 entries from travel agents in 26 countries. Best of all, it was an innovative "win/win" for everyone involved -- with no cash outlay, except for the taxes on the tickets.

United was an key participant in a very successful promotional partnership with Hong Kong in October for Visit Hong Kong Month. And we are promoting travel in Japan for the entire year of 2004 through cooperative advertising and marketing efforts.

If we work together, the idea of partnership will grow. We can creatively tap the potential for collaboration between all of us in the hotel, car rental, food service and other travel industries. That, my friends, is what International Pow Wow is all about. And that is what this time in our industry must be about.

This industry plays a truly important role – more so today than at any time in its history. It is time to remove unnecessary barriers to travel. It is time to give people more reason to travel internationally. It is time to come the United States. It is indeed… Time To Fly.

Thank you very much.