European Commission Approves Alliance Between United, Lufthansa and SAS; Further Enhances United's Financial Recovery Plan

Business Wire, Oct 29, 2002

Business Editors

CHICAGO--(BUSINESS WIRE)--Oct. 29, 2002

United Airlines (NYSE: UAL) today announced that, in a landmark decision, United, Deutsche Lufthansa AG, and Scandinavian Airlines System have received clearance from the European Commission to engage in price, schedule, and route coordination in the transatlantic market. The companies secured parallel approval from the U.S. Department of Transportation in November 1996.

In clearing the alliance, the European Commission found that the approval will bring benefits to the traveling public and cost savings to the airlines. The historic decision follows years of discussions between the airlines and the Commission, which began with the filing for approval of the alliance with the European Commission in July 1996.

This approval facilitates United's ability to further implement its profit improvement program, which is expected to deliver at least $1.4 billion in annual benefits, by strengthening the company's commercial relationship with Lufthansa and other members of the Star Alliance, allowing us to work together more closely.

"The ability to coordinate and cooperate is essential to our efforts to compete with other alliances and we can now do so in a more effective manner," said Glenn Tilton, United's chairman, president and chief executive officer. "We have long argued that competition is taking place not only between individual carriers, but also between global alliances. We are gratified that the European Commission came to the conclusion that our alliance will provide important consumer benefits and enhance inter-alliance network competition. We also commend the Commission for its professionalism and for the spirit of cooperation that surrounded our negotiations."

The U.S. and the European Commission evaluate each alliance on its merits and if necessary apply conditions to the approval. In the case of United, Lufthansa, and SAS, the Commission asked the airlines to provide a limited number of slots at Frankfurt to competitors for daily service between Frankfurt and Chicago, Los Angeles and San Francisco and for twice-daily service between Frankfurt and Washington if the new competitors cannot obtain slots through the normal allocation process.

United operates more than 1,900 flights a day on a route network that spans the globe. News releases and other information about United may be found at the company's website at www.united.com.