United Airlines 2007 Annual Report Download - page 4

PART I
ITEM 1. BUSINESS.
UAL Corporation (together with its consolidated subsidiaries, "UAL"), a holding company whose principal subsidiary is United Air Lines, Inc. (together
with its primary subsidiaries, "United"), was incorporated under the laws of the State of Delaware on December 30, 1968. We sometimes use the words "we,"
"our," "us," and the "Company" in this Form 10-K for disclosures that relate to both UAL and United. Our world headquarters is located at 77 W. Wacker Drive,
Chicago, Illinois 60601. The mailing address is P.O. Box 66919, Chicago, Illinois 60666 (telephone number [phone]).
This Annual Report on Form 10-K is a combined report of UAL and United. Unless otherwise noted, this information applies to both UAL and United. As
UAL consolidates United for financial statement purposes, disclosures that relate to activities of United also apply to UAL.
Most of UAL's revenue and expenses in 2007 were from United's airline operations. United transports people and cargo through its Mainline operations,
which utilize full-sized jet aircraft exceeding 70 seats in size, and its regional operations, which utilize smaller aircraft not exceeding 70 seats in size that are
operated under contract by United Express® carriers.
United Airlines operates more than 3,300 flights a day on United, United Express and Ted to more than 200 U.S. domestic and international destinations
from its hubs in Los Angeles, San Francisco, Denver, Chicago and Washington, D.C. With key global air rights in the Asia-Pacific region, Europe and Latin
America, United is one of the largest international carriers based in the United States. United also is a founding member of Star Alliance, the world's largest
airline network, which provides connections for our customers to 897 destinations in 160 countries worldwide. United offers a unique set of products and
services to target distinct customer groups, which we believe will allow us to generate a revenue premium. This strategy of market segmentation is intended to
optimize margins and costs and is focused on delivering an improved experience for all customers, and a best-in-class customer experience for our premium
customers. These services include:
•
United Mainline, including United First®, United Business® and Economy Plus®, the last providing three to five inches of extra legroom
on all United Mainline flights (including Ted), and on explusSM United Express flights;
•
A new international premium travel experience featuring 180-degree, lie-flat beds in business class. A total of 97 international aircraft will
be refitted with new premium seats, entertainment systems and other product enhancements upon installation of this equipment between
late 2007 and early 2010;
•
Ted, a low-fare service, which now operates 56 aircraft and serves 21 airports with over 200 daily departures from all United hubs;
•
p.s.SM—a premium transcontinental service connecting New York with both Los Angeles and San Francisco; and
•
United Express, with a total fleet of 279 aircraft operated by regional airline partners, including over 100 aircraft that offer explus, United's
premium regional service, redefining the regional jet experience. Explus aircraft offer both first class and Economy Plus seating.
The Company also generates revenue through its Mileage Plus® Frequent Flyer Program ("Mileage Plus"), United CargoSM and United Services. Mileage
Plus contributed approximately $800 million to passenger and other revenue in 2007 and helps the Company attract and retain high-value customers. Mileage
Plus revenue increased significantly in 2007, as compared to 2006, primarily due to the change in the inactive customer account expiration period from
36 months to 18 months, as discussed in the "Critical Accounting Policies" section of Item 7, below. United Cargo generated $770 million in freight
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Source: UNITED AIR LINES INC, 10-K, February 29, 2008