SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549
                              ________________

                             FINAL AMENDMENT TO
                               SCHEDULE 13E-3
                      RULE 13E-3 TRANSACTION STATEMENT
         (PURSUANT TO SECTION 13(E) OF THE SECURITIES EXCHANGE ACT
                     OF 1934 AND RULE 13E-3 THEREUNDER)

                              UAL CORPORATION
                              (NAME OF ISSUER)

                 UAL CORPORATION AND UNITED AIR LINES, INC.
                     (NAME OF PERSONS FILING STATEMENT)

                COMMON STOCK, PAR VALUE $5 PER SHARE, OF UAL
                       (TITLE OF CLASS OF SECURITIES)

                               902549 5 10 4
                       (CUSIP NUMBERS OF CLASSES OF SECURITIES)

                          FRANCESCA A. MAHER, ESQ.
                              UAL CORPORATION
                               P.O. BOX 66100
                          CHICAGO, ILLINOIS 60666
                               (708) 952-4000

        (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
       RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF PERSONS FILING
       STATEMENT)

                                 COPIES TO:
                          PETER ALLAN ATKINS, ESQ.
                          THOMAS H. KENNEDY, ESQ.
                           ERIC L. COCHRAN, ESQ.
                    SKADDEN, ARPS, SLATE, MEAGHER & FLOM
                              919 THIRD AVENUE
                          NEW YORK, NEW YORK 10022

     This statement is filed in connection with (check the appropriate box):
     a.   x    the filing of solicitation materials or an information
               statement subject to Regulation 14A, Regulation 14C, or
               Rule 13e-3(c) under the Securities Exchange Act of
               1934.
     b.   x    The filing of a registration statement under the
               Securities Act of 1933.
     c.        A tender offer.
     d.        None of the above.

     Check the following box if the soliciting materials or
     information statement referred to in checking box (a) are
     preliminary copies.  __
                                                                      


                                INTRODUCTION

          This Final Amendment to Schedule 13E-3 relates to a
     recapitalization (the "Recapitalization") of UAL Corporation, a
     Delaware corporation (the "Company" or "UAL"), pursuant to the
     Amended and Restated Agreement and Plan of Recapitalization,
     dated as of March 25, 1994 (as amended, the "Plan of
     Recapitalization"), among UAL, the Air Line Pilots Association,
     International ("ALPA") and the International Association of
     Machinists and Aerospace Workers (the "IAM").  The Plan of
     Recapitalization was approved and adopted by shareholders of UAL
     on July 12, 1994 and became effective on the same date.  Under
     the Plan of Recapitalization, each share of Common Stock, par
     value $5 per share, of the Company (the "Old Shares") that was
     outstanding at the Effective Time (as defined in the Plan of
     Recapitalization) became a right to receive: (a) $84.81 in cash
     and (b) one half (0.5) of a share of new Common Stock, par value
     $0.01 per share, of the Company (the "New Shares").  In addition,
     the Plan of Recapitalization provides for (1) certain amendments
     to the Company's Certificate of Incorporation and Bylaws that
     will, among other things, effectuate the Recapitalization and put
     into place the revised corporate governance structure
     contemplated by the Plan of Recapitalization and (2) the issuance
     of new classes of preferred stock that will (a) transfer
     approximately 55% (which, under certain circumstances may be
     increased, to up to a maximum of approximately 63%) of the common
     equity and voting power of the Company to employee stock
     ownership plans to be established for the benefit of certain
     groups of employees and (b) effectuate the corporate governance
     structure referred to above, among other things, by permitting
     different constituent groups to elect members of the Company's
     Board of Directors.

          In connection with the Plan of Recapitalization, UAL
     completed the public offering of 16,416,000 depositary shares
     (the "Depository Shares"), each representing 1/1,000 of a share
     of 12-1/4% Series B Preferred Stock of UAL (the equivalent of $25
     liquidation preference of Series B Preferred Stock per Depositary
     Share) (the "Series B Preferred Stock"), and United Air Lines,
     Inc. ("United") completed the public offering of $370,200,000
     10.67% Series A Debentures due 2004 (the "Series A Debentures")
     of United and the public offering of $371,000,000 11.21% Series B
     Debentures due 2014 of United (the "Series B Debentures" and,
     together with the Series A Debentures, the "Debentures").

          The Plan of Recapitalization further provides for certain
     amendments to the existing ALPA collective bargaining agreement
     and IAM collective bargaining agreements and the creation of a
     salaried and management employees cost reduction program, all of
     which became effective at the Effective Time and are estimated to
     provide United with $8.2 billion in improved operating earnings
     over a twelve year period with a net present value of
     approximately $4.9 billion.  Furthermore, certain employee
     benefit plans maintained by the Company and United are being
     amended to permit employees to acquire substantial amounts of the
     New Shares, Series B Preferred Stock and the Debentures.

          The Plan of Recapitalization is incorporated by reference as
     Exhibit 2.1 to Amendment No. 3 to the Registration Statement on
     Form S-4 (the "Registration Statement"), filed by UAL and United
     with the Securities and Exchange Commission (the "Commission") on
     June 10, 1994 from Exhibit 10.1 to UAL's Form 8-K dated June 3,
     1994.  The Plan of Recapitalization was amended by an amendment
     dated as of June 29, 1994 filed as Exhibit 1 to the July 1, 1994
     Supplement to the Proxy Statement/Joint Prospectus dated June 10,
     1994 filed with the Commission on July 5, 1994 (the "Prospectus
     Supplement").  A copy of the Prospectus Supplement is attached
     hereto as Exhibit 20.1.

          This Final Amendment to Schedule 13E-3 is being filed
     jointly by UAL and United.  By filing this Schedule 13E-3,
     neither UAL nor United concedes that Rule 13e-3 under the
     Securities Exchange Act of 1934 is applicable to the
     Recapitalization or any other transactions contemplated by the
     Plan of Recapitalization.

          The information set forth in the Registration Statement and
     Amendment No. 3 to the Registration Statement, including the Plan
     of Recapitalization and other exhibits, is incorporated in its
     entirety herein by reference.

          Pursuant to General Instruction H to Schedule 13E-3, this
     Final Amendment omits information previously disclosed in this
     Schedule 13E-3.

          Item 3.  Past Contacts, Transactions or Negotiations

          Item 3(a)(2) of the Schedule 13E-3 is hereby amended and
     supplemented as follows:

               At the meeting held on July 12, 1994, the shareholders
          of UAL voted to approve and adopt the Plan of
          Recapitalization and related transactions and UAL filed a
          Restated Certificate of Incorporation with the Secretary of
          State of the State of Delaware.  As a result, the Plan of
          Recapitalization became effective on July 12, 1994.

          Item 4.  Terms of the Transaction

          Item 4(a)  of the Schedule 13E-3 is hereby amended and
     supplemented as follows:

               The Company entered into a Second Amendment to the Plan
          of Recapitalization dated as of June 29, 1994. Such
          amendment was filed as Exhibit 1 to the Prospectus
          Supplement a copy of which is attached hereto as Exhibit
          20.1.

          Item 5.  Plans or Proposals of the Issuers or Affiliates

          Item 5(a) of the Schedule 13E-3 is hereby amended and
     supplemented as follows:

               The Plan of Recapitalization and related transactions
          were consummated on July 12, 1994.

          Item 5(b) of the Schedule 13E-3 is hereby amended and
     supplemented as follows:

               The Company has filed a Certificate and Notice of
          Termination of Registration under Section 12(g) of the
          Securities Exchange Act of 1934 on Form 15 relating to the
          Old Shares.

          Item 6.  Source and Amount of Funds and Other Consideration


          Item 6(a) of the Schedule 13E-3 is hereby amended and
     supplemented as follows:

               The $84.81 in cash paid to holders of Old Shares was
          funded as follows: $38.00 from the Company's existing cash
          resources, $15.05 from the sale of the Series A Debentures,
          $15.08 from the sale of the Series B Debentures, and $16.68
          from the sale of the Series B Preferred Stock.

          Item 9.  Reports, Opinions, Appraisals and Certain
     Negotiations.

          Item 9(a) of the Schedule 13E-3 is hereby amended and
     supplemented as follows:

               On July 1, 1994, CS First Boston Corporation and Lazard
          Freres & Co. each delivered their updated opinions that as
          of such date, the consideration to be received by holders of
          Old Shares in connection with the Recapitalization, taken as
          a whole, was fair to such holders of Old Shares from a
          financial point of view.  Copies of these opinions were
          attached as Exhibits 2 and 3, respectively, to the
          Prospectus Supplement a copy of which is attached hereto as
          Exhibit 20.1.

               On July 11, 1994, American Appraisal Associates, Inc.
          ("American Appraisal") delivered its updated solvency
          opinion.  A copy of such opinion is attached hereto as
          Exhibit 99.1

          Item 11.  Contracts,Arrangements or Understandings With
     Respect to the Issuer's Securities

          Item 11 of the Schedule 13E-3 is hereby amended and
     supplemented as follows:

               The Company entered into a Second Amendment to the Plan
          of Recapitalization dated as of June 29, 1994. Such
          amendment was filed as Exhibit 1 to the Prospectus
          Supplement a copy of which is attached hereto as Exhibit
          20.1.

          Item 17.  Material to be Filed as Exhibits

          20.1(c)    July 1, 1994 Supplement to the Proxy
                    Statement/Joint Prospectus dated June 10, 1994
                    filed with  the Commission on July 5, 1994.

          99.1(b)  Updated solvency opinion of American Appraisal
     dated July 11, 1994.

          99.2(d)   Notice to shareholders and Letter of Transmittal
                    dated July 12, 1994.

          99.3(d)   Guidelines for Certification of Taxpayer
                    Identification number on substitute Form W-9.

          99.4(d)   Press release issued by the Company dated July 12,
                    1994 announcing the closing of the Plan of
                    Recapitalization and related transactions.



                                 SIGNATURE

          After due inquiry, and to the best of my knowledge and
     belief, the undersigned certifies that the information set forth
     in this statement is true, complete and correct.

                                        UAL Corporation

                                        By:/s/ James M. Guyette
                                              James M. Guyette
                                          Executive Vice President

     Dated:  July 21, 1994


                                 SIGNATURE

          After due inquiry, and to the best of my knowledge and
     belief, the undersigned certifies that the information set forth
     in this statement is true, complete and correct.

                                        United Air Lines, Inc.

                                        By:/s/ James M. Guyette
                                             James M. Guyette
                                          Executive Vice President

     Dated:  July 21,  1994




     EXHIBIT INDEX
          Exhibit No.
                                     Description

          20.1(c)                       July 1, 1994 Supplement to the
                                        Proxy Statement/Joint
                                        Prospectus dated June 10, 1994
                                        filed with the Commission on
                                        July 5, 1994.

          99.1(b)                       Updated solvency opinion of
                                        American Appraisal  dated July
                                        11, 1994.

          99.2(d)                       Notice to shareholders and
                                        Letter of Transmittal dated
                                        July 12, 1994.

          99.3(d)                       Guidelines for Certification
                                        of Taxpayer Identification
                                        number on substitute Form W-9.

          99.4(d)                       Press release issued by the
                                        Company dated July 12, 1994
                                        announcing the closing of the
                                        Plan of Recapitalization and
                                        related transactions.






                                                                Exhibit 20.1

SUPPLEMENT TO THE PROXY STATEMENT/JOINT PROSPECTUS
DATED JUNE 10, 1994

                                UAL CORPORATION
                             UNITED AIR LINES, INC.

                                                                   July 1, 1994

Dear UAL Corporation Stockholder:

  The following information amends and supplements the Proxy Statement/Joint
Prospectus, dated June 10, 1994 (the "Proxy Statement/Prospectus"), of UAL
Corporation, a Delaware corporation (the "Company"), and its wholly-owned
subsidiary United Air Lines, Inc., a Delaware corporation ("United"). A copy of
the Proxy Statement/Prospectus has been sent to you previously. An additional
copy of the Proxy Statement/Prospectus may be obtained by calling (800)
223-2064. Certain information contained in this Supplement modifies, and should
be read in conjunction with, the Proxy Statement/Prospectus. Capitalized terms
used but not defined herein shall have the meanings set forth in the Proxy
Statement/Prospectus, as modified by the provisions of the Amendment (defined
below). Cross references set forth in this Supplement are to material in the
Proxy Statement/Prospectus.

Meeting of Stockholders

  A meeting of holders of common stock, $5.00 par value per share (the "Old
Shares"), of the Company (the "Meeting") is scheduled for July 12, 1994, at
8:30 a.m., local time, in the Imperial
 Ballroom of the Fairmont Hotel, 200
North Columbus Drive, Chicago, Illinois. The principal purpose of the Meeting
is to consider and vote upon various proposals relating to the Recapitalization
of the Company. The other purposes of the Meeting are as stated in the Notice
of Meeting attached to the Proxy Statement/Prospectus (the "Notice of
Meeting").

  Consummation of the Recapitalization is subject to approval by the
stockholders of the Company at the Meeting.

Proxies

  All Old Shares that are represented at the Meeting by properly executed
proxies received prior to or at the Meeting and not revoked will be voted at
the Meeting in accordance with the instructions indicated in such proxies. IF
NO INSTRUCTIONS ARE INDICATED, SUCH PROXIES WILL BE VOTED FOR APPROVAL OF THE
PLAN OF RECAPITALIZATION, AS AMENDED, THE CHARTER AND BYLAW AMENDMENTS, THE
STOCK ISSUANCE, THE AMENDMENT OF THE 1981 STOCK PROGRAM, THE AMENDMENT OF THE
1988 RESTRICTED STOCK PLAN AND THE AMENDMENT OF THE INCENTIVE PLAN; FOR THE
ELECTION OF FOUR PUBLIC DIRECTORS; FOR THE RATIFICATION OF ARTHUR ANDERSEN; AND
AGAINST THE STOCKHOLDER PROPOSALS. The Board of Directors of the Company does
not know of any matters, other than as described in the Notice of Meeting, that
are to come before the Meeting. IF A PROXY IS GIVEN TO VOTE IN FAVOR OF THE
PLAN OF RECAPITALIZATION, THE PERSONS NAMED IN SUCH PROXY WILL HAVE AUTHORITY
TO VOTE IN ACCORDANCE WITH THEIR BEST JUDGMENT ON ANY OTHER MATTER THAT IS
PROPERLY PRESENTED AT THE MEETING FOR ACTION, INCLUDING WITHOUT LIMITATION, ANY
PROPOSAL TO ADJOURN THE MEETING OR OTHERWISE CONCERNING THE CONDUCT OF THE
MEETING.

  A proxy card has been enclosed with this Supplement. Stockholders should
complete and return the proxy card accompanying this Supplement if they have
not previously completed and returned a proxy card or if they desire to revoke
any proxy previously given.

  Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by (i) filing
with the Secretary of the Company, before the polls are closed with respect to
the vote, a written notice of revocation bearing a later date than the proxy,
(ii) duly executing a subsequent proxy relating to the same Old Shares and
delivering it to the Secretary of the Company or (iii) attending the Meeting
and voting in person (although attendance at the Meeting will not in and of
itself constitute a revocation of a proxy). Any written notice revoking a proxy
in accordance with clause (i) above should be sent to: UAL Corporation, P.O.
Box 66919, Chicago, Illinois 60666, Attention: Francesca M. Maher, Secretary.
In addition, both proxies and revocations of proxy may be given by delivering
to Georgeson & Co. by means of facsimile at (212) 440-9009, before the close of
business on the day before the Meeting, both sides of an executed form of proxy
or a notice of revocation bearing a later date than the proxy.

Amendments to Amended and Restated Plan of Recapitalization and Amended and
Restated Certificate of Incorporation of the Company

  On June 29, 1994, the Company entered into a second amendment (the
"Amendment") to the Amended and Restated Agreement and Plan of
Recapitalization, dated as of March 25, 1994 (as amended, the "Plan of
Recapitalization"), with the Air Line Pilots Association, International and the
International Association of Machinists and Aerospace Workers (the "IAM"),
which was previously amended on June 2, 1994. A copy of the Amendment is
attached hereto as Exhibit 1. The Plan of Recapitalization as it existed prior
to the Amendment was filed as part of the Company's Current Report on Form 8-K
dated June 2, 1994 and the Amendment was filed as part of the Company's Current
Report on Form 8-K dated June 30, 1994.

  The Plan of Recapitalization generally provides for the Recapitalization of
the Company and the transfer of between 55% and 63% of the equity of the
Company to various trusts to be established for the benefit of certain employee
groups in exchange for wage and benefit reductions and work rule changes. The
Recapitalization is described in detail in the Proxy Statement/Prospectus.

  As a result of the Amendment, stockholders of the Company would be entitled
to receive in the Recapitalization for each Old Share: (i) one-half of a New
Share; (ii) $38.00 in cash from the Company's existing cash resources; (iii)
either $15.05 in cash from the proceeds of the United Series A Offering or, if
the United Series A Offering is not consummated, $15.55 principal amount of
United 10.125% Series A Debentures; (iv) either $15.08 in cash from the
proceeds of the United Series B Offering or, if the United Series B Offering is
not consummated, $15.55 principal amount of United 10.825% Series B Debentures;
and (v) either $16.68 in cash from the proceeds of the UAL Preferred Offering
or, if the UAL Preferred Offering is not consummated, Depositary Preferred
Shares representing interests in $17.96 liquidation preference of UAL 11.375%
Public Preferred Stock.

Underwriting of Public Preferred Stock and Debentures

  On June 30, 1994, the Company entered into an underwriting agreement relating
to the UAL Preferred Offering and United entered into an underwriting agreement
relating to the Series A Offering and the Series B Offering. Completion of the
offerings contemplated by each of the underwriting agreements is subject to
completion of the Recapitalization and certain other conditions.

  The underwriting agreement relating to the UAL Preferred Offering provides
that the Company will offer 16,416,000 Depositary Preferred Shares representing
interest in $410,400,000 liquidation preference of the Public Preferred Stock.
If the offering is consummated, the Depositary Preferred Shares representing
interests in the Public Preferred will bear an interest rate of 121/4%. The
offering price on the Depositary Preferred Shares is $25.00 per share; each
Depositary Preferred Share represents $25 liquidation preference of Public
Preferred Stock.

  The underwriting agreement relating to the Series A Offering provides that
United will offer $370,200,000 aggregate principal amount of United 10.67%
Series A Debentures. The underwriting
agreement relating to the Series B Offering provides that United will offer
$371,000,000 aggregate principal amount of United 11.21% Series B Debentures.

  There can be no assurance that any of the offerings will be consummated.

Recommendation of the Board

  THE BOARD OF DIRECTORS HAS APPROVED THE PLAN OF RECAPITALIZATION AND HAS
DETERMINED THAT THE RECAPITALIZATION IS FAIR TO THE HOLDERS OF OLD SHARES.

  THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE PLAN OF RECAPITALIZATION
AND THE RELATED MATTERS IDENTIFIED IN CLAUSES (II) THROUGH (VII) ON THE
ENCLOSED PROXY CARD.

  Set forth below is certain additional information concerning the views of Dr.
Brimmer and Mr. Olson:

  In connection with his testimony in the Shareholder Actions (as defined in
"Litigation" below), Dr. Brimmer stated that his abstention on May 20, 1994 was
not intended as a vote in favor of the Recapitalization. He was opposed to the
Recapitalization because, in addition to the reasons previously set qqforth in
the Proxy Statement/Prospectus, he believed that there were preferable
alternatives to the Recapitalization which included modifying the Company's
organization to start or acquire a subsidiary which would compete against other
low cost carriers, giving up non-competitive routes, disposing of high cost
assets, or pursuing alternatives which would not transfer majority control from
the common stockholders.

  In connection with his testimony in the Shareholder Action, Mr. Olson stated
that he was opposed to the first amendment to the Agreement and Plan of
Recapitalization, dated as of June 2, 1994, because he did not believe that an
increase in the employees' equity ownership was necessary to secure the
Coalition's agreement to proceed with the transaction or that any modification
was warranted.

Recent Developments: Union Organizing Activity

  On June 9, 1994, the Aircraft Mechanics Fraternal Association ("AMFA") filed
an application with the National Mediation Board seeking authorization to
represent the craft or class of mechanics and related employees at United who
constitute approximately 50% of the IAM's current membership at United. AMFA's
actions or future actions may affect the achievement of estimated labor savings
and harmonious labor relations within the Company.

Additional Information Concerning Investments and Savings

  In computing the estimated net present value of the labor savings and
short-haul savings set forth in the Proxy Statement/Prospectus, the Company
utilized a 10% discount rate. Such rate, which is generally used by the Company
in its internal discounted cash flow models, was selected by the Company based
on the Company's weighted average cost of capital. If a higher discount rate
were applied to the calculation (if, for example, it was determined that the
lack of assurance that the cost savings would be obtained should result in the
application of such a higher discount rate), the estimated net present value of
the labor savings and short-haul savings would be less than $4.9 billion.

  Such $4.9 billion estimate has not been adjusted for taxes. The Company
believes it would be difficult to isolate the tax implications of the savings
and, in any event, believes that the ESOP will generate tax benefits to offset
a significant portion of the income generated by such cost savings.

Additional Information Concerning Implementation of "Airline-Within-An-Airline"

  On June 23, 1994, United issued a press release discussing the implementation
of the "airline-within-an-airline", which read in part as follows:

  United Airlines today said it is shifting its planning focus from conceptual
to implementation of its new "airline within an airline," noting that most key
strategic and operational decisions have already been reached.

  The specialized carrier is targeted to take to the skies first on the West
Coast on Oct. 1, 1994 with an initial schedule of 82 daily flights. The service
will be expanded quickly to 129 flights in November and 143 flights in
December.

  United said it has established centralized implementation teams matched with
local implementation teams in key West Coast cities to assure a smooth
transition as the new service is introduced.

                                 *    *    *

  The initial group of 14 city pair markets to receive U-2 service include
seven presently served by United and seven not served today by United.

  United said the fares to be charged in these markets will be announced later
but emphasized they will be very attractive.

  United said that in addition to low fares its new operation will have these
additional features among others:

~ Boeing 737 jet aircraft.

~ Short ground time between flights (20 minutes).

~ Seat assignments at the airport.

~ Dedicated gates and a core group of front-line employees.

  Other service features including pricing and the name of the new carrier will
be announced at a later date. A number of names suggested by employees and
others are being reviewed through focus groups.

Certain Risk Factors

  In addition to the other information contained in the Proxy
Statement/Prospectus and this Supplement, holders of Old Shares should
carefully consider the risk factors set forth in the Proxy Statement/Prospectus
and this Supplement concerning the New Shares, and, if the Offerings are not
consummated, the Debentures and/or the Depositary Preferred Shares representing
interests in the Public Preferred Stock.

 Financial Effects; Delaware Law Considerations.

  The Recapitalization will immediately change the Company's capitalization to
one that is more highly leveraged. In this regard, the following discussion
compares the pro forma book effect of the Recapitalization on long-term debt,
stockholder's equity and income/loss from continuing operations with recent
historical financial information of the Company. On a pro forma book basis at
March 31, 1994, the Company would have had approximately $3.427 billion of
long-term debt and a deficit of approximately $710 million of stockholders'
equity, as compared to the approximately $2.693 billion of long-term debt and
approximately $1.097 billion of stockholder's equity that was shown on the
Company's balance sheet on such date. In addition, if the Recapitalization had
occurred as of January 1, 1993, the Company would have reported, on a pro forma
basis, a loss from continuing operations of approximately $50 million for the
year ended December 31, 1993 and a loss from continuing operations of
approximately $60 million for the three months ended March 31, 1994, as
compared to losses from continuing operations of $31 million for the year ended
December 31, 1993 and $71 million for the three months ended March 31, 1994
that were reported for each period. See "REVISED UNAUDITED PRO FORMA FINANCIAL
INFORMATION."

  The Company's earnings were inadequate to cover fixed charges and preferred
stock dividends by $98 million in 1993, by $748 million in 1992 and by $599
million in 1991. On a pro forma basis, the Company's earnings in 1993 were
inadequate to cover fixed charges and preferred stock dividends by $128
million. In addition, the Company's earnings were inadequate to cover fixed
charges and preferred stock dividends for the three month period ended March
31, 1994 by $118 million, and on a pro forma basis they were inadequate by $101
million. United's earnings were inadequate to cover fixed charges by $77
million in 1993, by $694
million in 1992 and by $604 million in 1991. On a pro forma basis, United's
earnings in 1993 were inadequate to cover fixed charges by $82 million. In
addition, United's earnings were inadequate to cover fixed charges for the
three month period ended March 31, 1994 by $130 million, and on a pro forma
basis they were inadequate by $107 million. Non-cash depreciation and
amortization are deducted in computing earnings before fixed charges. Such
non-cash charges do not significantly affect the ability of United to fund
operations, service debt, or provide funds to service the Company's preferred
stock dividends. Depreciation and amortization of United were $722 million in
1993, $695 million in 1992, $604 million in 1991 and $178 million for the three
month period ended March 31, 1994.

Opinion of Financial Advisors to the Board

  The valuation ranges as of May 20, 1994 referred to in the fifth sentence of
the section entitled "BACKGROUND OF THE PLAN OF RECAPITALIZATION-Definitive
Documentation Amendment" of the Proxy Statement/Prospectus relate to the
alternative proposal made by the Company to the Coalition and not to the
proposal made by the Coalition.

  On July 1, 1994, CS First Boston and Lazard each delivered their updated
written opinions that, as of such date, the consideration to be received by
holders of Old Shares in connection with the Recapitalization, taken as a
whole, was fair to such holders of Old Shares from a financial point of view.
Copies of these opinions are attached hereto as Exhibit 2 and Exhibit 3,
respectively.

Listing of New Shares, Depositary Preferred Shares and Debentures

  The Company has been informed that, subject to approval of the Plan of
Recapitalization by the stockholders of the Company, the New Shares, the
Depositary Preferred Shares and the Debentures have been authorized for listing
on the New York Stock Exchange, Inc. (the "NYSE"). Trading of the Depository
Preferred Shares on the NYSE is expected to commence within a 30-day period
after the initial delivery of the Depository Preferred Shares. The Company
expects to apply for listing of the New Shares on the Pacific Stock Exchange
and the Chicago Stock Exchange.

Certain Federal Income Tax Consequences

  Generally, the Federal income tax consequences described under the heading
"Certain Federal Income Tax Consequences" in the Proxy Statement/Joint
Prospectus remain as described therein. However, because the amount of cash
that will be exchanged (i) if the Offerings are consummated will decrease from
$88 per Old Share to $84.81 per Old Share and (ii) if the Offerings are not
consummated will increase to $38 per Old Share from $25.80 per Old Share, the
corresponding dollar amounts in numbered paragraph 2 (on page 57 of the Proxy
Statement/Joint Prospectus) should be adjusted accordingly. Specifically, if
the Offerings are consummated, in whole or in part, the maximum taxable gain
associated with the transaction will not exceed $84.81 per Old Share, or such
lesser amount, if as a result of the Offerings the amount of cash (or the
amount of cash and the fair market value of Debentures, as the case may be)
exchanged in the Recapitalization is less than $84.81 per Old Share. If the
Offerings are not consummated, assuming the Debentures have a fair market value
of $30.13 per Old Share, the maximum taxable gain associated with the
transaction will not exceed $68.13 per Old Share (i.e., the sum of the assumed
fair market value of the Debentures and the amount of cash received).

Litigation

  The Company, together with certain officers and directors of the Company and
the Unions, are parties to two stockholder actions pending in the Court of
Chancery of the State of Delaware, New Castle County, captioned Kaufman v.
Wolf, C.A. No. 13312, and Krasner v. UAL Corp., C.A. No. 13316 (the
"Shareholder Actions"). On June 17, 1994, plaintiffs in these two actions
jointly filed an Amended Complaint. The Amended Complaint alleged, among other
things, that the Proxy Statement issued by the Company in connection with the
proposed Recapitalization of the Company, on which common stockholders of the
Company are scheduled to vote on July 12, 1994, was false and misleading, and
further alleged that the proposed Recapitalization failed to maximize
shareholder value. The Amended Complaint seeks, among other things, a
preliminary and permanent injunction against consummation of the
Recapitalization.

  On June 21, 1994, plaintiffs filed a motion for a preliminary injunction to
enjoin consummation of the Recapitalization. The Court has scheduled a hearing
on this motion for July 7, 1994. On July 1, 1994, the Company and the
plaintiffs entered into a memorandum of understanding relating to a settlement
of the Shareholder Actions, on the basis of changes to the Plan of
Recapitalization (which changes are consistent with the changes disclosed in
this Supplement), and certain disclosures that are contained in this
Supplement. The settlement is subject to, among other things, definitive
documentation and court approval.

  In addition, the Company has become aware of an action pending in the United
States District Court for the Northern District of Illinois, Eastern Division,
captioned Wiley v. International Association of Machinists and Aerospace
Workers, No. 94C 3958, filed on June 29, 1994. The Complaint in the Wiley
action alleges that the ratification of the Recapitalization by District Lodge
141 of the IAM was defective and invalid because, among other things, certain
members of the IAM were allegedly treated preferentially and certain
information allegedly was not disclosed to members. The Complaint seeks, among
other things, an order enjoining implementation of the Recapitalization unless
and until it is ratified by the plaintiff's District Lodge. The Company is not
a party to this action.

Effect of the Recapitalization on Income Statement, Book Equity and Cash Flow

  The effect of the Recapitalization on the Company's equity will be to
immediately reduce it by approximately $1.8 billion due primarily to the
distribution of cash and Debentures as part of the Recapitalization
Consideration, vesting of unvested restricted stock and transaction costs.
Based on the Company's analyses, the reduction in book equity would be expected
to be earned back by year end 1998. The reasons for the rapid recovery of the
reduction in equity were increases in net income and the effect of employee
stock ownership plan accounting. Additionally, the Company's cash balance were
estimated to grow to be $3.8 billion greater than what it would have otherwise
been had the Recapitalization not been consummated.

  The following analysis shows the anticipated effect on income statement, book
equity and cash flow resulting from the Recapitalization. This analysis is
based on an assumed purchase price for the Class 1 ESOP Preferred Stock at the
Effective Time of $120 per share. The analysis for subsequent purchases of such
Stock assumes a 14% compounded growth rate for the market price of New Shares
and a purchase price premium for the Class 1 ESOP Preferred Stock in excess of
the market price for the New Shares which is initially approximately 38%,
declining in each successive year. The $120 per share assumed purchase price of
Class 1 ESOP Preferred Stock at the Effective Time is based on an assumed
market price of a New Share at the Effective Time of approximately $87. The
assumption is based upon (i) an assumed market price of an Old Share at the
Effective Time of approximately $128.31 per share, (ii) value of the non-New
Share portion of the Recapitalization Consideration of $84.81 per Old Share,
and (iii) a purchase price premium for the Class 1 ESOP Preferred Stock over
the assumed value of a New Share of 38%. The actual purchase price for the
Class 1 ESOP Preferred Stock at the Effective Time will be determined pursuant
to the terms of the purchase agreement with the ESOP Trustee, which provides
for a purchase price equal to 1.38 times the Closing Price, except that if the
closing price is less than 98% of the average of the Adjusted Old Share Price
for the five trading days immediately preceding the Effective Date, the
purchase price shall equal the product of 1.38 and such average price. See "THE
PLAN OF RECAPITALIZATION-Establishment of ESOPs-Sale of ESOP Preferred
Stock-Leveraged ESOP." There can be no assurance as to the purchase price of
the Class 1 ESOP Preferred Stock either at or subsequent to the Effective Time,
the Closing Price, or the Adjusted Old Share Price or the actual growth rate,
if any, for the market price of the New Shares during the six year wage
investment period. This analysis does not purport to be indicative of the
results of operations that may be obtained in the future. A change in the
purchase price of the Class 1 ESOP Preferred or the New Share market price
growth rate will affect the analysis set forth below. For example, a change in
the assumed purchase price of the Class 1 ESOP Preferred Stock to $130 would
increase the cumulative change in the cash balance in the year 2000 by $80
million. Changing the New Share market price growth rate assumption from 14% to
10% has the effect of reducing cumulative cash by approximately $70 million.


<TABLE>
<CAPTION>
                 Changes to Income, Book Equity and Cash Flow*
                                 (In millions)
                Recapitalization Better/(Worse) Than Status Quo

<S>                                        <C>    <C>    <C>     <C>     <C>     <C>     <C>
                                            1994   1995   1996    1997    1998    1999    2000
                                           ------ ------ ------- ------- ------- ------- -------
Flight Kitchen Sale Savings (Net).........   $16    $38     $49     $49     $45     $48     $50
Employee Investment Savings...............   262    604     742     805     820     856     591
ESOP Accounting Charge....................  (191)  (390)   (391)   (393)   (397)   (405)    (99)
                                           ------ ------ ------- ------- ------- ------- -------
Operating Income..........................    87    252     400     461     468     499     542
Interest Expense**........................   (41)   (81)    (81)    (81)    (81)    (81)    (81)
Interest Income...........................   (13)   (22)    (20)     (4)     24      51      67
                                           ------ ------ ------- ------- ------- ------- -------
Earnings Before Taxes.....................    34    149     299     376     411     469     528
Income Taxes***...........................   (12)   (57)   (114)   (143)   (156)   (178)   (201)
                                           ------ ------ ------- ------- ------- ------- -------
Net Income................................    21     92     185     233     255     291     328
Non-Cash ESOP Accounting Charge****.......   191    390     391     393     397     405      99
Deferred Taxes............................    (1)    13      38      53      62      77      65
                                           ------ ------ ------- ------- ------- ------- -------
Funds From Operations.....................   211    495     614     679     714     773     492
Series A and B Preferred Stock Dividends..   (25)   (50)    (26)    (13)    (13)    (13)    (13)
                                           ------ ------ ------- ------- ------- ------- -------
Net Cash Flow.............................  $186   $445    $589    $666    $700    $759    $478
Change in Cash Balance (cumulative).......  $186   $631  $1,220  $1,886  $2,586  $3,345  $3,823
Change in Book Equity (cumulative)........  $187   $619  $1,170  $1,783  $2,421  $3,103  $3,516
- ------
<FN>
* Assumes Offerings are successful and existing Series A Preferred Stock is
  converted on the first redemption date (May 1996) with the expected $3.25
  million cash distribution to the Series A holders coming from corporate cash
  with no coincidental debt or preferred offering. Excludes cash and book
  equity effects of non-recurring payments (including cash consideration paid
  to the shareholders) with the exception of severance benefits paid to flight
  kitchen workers which were netted from employee investment. See "REVISED
  UNAUDITED PRO FORMA FINANCIAL INFORMATION." Assumes closing date of the
  Recapitalization is July 1, 1994.
** Interest and dividend rates on the Debentures and the Preferred Stock have
   been set in accordance with the terms set forth above in "Underwriting of
   Public Preferred Stock and Debentures."
*** For purposes of this analysis, income taxes were computed using the
    statutory rates.
**** See "-Certain Risk Factors-Financial Reporting; Market Assessment."
</TABLE>


  As shown above, the Recapitalization is expected to result in an improvement
to cash flow averaging over $550 million per year through the year 2000. This
improvement, aggregating $3.8 billion (excluding the cash consideration
distributed to stockholders as part of the Recapitalization Consideration), is
expected to result from (i) the employee investment which reduces cash expenses
an average of $700 million per year, (ii) favorable tax treatment on ESOP
transactions, which is expected to provide over $400 million in annual tax
deductions during the ESOP allocation period, and (iii) partially offsetting
the factors described above, the additional interest expense on the Debentures,
dividends on the Depositary Preferred Shares and foregone interest on the cash
consideration distributed to stockholders in the Recapitalization. The Company
expects that at the Effective Time, taking into account the distribution of
cash in the Recapitalization, it will have an opening cash balance of
approximately $1.5 billion (assuming the Effective Time occurred on either June
30, 1994 or July 12, 1994). Cash generated after the Effective Time is assumed
to accumulate in a cash account; if the available cash was used to repay debt,
free cash flow would improve further.

  Due to the accounting rules for stock-based compensation such as the ESOPs,
it is expected to be difficult to compare the financial performance of the
Company to companies without significant stock-based compensation. In addition
to this, since there is a circular relationship between the Company's financial
results and its stock price (See "-Certain Risk Factors-Financial Reporting;
Market Assessment" and "-Opinions of the Financial Advisors to the Board"), it
is expected that certain financial analysts may adjust the way they analyze the
Company's performance. While there can be no assurances the Company's financial
performance will be considered other than as reported under generally accepted
accounting principles, the Company believes that the following analysis is
consistent with the manner in which certain analysts will evaluate the
Company's performance.

  The Earnings per Share Analysis set forth in the Proxy Statement/Prospectus
would change as a result of the changes to net income reflected in the previous
table from that set forth in the Proxy Statement/Prospectus.


SELECTED CONSOLIDATED HISTORICAL AND PRO FORMA FINANCIAL AND OPERATING
INFORMATION

                    UAL Corporation and Subsidiary Companies

  The following consolidated financial information has been derived from the
Company's consolidated financial statements, for each of the fiscal years in
the five year period ended December 31, 1993, which statements have been
audited by Arthur Andersen & Co., independent public accountants. Reference is
made to said reports for the years 1993 and 1992 which include an explanatory
paragraph with respect to the changes in methods of accounting for income taxes
and postretirement benefits other than pensions as discussed in the notes to
the consolidated financial statements for such years. The consolidated
financial information for the three months ended March 31, 1994 and 1993 is
unaudited but in the opinion of management includes all adjustments necessary
for a fair presentation. The table also sets forth certain information on a pro
forma basis giving effect to the Recapitalization and the Offerings. The
following should be read in conjunction with the unaudited pro forma financial
statements and notes related thereto included elsewhere herein and the
Consolidated Financial Statements, the related notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1993, as amended, and Quarterly Report on Form 10-Q for the
quarter ended March 31, 1994, and the Company's Current Report on Form 8-K
dated May 3, 1994.


<TABLE>
<CAPTION>

                                                             Year Ended December 31,    
                                             ------------------------------------------------------------
                                               1993                                     
                                             Pro Forma     1993     1992     1991     1990     1989
                                             ----------- -------- -------- -------- -------- ------------
                                             (Unaudited)
                                                              (Dollars in Millions)     
<S>                                          <C>         <C>      <C>      <C>      <C>       <C>
Statement of consolidated operations data:                                              
Operating revenues(a) ......................  $13,297    $13,325  $11,853  $10,706  $10,296   $9,288
Earnings (loss) from operations.............      354(e)     263     (538)    (494)     (36)     465
Earnings (loss) before extraordinary                                                    
item and cumulative effect of                                                           
accounting changes .........................      (50)       (31)    (417)    (332)      94      324
Net earnings (loss).........................     N.A.        (50)    (957)    (332)      94      324
Statement of consolidated financial position                                            
data (at end of period):                                                                
Total assets................................       (b)   $12,840  $12,257   $9,876   $7,983   $7,194
Total long-term debt and capital lease                                                  
obligations, including current                                                          
portion.....................................       (b)     3,735    3,783    2,531    1,327    1,405
Shareholder's equity........................       (b)     1,203      706    1,597    1,671    1,564
Other data:                                                                             
Ratio of earnings to fixed charges..........       (c)        (c)      (c)      (c)    1.16     1.95
Ratio of earnings to fixed charges and                                                  
preferred stock dividends...................       (c)        (c)      (c)      (c)    1.16     1.95
United operating data:                                                                  
Revenue passenger (millions)................       70         70       67       62       58       55
Average length of a passenger trip in                                                   
miles.......................................    1,450      1,450    1,390    1,327    1,322    1,269
Revenue passenger miles (millions)..........  101,258    101,258   92,690   82,290   76,137   69,639
Available seat miles (millions).............  150,728    150,728  137,491  124,100  114,995  104,547
Passenger load factor.......................     67.2%      67.2%    67.4%    66.3%    66.2%    66.6%
Break even passenger load factor............     65.0%      65.5%    70.6%    69.7%    66.5%    62.8%
Revenue per passenger mile..................     11.6c      11.6c    11.3c    11.5c    11.8c    11.6c
Cost per available seat mile................      8.5c       8.5c     8.9c     9.0c     9.0c     8.4c
Average price per gallon of jet fuel........     63.6c      63.6c    66.4c    71.6c    80.4c    63.6c
</TABLE>



<TABLE>
<CAPTION>
                                                                       (Unaudited) Three Months
                                                                            Ended March 31,
                                                                      ---------------------------
                                                                        1994    
                                                                      Pro Forma   1994     1993
                                                                      --------- -------- --------
                                                                         (Dollars in Millions)
<S>                                                                   <C>       <C>      <C>
Statement of consolidated operations data:                                      
Operating revenues(a) ...............................................   $3,193   $3,195   $3,053
Loss from operations.................................................   (8)(e)     (36)    (121)
Loss before extraordinary item and cumulative effect of accounting              
changes..............................................................     (60)     (71)    (138)
Net Loss.............................................................     N.A.     (97)    (157)
Statement of consolidated financial position data                               
(at end of period):                                                             
Total assets.........................................................  $11,805  $12,889  $13,288
Total long-term debt and capital lease obligations, including current           
portion..............................................................    4,421    3,687    4,017
Shareholders' equity.................................................    (710)    1,097    1,137
Other data:                                                                     
Ratio of earnings to fixed charges...................................       (d)      (d)      (d)
Ratio of earnings to fixed charges and preferred stock dividends.....       (d)      (d)      (d)
United operating data:                                                          
Revenue passengers (millions)........................................       16       16       16
Average length of a passenger trip in miles..........................    1,471    1,471    1,433
Revenue passenger miles (millions)...................................   23,289   23,289   22,443
Available seat miles (millions)......................................   35,598   35,598   35,220
Passenger load factor................................................     65.4%    65.4%    63.7%
Break even passenger load factor.....................................     65.8%    66.5%    66.3%
Revenue per passenger mile...........................................     11.9c    11.9c    12.0c
Cost per available seat mile.........................................      9.0c     9.0c     8.8c
Average price per gallon of jet fuel.................................     58.6c    58.6c    65.9c
- ------
<FN>
(a) In the first quarter of 1994, United began recording certain air
    transportation price adjustments, which were previously recorded as
    commission expense, as adjustments to revenue. Operating revenues and
    certain operating statistics for periods prior to 1994 have been adjusted
    to conform with the current presentation. See the Company's Current Report
    on Form 8-K dated May 3, 1994.
(b) The Pro Forma Statement of Consolidated Financial Position assumes the
    transaction occurred at March 31, 1994. Therefore, pro forma information at
    December 31, 1993 is not applicable.
(c) Earnings were inadequate to cover both fixed charges and fixed charges and
    preferred stock dividends by $98 million in 1993, by $748 million in 1992
    and by $599 million in 1991. On a pro forma basis, earnings were inadequate
    to cover both fixed charges and fixed charges and preferred stock dividends
    by $128 million in 1993.
(d) Earnings were inadequate to cover both fixed charges and fixed charges and
    preferred stock dividends by $118 million and $224 million for the three
    month periods ended March 31, 1994 and 1993, respectively. On a pro forma
    basis, earnings were inadequate to cover both fixed charges and fixed
    charges and preferred stock dividends by $101 million for the three months
    ended March 31, 1994.
(e) The loss from operations includes an ESOP accounting charge which is
    dependent on the fair market value of the ESOP Preferred Stock during the
    period. The pro forma amount is based on an assumed fair value of $120 per
    share. See note 4 to the Pro Forma Condensed Statement of Consolidated
    Operations for both the year ended December 31, 1993 and the three months
    ended March 31, 1994 for the effects of different fair value assumptions on
    the ESOP accounting charge.
</TABLE>



                United Air Lines, Inc. and Subsidiary Companies

  The following consolidated financial information has been derived from
United's consolidated financial statements, for each of the fiscal years in the
five year period ended December 31, 1993, which statements have been audited by
Arthur Andersen & Co., independent public accountants. Reference is made to
said reports for the years 1993 and 1992 which include an explanatory paragraph
with respect to the changes in methods of accounting for income taxes and
postretirement benefits other than pensions as discussed in the notes to the
consolidated financial statements for such years. The consolidated financial
information for the three months ended March 31, 1994 and 1993 is unaudited but
in the opinion of management includes all adjustments necessary for a fair
presentation. The table also sets forth certain information on a pro forma
basis giving effect to the Recapitalization and the Offerings. The following
should be read in conjunction with the unaudited pro forma financial statements
and notes related thereto included elsewhere herein and the Consolidated
Financial Statements, the related notes thereto and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included in
United's Annual Report on Form 10-K for the year ended December 31, 1993, and
Quarterly Report on Form 10-Q for the quarter ended March 31, 1994, as amended,
and United's Current Report on Form 8-K dated May 3, 1994.


<TABLE>
<CAPTION>

                                                             Year Ended December 31,
                                             --------------------------------------------------------
                                               1993                                 
                                             Pro Forma     1993     1992     1991     1990     1989
                                             ----------- -------- -------- -------- -------- --------
                                             (Unaudited)                            
                                                              (Dollars in Millions) 
<S>                                          <C>         <C>      <C>      <C>      <C>       <C>
Statement of consolidated operations data:                                          
Operating revenues(a).......................   13,140    $13,168  $11,688  $10,703  $10,282   $9,267
Earnings (loss) from operations.............      386(e)     295     (496)    (491)     (41)     464
Earnings (loss) before extraordinary                                                
item and cumulative effect of                                                       
accounting changes..........................      (20)       (17)    (386)    (335)      96      358
Net earnings (loss).........................     N.A.        (36)    (933)    (335)      96      358
Statement of consolidated financial position                                        
data (at end of period):                                                            
Total assets................................       (b)   $12,153  $12,067   $9,907   $8,001   $7,217
Total long-term debt and capital lease                                              
obligations, including current                                                      
portion.....................................       (b)     3,614    3,628    2,531    1,326    1,404
Shareholders' equity........................       (b)       674      738    1,613    1,769    1,665
Other data:                                                                         
Ratio of earnings to fixed charges..........       (c)        (c)      (c)      (c)    1.16     2.08
United operating data:                                                              
Revenue passengers (millions)...............       70         70       67       62       58       55
Average length of a passenger trip in                                               
miles.......................................    1,450      1,450    1,390    1,327    1,322    1,269
Revenue passenger miles (millions)..........  101,258    101,258   92,690   82,290   76,137   69,639
Available seat miles (millions).............  150,728    150,728  137,491  124,100  114,995  104,547
Passenger load factor.......................     67.2%      67.2%    67.4%    66.3%    66.2%    66.6%
Break even passenger load factor............     65.0%      65.5%    70.6%    69.7%    66.5%    62.8%
Revenue per passenger mile..................     11.6c      11.6c    11.3c    11.5c    11.8c    11.6c
Cost per available seat mile................      8.5c       8.5c     8.9c     9.0c     9.0c     8.4c
Average price per gallon of jet fuel........     63.6c      63.6c    66.4c    71.6c    80.4c    63.6c
</TABLE>



<TABLE>
<CAPTION>

                                                                 Three Months Ended March 31,
                                                                          (Unaudited)
                                                                 -----------------------------
                                                                   1994      
                                                                 Pro Forma     1994     1993
                                                                 ----------- -------- --------
                                                                     (Dollars in Millions)
<S>                                                              <C>         <C>      <C>
Statement of consolidated operations data:                 
Operating revenues(a)...........................................  $3,171      $3,173   $3,001
Loss from operations............................................     (16)(e)     (44)    (107)
Loss before extraordinary item and cumulative effect of account-             
ing changes.....................................................     (65)        (79)    (129)
Net Loss........................................................    N.A.        (105)    (148)
Statement of consolidated financial position data                            
(at end of period):                                                          
Total assets.................................................... $12,101     $12,196  $12,515
Total long-term debt and capital lease obligations, including                
current portion.................................................   4,301       3,567    3,864
Shareholders' equity............................................    (248)        570      592
Other data:                                                                  
Ratio of earnings to fixed charges..............................      (d)         (d)      (d)
United operating data:                                                       
Revenue passengers (millions)...................................      16          16       16
Average length of a passenger trip in miles.....................   1,471       1,471    1,433
Revenue passenger miles (millions)..............................  23,289      23,289   22,443
Available seat miles (millions).................................  35,598      35,598   35,220
Passenger load factor...........................................    65.4%       65.4%    63.7%
Break even passenger load factor................................    65.8%       66.5%    66.3%
Revenue per passenger mile......................................    11.9c       11.9c    12.0c
Cost per available seat mile....................................     9.0c        9.0c     8.8c
Average price per gallon of jet fuel............................    58.6c       58.6c    65.9c
- ------
<FN>
(a) In the first quarter of 1994, United began recording certain air
    transportation price adjustments, which were previously recorded as
    commission expense, as adjustments to revenue. Operating revenues and
    certain operating statistics for periods prior to 1994 have been adjusted
    to conform with the current presentation. See United's Current Report on
    Form 8-K dated May 3, 1994.
(b) The Pro Forma Statement of Consolidated Financial Position assumes the
    transaction occurred at March 31, 1994. Therefore, pro forma information at
    December 31, 1993 is not applicable.
(c) Earnings were inadequate to cover fixed charges by $77 million in 1993, by
    $694 million in 1992 and by $604 million in 1991. On a pro forma basis,
    earnings were inadequate to cover fixed charges by $82 million in 1993.
(d) Earnings were inadequate to cover fixed charges by $130 million and $211
    million for the three month periods ended March 31, 1994 and 1993,
    respectively. On a pro forma basis, earnings were inadequate to cover fixed
    charges by $107 million for the three months ended March 31, 1994.
(e) The loss from operations includes an ESOP accounting charge which is
    dependent on the fair market value of the ESOP Preferred Stock during the
    period. The pro forma amount is based on an assumed fair value of $120 per
    share. See note 4 to the Pro Forma Condensed Statement of Consolidated
    Operations for both the year ended December 31, 1993 and the three months
    ended March 31, 1994 for the effects of different fair value assumptions on
    the ESOP accounting charge.
</TABLE>


               REVISED UNAUDITED PRO FORMA FINANCIAL INFORMATION

  The following are the unaudited revised Pro Forma Financial Information for
each of the Company and United. These statements are based on an assumed
purchase price for the Class 1 ESOP Preferred Stock at the Effective Time of
$120 per share. The $120 per share assumed purchase price of Class 1 ESOP
Preferred Stock is based on an assumed market price of a New Share at the
Effective Time of $87. (The assumption is based upon (i) an assumed market
price of an Old Share at the Effective Time of approximately $128.31 per share,
(ii) a value of the non-New Share portion of the Recapitalization Consideration
of $84.81 per Old Share and (iii) a purchase price premium for the Class 1 ESOP
Preferred Stock over the assumed value of a New Share of 38%). The actual
purchase price for the Class 1 ESOP Preferred Stock at the Effective Time will
be determined pursuant to the terms of the purchase agreement with the ESOP
Trustee, which provides for a purchase price equal to 1.38 times the Closing
Price, except that if the Closing Price is less than 98% of the average of the
Adjusted Old Share Price for the five trading days immediately preceding the
Effective Date, the purchase price shall equal the product of 1.38 and such
average price. See "THE PLAN OF RECAPITALIZATION-Establishment of ESOPs-Sale of
ESOP Preferred Stock-Leveraged ESOP." There can be no assurance as to the
actual purchase price of the Class 1 ESOP Preferred Stock, the Closing Price,
or the Adjusted Old Share Price. In addition, these statements are based on the
following assumptions: (i) the interest rate on the Series A Debentures has
been set at 10.67%, the interest rate on the Series B Debentures has been set
at 11.21%, and the dividend rate on the Depositary Preferred Shares has been
set at 12.25%, (ii) the size of the Depositary Preferred Share underwriting has
been reduced to $410 million from $765 million, and an amount of additional
cash equal to $300 million ($12.20 per Old Share) from Company funds will be
delivered to holders of Old Shares in the Recapitalization, as a result of the
Amendment and the application of the interest rate cap provisions set forth in
the Plan of Recapitalization and (iii) shareholders are expected to receive in
the Recapitalization $84.81 per share in cash, consisting of $25.80 provided in
the Plan of Recapitalization prior to the Amendment, $30.13 from the proceeds
of the underwriting of the Series A Debentures and Series B Debentures, $12.20
in additional cash resulting from the Amendment and $16.68 from the proceeds of
the underwriting of the Depositary Preferred Shares. With respect to the
underwritings of the Series A Debentures, Series B Debentures and the
Depositary Preferred Shares, there can be no assurance that the respective
underwritings will be completed. These statements do not purport to be
indicative of the financial position or results of operations that may be
obtained in the future or that would actually have been obtained had the
Recapitalization occurred on the dates indicated. See "THE PLAN OF
RECAPITALIZATION-Establishment of ESOPs-Sales of ESOP Preferred Stock."

                    UAL Corporation and Subsidiary Companies

  The following unaudited Pro Forma Condensed Statements of Consolidated
Operations for the year ended December 31, 1993 and the three months ended
March 31, 1994, and the unaudited Pro Forma Condensed Statement of Consolidated
Financial Position as of March 31, 1994 for the Company and its subsidiaries
have been prepared to reflect the Recapitalization, including: (i) the
reclassification of Old Shares into New Shares and Series D Redeemable
Preferred Stock, (ii) the Offerings of interests in the Public Preferred Stock
(as represented by Depositary Preferred Shares and as modified as described
above) and Debentures, (iii) the exchange of Series D Redeemable Preferred
Stock for cash and proceeds from the Offerings, (iv) the issuance of the first
tranche of Class 1 ESOP Preferred Stock to the ESOP Trustee in exchange for
cash and a promissory note, (v) the recognition of unearned ESOP Preferred
Stock and the related additional capital invested, (vi) the recognition of the
employee stock ownership plan accounting charge, (vii) the reduction of
salaries and related costs for the anticipated impact of the wage and benefit
reduction and certain work rule changes and (viii) the recognition of the
anticipated benefits from the agreement to sell the U.S. flight kitchens. The
unaudited Pro Forma Condensed Statements of Consolidated Operations were
prepared as if the Recapitalization had occurred on January 1, 1993. The
unaudited Pro Forma Condensed Statement of Consolidated Financial Position was
prepared as if the Recapitalization occurred on March 31, 1994.

  The pro forma statements assume the Recapitalization is not accounted for as
an acquisition or merger and, accordingly, the Company's assets and liabilities
have not been revalued. The reclassification of Old
Shares into New Shares results in the elimination of the par value of the Old
Shares and recognition of the par value of the New Shares. The distribution of
the cash to holders of Old Shares is charged to additional capital invested and
retained earnings.

  The ESOPs are being accounted for in accordance with the American Institute
of Certified Public Accountants Statement of Position 93-6, "Employers'
Accounting for Employee Stock Ownership Plans" ("SOP"). For the Leveraged ESOP,
the Company will issue Class 1 ESOP Preferred Stock through seven ESOP
Tranches, at the Effective Time, approximately thirteen months following the
Effective Time, annually thereafter for four years and on January 1, 2000. As
the shares are issued to the Leveraged ESOP, the Company will report the
issuance of shares as a credit to additional capital invested based on the fair
value of the stock when such issuance occurs and report a corresponding charge
to unearned ESOP Preferred Stock. As consideration for the shares, the Company
will receive from the ESOP Trustee a series of promissory notes and cash. The
notes will not be recorded in the Company's Statement of Consolidated Financial
Position and the related interest income will also not be recorded in the
Company's Statement of Consolidated Operations. As shares of Class 1 ESOP
Preferred Stock are earned or committed to be released, an employee stock
ownership plan accounting charge will be recognized equal to the average fair
value of the shares committed to be released with a corresponding credit to
unearned ESOP Preferred Stock. Any differences between the fair value of the
shares committed to be released and the cost of the shares to the ESOP will be
charged or credited to additional capital invested. For the Non-Leveraged
Qualified ESOP, a credit for the shares of Class 2 ESOP Preferred Stock will be
recorded as the shares are committed to be contributed to the ESOP, with the
offsetting entry to compensation expense. Compensation expense will be recorded
based on the fair value of the shares committed to be contributed to the ESOP,
in accordance with the SOP. The pro forma financial statements assume that the
Supplemental ESOP is accounted for the same as the Non-Leveraged Qualified ESOP
(i.e. pursuant to the SOP). It is possible that, because the Supplemental ESOP
is a non-qualified plan, the Company may account for it under Accounting
Principles Board Opinion 25, "Accounting for Stock Issued to Employees,"
instead. The Company would not expect this to result in a material difference.
The shares committed to be contributed to the Supplemental ESOP will be
reported outside of equity because the employees can elect to receive their
"book entry" shares from the Company in cash upon termination of employment.

  The ESOP Preferred Stock is considered to be a common stock equivalent for
accounting purposes since the shares cannot remain outstanding indefinitely and
participants cannot withdraw their shares from the plan. Under the SOP, when
computing primary and fully diluted earnings per share, only those shares
committed to be released in the case of Class 1 ESOP Preferred Stock and shares
committed to be contributed in the case of Class 2 ESOP Preferred Stock are
considered outstanding as common stock equivalents. Prospectively, as dividends
are paid by the Company to the ESOP, only dividends on allocated shares will be
recorded as a charge to equity. Since the Company controls the use of dividends
on unallocated ESOP Preferred Stock, such dividends will not be considered
dividends for financial reporting purposes. Any dividends on unallocated shares
added to participant accounts would be reported as compensation expense.

  The unaudited Pro Forma Condensed Statements of Consolidated Operations
include the recurring charges and credits that are directly attributable to the
Recapitalization, such as the interest expense arising from the Debentures, the
effects of the wage and benefit reductions and certain work-rule changes
resulting from the employee investment, and the employee stock ownership plan
accounting charge. No adjustments have been made to the pro forma revenues and
expenses to reflect the results of structural changes in operations, such as
U2, that might have been made had the changes been consummated on the assumed
effective dates for presenting pro forma results.

   The pro forma adjustments are based upon available information and upon
certain assumptions that the Company believes are reasonable. In addition, this
information should be read in conjunction with the Company's Annual Report on
Form 10-K for the year ended December 31, 1993, as amended, and the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1994 which
include the Company's Consolidated Financial Statements and the related notes
thereto and "Management's Discussion and Analysis of Financial Condition and
Results of Operations," and the Company's Current Report on Form 8-K dated May
3, 1994.


<TABLE>
<CAPTION>
                    UAL Corporation and Subsidiary Companies
            Pro Forma Condensed Statement of Consolidated Operations

                          Year Ended December 31, 1993
                    (In millions, except per share amounts)

                                                       Historical          Adjustments           Pro Forma
                                                  ------------------------ ------------------ ---------------------
<S>                                               <C>                      <C>                <C> 
Operating revenues...............................             $13,325 (11)       $ (28)(1)            $13,297
Operating expenses:                                                                               
Salaries and related costs.......................               4,760             (428)(2)(3)     
                                                                                  (191)(1)              4,141
Employee stock ownership plan accounting charge..                                  369 (4)                369
Other............................................               8,302 (11)         131 (1)              8,433
                                                  ------------------------ ------------------ ---------------------
                                                               13,062             (119)                12,943
                                                  ------------------------ ------------------ ---------------------
Earnings (loss) from operations..................                 263               91                    354
                                                  ------------------------ ------------------ ---------------------
Other income (expense):                                                                           
Interest, net....................................                (209)             (81)(5)        
                                                                                   (40)(6)               (330)
Other, net.......................................                (101)                                   (101)
                                                  ------------------------ ------------------ ---------------------
                                                                 (310)            (121)                  (431)
                                                  ------------------------ ------------------ ---------------------
Loss from continuing operations                                                                   
before income taxes..............................                 (47)             (30)                   (77)
Provision (credit) for income taxes..............                 (16)             (11)(7)                (27)
                                                  ------------------------ ------------------ ---------------------
Loss from continuing operations..................                $(31)            $(19)(8)               $(50)
                                                  ======================== ================== =====================
Loss per share from continuing operations........            $  (2.64)(9)                           $  (10.66)(10)
                                                  ========================                    =====================
Shares used in per share computations............                24.4  (9)                               12.5  (10)
                                                  ========================                    =====================


See accompanying notes to Pro Forma Condensed
 Statement of Consolidated Operations.
</TABLE>



                    UAL Corporation and Subsidiary Companies
                          Notes to Pro Forma Condensed
                      Statement of Consolidated Operations

                      For the Year Ended December 31, 1993

 (1) The Company entered into an agreement to sell its U.S. flight kitchens
     over a period of months beginning in December 1993 through June 1994 and
     an agreement to acquire catering services for a seven year period. This
     adjustment eliminates $28 million of sales revenues and $191 million of
     compensation costs recorded in 1993 relating to the U.S. flight kitchens
     that were sold and adds estimated incremental catering costs of $131
     million.

 (2) To adjust compensation expense for the pro forma effect of the wage and
     benefit reductions and certain work-rule changes resulting from the
     employee investment that provide for wage and other compensation savings
     during the approximately six year period beginning at the Effective Time.
     The pro forma adjustment represents the estimated savings in the 12 months
     assuming that such savings had commenced at the beginning of the period.
     The pro forma adjustment does not include any savings related to U2.

 (3) The following reconciles the labor cost savings included in the Pro Forma
     Condensed Statement of Consolidated Operations to the value of the
     employee investments included in the Company Analysis of employee
     investments for 1994 (see "SPECIAL FACTORS-Certain Company Analyses"):


<TABLE>
<S>                                                                                 <C>
                                                                                    (millions)
Pro Forma adjustment based on 1993 salaries........................................      $428
Estimated compensation savings based on 1994 salaries..............................        68
Estimated benefits of U2 during the first year.....................................        64
Estimated additional severance for flight kitchen employees during the first year..       (36)
                                                                                    ----------
Estimated 1994 investments.........................................................      $524
                                                                                    ==========
Estimated six months of investments included in 1994 analysis......................      $262
                                                                                    ==========
</TABLE>


 (4) To record non-cash compensation for shares of ESOP Preferred Stock
     committed to be released to employees during the period based on the
     average fair value of such ESOP Preferred Stock. The average fair value of
     the ESOP Preferred Stock is based on two components: (1) the average fair
     value of the New Shares into which the ESOP Preferred Stock is convertible
     plus (2) a premium attributable to the dividend paying feature of the ESOP
     Preferred Stock. For purposes of the pro forma adjustment, the average
     fair value of the ESOP Preferred Stock was assumed to be the initial
     assumed purchase price of $120. In future years, it is anticipated that
     the ESOP Preferred Stock price, for purposes of computing the employees
     stock ownership plan accounting charge, will be determined by an
     independent appraiser who will value both components. Additionally, in
     future years, the shares committed to be released that are used to satisfy
     the dividends payable on previously allocated shares will be charged to
     retained earnings rather than compensation expense.

The shares of the ESOP Preferred Stock committed to be released are a fraction
of the original ESOP Preferred Stock shares. It is anticipated the shares will
be released in a level fashion over the 69 months of the ESOP taking into
account the partial periods in 1994 and 2000. This would result in
approximately 3.07 million ESOP Preferred Stock shares committed to be released
in each full calendar year. Shares released in a partial year would be pro
rated.

Since future expense is dependent on the fair market value of the ESOP
Preferred Stock, such expense is difficult to forecast and may vary
significantly from the value in the pro forma adjustment. Changes in the price
of a New Share directly affect the determination of the value of a share of
ESOP Preferred Stock. In addition, if the average value of a New Share exceeds
$136 during the first 12 months after
the Effective Time, additional shares of ESOP Preferred Stock will be issued to
the Qualified ESOP or reserved for issuance to the Supplemental ESOP to
increase the ESOP's ownership from approximately 55% up to a maximum of
approximately 63%. Future expense is also affected by the premium associated
with the dividend paying feature which shrinks over time as the dividend paying
period is reduced.

Following is a summary of the impact to the employee stock ownership plan
accounting charge of a range of fair market values:

  Average ESOP  ESOP Accounting
Preferred Stock     Charge*
   Fair Value      (millions)
- --------------- ---------------
           $110            $338
            120             369
            130             400
            140             430
- ------
* Assumes 3.07 million shares committed to be released in the pro forma period
  and no shares used to satisfy dividends payable since shares are not
  allocated to participants until December 31. In later years shares will be
  used to satisfy dividends on allocated shares, which will reduce the employee
  stock ownership plan accounting charge.

The following illustrates the impact to the employee stock ownership plan
accounting charge if the average value of the New Shares in the first 12 months
exceeds $136 per share.

                                      Shares to be   Increase in
 Average    Average ESOP   Additional   Released   ESOP Accounting
New Share Preferred Stock  Shares to    for First     Charge****
  Price     Fair Value*   be Issued**    Year***      (millions)
- --------- --------------- ----------- ------------ ---------------
     $136            $168           0            0              $0
      140             172   2,260,410      393,115              68
      150             182   6,949,234    1,208,562             220
- ------
* Assumes a dividend premium of $32 per share.
** To achieve the maximum increase in ownership, the price of a New Share must
   average at least $149.10 during the first 12 months after the Effective
   Time. If the average price of a New Share is less than or equal to $136, no
   additional shares of ESOP Preferred Stock will be issued.
*** The additional shares will be released in a level fashion over the 69
    months of the ESOP.
**** Represents the first year increase; subsequent increases are dependent on
     changes in the fair value of the ESOP Preferred Stock.

 (5) To record the interest expense on the Debentures and to record
     amortization of the underwriting discount. The pro forma calculations
     assume the United Debt Offerings are consummated and are based on an
     interest rate on the Series A Debentures of 10.67% and on the Series B
     Debentures of 11.21%. If the United Debt Offerings are not consummated,
     the interest rates are subject to the stated maximums under the
     Recapitalization of 10.125% for the Series A Debentures and 10.825% for
     the Series B Debentures. This will not impact the pro forma interest
     expense because even though the interest rate on the series of Debentures
     exceeds the stated maximum, the principal amount of the series of
     Debentures was reduced so that the yield to maturity will not exceed the
     yield to maturity that would have resulted if the par amount of the series
     of Debentures (based on the stated maximum interest rate) was priced at a
     discount.

 (6) To record foregone interest income due to the reduction in the Company's
     average investment balance resulting from the Recapitalization. The pro
     forma adjustment is based on the Company's average earnings rate during
     1993.

 (7) To adjust the provision (credit) for income taxes to reflect the tax
     effect of changes to pretax income at the statutory rate in effect during
     1993. For purposes of the pro forma adjustments, the book and tax employee
     stock ownership plan compensation charge are assumed to be the same.

 (8) If the Recapitalization is consummated, the Company expects to recognize
     nonrecurring charges of approximately $44 million relating to additional
     severance benefits for employees terminated as a result of the sale of the
     flight kitchens, up to $49.15 million of transaction fees and expenses
     incurred by ALPA, the IAM and certain advisors in connection with the
     structuring and establishment of the ESOPs, $30 million for the Company's
     transaction fees and expenses, $17 million of compensation expense
     relating to vesting the unvested restricted stock as a result of the
     change in control, $21 million of payments and benefits to Mr. Greenwald
     and officers who are retiring at the Effective Time, and $13 million of
     compensation expense (based on an assumed Old Share price of approximately
     $128.31 at the Effective Time) relating to the vesting of unvested Options
     and the implementation of a feature that provides for cashless exercise of
     Options in the event of the Recapitalization. (The existing Option holders
     are only entitled to utilize the cashless exercise feature if the
     Recapitalization occurs. The pro forma financial information assumes all
     in-the-money Options are exercised at the Effective Time and, since the
     cashless exercise results in variable plan accounting, there is an initial
     nonrecurring charge for the cashless exercise feature but no ongoing
     impact; however, if Option holders do not exercise their Options at the
     Effective Time, there will be an ongoing accounting impact for the changes
     in the fair market value of the Recapitalization Consideration that is
     issuable upon exercise of such Options.) The total after-tax effect of the
     nonrecurring charges is $122 million. Due to the nonrecurring nature of
     these charges, they have been excluded from the Pro Forma Condensed
     Statement of Consolidated Operations.

 (9) Due to the nature of the Recapitalization, a comparison of historical and
     pro forma loss per share is not meaningful.

(10) The pro forma loss per common share is based on an estimated 12,519,891
     weighted average shares outstanding and is calculated after preferred
     stock dividend requirements of $33.2 million on the Company's outstanding
     Series A Preferred Stock and $50.3 million on the Public Preferred Stock
     issued as a result of the Recapitalization. The number of weighted average
     shares assumes the Series A Preferred Stock does not convert during the
     first year of the transaction. The number of average shares of ESOP
     Preferred Stock committed to be released during the year were not included
     in the calculation as a common stock equivalent because the effect is
     anti-dilutive. Since no shares of ESOP Preferred Stock are allocated until
     December 31, the pro forma calculations assume no dividends are paid on
     allocated shares of ESOP Preferred Stock during the year ended December
     31, 1993, and accordingly, dividends on ESOP Preferred Stock are not
     included in the pro forma loss per share.

The pro forma calculations assume the UAL Preferred Offering is consummated and
are based on a dividend rate on the Public Preferred Stock of 12.25%. If the
UAL Preferred Offering is not consummated, the dividend rate is subject to the
stated maximum under the Recapitalization of 11.375%. This will not impact the
pro forma loss per share because even though the dividend rate of the Public
Preferred Stock exceeds the stated maximum, the number of Depositary Preferred
Shares representing the Public Preferred Stock was reduced so that the annual
dividends will not exceed the stated maximum which was calculated based upon
the dividend rate cap.

Following is a reconciliation of the historical and pro forma weighted average
shares:


<TABLE>
                                                                                       (in millions)
<S>                                                                                    <C>
Historical weighted average shares during the year....................................         24.4
Adjustment for restricted stock issued during the year assumed to be issued and vested
on January 1, 1993....................................................................          0.1
Adjustment for the number of option shares assumed to be issued at the Effective Time
(see "THE PLAN OF RECAPITALIZATION-Terms and Conditions-Gener-                     
al")..................................................................................          0.5
                                                                                       -------------
Adjusted weighted average shares......................................................         25.0
Adjustment to give effect to the two for one exchange of Old Shares for New Shares....        (12.5)
                                                                                       -------------
Pro forma weighted average shares.....................................................         12.5
                                                                                       =============
</TABLE>


(11) In the first quarter of 1994, the Company began recording certain air
     transportation price adjustments, which were previously recorded as
     commission expense, as adjustments to revenue. Historical operating
     revenue and expense amounts have been adjusted to conform with the current
     presentation. See the Company's Current Report on Form 8-K dated May 3,
     1994.


<TABLE>
<CAPTION>
                    UAL Corporation and Subsidiary Companies
            Pro Forma Condensed Statement of Consolidated Operations

                   For the Three Months Ended March 31, 1994
                    (In millions, except per share amounts)

                                                  Historical     Adjustments         Pro Forma
                                                  -------------- ------------------ ----------------
<S>                                               <C>            <C>                <C>
Operating revenues...............................     $3,195             $(2)(1)         $3,193
Operating expenses:                                                                
Salaries and related costs.......................      1,202            (111)(2)(3)
                                                                         (27)(1)          1,064
Employee stock ownership plan accounting charge..                         86 (4)             86
Other............................................      2,029              22 (1)          2,051
                                                  -------------- ------------------ ----------------
                                                       3,231             (30)             3,201
                                                  -------------- ------------------ ----------------
Earnings (loss) from operations..................        (36)             28                 (8)
                                                  -------------- ------------------ ----------------
Other income (expense):                                                            
Interest, net....................................        (56)            (20)(5)   
                                                                         (10)(6)            (86)
Other, net.......................................        (16)             19 (7)              3
                                                  -------------- ------------------ ----------------
                                                         (72)            (11)               (83)
                                                  -------------- ------------------ ----------------
Loss from continuing operations                                                    
before income taxes..............................       (108)             17                (91)
Provision (credit) for income taxes..............        (37)              6 (8)            (31)
                                                  -------------- ------------------ ----------------
Loss from continuing operations..................       $(71)            $11               $(60)
                                                  ============== ================== ================
Loss per share from continuing operations........     $(3.31)(9)                         $(7.05)(10)
                                                  ==============                    ================
Shares used in per share computations............      24.5  (9)                          12.5  (10)
                                                  ==============                    ================


See accompanying notes to Pro Forma Condensed
Statement of Consolidated Operations.
</TABLE>


                    UAL Corporation and Subsidiary Companies
                          Notes to Pro Forma Condensed
                      Statement of Consolidated Operations

                       Three Months Ended March 31, 1994

 (1) The Company entered into an agreement to sell its U.S. flight kitchens
     over a period of months beginning in December 1993 through June 1994 and
     an agreement to acquire catering services for a seven year period. This
     adjustment eliminates $2 million of sales revenues and $27 million of
     compensation costs recorded in the first quarter of 1994 relating to the
     U.S. flight kitchens that were sold and adds estimated incremental
     catering costs of $22 million.

 (2) To adjust compensation expense for the pro forma effect of the wage and
     benefit reductions and certain work-rule changes resulting from the
     employee investment that provide for wage and other compensation savings
     during the approximately six year period beginning at the Effective Time.
     The pro forma adjustment represents the estimated savings in the first
     quarter of 1994 assuming that such savings had commenced at the beginning
     of the prior year. The pro forma adjustment does not include any savings
     related to U2.

 (3) The following reconciles the labor cost savings included in the Pro Forma
     Condensed Statement of Consolidated Operations to the value of the
     employee investments included in the Company Analysis of employee
     investments for 1994 (see "SPECIAL FACTORS-Certain Company Analyses"):


<TABLE>
<S>                                                                            <C>
                                                                               (millions)
Pro Forma adjustment..........................................................      $111
Estimated compensation savings based on foregone 1994 raises..................        13
Estimated benefits of U2 for three months.....................................        16
Estimated additional severance for flight kitchen employees for three months..        (9)
                                                                               ----------
Estimated three months of investments.........................................      $131
                                                                               ==========
Estimated six months of investments included in 1994 analysis.................      $262
                                                                               ==========
</TABLE>


 (4) To record non-cash compensation for shares of ESOP Preferred Stock
     committed to be released to employees during the period based on the
     average fair value of the ESOP Preferred Stock. For purposes of the pro
     forma adjustment, the average fair value of the ESOP Preferred Stock was
     assumed to be the initial assumed purchase price of $120. The pro forma
     calculations assume that shares committed to be released in 1993 were
     allocated to participant accounts at the end of 1993. Thus, the portion of
     shares committed to be released in 1994 that will be used to satisfy
     dividends payable on allocated shares is charged to retained earnings
     rather than non-cash compensation expense. It is anticipated that in the
     first quarter of 1994, approximately 768,000 shares of ESOP Preferred
     Stock will be committed to be released, and that approximately 54,000 of
     these shares will be used for dividends.

Since future expense is dependent on the fair market value of the ESOP
Preferred Stock, such expense is difficult to forecast and may vary
significantly from the value in the pro forma adjustment. Changes in the price
of a New Share directly affect the determination of the value of an ESOP
Preferred Stock share. In addition, if the average value of a New Share exceeds
$136 during the first 12 months after the Effective Time, additional shares of
ESOP Preferred Stock will be issued to the Qualified ESOP or reserved for
issuance to the Supplemental ESOP. Future expense is also affected by the
premium associated with the dividend paying feature which shrinks over time as
the dividend paying period is reduced.

Following is a summary of the impact to the employee stock ownership plan
accounting charge of a range of fair market values:

Average ESOP    ESOP Accounting
Preferred Stock     Charge*
Fair Value         (millions)
- --------------- ---------------
      $110                  $79
       120                   86
       130                   93
       140                  100
- ------
* Assumes 768,000 shares committed to be released in the pro forma period and
  approximately 54,000 shares used for dividends which are charged to retained
  earnings. As additional shares are allocated in later years, the employee
  stock ownership plan accounting charge will be reduced.

The following illustrates the impact to the employee stock ownership plan
accounting charge for the quarter if the average value of the New Shares in the
first 12 months exceeds $136 per share.

          Average ESOP              Shares to    Increase in
Average     Preferred   Additional be Released ESOP Accounting
New Share  Stock Fair   Shares to    for the      Charge****
Price        Value*    be Issued**  Quarter***    (millions)
- --------- ------------ ----------- ----------- ---------------
$136              $168           0           0             $ 0
 140               172   2,260,410      98,279              16
 150               182   6,949,234     302,141              51

* Assumes a dividend premium of $32.
** To achieve the maximum increase in additional Shares, the price of a New
   Share must average at least $149.10 during the first 12 months after the
   Effective Time. If the average price of a New Share is less than or equal to
   $136, no additional shares of ESOP Preferred Stock will be issued.
*** The additional shares will be released in a level fashion over the 69
    months of the ESOP.
**** Represents the increase for the quarter; subsequent increases are
     dependent on changes in the fair value of the ESOP Preferred Stock.

 (5) To record the interest expense on the Debentures and to record
     amortization of the underwriting discount. The pro forma calculations
     assume the United Debt Offerings are consummated and are based on an
     interest rate on the Series A Debentures of 10.67% and on the Series B
     Debentures of 11.21%. If the United Debt Offerings are not consummated,
     the interest rates are subject to the stated maximums under the
     Recapitalization of 10.125% for the Series A Debentures and 10.825% for
     the Series B Debentures. This will not impact the pro forma interest
     expense because even though the interest rate on the series of Debentures
     exceeds the stated maximum, the principal amount of the series of
     Debentures was reduced so that the yield to maturity will not exceed the
     yield to maturity that would have resulted if the par amount of the series
     of Debentures (based on the stated maximum interest rate) was priced at a
     discount.

 (6) To record foregone interest income due to the reduction in the Company's
     average investment balance resulting from the Recapitalization. The pro
     forma adjustment is based on the Company's average earnings rate during
     the first quarter of 1994.

 (7) To reverse $19 million of nonrecurring fees and expenses relating to the
     Recapitalization which were recorded in the first quarter of 1994.

 (8) To adjust the provision (credit) for income taxes to reflect the tax
     effect of changes to pretax income at the statutory rate in effect during
     the first quarter of 1994. For purposes of the pro forma adjustment the
     book and tax employee stock ownership plan compensation charge are assumed
     to be the same.

 (9) Due to the nature of the Recapitalization, a comparison of historical and
     pro forma loss per share is not meaningful.

(10) The pro forma loss per common share is based on an estimated 12,547,163
     weighted average shares outstanding and is calculated after preferred
     stock dividend requirements of $9.4 million on the Company's outstanding
     Series A Preferred Stock, $12.6 million on the Public Preferred Stock
     issued as a result of the Recapitalization and $6.5 million on the ESOP
     Preferred Stock issued as a result of the Recapitalization. The dividends
     on the ESOP Preferred Stock relate to the estimated 3,073,974 shares
     allocated at the end of 1993 (of the total 17,675,345 shares that will be
     allocated) and a dividend rate of 7%. The number of weighted average
     shares assumes the Series A Preferred Stock does not convert during the
     first year of the transaction. The number of average shares of ESOP
     Preferred Stock committed to be released during the period were not
     included in the calculation as a common stock equivalent because the
     effect is anti-dilutive. In addition, the pro forma calculations assume
     the UAL Preferred Offering is consummated and are based on a divided rate
     on the Public Preferred Stock of 12.25%.

Following is a reconciliation of the historical and pro forma weighted average
shares:


<TABLE>
<S>                                                                                  <C>
                                                                                     (in millions)
Historical weighted average shares for the quarter..................................         24.5
Adjustment for restricted stock issued subsequent to January 1, 1993 assumed to be
issued and vested on January 1, 1993................................................          0.1
Adjustment for the number of option shares assumed to be issued at the Effective 
Time (see "THE PLAN OF RECAPITALIZATION-Terms and Conditions-General")..............          0.5
                                                                                     -------------
Adjusted weighted average shares....................................................         25.1
Adjustment to give effect to the two for one exchange of Old Shares for New Shares..        (12.6)
                                                                                     -------------
Pro forma weighted average shares...................................................         12.5
                                                                                     =============
</TABLE>



<TABLE>
<CAPTION>
                    UAL Corporation and Subsidiary Companies
        Pro Forma Condensed Statement of Consolidated Financial Position

                                 March 31, 1994
                        (In millions, except share data)

<S>                                                                   <C>        <C>                 <C>
                                ASSETS                                Historical Adjustments         Pro Forma
- --------------------------------------------------------------------- ---------- ------------------- ---------
Current assets:                                                                              
Cash and cash equivalents............................................    $1,046       $1,133 (1a)           $
                                                                                      (2,129)(1b)          50
Short-term investments...............................................     1,020             (140)(2)
                                                                                           8 (11)         888
Other................................................................     1,837           44 (3)        1,881
                                                                      ---------- ------------------- ---------
                                                                          3,903       (1,084)           2,819
                                                                      ---------- ------------------- ---------
Operating property and equipment.....................................    12,226                        12,226
Less: Accumulated depreciation and amortization......................    (5,177)                       (5,177)
                                                                      ---------- ------------------- ---------
                                                                          7,049                         7,049
                                                                      ---------- ------------------- ---------
Other assets:                                                                                
Other................................................................     1,937                         1,937
                                                                      ---------- ------------------- ---------
                                                                        $12,889      $(1,084)         $11,805
                                                                      ========== =================== =========

                 LIABILITIES AND SHAREHOLDERS' EQUITY                                        
- ---------------------------------------------------------------------                        
Current liabilities:                                           
Short-term borrowings, long-term debt maturing within one year                               
and current obligations under capital leases.........................      $486            $             $486
Other................................................................     4,502          (11)(11)       4,491
                                                                      ---------- ------------------- ---------
                                                                          4,988          (11)           4,977
                                                                      ---------- ------------------- ---------
Long-term debt.......................................................     2,693          734 (1c)       3,427
                                                                      ---------- ------------------- ---------
Long-term obligations under capital leases...........................       777                           777
                                                                      ---------- ------------------- ---------
Other liabilities, deferred credits and minority interest............     3,334                         3,334
                                                                      ---------- ------------------- ---------
Class 2 ESOP Preferred Stock, $.01 par, none issued..................                     -  (13)
                                                                      ---------- ------------------- ---------
Shareholders' equity:                                                                        
Series A Preferred Stock, $.01 stated value, 6,000,000 shares issued,                        
$100 liquidation value...............................................        -            -                -
Series B Preferred Stock, $.01 stated value, 16,416 shares issued,                           
$25,000 liquidation value............................................                     -  (1d)          -
Class 1 ESOP Preferred Stock, $.01 par, 1,899,059 shares issued,                             
$120 liquidation value...............................................                     -  (4)           -
Class 2 ESOP Preferred Stock, $.01 par, none issued .................                     -  (4)           -
Voting Preferred Stock, $.01 par, 3 shares issued, $.01 liquidation                          
value................................................................                     -  (5)           -
Common stock, $5 par value, 25,500,662 shares issued and                                     
outstanding-historical...............................................       128         (128)(1e)          -
Common stock, $.01 par value, 13,006,564 shares issued and                                   
outstanding-pro forma(12)............................................                    -   (1e)          -
Additional capital invested..........................................       963         (963)(1e)
                                                                                            399 (1d)
                                                                                            228 (4)
                                                                                          13 (6)          640
Retained earnings (deficit)..........................................       142        (1,038)(1e)
                                                                                        (108)(7)       (1,004)
Pension liability adjustment.........................................       (53)                          (53)
Unearned compensation................................................       (14)          14 (8)           -
Unearned ESOP Preferred Stock........................................                   (228)(4)         (228)
Unrealized loss on investments.......................................        (2)                           (2)
Common stock held in treasury, 929,631 shares-historical,                                    
439,816 shares-pro forma ............................................       (67)           4 (9)          (63)
                                                                      ---------- ------------------- ---------
                                                                          1,097       (1,807)(10)        (710)
                                                                      ---------- ------------------- ---------
                                                                        $12,889      $(1,084)         $11,805
                                                                      ========== =================== =========

See the accompanying notes to Pro Forma Condensed
Statement of Consolidated Financial Position.
</TABLE>


                    UAL Corporation and Subsidiary Companies
   Notes to Pro Forma Condensed Statement of Consolidated Financial Position

                                 March 31, 1994

 (1) To record the Recapitalization (as described in "THE PLAN OF
     RECAPITALIZATION-Terms and Conditions"). The entries assume that (i) the
     Offerings of Debentures and Depositary Preferred Shares representing
     interests in Public Preferred Stock are consummated, (ii) all in-the-money
     Options are vested and exercised at the Effective Time using a cashless
     exercise mechanism, (iii) treasury stock held by the Company immediately
     prior to the Effective Time will convert into New Shares that remain
     outstanding after the Recapitalization and (iv) Convertible Company
     Securities that are outstanding immediately prior to the Effective Time
     will not convert into the Recapitalization Consideration at the Effective
     Time. The cashless exercise feature permits holders of Options to exercise
     them by surrendering to the Company a portion of the proceeds of the
     Option in lieu of paying the exercise price in cash. When the cashless
     exercise feature is used, each element of the Recapitalization
     Consideration that is issuable upon the exercise of such Options is
     reduced proportionately, and the net Recapitalization Consideration
     (including the New Shares) that is issued is equal in value to the spread
     value of the Options exercised. See footnote 8 to the Pro Forma Condensed
     Statement of Consolidated Operations for the year ended December 31, 1993.

(a) To record the proceeds from the Offerings of approximately $741 million of
    Debentures and approximately $410 million of Depositary Preferred Shares
    representing interests in Public Preferred Stock, net of underwriting
    discount of $7 million for the Debentures and $11 million for the Public
    Preferred Stock. (If the Offerings are not consummated, the Debentures and
    the Depositary Preferred Shares included in entry 1(c) and 1(d) will be
    issued to the holders of Old Shares upon redemption of the Series D
    Redeemable Preferred Stock.)

(b) To record the cash payment to holders of Old Shares upon the redemption of
    the Redeemable Preferred Stock. The cash payment includes $25.80 per share
    plus an additional amount of cash equal to $12.20 per share plus proceeds
    from the sales of $30.13 face amount of Debentures and Depositary Preferred
    Shares representing interests in $16.68 liquidation preference of Public
    Preferred Stock (before deducting underwriting discounts). The pro forma
    adjustment also includes the cash payment of $84.81 per share upon exercise
    of Options. (If the amounts to be sold in the Offerings differ from the
    amounts discussed in entry 1(c) and 1(d) or if any of the Offerings are not
    consummated, the amount paid to holders of Old Shares will change.)

(c) To record the issuance of $370 million of principal amount of Series A
    Debentures and $371 million of principal amount of Series B Debentures,
    less the underwriting discount of $7 million. The pro forma adjustment
    assumes that the United Debt Offerings are consummated and that the
    interest rate is 10.67% for the Series A Debentures and 11.21% for the
    Series B Debentures based on the pricing of the United Debt Offerings. The
    Debentures are being recorded at their face amount on the assumption that
    they are priced to trade at par.

If the underwritings are not consummated, $382.5 of principal amount of Series
   A Debentures and $382.5 million of principal amount of Series B Debentures
   will be issued. The actual rates on the Debentures have been set at the
   applicable stated maximum rates of 10.125% for the Series A Debentures and
   10.825% for the Series B Debentures. If either or both of the United Debt
   Offerings are not consummated and the then current market interest rate
   exceeds the applicable stated maximum, such Debentures will be recorded at a
   discount.

(d) To record the issuance of Depositary Preferred Shares representing
    interests in $410 million liquidation preference of Public Preferred Stock,
    net of underwriting discount of $11 million. The pro forma adjustment
    assumes the UAL Preferred Offering is consummated and that the dividend
    rate is 12.25% based on the pricing of the UAL Preferred Offering. The
    Public Preferred Stock is recorded at its stated value of $.01 per share,
    with the excess of liquidation value over stated value and net of
    underwriting discount recorded as additional capital invested.

If the UAL Preferred Offering is not consummated, Depositary Preferred Shares
   representing interests in approximately $442 million of liquidation
   preference of Public Preferred Stock will be issued. The dividend rate has
   been set to the maximum rate of 11.375%.

(e) To record the reclassification of Old Shares into New Shares and Series D
    Redeemable Preferred Stock. The Series D Redeemable Preferred Stock is
    assumed to immediately convert to cash, including proceeds from the sale of
    Debentures and Depositary Preferred Shares representing interests in the
    Public Preferred Stock. (The pro forma adjustments do not reflect the
    Series D Redeemable Preferred Stock issued to the Company upon
    reclassification of the treasury stock because such shares are surrendered
    for cancellation immediately after issuance.)

The New Shares are recorded at their par value of $.01 per share. Following is
a summary of the entries to additional capital invested and retained earnings
(in millions):

                             Additional
                              Capital   Retained
                              Invested  Earnings
                             ---------- ---------
Cancellation of Old Shares..      $128       $-
Distribution of cash........    (1,091)   (1,038)
                             ---------- ---------
Pro forma adjustment........     $(963)  $(1,038)
                             ========== =========

 (2) To record the cash impact of the estimated fees and transaction expenses,
     including expenses for the Company, ALPA and the IAM, severance payments
     to terminated officers and flight kitchen employees and payments relating
     to the employment agreement with Mr. Greenwald.

 (3) To record the tax effects relating to nonrecurring charges recognized as a
     result of the Recapitalization.

 (4) To record the initial issuance of Class 1 ESOP Preferred Stock to the
     Leveraged ESOP for an aggregate purchase price of $228 million. The $228
     million was determined based on (i) 1,899,059 shares of Class 1 ESOP
     Preferred Stock expected to be issued in the first ESOP Tranche as of the
     Effective Time and (ii) an assumed purchase price of $120 per share. The
     Company and the Unions may, prior to the Effective Time, agree to increase
     or decrease the number of shares of Class 1 ESOP Preferred Stock sold at
     the Effective Time. The agreement with the ESOP Trustee provides that the
     number of shares of Class 1 ESOP Preferred Stock sold at the Effective
     Time shall be no more than 2,088,965 and no fewer than 1,709,153 provided,
     however, that the number of shares sold in the first ESOP Tranche will be
     adjusted if the Effective Time is before or after July 1, 1994. The actual
     price per share for the first
ESOP Tranche will be calculated as provided in the ESOP Stock Purchase
     Agreement (see "THE PLAN OF RECAPITALIZATION-Establishment of ESOPs").
     Thus, the ultimate amount recorded at the Effective Time will differ from
     the pro forma adjustment in order to reflect the actual number of shares
     issued and the purchase price calculated under the ESOP Stock Purchase
     Agreement.

Six additional ESOP Tranches will be issued to the Leveraged ESOP during the 69
months subsequent to the Effective Time, with the total shares of Class 1 ESOP
Preferred Stock issued in the seven ESOP Tranches aggregating approximately
14,000,000 shares (subject to increase, see "THE PLAN OF
RECAPITALIZATION-Establishment of ESOPs-Additional Shares"). The price for the
subsequent ESOP Tranches will be as agreed between the Company and the ESOP
Trustee at the time of each sale. As the subsequent ESOP Tranches are issued,
the shares will be reported as a credit to additional capital invested based on
the fair value of the stock when such issuances occur with a corresponding
charge to "Unearned ESOP Preferred Stock."

The unearned ESOP Preferred Stock recorded in the pro forma adjustment together
with the unearned ESOP Preferred Stock recorded from subsequent ESOP Tranches
will be recognized as compensation expense over the approximately six year
investment period as the shares are committed to be released. The difference
between the compensation expense recorded, which is based on the fair value of
the stock during an accounting period, and the recorded cost of the unearned
ESOP Preferred Stock will be recorded to additional capital invested.

The shares of Class 2 ESOP Preferred Stock will be recorded over the
approximately six year investment period as the shares are committed to be
contributed to the Non-Leveraged Qualified ESOP and credited to employees
pursuant to the Supplemental ESOP with the offsetting entry being to
compensation expense. The number of shares of Class 2 ESOP Preferred Stock that
will be issued will be equal to 17,675,345 less the number of Shares of Class 1
ESOP Preferred Stock that will be sold to the Qualified ESOP.

The ESOP Preferred Stock is convertible into New Shares at any time at the
election of the ESOP Trustee at a rate of one New Share for each share of ESOP
Preferred Stock (subject to adjustment). Primarily because of limitations
imposed by the Internal Revenue Code, the ESOP consists of three major
portions: the Leveraged ESOP, the Non-Leveraged Qualified ESOP, and the
Supplemental ESOP. Shares of ESOP Preferred Stock issued under the Leveraged
ESOP and the Non-Leveraged Qualified ESOP will be held by the ESOP Trustee
under the Qualified Trust. Under the Supplemental ESOP, shares will be credited
as Book-Entry Shares when earned by employees, and will be issued to employees
as New Shares, generally upon termination of employment. ALPA has the right to
elect, at any time, before or after the Effective Time, that the Supplemental
ESOP be maintained by the actual issuance of Class 2 ESOP Preferred Stock to a
non-qualified trust established under the Supplemental Plan. In general, the
Plan of Recapitalization is designed to maximize the number of shares of ESOP
Preferred Stock that may be sold to the Qualified Trust. However, because of
certain limitations imposed by the Internal Revenue Code, a portion of the
equity interest to be obtained by the ESOP Trustee may not be sold to the
Qualified Trust. The Class 1 ESOP Preferred Stock contains a fixed dividend
feature which is intended to maximize the number of shares of Class 1 ESOP
Preferred Stock that may be sold to the Qualified Trust consistent with the
applicable provisions of the Internal Revenue Code. To the extent that the
Qualified Trust is unable to purchase the Class 1 ESOP Preferred Stock, Class 2
ESOP Preferred Stock will be issued, to the extent permitted by the limitations
of the Internal Revenue Code, to the ESOP Trustee pursuant to the Non-Leveraged
Qualified ESOP. Class 2 ESOP Preferred Stock will not contain a fixed dividend.
To the extent that Class 2 ESOP Preferred Stock cannot be issued to the ESOP
Trustee because of the limitations of the Internal Revenue Code, the Company
will credit Book-Entry Shares to accounts established for the employees.

 (5) To record the issuance at par of one share of Class P Voting Preferred
     Stock, one share of Class M Voting Preferred Stock, and one share of Class
     S Voting Preferred Stock to the ESOP Trusts. The remaining Voting
     Preferred Stock will be issued when it is contributed to the Supplemental
     ESOP Trust. The Class P Voting Preferred Stock, the Class M Voting
     Preferred Stock and the Class S Voting Preferred Stock, which are referred
     to collectively as the Voting Preferred Stock, represent and permit, in
     connection with the establishment of the ESOPs, the exercise of voting
     power representing 55% (which under certain circumstances may be increased
     to up to 63%) of the voting power of the Company. See "DESCRIPTION OF
     SECURITIES-The Voting Preferred Stock." The ESOPs provide that upon the
     conversion of all the ESOP Preferred Stock into New Shares, each share of
     Voting Preferred Stock will be converted into one ten-thousandth of a New
     Share.

 (6) To account for the cashless exercise of options in the event of the
     Recapitalization. (Amount of the entry is based on an assumed Old Share
     price at the Effective Time of approximately $128.31 per share.)

 (7) Represents the offset to entries (2), (3), (6), (8), (9) and (11).

 (8) To record the vesting of the unvested restricted stock as a result of the
     Recapitalization.

 (9) To record 25,000 restricted shares to Mr. Greenwald that will vest at the
     Effective Time.

(10) Does not reflect the issuance of four shares of Class I Preferred Stock,
     one share of Class Pilot MEC Preferred Stock, one share of Class IAM
     Preferred Stock, and three shares of Class SAM Preferred Stock. These
     stocks have a $.01 par value and nominal economic value. The Class I
     Preferred Stock will be issued to the Independent Directors and will have
     the power to elect such directors to the Board. The Class Pilot MEC
     Preferred Stock will be issued to the ALPA-MEC and will have the power to
     elect the ALPA Director. The Class IAM Preferred Stock will be issued to
     the IAM or its designee and will have the power to elect the IAM Director.
     The Class SAM Preferred Stock will be issued to the Salaried and
     Management Director and to the senior executive at United who has primary
     responsibility for human resources and will have the power to elect the
     Salaried and Management Director. Such classes of stock are referred to
     collectively as the Director Preferred Stock. See "DESCRIPTION OF
     SECURITIES-The Director Preferred Stock." Upon the occurrence of an
     Uninstructed Trustee Action (as defined below), the Class Pilot MEC
     Preferred Stock will succeed to the voting power previously held by the
     Class P Voting Preferred Stock, the Class IAM Preferred Stock will succeed
     to the voting power previously held by the Class M Voting Preferred Stock
     and the Class SAM Preferred Stock will succeed to the voting power
     previously held by the Class S Voting Preferred Stock. See "DESCRIPTION OF
     SECURITIES-The Director Preferred Stock-Uninstructed Trustee Actions."

(11) To reverse $19 million of transaction fees and expenses recorded during
     the first quarter of 1994 because these expenses are included in entry
     (2).

(12) The number of New Shares issued on a pro forma basis is based on Fully
     Diluted Old Shares assuming the Convertible Company Securities do not
     convert. See "THE PLAN OF RECAPITALIZATION-Terms and Conditions-General."

(13) The Class 2 ESOP Preferred Stock committed to be contributed to the
     Supplemental ESOP will be reported outside of equity because the employees
     can elect to receive their "book entry" shares from the Company in cash
     upon termination of employment.


                United Air Lines, Inc. and Subsidiary Companies

  The following unaudited Pro Forma Condensed Statements of Consolidated
Operations for the year ended December 31, 1993 and the three months ended
March 31, 1994, and the unaudited Pro Forma Condensed Statement of Consolidated
Financial Position as of March 31, 1994 for United and its subsidiaries have
been prepared to reflect the impact of the Recapitalization on United,
including: (i) the recognition of unearned ESOP Preferred Stock and related
ESOP capital as a result of the issuance of the first tranche of UAL Class 1
ESOP Preferred Stock, (ii) the offering of Debentures and distribution of
proceeds to UAL, (iii) the recognition of the employee stock ownership plan
accounting charge, (iv) the reduction in salaries and related cost for the
anticipated impact of the wage and benefit reductions and certain work rule
changes, (v) the recognition of the anticipated benefits of the agreement to
sell the U.S. flight kitchens and (vi) the intercompany loan to UAL. The
unaudited Pro Forma Condensed Statements of Consolidated Operations were
prepared as if the Recapitalization had occurred on January 1, 1993. The
unaudited Pro Forma Condensed Statement of Consolidated Financial Position was
prepared as if the Recapitalization occurred on March 31, 1994.

  The pro forma statements assume the Recapitalization is not accounted for as
an acquisition or merger and, accordingly, United's assets and liabilities have
not been revalued. The distribution to UAL of proceeds from the United Debt
Offerings of Debentures is charged to additional capital invested.

  The ESOPs are being accounted for in accordance with the American Institute
of Certified Public Accountants Statement of Position 93-6, "Employers'
Accounting for Employee Stock Ownership Plans" ("SOP"). For the Leveraged ESOP,
the Company will issue Class 1 ESOP Preferred Stock through seven ESOP
Tranches, at the Effective Time, approximately thirteen months following the
Effective Time, annually thereafter for four years and on January 1, 2000. As
the Shares are issued to the Leveraged ESOP, United will report the issuance of
shares as a credit to ESOP capital based on the fair value of the stock when
such issuance occurs and report a corresponding charge to unearned ESOP
Preferred Stock. As shares of Class 1 ESOP Preferred Stock are earned or
committed to be released, compensation expense will be recognized equal to the
average fair value of the shares committed to be released with a corresponding
credit to unearned ESOP Preferred Stock. Any differences between the fair value
of the shares committed to be released and the cost of the shares to the ESOP
will be charged or credited to ESOP capital. For the Non-Leveraged Qualified
ESOP, the shares of Class 2 ESOP Preferred Stock will be recorded as the shares
are committed to be contributed to the ESOP, with the offsetting entry to
compensation expense. Compensation expense will be recorded based on the fair
value of the shares committed to be contributed to the ESOP, in accordance with
the SOP. The pro forma financial statements assume that the Supplemental ESOP
is accounted for the same as the Non-Leveraged Qualified ESOP (i.e., pursuant
to the SOP). It is possible that, because the Supplemental ESOP is a
non-qualified plan, the Company may account for it under Accounting Principles
Board Opinion 25, "Accounting for Stock Issued to Employees," instead. The
Company would not expect this to result in a material difference. The unearned
ESOP Preferred Stock, ESOP capital and employee stock ownership accounting
charge will be recorded on United's books since participants in the ESOP are
employees of United.

  The unaudited Pro Forma Condensed Statements of Consolidated Operations
include the recurring charges and credits which are directly attributable to
the Recapitalization, such as the interest expense arising from the Debentures,
the effects of the wage and benefit reductions and certain work-rule changes
resulting from the employee investment, and the employee stock ownership plan
accounting charge. No adjustments have been made to the pro forma revenues and
expenses to reflect the results of structural changes in operations, such as
U2, that might have been made had the changes been consummated on the assumed
effective dates for presenting pro forma results.

  The pro forma adjustments are based upon available information and upon
certain assumptions that United believes are reasonable. In addition, this
information should be read in conjunction with United's Annual Report on Form
10-K for the year ended December 31, 1993, and United's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1994, as amended, and which include
United's Consolidated Financial Statements, the related notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and United's Current Report on Form 8-K dated May 3, 1994.



<TABLE>
<CAPTION>
                United Air Lines, Inc. and Subsidiary Companies
            Pro Forma Condensed Statement of Consolidated Operations

                          Year Ended December 31, 1993
                                 (In millions)

<S>                                               <C>           <C>                 <C>
                                                  Historical     Adjustments        Pro Forma
                                                  ------------- ------------------- ---------
Operating revenues...............................    $13,168(8)         $(28)(1)     $13,140
Operating expenses:                                                         
Salaries and related costs.......................      4,695            (428)(2)(3)
                                                                        (191)(1)       4,076
Employee stock ownership plan accounting charge..                        369 (4)         369
Other............................................      8,178(8)          131 (1)       8,309
                                                  ------------- ------------------- ---------
                                                      12,873            (119)         12,754
                                                  ------------- ------------------- ---------
Earnings from operations.........................        295              91             386
                                                  ------------- ------------------- ---------
Other income (expense):                                                     
Interest, net....................................       (221)            (96)(5)        (317)
Other, net.......................................       (100)                           (100)
                                                  ------------- ------------------- ---------
                                                        (321)            (96)           (417)
                                                  ------------- ------------------- ---------
Loss from continuing operations                                             
before income taxes..............................        (26)             (5)            (31)
Provision (credit) for income taxes..............         (9)             (2)(6)         (11)
                                                  ------------- ------------------- ---------
Loss from continuing operations..................       $(17)            $(3)(7)        $(20)
                                                  ============= =================== =========


See accompanying notes to Pro Forma Condensed
Statement of Consolidated Operations.
</TABLE>



                United Air Lines, Inc. and Subsidiary Companies

                          Notes to Pro Forma Condensed
                      Statement of Consolidated Operations

                      For the Year Ended December 31, 1993

(1) United entered into an agreement to sell its U.S. flight kitchens over a
    period of months beginning in December 1993 through June 1994, and an
    agreement to acquire catering services for a seven year period. This
    adjustment eliminates $28 million of sales revenues and $191 million of
    compensation costs recorded in 1993 relating to the U.S. flight kitchens
    that were sold, and adds estimated incremental catering costs of $131
    million.

(2) To adjust compensation expense for the pro forma effect of wage and benefit
    reductions and certain work-rule changes resulting from the employee
    investment that provide for wage and other compensation savings during the
    approximately six year period beginning at the Effective Time. The pro
    forma adjustment represents the estimated savings in the 12 months assuming
    that such savings had commenced at the beginning of the period. The pro
    forma adjustment does not include any savings related to U2.

(3) The following reconciles the labor cost savings included in the Pro Forma
    Condensed Statement of Consolidated Operations to the value of the employee
    investments included in the Company Analysis of employee investments for
    1994 (see "SPECIAL FACTORS-Certain Company Analyses"):


<TABLE>
<S>                                                                                 <C>
                                                                                    (millions)
Pro Forma adjustment based on 1993 salaries........................................      $428
Estimated compensation savings based on 1994 salaries..............................        68
Estimated benefits of U2 during the first year.....................................        64
Estimated additional severance for flight kitchen employees during the first year..       (36)
                                                                                    ----------
Estimated 1994 investments.........................................................      $524
                                                                                    ==========
Estimated six months of investments included in 1994 analysis......................      $262
                                                                                    ==========
</TABLE>


(4) To record non-cash compensation for shares of ESOP Preferred Stock
    committed to be released to employees during the period based on the
    average fair value of such ESOP Preferred Stock. The average fair value of
    the ESOP Preferred Stock is based on two components: (1) the average fair
    value of the New Shares into which the ESOP Preferred Stock is convertible
    plus (2) a premium attributable to the dividend paying feature of the ESOP
    Preferred Stock. For purposes of the pro forma adjustment, the average fair
    value of the ESOP Preferred Stock was assumed to be the initial assumed
    purchase price of $120. In future years, it is anticipated that the ESOP
    Preferred Stock price, for purposes of computing the employee stock
    ownership plan accounting charge, will be determined by an independent
    appraiser who will value both components. Additionally, in future years,
    the shares committed to be released that are used to satisfy the dividends
    payable on previously allocated shares will be charged to retained earnings
    rather than compensation expense.

The shares of the ESOP Preferred Stock committed to be released are a fraction
of the original ESOP Preferred Stock shares. It is anticipated the shares will
be released in a level fashion over the 69 months of the ESOP taking into
account the partial period in 1994 and 2000. This would result in approximately
3.07 million ESOP Preferred Stock shares committed to be released in each full
calendar year. Shares released in a partial year would be pro rated.

Since future expense is dependent on the fair market value of the ESOP
Preferred Stock, such expense is difficult to forecast and may vary
significantly from the value in the pro forma adjustment. Changes in the price
of a New Share directly affect the determination of the value of an ESOP
Preferred Stock share. In
addition, if the average value of a New Share exceeds $136 during the first 12
months after the Effective Time, additional shares of ESOP Preferred Stock will
be issued to the Qualified ESOP or reserved for issuance to the Supplemental
ESOP to increase the ESOP's ownership from approximately 55% up to a maximum of
approximately 63%. Future expense is also affected by the premium associated
with the dividend paying feature which shrinks over time as the dividend paying
period is reduced.

Following is a summary of the impact to the employee stock ownership plan
accounting charge of a range of fair market values:

  Average ESOP  ESOP Accounting
Preferred Stock     Charge*
   Fair Value      (millions)
- --------------- ---------------
           $110            $338
            120             369
            130             400
            140             430
- ------
     *Assumes 3.07 million shares committed to be released in the pro forma
              period and no shares used to satisfy dividends payable since
              shares are not allocated to participants until December 31. In
              later years shares will be used to satisfy dividends on allocated
              shares, which will reduce the ESOP accounting charge.

The following illustrates the impact to the ESOP accounting charge if the
average value of the New Shares in the first 12 months exceeds $136 per share.

                                      Shares to
                                          be      Increase in
 Average    Average ESOP   Additional  Released ESOP Accounting
New Share Preferred Stock  Shares to  for First    Charge****
  Price     Fair Value*   be Issued**  Year***     (millions)
- --------- --------------- ----------- --------- ---------------
     $136            $168           0         0            $  0
      140             172   2,260,410   393,115              68
      150             182   6,949,234 1,208,562             220
- ------
     *Assumes a dividend premium of $32 per share.
    **To achieve the maximum increase in ownership, the price of a New Share
         must average at least $149.10 during the first 12 months after the
         Effective Time. If the average price of a New Share is less than or
         equal to $136, no additional shares of ESOP Preferred Stock will be
         issued.
   ***The additional shares will be released in a level fashion over the 69
          months of the ESOP.
  ****Represents the first year increase; subsequent increases are dependent on
                 changes in the fair value of ESOP Preferred Stock.

(5) To record interest expense of $81 million on the Debentures and to record
    amortization of the underwriting discount. The pro forma adjustment also
    includes approximately $15 million of foregone interest income due to the
    reduction in United's average investment balance resulting from the
    transaction. The pro forma calculations assume the United Debt Offerings
    are consummated and are based on an interest rate on the Series A
    Debentures of 10.67% and on the Series B Debentures of 11.21%. If the
    United Debt Offerings are not consummated, the interest rates are subject
    to the stated maximums under the Recapitalization of 10.125% for the Series
    A Debentures and 10.825% for the Series B Debentures. This will not impact
    the pro forma interest expense because even though the interest rate on the
    series of Debentures exceeds the stated maximum, the principal amount of
    the series of Debentures was reduced so that the yield to maturity will not
    exceed the yield to maturity that would have resulted if the par amount of
    the series of Debentures (based on the stated maximum interest rate) was
    priced at a discount.

(6) To adjust the provision (credit) for income taxes to reflect the tax effect
    of changes to pretax income at the statutory rate in effect during 1993.
    For purposes of the pro forma adjustment, the book and tax employee stock
    ownership plan compensation charge are assumed to be the same.

(7) If the Recapitalization is consummated, United expects to recognize
    nonrecurring charges of approximately $44 million relating to additional
    severance benefits for employees terminated as a result of the sale of the
    flight kitchens, up to $49.15 million of transaction fees and expenses
    incurred by ALPA, the IAM and certain advisors in connection with the
    structuring and establishment of the ESOPs, $30 million for United's
    transaction fees and expenses, $17 million of compensation expense relating
    to vesting the unvested restricted stock as a result of the change in
    control, $21 million of payments and benefits to Mr. Greenwald and officers
    who are retiring at the Effective Time, and $13 million of compensation
    expense (based on an assumed Old Share price of approximately $128.31 at
    the Effective Time) relating to the vesting of unvested Options and the
    implementation of a feature that provides for cashless exercise of Options
    in the event of the Recapitalization. (The existing Option holders are only
    entitled to utilize the cashless exercise feature if the Recapitalization
    occurs. The pro forma financial information assumes all in-the-money
    Options are exercised at the Effective Time and, since the cashless
    exercise results in variable plan accounting, there is an initial
    nonrecurring charge for the cashless exercise feature but no ongoing
    impact; however, if Option holders do not exercise their Options at the
    Effective Time, there will be an ongoing accounting impact for the changes
    in the fair market value of the Recapitalization Consideration that is
    issuable upon exercise of such Options.) The total after-tax effect of the
    nonrecurring charges is $122 million. Due to the nonrecurring nature of
    these charges, they have been excluded from the Pro Forma Condensed
    Statement of Consolidated Operations.

(8) In the first quarter of 1994, United began recording certain air
    transportation price adjustments, which were previously recorded as
    commission expense, as adjustments to revenue. Historical operating revenue
    and expense amounts have been adjusted to conform with the current
    presentation. See United's Current Report on Form 8-K dated May 3, 1994.



<TABLE>
<CAPTION>
                United Air Lines, Inc. and Subsidiary Companies
            Pro Forma Condensed Statement of Consolidated Operations

                      For the Three Months March 31, 1994
                                 (In millions)

<S>                                               <C>        <C>                 <C>
                                                  Historical  Adjustments        Pro Forma
                                                  ---------- ------------------- ---------
Operating revenues...............................    $3,173          $ (2)(1)      $3,171
Operating expenses:                                                      
Salaries and related costs.......................     1,202          (111)(2)(3)
                                                                      (27)(1)       1,064
Employee stock ownership plan accounting charge..                      86 (4)          86
Other............................................     2,015            22 (1)       2,037
                                                  ---------- ------------------- ---------
                                                      3,217           (30)          3,187
                                                  ---------- ------------------- ---------
Earnings (loss) from operations..................       (44)           28             (16)
                                                  ---------- ------------------- ---------
Other income (expense):                                                  
Interest, net....................................       (60)          (24)(5)         (84)
Other, net.......................................       (16)           19 (6)           3
                                                  ---------- ------------------- ---------
                                                        (76)           (5)            (81)
                                                  ---------- ------------------- ---------
Loss from continuing operations                                          
before income taxes..............................      (120)           23             (97)
Provision (credit) for income taxes..............       (41)            9 (7)         (32)
                                                  ---------- ------------------- ---------
Loss from continuing operations..................      $(79)          $14            $(65)
                                                  ========== =================== =========


See accompanying notes to Pro Forma Condensed
Statement of Consolidated Operations.
</TABLE>



                United Air Lines, Inc. and Subsidiary Companies

                          Notes to Pro Forma Condensed
                      Statement of Consolidated Operations

                       Three Months Ended March 31, 1994

(1) United entered into an agreement to sell its U.S. flight kitchens over a
    period of months beginning in December 1993 through June 1994, and an
    agreement to acquire catering services for a seven year period. This
    adjustment eliminates $2 million of sales revenues and $27 million of
    compensation costs recorded in the first quarter of 1994 relating to the
    U.S. flight kitchens that were sold, and adds estimated incremental
    catering costs of $22 million.

(2) To adjust compensation expense for the pro forma effect of wage and benefit
    reductions and certain work-rule changes resulting from the employee
    investment that provide for wage and other compensation savings during the
    approximately six year period beginning at the Effective Time. The pro
    forma adjustment represents the estimated savings in the first quarter of
    1994 assuming that such savings had commenced at the beginning of the prior
    year. The pro forma adjustment does not include any savings related to U2.

(3) The following reconciles the labor cost savings included in the Pro Forma
    Condensed Statement of Consolidated Operations to the value of the employee
    investments included in the Company Analysis of employee investments for
    1994 (see "SPECIAL FACTORS-Certain Company Analyses"):


<TABLE>
<S>                                                                            <C>
                                                                               (millions)
Pro Forma adjustment..........................................................      $111
Estimated compensation savings based on foregone 1994 raises..................        13
Estimated benefits of U2 for three months.....................................        16
Estimated additional severance for flight kitchen employees for three months..        (9)
                                                                               ----------
Estimated three months of investments.........................................      $131
                                                                               ==========
Estimated six months of investments included in 1994 analysis.................      $262
                                                                               ==========
</TABLE>


(4) To record non-cash compensation for shares of ESOP Preferred Stock
    committed to be released to employees during the period based on the
    average fair value of the ESOP Preferred Stock. For purposes of the pro
    forma adjustment, the average fair value of the ESOP Preferred Stock was
    assumed to be the initial assumed purchase price of $120. The pro forma
    calculations assume that shares committed to be released in 1993 were
    allocated to participant accounts at the end of 1993. Thus, the portion of
    shares committed to be released in 1994 that will be used to satisfy
    dividend payable on allocated shares is charged to retained earnings rather
    than non-cash compensation expense. It is anticipated that in the first
    quarter of 1994, approximately 768,000 shares of ESOP Preferred Stock will
    be committed to be released, and that approximately 54,000 of these shares
    will be used for dividends.

Since future expense is dependent on the fair market value of the ESOP
Preferred Stock, such expense is difficult to forecast and may vary
significantly from the value in the pro forma adjustment. Changes in the price
of a New Share directly affect the determination of the value of an ESOP
Preferred Stock share. In addition, if the average value of a New Share exceeds
$136 during the first 12 months after the Effective Time, additional shares of
ESOP Preferred Stock will be issued to the Qualified ESOP or reserved for
issuance to the Supplemental ESOP. Future expense is also affected by the
premium associated with the dividend paying feature which shrinks over time as
the dividend paying period is reduced.

Following is a summary of the impact to the employee stock ownership plan
accounting charge of a range of fair market values:

  Average ESOP  ESOP Accounting
Preferred Stock     Charge*
   Fair Value      (millions)
- --------------- ---------------
      $110                 $ 79
       120                   86
       130                   93
       140                  100

- ------
  * Assumes 768,000 shares committed to be released in the pro forma period and
    approximately 54,000 shares used for dividends which are charged to
    retained earnings. As additional shares are allocated in later years, the
    employee stock ownership plan accounting charge will be reduced.

The following illustrates the impact to the employee stock ownership plan
accounting charge for the quarter if the average value of the New Shares in the
first 12 months exceeds $136 per share.

          Average ESOP             Shares to be   Increase in
 Average    Preferred   Additional   Released   ESOP Accounting
New Share  Stock Fair   Shares to     for the      Charge****
  Price      Value*    be Issued**  Quarter***     (millions)
- --------- ------------ ----------- ------------ ---------------
$136              $168      0            0                  $ 0
 140               172   2,260,410       98,279              16
 150               182   6,949,239      302,141              51
- ------
   *Assumes a dividend premium of $32.
  ** To achieve the maximum increase in additional shares, the price of a New
     Share must average at least $149.10 during the first 12 months after the
     Effective Time. If the average price of a New Share is less than or equal
     to $136, no additional shares of ESOP Preferred Stock will be issued.
 *** The additional shares will be released in a level fashion over the 69
     months of the ESOP.
****Represents the increase for the quarter; subsequent increases are dependent
               on changes in the fair value of the ESOP Preferred Stock.

(5) To record interest expense of $20 million on the Debentures and to record
    amortization of the underwriting discount. The pro forma adjustment also
    includes approximately $4 million of foregone interest income due to the
    reduction in United's average investment balance resulting from the
    transaction. The pro forma calculations assume the United Debt Offerings
    are consummated and are based on an interest rate on the Series A
    Debentures of 10.67% and on the Series B Debentures of 11.21%. If the
    United Debt Offerings are not consummated, the interest rates are subject
    to the stated maximums under the Recapitalization of 10.125% for the Series
    A Debentures and 10.825% for the Series B Debentures. This will not impact
    the pro forma interest expense because even though the interest rate on the
    series of Debentures exceeds the stated maximum, the principal amount of
    the series of Debentures was reduced so that the yield to maturity will not
    exceed the yield to maturity that would have resulted if the par amount of
    the series of Debentures (based on the stated maximum interest rate) was
    priced at a discount.

(6) To reverse $19 million of nonrecurring fees and expenses relating to the
    Recapitalization which were recorded in the first quarter of 1994.

(7) To adjust the provision (credit) for income taxes to reflect the tax effect
    of changes to pretax income at the statutory rate in effect during the
    first quarter of 1994. For purposes of the pro forma adjustment the book
    and tax employee stock ownership plan compensation charge are assumed to be
    the same.


<TABLE>
<CAPTION>

                United Air Lines, Inc. and Subsidiary Companies
        Pro Forma Condensed Statement of Consolidated Financial Position

                                 March 31, 1994
                        (In millions, except share data)


<S>                                                             <C>        <C>            <C>
                             ASSETS                             Historical Adjustments    Pro Forma
- --------------------------------------------------------------- ---------- -------------- ---------
Current assets:                                                                   
Cash and cash equivalents......................................      $666      $(140)(1)         $
                                                                                 734 (3)
                                                                                (741)(3)
                                                                                (300)(10)
                                                                                   8 (9)       227
Short-term investments.........................................       542                      542
Other..........................................................     2,241         44 (2)     2,285
                                                                ---------- -------------- ---------
                                                                    3,449       (395)        3,054
                                                                ---------- -------------- ---------
Operating property and equipment...............................    12,211                   12,211
Less: Accumulated depreciation                                                    
and amortization...............................................    (5,164)                  (5,164)
                                                                ---------- -------------- ---------
                                                                    7,047                    7,047
                                                                ---------- -------------- ---------
Other assets:                                                                     
Other..........................................................     1,700        300 (10)    2,000
                                                                ---------- -------------- ---------
                                                                  $12,196       $(95)      $12,101
                                                                ========== ============== =========

              LIABILITIES AND SHAREHOLDER'S EQUITY                                
- ---------------------------------------------------------------                   
Current liabilities:                                     
Short-term borrowings, long-term debt maturing within one year                    
and current obligations under capital leases...................      $466          $          $466
Other..........................................................     4,473        (11)(9)     4,462
                                                                ---------- -------------- ---------
                                                                    4,939        (11)        4,928
                                                                ---------- -------------- ---------
Long-term debt.................................................     2,596        734 (3)     3,330
                                                                ---------- -------------- ---------
Long-term obligations under capital leases.....................       774                      774
                                                                ---------- -------------- ---------
Other liabilities, deferred credits and minority interest......     3,317                    3,317
                                                                ---------- -------------- ---------
Shareholder's equity:                                                             
Common stock, $5 par value; 1,000 shares authorized; 200 shares                   
outstanding....................................................        -                        -
Additional capital invested....................................       839       (741)(3)
                                                                                  13 (5)
                                                                                    4 (6)      115
Retained earnings (deficit)....................................      (200)      (108)(7)      (308)
ESOP capital...................................................                  228 (4)       228
Unearned ESOP Preferred Stock..................................                 (228)(4)      (228)
Unearned compensation..........................................       (14)        14 (8)        -
Pension liability adjustment ..................................       (53)                     (53)
Unrealized loss of investments.................................        (2)                      (2)
                                                                ---------- -------------- ---------
                                                                      570       (818)         (248)
                                                                ---------- -------------- ---------
                                                                  $12,196       $(95)      $12,101
                                                                ========== ============== =========

See the accompanying notes to Pro Forma Condensed
Statement of Consolidated Financial Position.
</TABLE>



United Air Lines, Inc. and Subsidiary Companies
Notes to Pro Forma Condensed
Statement of Consolidated Financial Position

                                 March 31, 1994

(1) To record the cash impact of the estimated fees and transaction expenses,
    including expenses for United, ALPA and the IAM, severance payments to
    terminated officers and flight kitchen employees, and payments relating to
    the employment agreement with Mr. Greenwald.

(2) To record the tax effects relating to nonrecurring charges recognized as a
    result of the transaction.

(3) To record the issuance of $370 million of principal amount of Series A
    Debentures and $371 million of principal amount of Series B Debentures and
    to record the distribution of proceeds to UAL. The pro forma adjustment
    assumes that the United Debt Offerings are consummated and that the
    interest rate is 10.67% for the Series A Debentures and 11.21% for the
    Series B Debentures based on the pricing of the United Debt Offerings. The
    Debentures are being recorded at their face amount on the assumption that
    they are priced to trade at par, less the underwriting discount of $7
    million.

 If the underwritings are not consummated, $382.5 of principal amount of Series
    A Debentures and $382.5 million of principal amount of Series B Debentures
    will be issued. The actual rates on the Debentures have been set at the
    applicable stated maximum rates of 10.125% for the Series A Debentures and
    10.825% for the Series B Debentures. If either or both of the United Debt
    Offerings are not consummated and the then current market interest rate
    exceeds the applicable stated maximum, such Debentures will be recorded at
    a discount.

(4) To record the ESOP capital as a result of the initial issuance of shares of
    UAL's Class 1 ESOP Preferred Stock to the Leveraged ESOP for an aggregate
    purchase price of $228 million and to record the related charge to unearned
    ESOP Preferred Stock. The $228 million was determined based on (i)
    1,899,059 shares of Class 1 ESOP Preferred Stock expected to be issued in
    the first ESOP Tranche as of the Effective Time and (ii) an assumed
    purchase price of $120 per share. The Company and the Unions may, prior to
    the Effective Time, agree to increase or decrease the number of shares of
    Class 1 ESOP Preferred Stock sold at the Effective Time. The agreement with
    the ESOP Trustee provides that the number of shares of Class 1 ESOP
    Preferred Stock sold at the Effective Time shall be no more than 2,088,965
    and no fewer than 1,709,153 provided, however, that the number of shares
    sold in the first ESOP Tranche will be adjusted if the Effective Time is
    before or after July 1, 1994. The actual price per share for the first ESOP
    Tranche will be calculated as provided in the ESOP Stock Purchase
    Agreement. Thus, the ultimate amount recorded at the Effective Time will
    differ from the pro forma adjustment in order to reflect the actual number
    of shares issued and the purchase price calculated under the ESOP Stock
    Purchase Agreement.

 Six additional ESOP Tranches will be issued to the Leveraged ESOP during the
     69 months subsequent to the Effective Time, with the total shares of Class
     1 ESOP Preferred Stock issued in the seven ESOP Tranches aggregating
     approximately 14,000,000 shares (subject to increase, see "THE PLAN OF
     RECAPITALIZATION-Establishment of ESOPs-Additional Shares"). The price for
     the subsequent ESOP Tranches will be as agreed between the Company and the
     ESOP Trustee at the time of each sale. As the subsequent ESOP Tranches are
     issued, the shares will be reported as a credit to additional capital
     invested based on the fair value of the stock when such issuances occur
     with a corresponding charge to "Unearned ESOP Preferred Stock."

The unearned ESOP Preferred Stock recorded in the pro forma adjustment together
with the unearned ESOP Preferred Stock recorded from subsequent ESOP Tranches
will be recognized as compensation expense over the approximately six year
investment period as the shares are committed to be released. The difference
between the compensation expense recorded, which is based on the fair value of
the stock during an accounting period, and the recorded cost of the unearned
ESOP Preferred Stock will be recorded to ESOP capital.

ESOP capital will also be recorded over the approximately six year investment
period as the shares of UAL's Class 2 ESOP Preferred Stock are committed to be
contributed to the Non-Leveraged Qualified ESOP and credited to employees
pursuant to the Supplemental ESOP with the offsetting entry being to
compensation expense. The number of shares of Class 2 ESOP Preferred Stock that
will be issued will be equal to 17,675,345 less the number of shares of Class 1
ESOP Preferred Stock that will be sold to the Qualified ESOP.

(5) To account for the cashless exercise of options in the event of the
    Recapitalization. (Amount of the entry is based on an assumed Old Share
    price at the Effective Time of approximately $128.31 per share.)

(6) To record 25,000 restricted shares to Mr. Greenwald that will vest at the
    Effective Time.

(7) Represents the offset to entries (1), (2), (5), (6), (8) and (9).

(8) To record the vesting of the unvested restricted stock as a result of the
    Recapitalization.

(9) To reverse $19 million of transaction fees and expenses recorded during the
    first quarter of 1994 because these expenses are included in entry (1).

(10) To record an intercompany loan to UAL which will be used to pay a portion
     of the Recapitalization Consideration to holders of Old Shares.


                                 CAPITALIZATION

                    UAL Corporation and Subsidiary Companies

  The following table sets forth the unaudited consolidated capitalization of
the Company as of March 31, 1994, as adjusted to give effect to the
consummation of the Recapitalization and the Offerings, including (i)
reclassification of Old Shares into New Shares and Series D Redeemable
Preferred Stock, (ii) the Offerings of the Public Preferred Stock (as
represented by Depositary Preferred Shares) and Debentures, (iii) redemption of
the Series D Redeemable Preferred Stock for cash and proceeds from the
Offerings and (iv) the issuance of the first tranche of Class 1 ESOP Preferred
Stock, the Voting Preferred Stock and the Director Preferred Stock. The table
should be read in conjunction with the Pro Forma Condensed Statement of
Consolidated Financial Position included elsewhere in this document.


<TABLE>
<CAPTION>
                                                                                         March 31, 1994
                                                                                       ---------------------
                                                                                          (In Millions)
                                                                                                    Pro
                                                                                       Historical  Forma
                                                                                       ---------- ----------
                                                                                           (Unaudited)
<S>                                                                                    <C>        <C>
Short-term borrowings, long-term debt maturing within one year and current obligations     
under capital leases..................................................................      $486     $486
                                                                                       ---------- ----------
Long-term debt, excluding portion due within one year:                                     
Secured notes.........................................................................     1,388    1,388
Deferred purchase certificates........................................................       194      194
Debentures............................................................................     1,000    1,741
Convertible debentures................................................................        33       33
Promissory notes......................................................................        93       93
Unamortized discount on debt..........................................................       (15)     (22)
                                                                                       ---------- ----------
                                                                                           2,693    3,427
Long-term obligations under capital leases............................................       777      777
                                                                                       ---------- ----------
Total long-term debt and capital lease obligations....................................     3,470    4,204
                                                                                       ---------- ----------
Class 2 ESOP Preferred Stock, $.01 par value..........................................                 - (a)
                                                                                       ---------- ----------
Shareholders' equity:                                                                      
Series A Preferred Stock, $.01 stated value...........................................        -        -
Series B Preferred Stock, $.01 stated value...........................................                 -
Class 1 ESOP Preferred Stock, $.01 par value..........................................                 -
Class 2 ESOP Preferred Stock, $.01 par value..........................................                 -
Class P, M and S Voting Preferred Stock, $.01 par value...............................                 -
Class I, Pilot MEC, IAM, and SAM Preferred Stock, $.01 par value......................                 -
Common stock, $5 par value............................................................       128       -
Common stock, $.01 par value..........................................................                 -
Additional capital invested...........................................................       963      640
Retained earnings (deficit)...........................................................       142   (1,004)
Pension liability adjustment..........................................................       (53)     (53)
Unearned compensation.................................................................       (14)      -
Unearned ESOP Preferred Stock.........................................................               (228)
Unrealized loss on investments........................................................        (2)      (2)
Common stock held in treasury.........................................................       (67)     (63)
                                                                                       ---------- ----------
Total shareholders' equity............................................................     1,097     (710)
                                                                                       ---------- ----------
Total capitalization..................................................................   $ 5,053  $ 3,980
                                                                                       ========== ==========
- ------
<FN>
(a) The Class 2 ESOP Preferred Stock committed to be contributed to the
    Supplemental ESOP will be reported outside of equity because the employees
    can elect to receive their "book entry" shares from the Company in cash
    upon termination of employment.
</TABLE>



                United Air Lines, Inc. and Subsidiary Companies

  The following table sets forth the unaudited consolidated capitalization of
United as of March 31, 1994 and as adjusted to give effect to the consummation
of the Recapitalization and the Offerings, including (i) the issuance of
Debentures and (ii) the ESOP capital recorded as a result of the issuance of
the first tranche of UAL's Class 1 ESOP Preferred Stock to the ESOP Trustee for
the Qualified ESOP and the related charge for unearned ESOP Preferred Stock.
The table should be read in conjunction with the Pro Forma Condensed Statement
of Consolidated Financial Position included elsewhere in this document.


<TABLE>
<CAPTION>
                                                                                     March 31, 1994
                                                                                   ------------------
                                                                                     (In Millions)
                                                                                                Pro
                                                                                   Historical  Forma
                                                                                   ---------- -------
                                                                                      (Unaudited)
<S>                                                                                <C>        <C>
Short-term borrowings, long-term debt maturing within one year and current obliga-  
tions under capital leases........................................................      $466    $466
                                                                                   ---------- -------
Long-term debt, excluding portion due within one year:                              
Secured notes.....................................................................    $1,388  $1,388
Deferred purchase certificates....................................................       194     194
Debentures........................................................................     1,000   1,741
Promissory notes..................................................................        29      29
Unamortized discount on debt......................................................       (15)    (22)
                                                                                   ---------- -------
                                                                                       2,596   3,330
Long-term obligations under capital leases........................................       774     774
                                                                                   ---------- -------
Total long-term debt and capital lease obligations................................     3,370   4,104
                                                                                   ---------- -------
Shareholder's equity:                                                               
Common stock, $5 par value........................................................        -       -
Additional capital invested.......................................................       839     115
Retained earnings (deficit).......................................................      (200)   (308)
ESOP capital......................................................................               228
Unearned ESOP shares..............................................................              (228)
Pension liability adjustment......................................................       (53)    (53)
Unearned compensation.............................................................       (14)     -
Unrealized loss on investments....................................................        (2)     (2)
                                                                                   ---------- -------
Total shareholder's equity........................................................       570    (248)
                                                                                   ---------- -------
Total capitalization..............................................................    $4,406  $4,322
                                                                                   ========== =======
</TABLE>



                                 EXHIBIT INDEX

Exhibit 1 Second Amendment to the Plan of Recapitalization.

Exhibit 2 Opinion of CS First Boston Corporation dated July 1, 1994.

Exhibit 3 Opinion of Lazard Freres & Co. dated July 1, 1994.



                                                                 Exhibit 1

                       SECOND AMENDMENT TO THE AGREEMENT
                          AND PLAN OF RECAPITALIZATION

  Second Amendment (this "Amendment"), dated as of June 29, 1994, to the
Agreement and Plan of Recapitalization (as amended, the "Plan of
Recapitalization"), dated as of March 25, 1994, by and among UAL Corporation, a
Delaware corporation (the "Company"), Air Line Pilots Association,
International, pursuant to its authority as the collective bargaining
representative for the crafts or class of pilots employed by United Air Lines,
Inc., a Delaware corporation and a wholly-owned subsidiary of the Company
("United"), and the International Association of Machinists and Aerospace
Workers, pursuant to its authority as the collective bargaining representative
for the crafts or classes of mechanics and related employees, ramp and stores
employees, food service employees, dispatchers and security officers employed
by United, as amended by the First Amendment to the Plan of Recapitalization,
dated as of June 2, 1994.

                              W I T N E S S E T H

  WHEREAS, the parties hereto desire to amend the Plan of Recapitalization and
certain Schedules thereto; and

  WHEREAS, Section 10.3(a) of the Plan of Recapitalization permits amendments
to the Plan of Recapitalization and the Schedules thereto by written instrument
signed by all parties;

  NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the parties hereto agree as follows:

  1. Section 1.3 of the Plan of Recapitalization is hereby amended and restated
in its entirety in the form attached to this Amendment as Exhibit A.

  2. Section 1.5(b) of the Plan of Recapitalization is hereby amended and
restated in its entirety in the form attached to this Amendment as Exhibit B.

  3. Section 1.11 of the Plan of Recapitalization is hereby amended and
restated in its entirety in the form attached to this Amendment as Exhibit C.

  4. Article FOURTH, Part I.D, Section 2.5 of the Restated Certificate is
hereby amended and restated in its entirety in the form attached to this
Amendment as Exhibit D.

                                 Miscellaneous

  A. Definitions. Capitalized terms used in this Amendment and not defined
herein shall have the meanings ascribed to them in the Plan of Recapitalization
or the Schedules or other attachments thereto.

  B. Entire Plan of Recapitalization; Restatement. The Plan of
Recapitalization, as amended by this Amendment, is the entire agreement of the
parties with respect to the subject matter hereof and the parties hereto hereby
agree that the Plan of Recapitalization and all Schedules thereto may be
restated to reflect all amendments provided for in this Amendment.

  C. Governing Law. This Amendment shall be deemed to be made in and in all
respects shall be interpreted, governed by and construed in accordance with the
laws of the State of Delaware, without regard to the conflicts of laws
principles thereof.

  D. Counterparts. This Amendment may be executed in counterparts, each of
which shall be an original and all of which shall together constitute one and
the same instrument.

                       Second Amendment to the Agreement
                          and Plan of Recapitalization

  IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized on the date
first above written.

UAL Corporation

                              /s/ Stephen M. Wolf
By:
Name:  Stephen M. Wolf
Title:  Chairman and Chief Executive Officer

Air Line Pilots Association, International

                               /s/ Roger D. Hall
By:
Name:  Roger D. Hall
Title:  Chairman, UAL-MEC

International Association of Machinists
and Aerospace Workers

                                 /s/ Ken Thiede
By:
Name:  Ken Thiede
Title:  President and General Chairman,
District Lodge 141


                                 EXHIBIT INDEX

Exhibit A-Section 1.3 of the Plan of Recapitalization

Exhibit B-Section 1.5(b) of the Plan of Recapitalization

Exhibit C-Section 1.11 of the Plan of Recapitalization

Exhibit D-Article FOURTH, Part I.D, Section 2.5 of the Restated Certificate



                                                                      EXHIBIT A

  Section 1.3 Redemption. Following the Effective Time, all outstanding shares
of Redeemable Preferred Stock shall, to the extent of funds legally available
therefor and subject to the provisions of the Restated Certificate, be redeemed
immediately after issuance according to the terms thereof (the "Redemption").
Pursuant to the Redemption, the holders of Redeemable Preferred Stock, if any,
shall be entitled to receive, in respect of each one one-thousandth of a share
of Redeemable Preferred Stock, subject to the terms thereof and Section 1.5(f):

  (i) 25.80 in cash;

  (ii) either (a) if the Underwriting Alternative with respect to depositary
shares (the "Depositary Shares") representing interests in Series B Preferred
Stock of the Company, without par value (the "Public Preferred Stock"), is not
consummated, both (I) an additional cash payment equal to $12.20, plus (II)
Depositary Shares representing interests in a liquidation preference of Public
Preferred Stock equal to the excess of (xx) $31.10 over (yy) the product of
$12.20 and a fraction (but in no event less than one) the numerator of which is
the Applicable Rate with respect to the Depositary Shares assuming that the
Underwriting Alternative with respect to the Depositary Shares is consummated,
and the denominator of which is 11.375%, or (b) if the Underwriting Alternative
with respect to the Depositary Shares is consummated, a cash payment equal to
the Depositary Share Proceeds Amount (as defined in Section 1.11 below);

  (iii) either (a) $15.55 principal amount of Series A Senior Unsecured
Debentures due 2004 of United issued as provided below (the "Series A
Debentures") or (b) if the Underwriting Alternative with respect to the Series
A Debentures is consummated, a cash payment equal to the Series A Debenture
Proceeds Amount (as defined in Section 1.11 below); and

  (iv) either (a) $15.55 principal amount of Series B Senior Unsecured
Debentures due 2014 of United issued as provided below (the "Series B
Debentures" and, together with the Series A Debentures, collectively, the
"Debentures") or (b) if the Underwriting Alternative with respect to the Series
B Debentures is consummated, a cash payment equal to the Series B Debenture
Proceeds Amount (as defined in Section 1.11 below).

The Depositary Shares shall be issued pursuant to a Deposit Agreement
substantially in the form set forth on Schedule 1.3(a) (the "Deposit
Agreement"). The Depositary Shares shall be issued only in denominations of
$25.00 of liquidation preference and integral multiples thereof. The Public
Preferred Stock shall have the rights, powers and privileges described in the
Restated Certificate, which shall include a per share liquidation preference of
$25,000. The Debentures shall be issued pursuant to the Indenture, dated as of
July 1, 1991, between United and the Bank of New York, and the Officers'
Certificate (the "Officers' Certificate") in form and substance as set forth on
Schedule 1.3(b) (collectively, the "Indenture"). Such Indenture shall be
qualified under the Trust Indenture Act of 1939, and the rules and regulations
promulgated thereunder (the "TIA"). The Debentures shall be issued only in
denominations of $100 and integral multiples thereof or, if the Underwriting
Alternative with respect to either series of Debentures is consummated at or
prior to the Effective Time and the Company so elects, denominations of $1,000
and integral multiple thereof, in which case conforming changes shall be made
to this Agreement and the attachments hereto to take into account such greater
denominations with respect to such series.



                                                                      EXHIBIT B

  [Section 1.5 Surrender and Exchange.]

  (b) Each holder of Old Shares that have been converted into New Shares and
Redeemable Preferred Stock, upon surrender to the Exchange Agent of an Old
Certificate or Certificates, together with a properly completed letter of
transmittal covering such Old Shares, will be entitled to receive in respect of
such Old Shares, subject to Section 1.5(f):

  (i) a certificate or certificates representing 0.5 of a New Share for each
Old Share formerly represented by such Old Certificate or Certificates in
accordance with Section 1.2;

  (ii) either (a) if the Underwriting Alternative with respect to Depositary
Shares representing interests in the Public Preferred Stock is not consummated,
for each Old Share formerly represented by such Old Certificate or Certificates
in respect of the Redemption, both (I) a cash payment equal to $12.20, plus
(II) a depositary receipt or receipts representing Depositary Shares
representing interests in a liquidation preference of Public Preferred Stock
equal to the excess of (xx) $31.10 over (yy) the product of $12.20 and a
fraction (but in no event less than one) the numerator of which is the
Applicable Rate with respect to the Depositary Shares assuming that the
Underwriting Alternative with respect to the Depositary Shares is consummated,
and the denominator of which is 11.375%, or (b) if the Underwriting Alternative
with respect to the Depositary Shares is consummated, a cash payment equal to
the Depositary Share Proceeds Amount in respect of the Redemption;

  (iii) either (a) $15.55 principal amount of Series A Debentures for each Old
Share formerly represented by such Old Certificate or Certificates in respect
of the Redemption or (b) if the Underwriting Alternative with respect to the
Series A Debentures is consummated, a cash payment equal to the Series A
Debenture Proceeds Amount in respect of the Redemption;

  (iv) either (a) $15.55 principal amount of Series B Debentures for each Old
Share formerly represented by such Old Certificate or Certificates in respect
of the Redemption or (b) if the Underwriting Alternative with respect to the
Series B Debentures is consummated, a cash payment equal to the Series B
Debenture Proceeds Amount in respect of the Redemption; and

  (v) a cash payment of $25.80 for each Old Share formerly represented by such
Old Certificate or Certificates in respect of the Redemption (the cash and/or
securities distributed pursuant to clauses (i) through (v), collectively, the
"Recapitalization Consideration").

Until so surrendered, each Old Certificate or Certificates formerly
representing Old Shares shall, after the Effective Time, represent for all
purposes only the right to receive such Recapitalization Consideration.



                                                                      EXHIBIT C

Section 1.11 Underwriting Alternative

  The Company has elected to pursue the underwriting of (a) a number of
Depositary Shares calculated as provided in the next sentence, (b) $382.5
million principal amount of Series A Debentures, subject to reduction as
described below, and (c) $382.5 principal amount of Series B Debentures,
subject to reduction as described below (referred to collectively herein as the
"Underwriting Alternative"), and the consummation of the underwritings with
respect to the Depositary Shares and the Debentures shall be in lieu of issuing
Depositary Shares and Debentures to holders of Old Shares pursuant to Section
1.5 hereof, to holders of Options pursuant to Section 1.7 hereof and to holders
of Convertible Company Securities pursuant to Section 1.8 hereof. The number of
Depositary Shares that shall be subject to the Underwriting Alternative (which
may be rounded up to produce an aggregate amount of Depositary Shares that is
consistent with customary aggregate underwriting denominations) shall equal one
twenty-fifth of the excess of (I) the product of $765 million and a fraction
(such fraction, which shall in no event be greater than one, is referred to
herein as the "Liquidation Preference Fraction"), the numerator of which is
11.375%, and the denominator of which is the Applicable Rate with respect to
the Depositary Shares assuming that the Underwriting Alternative with respect
to the Depositary Shares is consummated, over (II) $300 million. The Company
shall use its best efforts to accomplish such underwritings, including entering
into a firm commitment underwriting agreement or agreements, provided, however,
that the Company may elect to terminate the Underwriting Alternative at any
time prior to the Effective Time. The Unions will cooperate and use their
respective best efforts to facilitate the underwritings. The Underwriting
Alternative will be effected in accordance with customary underwriting
agreements which may reflect that, if the Company is advised by the managing
underwriter or managing underwriters that the Series A Debentures or Series B
Debentures would be priced in excess of the maximum price applicable to such
security (so that such security, if priced at the applicable Maximum Pricing,
could only be sold at less than par), and is further advised that consistent
with industry practice the Underwriting Alternative will be facilitated by the
sale of such securities at or closer to par, the Company may reduce the amount
of such securities to be sold and increase the interest rate above the
applicable Maximum Pricing so that such securities may be sold at or closer to
par, provided that (1) the yield to maturity of the reduced par amount of
Debentures will not exceed the yield to maturity that would result if the
unreduced par amount of such Debentures were priced at a discount to par using
the Maximum Pricing for the respective Debenture and (2) the proceeds from the
issuance of the reduced par amount of Debentures will equal the proceeds that
would result if the unreduced par amount of such Debentures were priced at a
discount to par using the Maximum Pricing for the respective Debenture. If the
Underwriting Alternative is consummated, the amount of cash payable in respect
of each Old Share shall equal the sum of (i) $25.80 per share, (ii) the sum of
$12.20 and the gross proceeds (price to the public without deducting any
underwriting discount or other cost) received by the Company from the sale of
the "Underwriting Liquidation Preference" of Public Preferred Stock as
represented by Depositary Shares in the Underwriting Alternative (collectively,
the "Depositary Share Proceeds Amount"), (iii) the gross proceeds (price to the
public without deducting any underwriting discount or other costs) received by
United from the sale of each $15.55 principal amount of Series A Debentures in
the Underwriting Alternative (subject to adjustment as described in the
immediately preceding sentence, the "Series A Debenture Proceeds Amount") and
(iv) the gross proceeds (price to the public without deducting any underwriting
discount or other costs) received by United from the sale of each $15.55
principal amount of Series B Debentures in the Underwriting Alternative
(subject to adjustment as described in the immediately preceding sentence, the
"Series B Debenture Proceeds Amount"). The "Underwriting Liquidation
Preference" shall equal the excess of (I) the product of $31.10 and the
Liquidation Preference Fraction over (III) $12.20.



                                                                      EXHIBIT D

[D. DESIGNATION, PREFERENCES AND RIGHTS OF
SERIES D REDEEMABLE PREFERRED STOCK]

  2.5 "Redemption Consideration" shall mean (subject to Section 6 hereof) (i)
$25.80 in cash, (ii) $15.55 principal amount of Series A Debentures,* (iii)
$15.55 principal amount of Series B Debentures** and (iv) an additional $12.20
in cash and Depositary Shares representing interests in $   *** in liquidation
preference of shares of Series B Preferred Stock, which Preferred Stock shall
be issued in the name of the Depositary pursuant to the Deposit Agreement and
against which the Depositary shall issue Depositary Shares to the holder of the
fraction of a share of the Series D Preferred Stock being redeemed, as provided
in the Deposit Agreement,**** such Redemption Consideration to be distributed
by the Corporation in respect of each 1/1,000th of a share of Series D
Preferred Stock to the holder thereof upon the redemption of such fraction of a
share as provided in Section 6 hereof and as adjusted as provided in Section 6
hereof.
- ------
   * If the Underwriting Alternative with respect to the Series A Debentures is
     consummated, delete clause (ii), increase the cash payment in clause (i)
     by the Series A Debenture Proceeds Amount and revise definitions as
     appropriate.
  ** If the Underwriting Alternative with respect to the Series B Debentures is
     consummated, delete clause (iii), increase the cash payment in clause (i)
     by the Series B Debenture Proceeds Amount and revise definitions as
     appropriate.
 *** Amount to be calculated in accordance with Plan of Recapitalization.
**** If the Underwriting Alternative with respect to the Depositary Shares is
     consummated, delete clause (iv), increase the cash payment in clause (i)
     by the Depositary Share Proceeds Amount and revise definitions as
     appropriate.





                                                                    EXHIBIT 2

                         [logo of CS First Boston]

   CS First Boston Corporation
                                                55 East 52nd Street
                                                New York, NY  10055-0186
                                                Telephone 212 909 2000

July 1, 1994

Board of Directors
UAL Corporation
1200 East Algonquin Road
Elk Grove Township, IL 60007

Gentlemen and Madam:

You have requested our opinion as to the fairness, from a financial point of
view, to the holders (the "Common Stockholders") of shares of common stock, par
value $5.00 per share ("Old Shares"), of UAL Corporation, a Delaware
corporation ("UAL"), of the consideration to be received by such Common
Stockholders in connection with the proposed recapitalization of UAL (the
"Transaction"), as set forth in, and pursuant to the terms of, the Agreement
and Plan of Recapitalization dated as of March 25, 1994, as amended and
restated (the "Recapitalization Agreement"), among UAL and the Airline Pilots
Association, International, and the International Association of Machinists and
Aerospace Workers (together with other participating employees, the
"Participating Employees").

We understand that the Transaction, as more specifically set forth in the
Recapitalization Agreement, provides that, in exchange for certain labor
concessions by the Participating Employees, UAL will issue common stock to
certain employee trusts/ESOPs equal to a minimum of 55% and a maximum of 63% of
the common stock of UAL.  We also understand that in the Transaction the
current Common Stockholders of UAL will receive, for each Old Share held, one-
half of a new share of common stock, par value $.01 per share, of UAL
(representing an equity interest immediately after the Transaction is completed
of approximately 45% of one Old Share's current percentage equity interest in
UAL, subject to possible reduction) and $84.81 in cash.  A portion of the cash
consideration to be received by Common Stockholders of UAL will represent the
gross proceeds of a public offering by United Air Lines, Inc. of its Series A
Debentures due 2004 and its Series B Debentures due 2014 and the gross proceeds
of a public offering by UAL of Depositary Preferred Shares representing shares
of its Series B Preferred Stock, without par value.

In arriving at our opinion, we have reviewed and analyzed the Recapitalization
Agreement, as well as certain publicly available business and financial
information relating to UAL.  We have also reviewed certain other information,
including financial forecasts provided to us by UAL.  We have met with UAL's
management to discuss the past and current operations and financial condition
and prospects of UAL.  We have also considered certain financial and stock
market data for UAL and we have compared that data with similar data for other
publicly held companies in businesses similar to those of UAL, and we have
considered the financial terms of certain other business combinations that have


                       [logo of CS First Boston]

recently been effected.  We also considered such other information, financial
studies, analyses and investigations and financial, economic and market
criteria that we deemed relevant.  In addition, we have reviewed the
alternative of not effecting a reorganization or similar transaction and UAL
implementing various operating strategies considered by it which, if fully
implemented, might result in a greater value to Common Stockholders than the
Transaction; however, we understand and have assumed for purposes of this
opinion that the Board of Directors of UAL has determined, in light of various
factors relating to the implementation of such operating strategies and the
availability of the Transaction, not to pursue such implementation.

In connection with our review, we have not independently verified any of the
foregoing information and have relied on its being complete and accurate in all
material respects.  With respect to the financial forecasts, we have assumed
that they have been reasonably prepared on bases reflecting the best currently
available estimates and judgments of UAL's management as to the future
financial performance of UAL.  We express no view as to such forecasts or the
assumptions on which they are based.  We have not made an independent
evaluation or appraisal of the assets or liabilities of UAL, nor have we been
furnished with any such appraisals.  We were not requested to, and did not,
solicit third party offers to acquire all or any part of UAL, nor, to our
knowledge, has any interest in making such an offer been presented by any third
party, including in response to the public disclosure regarding discussions
between UAL and the Participating Employees.  We have assumed that the results
expected by UAL's management to be obtained from the Transaction, including
those arising from the Participating Employees' labor concessions, will be
realized.  Our opinion is necessarily based solely upon information available
to us and business, market, economic and other conditions as they exist on, and
can be evaluated as of, the date hereof.  Our opinion does not address UAL's
underlying business to effect the Transaction.

We have acted as financial advisor to UAL in connection with the Transaction
and will receive a fee for our services, a significant portion of which is
contingent upon the consummation of the Transaction.  We will also receive a
fee for rendering this opinion and other additional services currently being
rendered to UAL.  In the ordinary course of our business, we actively trade the
debt and equity securities of UAL for our own account and for the accounts of
customers and, accordingly, may at any time hold a long or short position in
such securities.

It is understood that this opinion is only for the information of the Board of
Directors of UAL.  However, this opinion may be included in its entirety in any
proxy statement from UAL to its Common Stockholders.  This opinion may not,
however, be summarized, excerpted from or otherwise publicly referred to
without our prior written consent, which will not unreasonably be withheld.  In
addition, we may not be otherwise publicly referred to without our prior
consent, which will not unreasonably be withheld.

Based upon and subject to the foregoing, it is our opinion that, as of the date
hereof, the consideration to be received by the Common Stockholders of UAL in
the Transaction, taken as a whole, is fair to such Common Stockholders from a
financial point of view.

                                           Very truly yours,

                                           CS FIRST BOSTON CORPORATION


                          [logo of CS First Boston]

                                           By:  [authorized signature]   



                                                                    EXHIBIT 3

   [logo of Lazard Freres & Co.]
   One Rockefeller Plaza
   New York, N.Y. 10020

   Telephone (212) 632-6000
   Facsimile (212) 632-6060

                                                     New York

July 1, 1994

Board of Directors
UAL Corporation
1200 East Algonquin Road
Elk Grove Township, IL 60007

Gentlemen and Madam:

You have requested our opinion as to the fairness, from a financial point of
view, to the holders (the "Common Stockholders") of shares of common stock, par
value $5.00 per share ("Old Shares"), of UAL Corporation, a Delaware
corporation ("UAL"), of the consideration to be received by such Common
Stockholders in connection with the proposed recapitalization of UAL (the
"Transaction"), as set forth in, and pursuant to the terms of, the Agreement
and Plan of Recapitalization dated as of March 25, 1994, as amended and
restated (the "Recapitalization Agreement"), among UAL and the Airline Pilots
Association, International, and the International Association of Machinists and
Aerospace Workers (together with other participating employees, the
"Participating Employees").

We understand that the Transaction, as more specifically set forth in the
Recapitalization Agreement, provides that, in exchange for certain labor
concessions by the Participating Employees, UAL will issue common stock to
certain employee trusts/ESOPs equal to a minimum of 55% and a maximum of 63% of
the common stock of UAL.  We also understand that in the Transaction the
current Common Stockholders of UAL will receive, for each Old Share held, one-
half of a new share of common stock, par value $.01 per share, of UAL
(representing an equity interest immediately after the Transaction is completed
of approximately 45% of one Old Share's current percentage equity interest in
UAL, subject to possible reduction) and $84.81 in cash.  A portion of the cash
consideration to be received by Common Stockholders of UAL will represent the
gross proceeds of a public offering by United Air Lines, Inc. of its Series A
Debentures due 2004 and its Series B Debentures due 2014 and the gross proceeds
of a public offering by UAL of Depositary Preferred Shares representing shares
of its Series B Preferred Stock, without par value.

In arriving at our opinion, we have reviewed and analyzed the Recapitalization
Agreement, as well as certain publicly available business and financial
information relating to UAL.  We have also reviewed certain other information,
including financial forecasts provided to us by UAL.  We have met with UAL's
management to discuss the past and current operations and financial condition
and prospects of UAL.  We have also considered certain financial and stock
market data for UAL and we have compared that data with similar data for other


publicly held companies in businesses similar to those of UAL, and we have
considered the financial terms of certain other business combinations that have
recently been effected.  We also considered such other information, financial
studies, analyses and investigations and financial, economic and market
criteria that we deemed relevant.  In addition, we have reviewed the
alternative of not effecting a reorganization or similar transaction and UAL
implementing various operating strategies considered by it which, if fully
implemented, might result in a greater value to Common Stockholders than the
Transaction; however, we understand and have assumed for purposes of this
opinion that the Board of Directors of UAL has determined, in light of various
factors relating to the implementation of such operating strategies and the
availability of the Transaction, not to pursue such implementation.

In connection with our review, we have not independently verified any of the
foregoing information and have relied on its being complete and accurate in all
material respects.  With respect to the financial forecasts, we have assumed
that they have been reasonably prepared on bases reflecting the best currently
available estimates and judgments of UAL's management as to the future
financial performance of UAL.  We express no view as to such forecasts or the
assumptions on which they are based.  We have not made an independent
evaluation or appraisal of the assets or liabilities of UAL, nor have we been
furnished with any such appraisals.  We were not requested to, and did not,
solicit third party offers to acquire all or any part of UAL, nor, to our
knowledge, has any interest in making such an offer been presented by any third
party, including in response to the public disclosure regarding discussions
between UAL and Participating Employees.  We have assumed that the results
expected by UAL's management to be obtained from the Transaction, including
those arising from the Participating Employees' labor concessions, will be
realized.  Our opinion is necessarily based solely upon information available
to us, and  business, market, economic and other conditions as they exist on,
and can be evaluated as of, the date hereof.  Our opinion does not address
UAL's underlying business decision to effect the Transaction.

We have acted as financial advisor to UAL in connection with the Transaction
and will receive a fee for our services, a significant portion of which is
contingent upon the consummation of the Transaction.  A portion of this fee
relates to the rendering of this opinion.

It is understood that this opinion is only for the information of the Board of
Directors of UAL.  However, this opinion may be included in its entirety in any
proxy statement from UAL to its Common Stockholders.  This opinion may not,
however, be summarized, excerpted from or otherwise publicly referred to
without our prior written consent, which will not unreasonably be withheld.  In
addition, we may not be otherwise publicly referred to without our prior
consent, which will not be unreasonably withheld.

Based upon and subject to the foregoing, it is our opinion that, as of the date
hereof, the consideration to be received by the Common Stockholders of UAL in
the Transaction, taken as a whole, is fair to such Common Stockholders from a
financial point of view.

                                           Very truly yours,

                                                [authorized signature]   
                                           Lazard Freres & Co.





                                                         Exhibit 99.1

     [logo of American Appraisal Associates]      100 East Wisconsin Avenue
                                                  Suite 2100
                                                  P.O. Box 664
                                                  Milwaukee, Wisconsin
                                                  53201-0664

                                                  Telephone 414/271-7240

                                                         July 11, 1994

     UAL Corporation
     and its
     Board of Directors
     1200 Algonquin Road
     Elk Grove Township, IL 60007

     and

     United Air Lines, Inc. 
     and its
     Board of Directors
     1200 Algonquin Road
     Elk Grove Township, IL 60007

     Ladies and Gentlemen:

     This letter is furnished at the request of UAL Corporation, a
     Delaware corporation (the "Company"), and its principal
     subsidiary United Air Lines, Inc., a Delaware corporation
     ("United"), concerning a proposed recapitalization plan (the
     "Plan") for the Company and United as further described below.

     We understand that the Company has entered into an Agreement and
     Plan of Recapitalization, dated as of March 25, 1994, by and
     among the Company, Air Line Pilots Association, International
     ("ALPA") and International Association of Machinists and
     Aerospace Workers ("IAM"), as amended by amendments dated June 2,
     1994 and June 29, 1994 (as amended, the "Agreement").  The
     Agreement provides for a transaction pursuant to which employee
     trusts (the "ESOPs") for the benefit of ALPA, IAM and
     salaried/management employees of the Company, United and other
     subsidiaries
 will acquire 55% of the equity of the Company
     (subject to increase to up to 63% in certain circumstances) in
     exchange for significant pay and benefit concessions and work
     rule changes.  

     The Agreement provides that each share of the Company's common
     stock, par value $5 per share (the "Old Common Stock"), will be
     reclassified into one-half of a share of the Company's common
     stock, par value $.01 per share (the "New Common Stock"), and
     one-one thousandth of a share of Series D Redeemable Preferred
     Stock, par value $.01 per share (the "Redeemable Preferred
     Stock").  Upon issue, each one-one thousandth of a share of
     Redeemable Preferred Stock shall be immediately redeemed (the
     "Redemption") for $84.81 in cash (the "Redemption Cash").  The
     Company is offering for sale in a public offering 16,416,000
     Depositary Shares representing shares of Series B Preferred
     Stock, $.01 per share, of the Company (the "Preferred Offering"). 
     United is offering for sale in a public offering $370.2 million
     principal amount of 10.67% Series A Debentures due 2004 and $371
     million principal amount of 11.21% Series B Debentures Due 2014
     (the "Debenture Offerings" and, together with the Preferred
     Offering, the "Offerings").  The New Common Stock and Redemption
     Cash are referred to herein as the "Reclassification
     Consideration".  The proceeds of the Debenture Offerings and a
     portion of the Redemption Cash shall be delivered to the Company
     by United prior to the Redemption by way of a dividend (the
     "Dividend").  The Redemption Cash will be obtained from the
     proceeds of the Preferred Offering, the Dividend and from other
     available cash resources of the Company.  Immediately following
     the Transaction, the outstanding New Common Stock will represent,
     in the aggregate, 45% of the common equity interest and voting
     power of the Company at closing.

     The proposed Plan consists of two ESOPs.  There will be a
     leveraged ESOP ("LESOP") covering all participating employees and
     a supplemental ESOP ("Supplemental ESOP") covering certain
     participating employees.  THE LESOP and the Supplemental ESOP
     will hold one or more series of a convertible preferred stock
     (collectively, "ESOP Preferred Shares") of the recapitalized
     Company.  If and to the extent that the required stock deposits
     cannot be made to the LESOP because of tax limitations on deposit
     opportunities, the Supplemental ESOP will accept the overflow.

     State Street Bank & Trust Company has been retained to act as
     trustee(s) of the ESOPS (the "ESOP Trustee").  The ESOP Trustee
     will purchase, for the LESOP, ESOP Preferred Shares from the
     Company.  The ESOP Trustee will obtain funds to pay the purchase
     price with the proceeds of a loan (the "ESOP Purchase Loan") made
     by the Company, and cash contributed by the Company to the ESOP. 
     The ESOP Purchase Loan will be in a multi-billion dollar amount,
     the exact figure to be determined pursuant to a formula contained
     in an agreement between the Company and the ESOP Trustee.

     The stock targeted for the Supplemental ESOP will be contributed
     by the Company to the Supplemental ESOP over the wage investment
     period rather than by leveraged purchase at the inception of the
     transaction.  Until contributed, the stock will be held by the
     Company in treasury or, under certain circumstances, contributed
     to a nonqualified trust.

     The employee groups have agreed to make wage investments over the
     wage investment period as a condition to the ESOP's acquisition
     of its share of the Company's equity.  The ESOP Preferred Shares
     initially acquired by the ESOP will be allocated to ESOP
     participants' accounts as the ESOP pays down the ESOP Purchase
     Loan (the ESOP's acquisition indebtedness) over that period.  The
     joint LESOP will pay back the ESOP Purchase Loan with employer
     contributions made by the participating employers for this
     purpose and dividends received on the LESOP Preferred Shares held
     by the LESOP.

     The Plan, the Reclassification Consideration, the Redemption, the
     Offerings, the Dividend, the ESOPs, the ESOP Purchase Loan, the
     transactions contemplated thereby, any changes in the Company's
     or United's assets and liabilities as a result of the
     Reclassification Consideration, the Redemption, the Offerings,
     the Dividend, the ESOPs and the ESOP Purchase Loan, and
     refinancing of existing indebtedness of the Company, and the
     payment of related fees and expenses are collectively referred to
     as the "Transaction".

     In connection with the Transaction, you have requested that we
     render a written opinion prior to the issuance of the
     Reclassification Consideration (the "Opinion") addressed to the
     Company and United and their respective Boards of Directors as to
     whether, assuming the Transaction has been consummated as
     proposed, both immediately before and after, and giving effect
     to, the consummation of the Transaction:

      (a) The fair value of the aggregate assets of the Company
          (on a consolidated basis) and United (on a consolidated
          basis) will exceed their total respective liabilities
          (including, without limitation, subordinated,
          unmatured, unliquidated and contingent liabilities);

      (b) The present fair saleable value of the aggregate assets
          of the Company (on a consolidated basis) and United (on
          a consolidated basis) will be greater than the
          Company's and United's respective probable liabilities
          on their debts as such debts become absolute and
          matured;

      (c) The Company (on a consolidated basis) and, United (on a
          consolidated basis) will be able to pay their
          respective debts and other liabilities, including
          contingent liabilities and other commitments, as they
          mature; and 

      (d) The capital remaining in the Company (on a consolidated
          basis) and in United (on a consolidated basis) will not
          be unreasonably small for the business in which the
          Company and United is engaged, as management of the
          Company and United has indicated such business is now
          conducted and as management has indicated the business
          is proposed to be conducted following the consummation
          of the Transaction, and after giving due consideration
          to the prevailing practices in the industry in which
          the Company and United will be engaged.

      (e) The excess of the fair value of the total assets of the
          Company over the total liabilities, including
          contingent liabilities, of the Company, is equal to or
          exceeds the value of the Reclassification Consideration
          to stockholders plus the stated capital of the Company,
          i.e., the Transaction meets the Delaware Test.

      (f) The excess of the fair value of the total assets of
          United over the total liabilities, including contingent
          liabilities, of United, is equal to or exceeds the
          value of the stated capital of United, i.e. the
          Transaction meets the Delaware Test.

     In rendering our Opinion, we have valued the assets of the
     Company (on a consolidated basis) and United (on a consolidated
     basis), as going concerns, both immediately before and after, and
     giving effect to, the Transaction.  The valuation included the
     aggregate assets of the business enterprise of each of the
     Company (on a consolidated basis) and United (on a consolidated
     basis), or total invested capital as represented by the total net
     working capital, tangible plant, property and equipment, and
     intangible assets of the respective business enterprises.  We
     believe this is a reasonable basis to value the Company and
     United.  Nothing has come to our attention that causes us to
     believe that each of the Company (on a consolidated basis) and
     United (on a consolidated basis), before and after the
     Transaction, will not be going concerns.  For purposes of the
     Opinion, the following terms will have the meanings set forth
     below:

      (1) "Fair value" means the amount at which the aggregate
          assets would change hands between a willing buyer and a
          willing seller, within a commercially reasonable period
          of time, each having reasonable knowledge of the
          relevant facts, neither being under any compulsion to
          act, with equity to both;

      (2) "Present fair saleable value" means the amount that may
          be realized if the aggregate assets are sold with
          reasonable promptness in an arms-length transaction
          under present conditions in a current market for the
          sale of a comparable business enterprise;

      (3) "Contingent liabilities" of the Company and United, as
          the case may be, means the estimated amount of
          contingent liabilities, which contingent liabilities
          have been identified to us by responsible officers and
          employees of the Company and United, their respective
          accountants and financial advisors, and such other
          experts as we deemed necessary to consult, and valued
          by AAA after consultation with responsible officers and
          employees of the Company and United and/or such
          industry, economic, statistical and other experts as we
          deemed necessary to consult (the valuation of
          contingent liabilities to be computed in light of all
          the facts and circumstances existing at the time of
          such valuation as the maximum amount that can
          reasonably be expected to become an actual or matured
          liability), which contingent liabilities may not meet
          the criteria for accrual under Statement of Financial
          Accounting Standards No. 5 and therefore may not be
          recorded as liabilities under GAAP;

      (4) "Able to pay its debts as they mature" means that,
          assuming the Transaction has been consummated as
          proposed (and taking into consideration additional
          borrowing capacity under the Company's and United's
          borrowing facilities) during the period covered by the
          financial projections (the "Financial Projections")
          prepared by managements of the Company and United, the
          Company or United, as the case may be, will have
          positive cash flow after paying its scheduled
          anticipated indebtedness; the realization of current
          assets in the ordinary course of business will be
          sufficient to pay recurring current debt, short-term
          debt, long-term debt service and other contractual
          obligations, including contingent liabilities, as such
          obligations mature; and the cash flow will be
          sufficient to provide cash necessary to repay the
          Company's and United's long-term indebtedness as such
          debt matures; and

      (5) "Will not have unreasonably small capital with which to
          conduct its business" means that the Company and United
          will not lack sufficient capital for the needs and
          anticipated needs for capital of the business,
          including contingent liabilities, as managements of the
          Company and United have indicated it is being conducted
          and as management has indicated the Company's and
          United's business is proposed to be conducted following
          the consummation of the Transaction.

      (6) "The Company (on a consolidated basis)" means, as
          appropriate, the assets held directly by the Company,
          including the stock of each subsidiary of the Company,
          or the liabilities which are obligations of the
          Company.

      (7) "United (on a consolidated basis)" means, as
          appropriate, the assets held directly by the United,
          including the stock of each subsidiary of United, or
          the liabilities which are obligations of United.

      (8) "Stated Capital" shall mean "capital" as defined in and
          computed in accordance with Sections 154 and 244 of the
          General Corporation Law of the State of Delaware, which
          definition is set forth herein under "Delaware Test."

      (9) "Delaware Test" means that as a result of the
          Transactions, the capital of each of the Company and
          United was not then impaired or did not become
          impaired, as such terms are used in Section 160 of the
          Delaware General Corporation Law.  We understand that
          impairment of capital means the reduction of the net
          assets of the Company or United, as the case may be,
          below the capital of such corporation, i.e. the
          aggregate amount represented by the aggregate par value
          of the outstanding shares of capital stock of the
          Company or United, as the case may be, plus any amounts
          transferred to the capital of such corporation by
          resolution of its board of directors.

     Our opinion of fair value is subject to the following conditions:

       (i)     Any sale of each of the Company (on a
               consolidated basis) or United (on a
               consolidated basis), will be completed as the
               sale of an ongoing business entity; and

      (ii)     A "commercially reasonable period" of time
               means at least twelve months for a willing
               buyer and a willing seller to agree on price
               and terms, plus the time necessary to
               complete the sale of the Company (on a
               consolidated basis) and United (on a
               consolidated basis);

     In connection with our Opinion of the fair value of each of the
     Company (on a consolidated basis) and United (on a consolidated
     basis), we were provided historical and projected operating
     results.  In addition to this information, we were provided other
     operating data and information all of which has been accepted,
     without independent verification, as representing a fair
     statement of historical and projected results of each of the
     Company (on a consolidated basis) and United (on a consolidated
     basis) in the opinion of the management of each of the Company
     and United.  However, in the course of our investigation, nothing
     has led us to believe that our acceptance and reliance on such
     operating data and information was unreasonable.

     The determination of the fair value of each of the Company (on a
     consolidated basis) and United (on a consolidated basis) was
     based on the generally accepted valuation principles used in the
     market and discounted cash flow approaches, described as follows:

          Market Approach - Based on current stock market prices
          of publicly held companies whose businesses are similar
          to that of the Company (on a consolidated basis) and
          United (on a consolidated basis) and premiums paid over
          market price by acquirers of total or controlling
          ownership in such businesses.

          Discounted Cash Flow Approach - Based on the present
          value of each of the Company's (on a consolidated
          basis) and United's (on a consolidated basis) future
          debt-free operating cash flow as estimated by the
          managements of each of the Company (on a consolidated
          basis), and United (on a consolidated basis) and
          contained in the Financial Projections.  The present
          value is determined by discounting the projected
          operating cash flow at a rate of return that reflects
          the financial and business risks of each of the Company
          (on a consolidated basis) and United (on a consolidated
          basis).

     In determining the amount that would be required to pay the total
     probable liabilities on their respective dates of the Company's
     (on a consolidated basis) and United's (on a consolidated basis)
     liabilities become absolute and matured for purposes of opinion
     (a) below, we have applied valuation techniques, including
     present value analysis, using appropriate rates over appropriate
     periods to the amounts that will be required from time to time to
     pay such liabilities and contingent liabilities as they become
     absolute and matured based on their scheduled maturities.

     In the course of our investigation of identified contingent
     liabilities, the areas brought to our attention by the
     managements of the Company (on a consolidated basis) and United
     (on a consolidated basis) included:  (i) environmental matters;
     (ii) the adequacy of the corporate insurance program; (iii) tax
     audit exposure; (iv) the liability for the pension and welfare
     benefits program; (v) labor and collective bargaining issues; and
     (vi) various lawsuits and claims filed and/or pending against the
     Company (on a consolidated basis) and United (on a consolidated
     basis).

     Reserves for contingent liabilities have been made in the pro
     forma consolidated balance sheet (the "Pro Forma Balance Sheet")
     prepared and furnished to us by each of the managements of the
     Company (on a consolidated basis) and United (on a consolidated
     basis), and provisions for the ongoing expenses related to these
     issues have been included with the projection of income and
     expenses presented in the Financial Projections, and are
     considered in our valuation study as ongoing business operating
     expenses.  We have taken these identified contingent liabilities
     into account in rendering our Opinion and have concluded that
     such liabilities and ongoing expenses do not require any
     qualification of our Opinion.  Our conclusion is based on:  (i)
     our review of various acquisition transactions, including
     leveraged transactions and significant debt-financed
     recapitalization transactions, involving corporations engaged in
     businesses similar to those of each of the Company (on a
     consolidated basis) and United (on a consolidated basis); (ii)
     the opinion of the managements of each of the Company (on a
     consolidated basis) and United (on a consolidated basis) that the
     issues concerning various lawsuits, claims and other identified
     contingent liabilities do not and are not reasonably likely to
     have a material adverse effect on each of the consolidated
     financial position of the Company (on a consolidated basis) and
     United (on a consolidated basis) and (iii) our discussions with
     the managements of each of the Company (on a consolidated basis)
     and United (on a consolidated basis), its accountants,
     consultants and counsel concerning, and our investigation of the
     various lawsuits, claims and other contingent liabilities
     identified to us and the possible effect of the foregoing on each
     of the Company and United.

     We have assumed that the total liabilities of each of the Company
     (on a consolidated basis) and United (on a consolidated basis)
     will be only those liabilities set forth in the Financial
     Projections and the Pro Forma Balance Sheet of each of the
     Company (on a consolidated basis) and United (on a consolidated
     basis), and the identified contingent liabilities referred to
     herein.  In the course of our investigation, nothing came to our
     attention which caused us to believe such assumptions to be
     unreasonable.  The Pro Forma Balance Sheet is the unaudited Pro
     Forma Condensed Balance Sheet as of March 31, 1994 each of for
     the Company (on a consolidated basis) and United (on a
     consolidated basis), adjusted to give effect to:  (a) the planned
     financing of the Transaction; and (b) the application of the
     proceeds of the financing and restated by us to reflect the fair
     value of each of the Company (on a consolidated basis) and United
     (on a consolidated basis).

     The Company's and United's management has represented to us, and
     we have relied on the managements of the Company and United's
     representation that no adverse changes have occurred since their
     preparation which would materially impact the content of the
     Company's and United's Pro Forma Balance Sheet and Financial
     Projections.  Nothing has come to our attention which would lead
     us to believe our reliance on such representations to be
     unreasonable.

     In connection with our Opinion, we have made such reviews,
     analyses and inquiries as we have deemed necessary and
     appropriate under the circumstances.  Among other things, we
     have:  

        (i)    Reviewed the Transaction documents and SEC
               reporting documents;

       (ii)    Reviewed Financial Projections and inquired
               of managements of the Company and United as
               to the foundation for any such projections
               and the basic assumptions made in the
               preparation of projections relating to the
               type of business, geographic markets,
               domestic and international economic
               conditions, and capital facilities and
               working capital requirements;

      (iii)    Reviewed audited and unaudited historical
               income statements, balance sheets and
               statements of sources and uses of funds of
               the Company and United as provided by
               management and its accountants;

       (iv)    Visited the Company's and United's
               headquarters and selected facilities to
               discuss historical and projected operating
               results and industry data, including the
               impact of future trends on the industry and
               the Company and United, as well as the
               effects of the Transaction;

        (v)    Reviewed internal financial analyses and
               other internally generated data of the
               Company and United including asset
               valuations;

       (vi)    Inquired of managements of the Company and
               United and their respective financial
               advisors as to estimated levels of cash and
               working capital required by the Company and
               United;

      (vii)    Reviewed certain publicly available economic,
               financial and market information as it
               relates to the business operations of the
               Company and United;

     (viii)    Reviewed information regarding businesses
               similar to the Company and United, and
               investigate the financial terms and post-
               transaction performance of recent
               acquisitions;

       (ix)    Consulted with industry, economic and
               statistical experts, as necessary; 

        (x)    Discussed all of the foregoing information,
               where appropriate, with managements of the
               Company and United, and their respective
               employees, agents, accountants and financial
               advisors; and 

       (xi)    Conducted such other studies, analyses and
               investigations as we deem relevant or
               necessary for purposes of the Opinions.

     We have assumed, without independent verification, that the Pro
     Forma Balance Sheet and Financial Projections provided to us have
     been reasonably prepared and reflect the best available
     estimates, at the time they were prepared, of the future
     financial results and condition of the Company and United, and
     that there has been no material adverse change in the assets,
     financial condition, business or prospects of the Company and
     United since the date of the most recent financial statements
     made available us.  Nothing has come to our attention which would
     lead us to believe that the foregoing assumption is unreasonable.

     Although we have not independently verified the accuracy and
     completeness of the Financial Projections and forecasts, or any
     of the assumptions, estimates, or judgements referred to therein,
     or the basis therefor, and although no assurances can be given
     that such Financial Projections and forecasts can be realized or
     that actual results will not vary materially from those
     projected, nothing has come to our attention during the course of
     our engagement which lead us to believe that any information
     reviewed by us or presented to us in connection with our
     rendering of the Opinion is unreasonable or inaccurate in any
     material respect or that it was unreasonable for us to utilize
     and rely upon the financial projections, financial statements,
     assumptions, description of the business and liabilities,
     estimates and judgments or statements of the managements of the
     Company and United and their respective counsel, accountants and
     financial advisors.  Our Opinion is necessarily based on
     business, economic, market and other conditions as they currently
     exist and as they can be evaluated by us at the date of this
     Opinion.

     Based upon the foregoing, and in reliance thereon, it is our
     opinion as of this date that, assuming the Transaction is
     consummated as proposed, both immediately before and after, and
     giving effect to, the consummation of the Transaction.

      (a) The fair value of the aggregate assets of each of the
          Company (on a consolidated basis) and United (on a
          consolidated basis) will exceed their total respective
          liabilities (including, without limitation,
          subordinated, unmatured, unliquidated and contingent
          liabilities);

      (b) The present fair saleable value of the aggregate assets
          of each of the Company (on a consolidated basis) and
          United (on a consolidated basis) will be greater than
          their respective probable liabilities on their debts as
          such debts become absolute and matured;

      (c) Each of the Company (on a consolidated basis) and,
          United (on a consolidated basis) will be able to pay
          their respective debts and other liabilities, including
          contingent liabilities and other commitments, as they
          mature; and 

      (d) The capital remaining in each of the Company (on a
          consolidated basis) and in United (on a consolidated
          basis) after consummation of the Transaction will not
          be unreasonably small for the business in which the
          Company and United is engaged, as management of the
          Company and United has indicated such business is now
          conducted and as management has indicated the business
          is proposed to be conducted following the consummation
          of the Transaction, and after giving due consideration
          to the prevailing practices in the industry in which
          the Company and United will be engaged.

      (e) The excess of the fair value of the total assets of the
          Company over the total liabilities, including
          contingent liabilities, of the Company, is equal to or
          exceeds the value of the Reclassification Consideration
          to stockholders plus the stated capital of the Company, 
          i.e., the Transaction meets the Delaware Test.

      (f) The excess of the fair value of the total assets of
          United over the total liabilities, including contingent
          liabilities, of United, is equal to or exceeds the
          value of the stated capital of United, i.e. the
          Transaction meets the Delaware Test.

     It is understood that the Opinion is solely for the information
     of the above mentioned addressees, their successors or assignees,
     and is not to be quoted, or referred to, in whole or in part, in
     any written document other than a reference in (i) the filing and
     disclosure of the Company's Opinion with the Securities and
     Exchange Commission (the "SEC") and any state securities
     commission or blue sky authority, or other governmental authority
     or agency if such filing or disclosure is required pursuant to
     the rules and regulations thereof, or otherwise required by
     applicable law in the opinion of the Company's counsel; (ii) the
     disclosure of the Opinions upon the demand, order or request of
     any court, administrative or governmental agency or regulatory
     body (whether or not such demand, order or request has the force
     of law) or as may be required or appropriate in response to any
     summons, subpoena, or discovery requests, (iii) the attachment of
     the Opinions as an exhibit to the loan documents governing any
     financing by banks, who, in the future, may extend credit to the
     Company or United, or as an exhibit to any documents governing
     debt financing by other financing sources, (iv) the disclosure of
     the Opinions in connection with (A) the prospective sale,
     assignment, participation or any other disposition by any bank or
     other financing source of any right or interest in the debt
     financing by such bank or other financing source, (B) an audit or
     any bank or other financing source by an independent public
     accountant or any administrative agency or regulatory body or (C)
     the exercise of any right or remedy by a bank or other financing
     source in connection with the debt financing, (v) the disclosure
     of the Opinions as may be requested, required or ordered in, or
     to protect a bank's or other financing source's interest in, any
     litigation, governmental proceeding  or  investigation to which
     any bank or other financing source  is subject or purported to be
     subject, (vi) the disclosure of the Opinions as otherwise
     required by, or as reasonably determined by any bank or financing
     source to be required by, any law, order, regulation or ruling
     applicable to such bank or other financing course, (vii) the
     attachment of this letter the Recapitalization Agreement, (viii)
     the delivery of this letter to the managing underwriters of the
     Debenture Offerings, who may rely upon it as if it were addressed
     to them.

                                   Very truly yours,

                                   AMERICAN APPRAISAL ASSOCIATES, INC.
                                                ( "AAA")

                                   By /s/ Ronald M. Goergen
                                      Ronald M. Goergen
                                      President




                                                  UNITED AIR LINES (BEFORE)
     SHAREHOLDER DISTRIBUTION TEST
     BASED ON
     MARCH 31, 1994

     STOCKHOLDERS' EQUITY                                                 $570
      (PER HISTORICAL FINANCIAL STATEMENTS - PRIOR TO TRANSACTION)

     EXCESS OF TOTAL ASSETS OVER PRO FORMA LIABILITIES                  $2,188
      (RESTATED TO REFLECT PFSV - PRIOR TO TRANSACTION)

     TRANSACTION

      LESS DISTRIBUTION TO SHAREHOLDER:
       CASH                                                                  0
       CASH FROM DEBENTURES                                                  0

      LESS STATED CAPITAL OF THE CORPORATION                                 1
                                                                      ________
     INDICATED EXCESS ASSETS                                            $2,187
      (PRIOR TO TRANSACTION)                                          ========

                               AMERICAN APPRAISAL ASSOCIATES, INC.
                                              1 OF 4     11-JUL-94
______________________________________________________________________________


                                                  UNITED AIR LINES (AFTER)

     SHAREHOLDER DISTRIBUTION TEST
     BASED ON
     MARCH 31, 1994

     STOCKHOLDERS' EQUITY                                                 $570
      (PER HISTORICAL FINANCIAL STATEMENTS - PRIOR TO TRANSACTION)

     EXCESS OF TOTAL ASSETS OVER PRO FORMA LIABILITIES                  $2,495
      (RESTATED TO REFLECT PFSV - PRIOR TO TRANSACTION)

     TRANSACTION

      LESS DISTRIBUTION TO SHAREHOLDER:
       CASH                                                                300
       CASH FROM DEBENTURES                                                741

      LESS STATED CAPITAL OF THE CORPORATION                                 1
                                                                      ________
     INDICATED EXCESS ASSETS                                            $1,453
                                                                      ========

                               AMERICAN APPRAISAL ASSOCIATES, INC.
                                              2 OF 4     11-JUL-94
______________________________________________________________________________


                                                  UAL (BEFORE)

     SHAREHOLDER DISTRIBUTION TEST
     BASED ON
     MARCH 31, 1994

     STOCKHOLDERS' EQUITY                                               $1,097
      (PER HISTORICAL FINANCIAL STATEMENTS - PRIOR TO TRANSACTION)

     EXCESS OF TOTAL ASSETS OVER PRO FORMA LIABILITIES                  $2,271
      (RESTATED TO REFLECT PFSV - PRIOR TO TRANSACTION)

     TRANSACTION

      LESS DISTRIBUTION TO SHAREHOLDERS:
       CASH                                                                  0
       CASH FROM DEBENTURES                                                  0
       CASH FROM PREFERRED                                                   0

      LESS STATED CAPITAL OF THE CORPORATION                               128
                                                                      ________
     INDICATED EXCESS ASSETS                                            $2,143
      (PRIOR TO TRANSACTION)                                          ========


                               AMERICAN APPRAISAL ASSOCIATES, INC.
                                              3 OF 4     11-JUL-94
______________________________________________________________________________


                                                  UAL (AFTER)
     SHAREHOLDER DISTRIBUTION TEST
     BASED ON
     MARCH 31, 1994

     STOCKHOLDERS' EQUITY                                               $1,537
      (PER HISTORICAL FINANCIAL STATEMENTS - PRIOR TO TRANSACTION)

     EXCESS OF TOTAL ASSETS OVER PRO FORMA LIABILITIES                  $3,666
      (RESTATED TO REFLECT PFSV - PRIOR TO TRANSACTION)

     TRANSACTION

      LESS DISTRIBUTION TO SHAREHOLDERS:
       CASH                                                                978
       CASH FROM DEBENTURES                                                741
       CASH FROM PREFERRED                                                 410

      LESS STATED CAPITAL OF THE CORPORATION                                 1
                                                                      ________
     INDICATED EXCESS ASSETS                                            $1,536
      (AFTER TRANSACTION)

      LESS DECLARATION OF DIVIDENDS:
       SERIES A DIVIDEND (JULY 11, 1994)                                     9
       SERIES B DIVIDEND (JULY 12, 1994)                                     3
                                                                      ________
     INDICATED EXCESS ASSETS                                            $1,524
      (AFTER TRANSACTION AND DECLARATION OF DIVIDENDS)                ========

                               AMERICAN APPRAISAL ASSOCIATES, INC.
                                              4 OF 4     11-JUL-94
______________________________________________________________________________





                                                          EXHIBIT 99.2

     UAL CORPORATION
     [LOGO]

     July 12, 1994  

     Dear Fellow Stockholder:
      
        At the Meeting of Stockholders of UAL Corporation (the
     "Company") held on  July 12, 1994, the stockholders of the
     Company voted to approve and adopt the  Amended and Restated
     Agreement and Plan of Recapitalization (as amended, the  "Plan of
     Recapitalization"), pursuant to which employees of the Company
     are  acquiring a majority stake in the common equity of the
     Company in exchange for  wage and benefit reductions and
     work-rule changes. In accordance with the Plan  of
     Recapitalization, each outstanding share of the Company's Common
     Stock, par  value $5.00 per share (the "Old Shares"), will be
     converted into, and become a  right to receive (subject to
     certain adjustments) one half of a share of Common  Stock, par
     value $0.01 per share, of the Company ("New Share"), $84.81 in
     cash  and cash-in-lieu of fractional New Shares. 
      
        To receive the consideration for your Old Shares (less any
     amount required to  be withheld under applicable federal income
     tax regulations), please complete  the enclosed Letter of
     Transmittal in accordance with its instructions and  return it
     with the certificates representing your Old Shares in the
     enclosed  envelope to First Chicago Trust Company
 of New York,
     the exchange agent  appointed by the Company pursuant to the Plan
     of Recapitalization. The cash  payment will be made by check, and
     the entire consideration will be mailed to  the address shown on
     the Letter of Transmittal. 
      
        Thank you for your consideration and support.
      
                                             Sincerely,

                                             (ART)
      
                                             Francesca M. Maher
                                             Vice President-Law and
                                             Corporate Secretary
      

     [Letterhead address]


     LETTER OF TRANSMITTAL
     For Shares of Common Stock,
     Par Value $5.00 Per Share
     of
      
     UAL CORPORATION
      
     Surrendered for Cash and Stock Payment
     Pursuant to the
     Plan of Recapitalization
     Dated as of March 25, 1994,
     as Amended
     _____________________________
     The Exchange Agent:
     First Chicago Trust Company of New York  
     For Information Call:
     (201)324-0137
     By Mail:                           By Hand or Overnight Courier:
     FIRST CHICAGO TRUST COMPANY        FIRST CHICAGO TRUST COMPANY 
     OF NEW YORK                        OF NEW YORK 
     P.O. BOX 2565,                     8TH FLOOR, SUITE 4680 
     MAIL SUITE 4660 JERSEY  CITY,      14 WALL STREET  
     NJ 07303-2565                      NEW YORK, NY 10005 

    Name & Address of Registered Holder(s): Certificate(s) Surrendered
           (Please fill in if blank)         (Attach Additional Lists
                                         If Necessary. See Instruction 1) 
                                     Certificate Number     Number of Shares

                                         Total 
                                                          
      PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS  
     LADIES/GENTLEMEN: 
        The undersigned hereby represents and warrants that he or she
     has good title  to the shares being delivered and surrendered to
     First Chicago Trust Company of  New York, as exchange agent (the
     "Exchange Agent"), free and clear of all  liens, restrictions,
     charges and encumbrances, and that such shares are not  subject
     to any adverse claim. The undersigned represents and warrants
     that he  or she has full power and authority to surrender the
     stock certificate(s). The  undersigned will, upon request,
     execute and deliver any additional documents  reasonably deemed
     appropriate or necessary by UAL Corporation ("UAL") or the 
     Exchange Agent in connection with the surrender of the
     certificate(s). All  authority conferred or agreed to be
     conferred in this Letter of Transmittal  shall be binding upon
     the successors, assigns, heirs, executors,  administrators,
     trustees in bankruptcy and legal representatives of the 
     undersigned and shall not be affected by, and shall survive, the
     death or  incapacity of the undersigned. 
        The undersigned understands that the delivery and surrender of
     the stock  certificate(s) is not effective, and the risk of loss
     of the certificate(s)  does not pass to the Exchange Agent, until
     receipt by the Exchange Agent of  this Letter of Transmittal,
     duly completed and signed, together with all  accompanying
     evidences of authority in a form satisfactory to UAL and the 
     Exchange Agent and any other required documents. All questions as
     to validity,  form and eligibility of any surrender of
     certificate(s) hereunder will be  determined by UAL, and such
     determination shall be final and binding on all  parties. 
        The undersigned hereby represents and warrants that he or she
     understands  that unless and until certificate(s) shall have been
     surrendered to the  Exchange Agent, holders of such
     certificate(s) shall not be entitled to receive  dividends or
     other distributions with respect to Common Stock, par value $0.01 
     per share, of UAL to be distributed in respect of the shares
     being delivered  and surrendered herewith. 
      
        The undersigned understands that payment for surrendered
     certificate(s) will  be made as promptly as practicable after
     surrender of the certificate(s) is  made in acceptable form. 
      
     SHAREHOLDER SIGN HERE
        Must be signed by the registered holders exactly as names
     appear on  certificate(s) or by persons authorized to become
     registered holders by  certificate(s) and documents transmitted
     herewith. If signing is by an  attorney-in-fact, executor,
     administrator, trustee, guardian, officer of a  corporation,
     agent or other person acting in a fiduciary or representative 
     capacity, please set forth full title. See Instruction 4. The
     undersigned  represents and warrants that he or she has full
     power and authority to  surrender the certificate(s) and has read
     and agrees to all the terms and  conditions set forth herein. 

     Signatures_______________________________________________________
     _________________________________________________________________
     __________________________________________________________ 
     Names
     _________________________________________________________________
     __________________________
     _________________________________________________________________
     ____________________________ 
     Capacity
     _________________________________________________________________
     ________________________
     Address
     _________________________________________________________________
     _________________________
     Tax Identification or Social Security No.
     _______________________________________________________________
                                 (SEE INSTRUCTION 10)
     Area Code and Tel. No.
     _________________________________________________________________
     __________

     Dated ______________ , 19 ______ 
      
     SIGNATURE GUARANTEE
     (IF REQUIRED-SEE INSTRUCTION 4)
     Authorized Signature
     _________________________________________________________________
     ______________
     Name
     _________________________________________________________________
     __________________________ 
     (PLEASE TYPE OR PRINT)
     Title
     _________________________________________________________________
     ___________________________
     Name of Firm
     _________________________________________________________________
     ___________________


     Address
     _________________________________________________________________
     ________________________
     _________________________________________________________________
     _______________________________ 
                                                   (ZIP CODE) 
     Area Code and Tel. No.
     _________________________________________________________________
     ___________

     Dated _________ , 19 ________ 
     PLEASE ISSUE CHECK AND CERTIFICATES AS INDICATED ABOVE (SEE "A"
     OR "B" BELOW IF  REQUIRED) 
      
      
     "A" SPECIAL PAYMENT                
     INSTRUCTIONS                       
      (SEE INSTRUCTION 4)               
                                        
        To be completed only if a       
     check and certificates are to      
     be issued in a name  other         
     than as shown above.               
     Name  . . . . . . . . . . .
                                        
     Address   . . . . . . . . .        
       . . . . . . . . . . . . .
                                        
     TIN # . . . . . . . . . . .  

     "B" SPECIAL DELIVERY
     INSTRUCTIONS
     (SEE INSTRUCTION 7)

     To be completed only if a check 
     and certificates are to be mailed
     to an address other than as shown
     above or in "SPECIAL PAYMENT
     INSTRUCTIONS."  
     Name  . . . . . . . . . . .
     
     Address   . . . . . . . . .
       . . . . . . . . . . . . .
     
     Zip Code  . . . . . . . . .       
     
     


     INSTRUCTIONS FOR LETTER OF TRANSMITTAL  

      1. General. This Letter of Transmittal should be properly
     filled in, dated  and signed by the registered holder(s) of the
     shares which are delivered or  mailed, together with the stock
     certificate(s) for said shares, to the Tenders  & Exchanges
     Department of the Exchange Agent at one of the addresses on the 
     face hereof. The method of delivery is at your option and risk,
     but if sent by  mail, we suggest insured registered mail with
     return receipt. A mailing  envelope is enclosed for your
     convenience. Additional copies of this Letter of  Transmittal may
     be obtained from the Exchange Agent. If the space provided on 
     this Letter of Transmittal is inadequate, the certificate numbers
     and the  number of shares should be listed on a separate signed
     schedule and attached to  this Letter of Transmittal. 
      
      2. Risk of Loss. Delivery of stock certificate(s) shall be
     effected and the  risk of loss and title shall pass only upon
     proper delivery of the  certificate(s) and this Letter of
     Transmittal to the Exchange Agent.   
       
      3. Consideration Issued in the Same Name. If the consideration
     for shares  surrendered is issued in the same name as the
     registered holder(s), no  endorsement or transfer tax stamps is
     required on the certificate(s). In such  event, the signatures on
     this Letter of Transmittal must be exactly the same as  the names
     that appear on the face of the certificate(s), without
     alteration,  enlargement or any change whatsoever. 
      
      4. Special Payment Instructions. If the consideration for
     shares surrendered  is to be issued in a name other than that of
     the registered holder of the  shares surrendered, the surrendered
     certificate(s) must be endorsed or  accompanied by an endorsed
     stock power and the signature thereon guaranteed by  an eligible
     guarantor institution such as a commercial bank, trust company, 
     securities broker/dealer, credit union or savings institution
     participating in  the Medallion Signature Guarantee Program. A
     verification by a Notary Public is  not acceptable. Endorsements
     on the certificate(s) must correspond in every  particular with
     the registered names on such certificate(s). In case the 
     endorsement on any certificate(s) is executed by an attorney,
     executor,  administrator, guardian or other fiduciary, or by an
     officer of a corporation,  the person executing the endorsement
     must give his full title in such capacity  and appropriate
     evidence of authority to act in such capacity must be forwarded 
     with the certificate(s) surrendered. 
      
      5. Exchange and Payment. The Exchange Agent will mail the
     consideration for  the stock certificate(s) surrendered by first
     class mail as soon as practicable  after the receipt by the
     Exchange Agent of a properly completed and duly  executed Letter
     of Transmittal, such certificate(s) and any required supporting 
     documents. 
      
      6. Validity of Surrender; Irregularities. All questions as to
     validity, form  and eligibility of any surrender of the
     certificate(s) hereunder will be  determined by UAL Corporation,
     and such determination shall be final and  binding on all
     parties. A surrender will not be deemed to have been made until 
     all irregularities have been cured or waived. 
      
      7. Special Delivery Instructions. Indicate the name and address
     to which  payment for the shares is to be sent if different from
     the name and address of  the persons signing this Letter of
     Transmittal. 
      
      8. Adequacy of Documentation. UAL Corporation and the Exchange
     Agent reserve  full discretion to determine whether each Letter
     of Transmittal submitted to  the Exchange Agent has been properly
     filled in and is adequate. UAL Corporation  and the Exchange
     Agent shall have the right to request the execution of any 
     additional documents which either of them, in its sole
     discretion, deems  necessary or desirable to facilitate the
     proper transmittal of stock  certificate(s). Any determination by
     UAL Corporation and the Exchange Agent as  to the adequacy of
     documentation shall be final. 
      
      9. Lost, Stolen or Destroyed Certificates. If stock
     certificate(s) have been  lost, stolen or destroyed, you should
     contact the Exchange Agent at one of the  addresses on the face
     hereof or the telephone number listed below, and the  Exchange
     Agent will mail to you an affidavit of loss and an indemnity
     bond. The  consideration for shares will be delivered to you only
     upon receipt of a  properly completed affidavit of loss and an
     indemnity bond.   
       
      10. Substitute Form W-9. You are required to provide the
     Exchange Agent with  a correct Taxpayer Identification Number
     ("TIN") on Substitute Form W-9, which  is provided under
     "Important Tax Information" above, and to indicate that you  are
     not subject to backup withholding by checking the box in Part 2
     of the  form. Failure to provide the information on the form may
     subject you to a  penalty and a 31 percent Federal income tax
     withholding on certain payments due  for the certificates. The
     box in Part 3 of the form may be checked if you have  not been
     issued a TIN and have applied for a number or intend to apply for
     a  number in the near future. If the box in Part 3 is checked and
     the Exchange  Agent is not provided with a TIN within 60 days,
     the Exchange Agent will  withhold 31 percent of certain amounts
     due for the certificates until a TIN is  provided to the Exchange
     Agent. 
      
      11.  Questions. If you have any questions, please call our
     Tenders & Exchanges  Department at (201) 324-0137. 
      
     IMPORTANT TAX INFORMATION
      
      Under the Federal income tax law, a stockholder is required by
     law to provide  the Exchange Agent (as payer) with his or her
     correct taxpayer identification  number on Substitute Form W-9
     below. If such stockholder is an individual, the  taxpayer
     identification number is his or her social security number. If
     the  Exchange Agent is not provided with the correct taxpayer
     identification number,  the stockholder may be subject to a
     penalty imposed by the Internal Revenue  Service. In addition,
     certain payments that are made to such stockholder may be 
     subject to backup withholding. 
      
      Exempt stockholders (including, among others, all corporations
     and certain  foreign individuals) are not subject to these backup
     withholding and reporting  requirements. (In order for a foreign
     individual to qualify as an exempt  recipient, that stockholder
     must submit a statement, signed under penalties of  perjury,
     attesting to that individual's exempt status. Such statements can
     be  obtained from the Exchange Agent.) See the Guidelines for
     Certification of  Taxpayer Identification Number on Substitute
     Form W-9 for additional  instructions. 
      
      If backup withholding applies, the Exchange Agent is required
     to withhold 31  percent of any such payments made to the
     stockholder. Backup withholding is not  an additional tax.
     Rather, the tax liability of persons subject to backup 
     withholding will be reduced by the amount of tax withheld. If
     withholding  results in an overpayment of taxes, a refund may be
     obtained.   

     PURPOSE OF SUBSTITUTE FORM W-9
      
      To prevent backup withholding on payments that are made to a
     stockholder, the  stockholder is required to notify the Exchange
     Agent of his or her correct  taxpayer identification number by
     completing the form below certifying that the  taxpayer
     identification number provided on Substitute Form W-9 is correct
     (or  that such stockholder is awaiting a taxpayer identification
     number) and that  (1) the stockholder has not been notified by
     the Internal Revenue Service that  he or she is subject to backup
     withholding as a result of failure to report all  interest or
     dividends or (2) the Internal Revenue Service has notified the 
     stockholder that he or she is no longer subject to backup
     withholding.   

     WHAT NUMBER TO GIVE THE EXCHANGE AGENT
      
      The stockholder is required to give the Exchange Agent the
     social security  number or employer identification number of the
     record owner of the shares.   
                  

     PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK  
      
     SUBSTITUTE
     FORM W-9
     DEPARTMENT OF THE TREASURY
     INTERNAL REVENUE SERVICE
      
     PAYER'S REQUEST FOR TAXPAYER
     IDENTIFICATION NUMBER ("TIN")
      
     PART 1-
     PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT 
     AND CERTIFY BY SIGNING AND  DATING BELOW. 
      
     Social Security Number or
     Employer Identification Number
      
     _______________________________________________

       
     PART 2-Check the box if you are NOT subject to backup withholding
     under the  provisions of section 340(6)(a)(1)(C) of the Internal
     Revenue Code because (1)  you have not been notified that you are
     subject to backup withholding as a  result of failure to report
     all interest or dividends or (2) the Internal  Revenue Service
     has notified you that you are no longer subject to backup 
     withholding.  ( ) 

     CERTIFICATION-UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT THE
     INFORMATION  PROVIDED ON THIS FORM IS TRUE, CORRECT, AND
     COMPLETE. 
      
     SIGNATURE 
     DATE 
      
     PART 3-
     Awaiting TIN ( )
      
     NOTE:  FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
            WITHHOLDING OF 31% OF CERTAIN PAYMENTS MADE TO YOU.
            PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
            TAXPAYER  IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR
            ADDITIONAL DETAILS.   

     PLEASE READ CAREFULLY THE INSTRUCTIONS CONTAINED IN THIS LETTER
     OF TRANSMITTAL. 






                                                             Exhibit 99.3

          GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
                       NUMBER ON SUBSTITUTE FORM W-9

Guidelines for Determining the Proper Identification Number to Give the
Payer. Social Security numbers have nine digits separated by two hyphens: 
i.e. 000-00-0000.  Employer identification numbers have nine digits
separated by only one hyphen:  i.e. 00-0000000.  The table below will help
determine the number to give the payer.
______________________________________________________________________________
                       Give the                             Give the
                       SOCIAL                               EMPLOYER
For this type of       SECURITY       For this type of      IDENTIFICATION
 account:              number of__    account:              number of __
                            
_______________________________________________________________________________

1. An individual's   The individual   9. A valid trust,    The legal
   account                               estate, or        entity (Do
                                         pension trust     not furnish
2. Two or more       The actual                            the identifying
   individuals       owner of the                          number of the
   (joint account)   account or,                           personal repre-
                     if combined                           sentative or
                     funds, any                            trustee
                     one of the                            unless the
                     individuals(1)                        legal entity
                                                           itself is not
                                                           designated in
3. Husband and wife  The actual                            the account
   (joint account)   owner of the                          title).(5)
                     account or,                           
                     if joint
                     funds, either  10. Corporate account  The corporation
                     person(1)                             

4. Custodian account The minor(2)   11. Religious,         The organization
   of a minor                           charitable, or    
   (Uniform Gift to                     educational
   Minors Act)                          organization
                                        account
5. Adult
 and minor   The adult or,
   (joint account)   if the minor   12. Partnership       The partnership
                     is the only        account held in   
                     contributor,       the name of the
                     the minor(1)       business

6. Account in the    The ward,      13. Association,      The organization
   name of guardian  minor, or          club, or other    
   or committee for  incompetent        tax-exempt
   a designated      person(3)          organization
   ward, minor, or
   incompetent                      14. A broker or       The broker or
   person                               registered        nominee
                                        nominee

7. a. The usual    The grantor-     15. Account with the  The public
      revocable    trustee(1)           Department of     entity
      savings                           Agriculture in
      trust                             the name of a  
      account                           public entity
      (grantor is                       (such as a State
      also trustee)                     or local 
                                        government,
                                        school district,
                                        or prison) that
   b. So-called     The actual          receives agricul-
      trust account owner(1)            tural program 
      that is not a                     payments
      legal or valid
      trust under
      State law
 
8.   Sole propriet- The owner(4)
     orship  
     account
____________________________________________________________________________

(1)  List first and circle the name of the person whose number you furnish.
(2)  Circle the minor's name and furnish the minor's social security number.
(3)  Circle the ward's, minor's or incompetent person's name and furnish
      such person's social security number.
(4)  Show the name of the owner.                                      
(5)  List first and circle the name of the legal trust, estate, or pension
      trust.
 
NOTE:   If no name is circled when there is more than one name, the number
        will be considered to be that of the first name listed.


          GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
                       NUMBER OF SUBSTITUTE FORM W-9
                                   PAGE 2

     OBTAINING A NUMBER                
     If you don't have a taxpayer      
     identification number or you 
     don't know your number, obtain    
     Form SS-5, Application for a      
     Social Security Number Card, or   
     Form SS-4, Application for an     
     Employer Identification Number,   
     at the local office of the        
     Social Security Administration    
     or the Internal Revenue Service   
     and apply for a number.           
                                       
                                       
     PAYEES EXEMPT FROM BACKUP         
     WITHHOLDING                       
     Payees specifically exempted      
     from backup withholding on ALL    
     payments include the following:   
                                       
        *    A corporation.            
        *    A financial               
             institution.              
        *    An organization exempt    
             from tax under section    
             501(a), or an             
             individual retirement     
             plan.                     
        *    The United States or      
             any agency or             
             instrumentality           
             thereof.                  
        *    A State, the District     
             of Columbia, a            
             possession of the         
             United States, or any     
             subdivision or            
             instrumentality           
             thereof.                  
        *    A foreign government, a   
             political subdivision     
             of a foreign              
             government, or any        
             agency or                 
             instrumentality           
             thereof.                  
        *    An international          
             organization or any       
             agency, or                
             instrumentality           
             thereof.                  
        *    A registered dealer in    
             securities or             
             commodities registered    
             in the U.S. or a          
             possession of the U.S.    
        *    A real estate             
             investment trust.
        *    A common trust fund       
             operated by a bank        
             under section 584(a).     
        *    An exempt charitable      
             remainder trust, or a     
             non-exempt trust          
             described in section      
             4947(a)(1).               
        *    An entity registered at   
             all times under the       
             Investment Company Act    
             of 1940.                  
        *    A foreign central bank    
             of issue.                 
        Payments of dividends and      
     patronage dividends not           
     generally subject to backup
     withholding include the
     following:

   *   Payments to nonresident
       aliens subject to
       withholding under
       section 1441.
   *   Payments to
       partnerships not
       engaged in a trade or
       business in the U.S.
       and which have at least
       one nonresident
       partner.
   *   Payments of patronage
       dividends where the
       amount received is not
       paid in money.
   *   Payments made by
       certain foreign
       organizations.
   *   Payments made to a
       nominee.
   Payments of interest not
generally subject to backup
withholding include the
following:
   *   Payments of interest on
       obligations issued by
       individuals.  Note: You
       may be subject to
       backup withholding if
       this interest is $600
       or more and is paid in
       the course of the
       payer's trade or
       business and you have
       not provided your
       correct taxpayer
       identification number
       to the payer.
   *   Payments of tax-exempt
       interest (including
       exempt-interest
       dividends under section
       852).
   *   Payments described in
       section 6049(b)(5) to
       nonresident aliens.
   *   Payments on tax-free
       covenant bonds under
       section 1451.
   *   Payments made by
       certain foreign
       organizations.
   *   Payments made to a
       nominee.

Exempt payees described above
should file Form W-9 to avoid
possible erroneous backup
withholding.  FILE THIS FORM
WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER,
WRITE "EXEMPT" ON THE FACE OF
THE FORM, AND RETURN IT TO THE
PAYER.  IF THE PAYMENTS ARE
INTEREST, DIVIDENDS, OR
PATRONAGE DIVIDENDS, ALSO SIGN
AND DATE THE FORM.
   Certain payments, other than
interest, dividends, and
patronage dividends, that are
not subject to information 
reporting are also not subject
to backup withholding.  For
details, see the regulations
under sections 6041, 6041A(a),
6045, and 6050A.

PRIVACY ACT NOTICE. Section
6109 requires most recipients
of dividend, interest, or other
payments to give taxpayer
identification numbers to
payers who must report the
payments to IRS.  IRS uses the
numbers for identification
purposes.  Payers must be given
the numbers whether or not
recipients are required to file
tax returns.  Payers must
generally withhold 31% of
taxable interest, dividend, and
certain other payments to a
payee who does not furnish a
taxpayer identification number
to a payer.  Certain penalties
may also apply.

PENALTIES
(1)  PENALTIES FOR FAILURE TO
FURNISH TAXPAYER IDENTIFICATION
NUMBER. If you fail to furnish
your taxpayer identification
number to a payer, you are
subject to a penalty of $50 for
each such failure unless your
failure is due to reasonable
cause and not to willful
neglect.
(2)  FAILURE TO REPORT CERTAIN
DIVIDEND AND INTEREST
PAYMENTS. If you fail to
include any portion of an
includible payment for
interest, dividends, or
patronage dividends in gross
income, such failure will be
treated as being due to
negligence and will be subject
to a penalty of 5% on any
portion of an under-payment
attributable to that failure
unless there is clear and
convincing evidence to the
contrary.
(3)  CIVIL PENALTY FOR FALSE
INFORMATION WITH RESPECT TO
WITHHOLDING. If you make a
false statement with no
reasonable basis which results
in no imposition of backup
withholding, you are subject to
a penalty of $500.
(4)  CRIMINAL PENALTY FOR
FALSIFYING
INFORMATION. Falsifying
certifications or affirmations
may subject you to criminal
penalties including fines
and/or imprisonment.
FOR ADDITIONAL INFORMATION
CONTACT YOUR TAX CONSULTANT OR
THE INTERNAL REVENUE SERVICE






                                                       Exhibit 99.4

                              Corporate Communications Contacts:
                              John Kiker             (708) 952-4162
                              Joe Hopkins            (708) 952-5770
                              Tony Molinaro          (708) 952-4971
                              Night                  (708) 952-4088

                              Investor Relations Contact:
                              Pamela Hanlon          (708) 952-7501

           UAL CORP. SHAREHOLDERS APPROVE HISTORIC RECAPITALIZATION
               CREATING NATION'S LARGEST EMPLOYEE-OWNED COMPANY

          FOR IMMEDIATE RELEASE

                    CHICAGO, July 12, 1994 -- UAL Corp. Chairman
          and Chief Executive Officer Stephen M. Wolf announced
          today that the company's shareholders have approved the
          historic recapitalization in which employees will acquire
          55 percent of the company's common stock in exchange for
          pay and benefit reductions and work rule changes.

                    The employee investment transaction will make
          UAL Corp., parent company of United Airlines, the largest
          employee-owned company in the United States.

                    Wolf told shareholders, "Those of us here today
          are participating in an event of monumental proportions
          ... a milestone marking one of the most significant
          transformations in the airline industry since this
          business was founded in the early 20th century."

                    He went on to say, "Through a significant
          investment in the airline, our employees are about to
          align their interests with the interests of our public
          shareholders
 in a plan that should assure this company's
          future in the global marketplace for many years to come."

                    Wolf himself will be leaving the company when
          the transaction closes later today, and he will be
          succeeded by Gerald Greenwald, a former vice chairman of
          Chrysler Corp., as chairman and chief executive officer.

                    Following the announcement of the shareholders
          vote today, Greenwald said, "No other airline is as well-
          positioned for takeoff as United: A route system that
          spans five continents, an excellent fleet of aircraft, a
          management team that is one of the very best in the
          business -- and a name that is recognized and respected
          the world over.  Today's milestone puts United a step
          ahead."

                    The coalition of employees acquiring the
          company includes two major unions, the Air Line Pilots
          Association and the International Association of
          Machinists, and a group of management and salaried
          employees.

                    The reduced salaries and benefits and
          modifications in work rules which are estimated to have a
          present value of $4.9 billion will lower the company's
          unit costs significantly and establish the framework for
          more effective competition vis-a-vis U.S. carriers with
          lower cost structures already in place.

                    Meanwhile, employee ownership provides
          employees with a powerful new incentive to put forth
          their best efforts to meet customer needs, assure the
          long-time success of the company and add value to the
          price of UAL Corp. shares.

                    UAL and United announced previously that they
          will mount an airline within an airline beginning Oct. 1
          on the U.S. West Coast with 83 flights initially.  It
          will be characterized by high frequency service,
          attractive low fares and scaled back amenities.

                    The company has said for some time that the
          flying public is influenced by low fares much more today
          than other factors in deciding whether to fly and
          selecting a carrier.

                    As previously disclosed, existing stockholders
          will receive for each share of UAL common stock one-half
          share of new UAL common stock and $84.81 in cash provided
          that offerings of preferred stock and two issues of debt
          are consummated.

                                     -UA-