SECURITIES AND EXCHANGE COMMISSION
                        Washington, DC 20549
                              FORM 10-K

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
    EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year Ended December 31, 1994 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
    SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from                to

Commission File No. 1-6033
                          UAL CORPORATION
       (Exact name of registrant as specified in its charter)

            Delaware                                 36-2675207
(State or other jurisdiction of                     (IRS Employer
incorporation or organization)                    Identification No.)

Location: 1200 Algonquin Road, Elk Grove Township, Illinois   60007
Mailing Address: P. O. Box 66919, Chicago, Illinois           60666
(Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code   (708) 952-4000

Securities registered pursuant to Section 12(b) of the Act:

                                             NAME OF EACH EXCHANGE
            TITLE OF EACH CLASS               ON WHICH REGISTERED

        Common Stock ($.01 par value)          New York, Chicago and
                                               Pacific Stock Exchanges

        Preferred Stock Purchase Rights        New York, Chicago and
                                               Pacific Stock Exchanges
        Depositary Shares representing
        interests in Registrant's Series
        B Preferred Stock, without par value   New York Stock Exchange
        
        6-3/8% Convertible Subordinated 
        Debentures due 2025                    New York Stock Exchange

Securities registered pursuant to Section  12(g) of the Act:

                                  NONE

Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days.
                         Yes   X         No

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K.[ ]

The number of shares of common stock outstanding as of March 1, 1995
was 12,434,865.  The aggregate market value of voting stock held by
non-affiliates of the Registrant was $1,178,423,998 as of
March 1, 1995.


Part III information shall be incorporated by reference from the
Registrant's definitive proxy statement for its 1995 Annual Meeting
of Shareholders or shall be added hereto by an amendment to this Form
10-K, in either case within the time required by the instructions to
Form 10-K.




                             PART I                           


ITEM 1.        BUSINESS.

     Introduction

     UAL Corporation ("UAL" or the "Company") was incorporated
under the laws of the State of Delaware on December 30, 1968.
The world headquarters of the Company are located at 1200
Algonquin Road, Elk Grove Township, Illinois  60007.  The
Company's mailing address is P.O. Box 66919, Chicago, Illinois
60666.  The telephone number for the Company is (708) 952-4000.

     The Company is a holding company and its principal
subsidiary is United Air Lines, Inc., a Delaware corporation
("United"), which is wholly-owned.  United accounted for
virtually all of the Company's revenues and expenses in 1994.
United is a major commercial air transportation company.

     Employee Investment Transaction and Recapitalization

     On July 12, 1994, the stockholders of the Company approved
and adopted the Amended and Restated Agreement and Plan of
Recapitalization, dated as of March 25, 1994, among UAL, the Air
Line Pilots Association, International and the International
Association of Machinists and Aerospace Workers (the
"Recapitalization"), that provides an approximately 55% equity
and voting interest in the Company to certain employees of United
in exchange for wage concessions and work-rule changes.  The
employees' equity interest will be allocated to individual
employee accounts through the year 2000 under Employee Stock
Ownership Plans ("ESOPs") which were created as a part of the
Recapitalization.  The entire 55% ESOP voting interest generally
will be voted by the ESOP trustee at the direction of, and on
behalf of, the employees participating in the ESOPs. In
connection with the Recapitalization, holders of the Company's
old common stock received approximately $2.1 billion in cash and
the remaining 45% of the equity in the form of Common Stock.
Each share of old common stock was converted into one-half share
of Common Stock and cash in lieu of fractional shares plus a cash
payment of $84.81.  In connection with the Recapitalization,
United issued $370 million of 10.67% debentures due in 2004 and
$371 million of 11.21% debentures due 2014 and the Company issued
Series B 12-1/4% preferred stock with an aggregate liquidation
preference of $410 million.  In addition, in connection with the
consummation of the plan of Recapitalization, the Rights
Agreement was amended to provide, among other things, for one
right to purchase shares of the Company's Series C Junior
Participating Preferred Stock to be attached to and issued with
each share of Common Stock, including shares of Common Stock into
which the preferred stock held in the ESOPs is convertible.

     Airline Operations

     United has been engaged in the air transportation of per-
sons, property and mail since 1934, and certain of its
predecessors began operations as early as 1926.  United is the
world's largest employee-owned airline and one of the world's
largest airlines as measured by operating revenues, revenue
passengers and revenue passenger miles flown.  At the end of
1994, United served 152 airports in the United States and 29
foreign countries.  During 1994, United averaged 2,004 departures
daily, flew a total of 108 billion revenue passenger miles, and
carried an average of 203,400 passengers per day.

     United provides its domestic and international service
principally through a system of hub airports at major cities.
Each hub provides United flights to a network of spoke
destinations as well as flights to the other United hubs.  This
arrangement permits travelers to fly from point of origin to more
destinations without changing carriers.  Currently, United flies
from four U.S. hubs - Chicago-O'Hare International, Denver
International, San Francisco International, and Dulles
International near Washington, D.C. - and is the principal
carrier at each of these hubs.  United also has a Pacific hub
operation at Tokyo Narita Airport.  During the last several
years, United has strengthened the revenue-generating capability
of the hub airports by:  (1) adding new spokes (routes to new
cities and airports); (2) adding frequency on previously operated
route segments; and (3) entering into marketing agreements with
smaller U.S. air carriers which serve less populated destinations
and with foreign carriers which serve destinations that United
could not serve itself for economic or regulatory reasons.

     United has developed a route system covering North America,
Asia, the South Pacific, Europe and Latin America.

     Within North America, East-West traffic is served by nonstop
transcontinental flights and by the hubs at Chicago O'Hare and
Denver, while North-South traffic on the West Coast is served by
the San Francisco hub.

     In October 1994, United launched a new service designed to
be cost competitive on routes under 750 miles.  Named "Shuttle by
United", this service achieves lower costs through special work
rules and wage rates for pilots, high station and aircraft
utilization and minimal service amenities.  As of February 1995,
Shuttle by United was operating daily 342 flights on 15 routes
between 10 West Coast cities and, as of April 1995, expects to be
operating 378 flights on 16 routes between 11 cities.

     United has a marketing program in North America with
selected independent regional air carriers, known as the United
Express program, which allows United to increase the number of
destinations served by its hub-and-spoke network.  Six regional
carriers currently participate in the United Express marketing
program providing connecting schedules to ten major cities also
served by United.

     United also has marketing agreements that provide for
sharing of the "UA" code on certain routes with three other
independent domestic air carriers.  Code-sharing allows an
airline to expand the marketing of its service brand by using its
two-letter designator code in computer reservations systems on a
connecting flight operated by another airline on the itinerary.
Also, North American traffic is served by code-sharing agreements
United has with two independent Caribbean air carriers.

     Asian traffic is served from six U.S. cities via the Tokyo
hub and with nonstop flights from San Francisco to Hong Kong,
Osaka, Seoul and Taipei; from Honolulu to Osaka; and from Los
Angeles to Hong Kong and Osaka.  South Pacific traffic to Sydney
is served from Los Angeles and San Francisco, while traffic to
Auckland and Melbourne is served from Los Angeles.  In December
1994, service began from Guam and Saipan to Osaka and from Guam
to Saipan, further strengthening United's presence at Osaka's new
Kansai International Airport which opened September 4, 1994.  In
addition, United plans to initiate service between the U.S. and
Ho Chi Minh City via an intermediate point as soon as government
approvals are received.  United also has code-sharing agreements
with two independent South Pacific air carriers.  Based on
reports filed with the Department of Transportation, United was
the leading U.S. carrier in the Pacific in 1994 in terms of
revenue passenger miles and available seat miles.  During 1994,
United's Pacific Division accounted for 22% of United's revenues.

     Service between the U.S. and Europe is provided by:  flights
from six U.S. cities (five after Seattle service is discontinued
in April 1995) to London, with connecting service at
London to Amsterdam and Brussels; flights from four U.S. cities
to Paris; nonstop service from Dulles to Amsterdam, Brussels,
Frankfurt, Madrid, Milan/Rome and Zurich; and nonstop service
from Chicago to Frankfurt.  European traffic is also served by
United's code-sharing agreements with three independent air
carriers, including Germany's flag carrier, Lufthansa.

     United's comprehensive marketing agreement with Lufthansa
began during 1994.  This worldwide alliance involves, among other
things, coordination of scheduling, ground handling, frequent
flyer programs and other passenger services, and allows, among
other things, code-sharing between the two airlines on
Transatlantic route segments, and permits United to code-share on
Lufthansa flights in certain markets beyond Lufthansa's European
gateways.  Similarly, the agreement permits Lufthansa to code-
share on United flights to certain cities in the U.S.  As of
February 1995, the list of markets includes 43 city pairs in
which United places its code on flight segments operated by
Lufthansa and Lufthansa places its code on 30 flight segments
operated by United.  Code-share segments include North America,
Europe, Africa and the Middle East.

     Service between the U.S. and Latin America is provided by
flights to eleven Latin American cities in nine countries from a
number of cities in the U.S.  Eight Latin American cities are
served nonstop from Miami, two nonstop from Los Angeles, and
three from New York-Kennedy.  In addition, United expects to
commence daily nonstop service in the summer of 1995 to Belo
Horizonte, Brazil from Miami.  United has code-sharing agreements
with two independent air carriers in this region.

     Operating revenues attributed to United's foreign operations
were approximately $4.9 billion in 1994, $4.5 billion in 1993 and
$3.9 billion in 1992.

     Selected Operating Statistics
                                  
      The following table sets forth certain selected operating
data for United:

<TABLE>
                       Year Ended December 31
<CAPTION>
<S>                      <C>       <C>       <C>      <C>      <C>
                            1994      1993      1992     1991     1990
Revenue Aircraft Miles
  (millions)(a)              776       756       695      635      597
Revenue Aircraft
  Departures             731,284   746,665   721,504  691,402  654,555
Available Seat Miles
  (millions)(b)          152,193   150,728   137,491  124,100  114,995
Revenue Passenger Miles
  (millions)(c)          108,299   101,258    92,690   82,290   76,137
Revenue Passengers
  (thousands)             74,241    69,814    66,692   62,003   57,598
Average Passenger Journey
  (miles)                  1,459     1,450     1,390    1,327    1,322
Average Flight Length
  (miles)                  1,062     1,013       964      918      912
Passenger Load Factor(d)    71.2%     67.2%     67.4%     66.3%   66.2%
Break-even Load Factor(e)   68.2%     65.5%     70.6%     69.7%   66.5%
Average Yield Per Revenue
  Passenger Mile
  (in cents)(f)             11.3      11.6      11.3      11.5    11.8
Cost Per Available Seat
  Mile (in cents)(g)         8.8       8.5       8.9       9.0     9.0
Average Fare Per Revenue
  Passenger              $165.61   $169.00   $157.17   $153.17 $156.12
Average Daily Utilization
  of each Aircraft
  (hours:minutes)(h)       8:28       8:30      8:19      8:13    8:14

</TABLE>


(a)  "Revenue aircraft miles" means the number of miles flown in
revenue producing service.
(b)  "Available seat miles" represents the number of seats
available for passengers multiplied by the number of miles those
seats are flown.
(c)  "Revenue passenger miles" represents the number of miles
flown by revenue passengers.
(d)  "Passenger load factor" represents revenue passenger miles
divided by available seat miles.
(e)  "Break-even load factor" represents the number of revenue
passenger miles at which operating earnings would have been zero
(based on the actual average yield) divided by available seat
miles.
(f)  "Average yield per revenue passenger mile" represents the
average revenue received for each mile a revenue passenger is
carried.
(g)  "Cost per available seat mile" represents operating expenses
divided by available seat miles.
(h)  "Average daily utilization of each aircraft" means the
average air hours flown in service per day per aircraft for the
total fleet of aircraft.


     Industry Conditions

     Seasonal and Other Factors.   The Company's results of
operations for interim periods are not necessarily indicative of
those for an entire year, since the air travel business is
subject to seasonal fluctuations.  United's first and fourth
quarter results normally are affected by reduced travel demand in
the fall and winter, and United's operations, particularly at its
O'Hare and Denver hubs, are often affected adversely by winter
weather.  In the past, these fluctuations have generally resulted
in better operating results for United and, thus, the Company, in
the second and third quarters.  See Item 8, "Financial Statements
and Supplementary Data," for summarized unaudited financial data
for the four quarters of 1994 and 1993.

     The results of operations in the air travel business have
also fluctuated significantly in the past in response to general
economic conditions.  In addition, the airline business is
characterized by a high degree of operating leverage.  As a
result, the economic environment and small fluctuations in
United's yield per revenue passenger mile and cost per available
seat mile can have a significant impact on operating results.
The Company anticipates that seasonal factors and general
economic conditions, in addition to industrywide fare levels,
labor and fuel costs, the competition from other airlines,
international government policies, and other factors, will
continue to impact United's operations.

     Competition and Fares.  The airline industry is highly
competitive.  In domestic markets, new and existing carriers are
free to initiate service on any route.  United faces competition
from other carriers on virtually every route it serves.  In
United's domestic markets, these competitors include all of the
other major U.S. airlines as well as smaller carriers.

     United's marketing strategy is driven by four principal
competitive factors: schedule convenience, overall customer
service, frequent flyer programs and price.  United seeks to
attract travelers through convenient scheduling, high quality
service, frequent flyer programs designed to reward customer
loyalty, and competitive pricing.

     During the past few years, certain domestic carriers
reorganized their operating cost structures.  These carriers,
together with more recent entrants to the airline business, and a
select number of established domestic carriers, have had cost
structures which were significantly lower than United's, and
therefore may have been able to operate profitably at lower fare
levels.  Furthermore, certain carriers in the short haul domestic
markets have been able to compete against major air carriers,
including United, by operating without as great a reliance upon a
hub-and-spoke system.  These airlines operate efficiently through
strategies such as rapid turnaround of flights on a point-to-
point basis.  United's response to these competitive pressures
has been the consummation of the employee investment transaction
which allowed United to lower its labor costs and to introduce
the Shuttle by United, a low cost point-to-point service
operating in the West Coast.

     From time to time, excess aircraft capacity and other
factors such as the cash needs of financially distressed carriers
induce airlines to engage in "fare wars."  Such factors can have
a material adverse impact on the Company's revenues.  The Company
maintains yield and inventory management programs designed to
manage the number of seats offered in various fare categories in
order to enhance the effectiveness of fare promotions and
maximize revenue production on each flight.

     In its international markets, United competes with major
U.S. carriers as well as investor-owned, government-subsidized
and national flag carriers of foreign countries.  Competition in
certain international markets is subject to varying degrees of
governmental regulation (see "Government Regulation"), and in
certain instances United's foreign competitors enjoy subsidies
and other forms of governmental support which are not available
to U.S. carriers.

     United and other U.S. carriers have certain advantages over
foreign air carriers in their ability to generate U.S.-origin-
destination traffic from their integrated domestic route systems.
In addition, foreign carriers are prohibited by law from carrying
local passengers between two points in the United States.

     However, the U.S. carriers are in many cases constrained
from carrying passengers to points beyond designated gateway
cities in foreign countries due to limitations in the bilateral
air service agreements with such countries or restrictions
imposed unilaterally by the foreign governments.  To the extent
that foreign competitors can offer more connecting services to
points beyond these gateway cities, they have an advantage in
attracting traffic moving between these foreign points and in
attracting traffic moving between such cities and points in the
United States.  Also, several foreign air carriers have sought
and obtained access to the U.S. domestic market through
substantial equity investments and code sharing arrangements with
U.S. airlines.  The comprehensive marketing agreement with
Lufthansa has enhanced the Company's competitive position in
international markets.

     To improve profitability, in late 1994 United announced
discontinuation of all service to 15 destinations.  This included
three European, seven domestic and five Latin America
destinations.

     No material part of the business of United, or of the
Company and its subsidiaries, is dependent upon a single customer
or very few customers.  Consequently, the loss of the few largest
customers of United, or of the Company, would not have a material
adverse effect on the Company.

     Airport Access.  United's operations at its principal
domestic hub, Chicago-O'Hare International Airport ("O'Hare"), as
well as at three other airports, Kennedy, New York LaGuardia
("LaGuardia"), and Washington National ("National"), are limited
by the "high density traffic airports rule" administered by the
Federal Aviation Administration ("FAA").   Under this rule, take-
off and landing rights ("slots") required for the conduct of
domestic flight operations may be bought, sold or traded.  As of
December 31, 1994, United held 754 domestic air carrier slots at
O'Hare, 34 at National, 62 at LaGuardia and 11 at Kennedy.  In
addition, Air Wisconsin, Inc., an indirect wholly-owned
subsidiary of the Company, held or owned the beneficial interest
in 38 air carrier slots and 118 commuter slots at O'Hare which
are either operated by United or leased to United Express
carriers serving O'Hare.  Under the high density rule carriers
are required to relinquish slots to the FAA for reallocation if
they fail to meet certain minimum use standards.

     Slots for international services at O'Hare are allocated by
the FAA seasonally to both U.S. and foreign carriers based upon
the carriers' historic operations and requests for additional
capacity.  The FAA holds a certain number of slots in reserve for
this purpose.  Slots over that number are provided through the
withdrawal of domestic slots from carriers at O'Hare and the
reallocation of those slots for international operations of
requesting carriers. The FAA prohibits domestic carriers with
more than 100 slots from using another carrier's slots for its
own international operations.  United has lost as many as 33
daily slots - that is, slots that were being used by United three
days or more per week - during a single operating season.

     Congress capped for fiscal year 1995 the number of slots
that could be withdrawn from U.S. carriers for allocation to
international operations.  United currently has a sufficient
number and distribution of slots it holds at airports subject to
the high density rule to support its current operations.  There
can be no assurance, however, that additional slots sufficient to
accommodate otherwise desirable service expansions will be
available to United on satisfactory terms in the future.  The FAA
is preparing a comprehensive review of its slot rules, and
rulemaking proceedings proposing changes to the rules are
expected to follow.  If an alternative to the current system were
to be adopted, no assurance can be given that such alternative
would preserve United's investment in slots already acquired or
that slots adequate for future operations would be available.

     United currently has a sufficient number of leased gates and
other airport facilities at the cities it serves to meet its
current and near term needs.  From time to time, expansion by
United at certain airports may be constrained by insufficient
availability of gates on attractive terms.  United's ability to
expand its international operations in Asia, the South Pacific,
Europe and Latin America is subject to restrictions at many of
the airports in these regions, including noise curfews, slot
controls and absence of adequate airport facilities.

     Mileage Plus Program.  United operates a frequent flyer
marketing program known as "Mileage Plus" wherein credits are
earned by flying on United or using the services of one of the
other airlines, credit card companies, car rental agencies and
hotels (the "Partners") participating in the Mileage Plus
program.  Mileage Plus, Inc., a wholly-owned subsidiary of the
Company, administers frequent flyer bonus programs for United.
The program is designed to enable United to retain and increase
the business of frequent travelers.  Credits earned under the
program may be exchanged at certain plateaus for free travel or
service upgrades on United or for use with one or more of the
Partners.

     In November 1994, United implemented a new marketing
program, "Mileage Plus Reward Miles", that can be used by
companies as incentives for their employees or customers.  Reward
Miles certificates can be purchased in three denominations:  60
certificates good for 500 miles each for $600;  30 certificates
good for 1,000 miles each for $600;  and 15 certificates good for
5,000 miles each for $1,500, subject to a minimum purchase
requirement and processing fee.  Recipients of Reward Miles can
generally have the certificates credited to their Mileage Plus
personal accounts.

     When an award level is attained, a liability is recorded for
the incremental costs of accrued credits under the Mileage Plus
program based on the expected redemptions.  United's incremental
costs include the costs of providing service for an otherwise
vacant seat including fuel, meals, certain incremental personnel
and ticketing costs.  The incremental costs do not include any
contribution to overhead or profit.  Awards earned after July
1989 have an expiration date three years from date earned.  The
program also contains certain restrictive provisions, including
blackout dates and capacity controlled bookings, which
substantially limit the use of the awards on certain flights.
  
     Effective February 10, 1995, United increased the mileage
levels for Mileage Plus domestic award travel on a prospective
basis requiring 25,000 miles, instead of the previous level,
20,000 miles, for award tickets issued for economy class travel
within the continental United States.  In addition, United made
certain other mileage award level changes as well as a change to
a bank-account type of system to track mileage.

     Lawsuits challenging these changes are pending in Illinois.
United believes that it has the right to make the aforementioned
changes to its program and is defending itself vigorously in the
pending litigation.  However, an adverse court decision could
restrict United's ability to alter award levels now or in the
future.

     At December 31, 1994 and 1993, it was estimated that the
total number of outstanding awards was approximately 7.8 million
and 7.7 million, respectively.  United estimated that 5.8 million
and 5.8 million, respectively, of such awards could be expected
to be redeemed and, accordingly, had recorded a liability
amounting to $195 million and $205 million, respectively, at
December 31, 1994 and 1993.  The difference between the awards
expected to be redeemed and the total awards outstanding is the
estimate, based on historical data, of awards (1) which will
never be redeemed, (2) which will be redeemed for other than free
trips, or (3) which will be redeemed on Partner carriers.

     The number of awards used on United were 1.9 million, 1.6
million and 1.4 million for the years 1994, 1993 and 1992,
respectively.  Such awards represented 9.1%, 7.5% and 6.7% of
United's total revenue passenger miles for each period, res
pectively.  With these percentages, seat availability and
restrictions on the use of free travel awards, the displacement,
if any, of revenue passengers by users of Mileage Plus awards is
minimal.

     United has agreements with certain air carriers and other
parties to utilize the Mileage Plus program and receives and
makes payments based on the earning and redemption of awards by
Mileage Plus participants with such parties.
  
     Computer Reservations Systems.  Travel agents account for a
substantial percentage of United's sales.  The complexity of the
various schedules and fares offered by air carriers has fostered
the development of electronic distribution systems that display
information relating the fares and schedules of United and other
airlines to travel agents and others.  The use of such systems
has been a key factor in the marketing and distribution of
airlines' products and has been subject to regulation by the
Department of Justice.  See "Government Regulation - General".

     Before September 1993, United had an ownership interest in
two entities which owned and marketed computer reservation system
("CRS") products and services.  In September 1993, The Covia
Partnership ("Covia"), a 50%-owned affiliate of United, and The
Galileo Company Limited, a 25.6%-owned affiliate of United,
combined.  In the combination Covia was renamed as Galileo
International Partnership ("Galileo"), and a second entity, the
Apollo Travel Services Partnership ("ATS"), was formed.  These
two general partnerships are owned 38% and 77%, respectively, by
United through a wholly-owned subsidiary.

     Galileo owns the Apollo and Galileo CRSs and markets CRS
services worldwide through a system of national distribution
companies.  ATS, directly or through its wholly-owned
subsidiaries, is responsible for marketing, sales and support of
Apollo CRS products and services in the United States, Mexico and
the Caribbean.  

Competition among CRS vendors is intense, and services
similar to those offered by ATS and Galileo are marketed by
several air carriers and other concerns, both in the United
States and worldwide.  In the European and Pacific CRS market,
various consortia of foreign carriers have formed CRSs to be
marketed in countries in which the owning carriers have a
substantial presence.

     In February 1995, United announced that it is introducing a
new travel agency commission payment plan that offers a maximum
of $50 for round-trip or multiple stopover domestic tickets and a
maximum of $25 for one-way domestic tickets.

     Lawsuits have been filed challenging the reductions by
United and other carriers in the commissions paid to travel
agencies for ticketing of air transportation alleging, among
other things, a conspiracy to restrain trade among the carriers
in violation of antitrust laws.  United believes it has the right
to make the aforementioned changes to such commissions, and will
defend itself vigorously in the pending litigation.

     Government Regulation
  
     General.  All carriers engaged in air transportation in the
United States, including United, are subject to regulation by the
Department of Transportation ("DOT") and the Federal Aviation
Administration ("FAA") under federal aviation laws.  The DOT has
authority to regulate certain economic and consumer protection
aspects of air transportation.  It is empowered to issue
certificates of public convenience and necessity for domestic air
transportation upon a carrier's showing of fitness; to authorize
the provision of foreign air transportation by U.S. carriers; to
prohibit unjust discrimination; to prescribe forms of accounts
and require reports from air carriers; to regulate methods of
competition, including the provision and use of computerized
reservation systems; and to administer regulations providing for
consumer protection, including regulations governing the
accessibility of air transportation facilities for handicapped
individuals.  United's operations require certificates of public
convenience and necessity issued by the DOT (or specific
exemptions therefrom), and an air carrier operating certificate
and related operations specifications issued by the FAA.

     United's operations also require licenses issued by the
aviation authorities of the foreign countries United serves.
Foreign aviation authorities may from time to time impose a
greater degree of economic regulation than exists with respect to
United domestic operations.

     In international markets, United competes against foreign
and U.S. carriers that have been granted authority to provide
scheduled passenger and freight service between points in the
United States and various overseas destinations.  In connection
with its international services, United is required to file with
the DOT and observe tariffs establishing the fares and rates
charged and the rules governing the transportation provided.  In
certain cases, fares, rates and schedules require the approval of
the DOT and the relevant foreign governments.

     In addition, United's operating authorities in international
markets are governed by the aviation agreements between the
United States and foreign countries.  United's expansion into
many foreign markets is presently precluded by lack of an
aviation agreement allowing such service.  United continually
urges the U.S. Government to negotiate increased access to such
restricted markets.

     Shifts in United States or foreign government aviation
policies can lead to the alteration or termination of existing
air service agreements that the U.S. has with other governments,
which could diminish the value of United's international route
authority.  While such events are generally the subject of inter-
governmental negotiations, there are no assurances that United's
operating rights under the bilateral aviation agreements and DOT-
issued certificates of public convenience and necessity can be
preserved in such cases.

     The DOT and the U.S. Congress have engaged from time to time
in various regulatory and legislative initiatives, respectively,
with respect to CRS activities and issues, such as the level of
booking fees, host versus non-host functionality, mandatory
dehosting, travel agency connection of third-party hardware and
software to a CRS, terms of the contracts between CRS vendors and
travel agencies, continued airline ownership of CRS vendors, and
the ability to access multiple CRS systems from a single computer
terminal.  New regulatory or legislative initiatives in many of
these areas, if enacted, could have a material adverse effect
upon CRS vendors in general and ATS and United in particular.

     Safety.  The FAA has regulatory jurisdiction over flight
operations generally, including equipment, ground facilities,
maintenance, communications and other matters.  In order to
ensure compliance with its operational and safety standards, the
FAA requires air carriers to obtain operating, airworthiness and
other certificates.

     United's aircraft and engines are maintained in accordance
with the standards and procedures recommended and approved by the
manufacturers and the FAA.  For all of its engines, United
utilizes a "condition monitoring" maintenance program so that the
schedule for engine removals and overhauls is based on
performance trend monitoring of engine operating data.  In
addition, all engines contain time-limited components, each of
which has a maximum amount of time (measured by operating hours)
or a maximum number of operating cycles (measured by takeoffs and
landings) after which the component must be removed from the
engine assembly and overhauled or scrapped.  Similarly, United's
FAA-approved maintenance program specifies the number of hours or
operating cycles between inspections and overhauls of the
airframes and their component parts.  The nature and extent of
each inspection and overhaul is specifically prescribed by the
approved maintenance program.

     From time to time, the FAA issues airworthiness directives
("ADs") which require air carriers to undertake inspections and
to make unscheduled modifications and improvements on aircraft,
engines and related components and parts.  The ADs sometimes
cause United to incur substantial, unplanned expense and
occasionally aircraft or engines must be removed from service
prematurely in order to undergo mandated inspections or
modifications on an accelerated basis.  The issuance of any
particular AD may have a greater or lesser impact on United
compared to its competitors depending upon the equipment covered
by the directive.

     Since 1988 the airlines, in cooperation with the FAA, have
been engaged in an in-depth review of the adequacy of existing
maintenance procedures applicable to older versions of most of
the aircraft types in general use in the airline industry.  These
include certain of the Boeing and Douglas aircraft used by
United.  As a part of this program, the FAA has issued ADs
requiring interim inspections and remedial maintenance
procedures.  While certain of these aging aircraft ADs have
necessitated unscheduled removals from service and increased
maintenance costs, compliance is not expected to have a material
adverse impact on United's costs or operations.

     Both the DOT and the FAA have authority to institute
administrative and judicial proceedings to enforce federal
aviation laws and their own regulations, rules and orders.  Both
civil and criminal sanctions may be assessed for violations.

     Environmental Regulations.  The Airport Noise and Capacity
Act of 1990 ("ANCA") requires the phase-out by December 31, 1999
of Stage 2 aircraft operations, subject to certain waivers.  The
FAA has issued final regulations which would require carriers to
modify or reduce the number of Stage 2 aircraft operated by 25%
by December 31, 1994, 50% by December 31, 1996, 75% by December
31, 1998 and 100% by December 31, 1999.  Alternatively, a carrier
could satisfy compliance requirements by operating a fleet that
is at least 55% Stage 3 by December 31, 1994, 65% Stage 3 by
December 31, 1996, 75% Stage 3 by December 31, 1998 and 100%
Stage 3 by December 31, 1999.  At December 31, 1994, United
operated 374 Stage 3 aircraft representing 69% of United's total
operating fleet, and thus is in compliance with these
regulations.

     The ANCA recognizes the rights of operators of airports with
noise problems to implement local noise abatement procedures so
long as such procedures do not interfere unreasonably with inter
state or foreign commerce or the national air transportation
system.  ANCA generally requires FAA approval of local noise
restrictions on Stage 3 aircraft first effective after October
1990, and establishes a regulatory notice and review process for
local restrictions on Stage 2 aircraft first proposed after
October 1990.  While United has had sufficient scheduling
flexibility to accommodate local noise restrictions imposed to
the present, United's operations could be adversely affected if
locally-imposed regulations become more restrictive or
widespread.

     Federal Aviation Regulation Part 150, which was issued
pursuant to Title I of the Aviation Safety and Noise Abatement
Act of 1979, provides limited funding to airport operators to
formulate noise compatibility programs, and established
procedures through which such programs may be approved by the
FAA.  This rule may encourage the consideration of additional
local aircraft and airport usage restrictions.

     The Environmental Protection Agency regulates operations,
including air carrier operations, which affect the quality of air
in the United States.  United has made all necessary
modifications to its operating fleet to meet emission standards
issued by the Environmental Protection Agency ("EPA").

     Federal and state environmental laws require that
underground storage tanks (USTs) be upgraded to new construction
standards and equipped with leak detection by December 22, 1998.
These requirements are phased into effect based on the age,
construction and use of existing tanks.  United operates a number
of underground and above ground storage tanks throughout its
system, primarily used for the storage of fuels and deicing
fluids.  A program for the removal or upgrading of USTs and
remediation of any related contamination has been ongoing since
1987.  Compliance with these federal and state UST regulations is
not expected to have a material adverse effect on United's
financial condition.

     United has been identified by the EPA as a potentially
responsible party with respect to Superfund sites involving soil
and groundwater contamination at the Bay Area Drum Site in San
Francisco, California, the Chemsol, Inc. Site in Piscataway, New
Jersey, the Petrochem/Ekotek Site in Salt Lake City, Utah, the
Monterey Park Site at Monterey Park, California, the West Contra
Costa Sanitary Landfill Site in Richmond, California, and the
Douglasville Site in Berks County, Pennsylvania.  Because of the
limited nature of the volume of pollutants allegedly contributed
by United to the above Superfund sites, the outcome of these
matters is not expected to have a material adverse effect on
United's financial condition.

     United is aware of soil and groundwater contamination
present on its leaseholds at several U.S. airports, with the most
significant locations being San Francisco International Airport,
John F. Kennedy International Airport in New York, Seattle Tacoma
International Airport and Stapleton International Airport in
Denver (which closed on February 28, 1995).  United is
investigating these sites, assessing its obligations under
applicable environmental regulations and lease agreements and,
where appropriate, remediating these sites.  Remediation of these
sites, for which United may be responsible, is not expected to
have a material adverse effect on United's financial condition.

     Other Government Matters.  Besides the DOT and the FAA,
other federal agencies with jurisdiction over certain aspects of
United's operations are the Department of Justice (Antitrust
Division and Immigration and Naturalization Service), the Equal
Employment Opportunity Commission, the Occupational Safety and
Health Administration, the Department of Labor (the Office of
Federal Contract Compliance Programs of the Employment Standards
Administration), the National Labor Relations Board, the National
Mediation Board, the National Transportation Safety Board, the
Treasury Department (U.S. Customs Service), the Federal
Communications Commission (due to use of radio facilities by
aircraft), and the United States Postal Service (carriage of
domestic and international mail).  In connection with its service
to cities in other countries, United is subject to varying
degrees of regulation by foreign governments.

     In time of war or during an unlimited national emergency or
civil defense emergency declared by the President or the Congress
of the United States, or in a situation short of this if approved
by the Director of the Office of Emergency Preparedness, the
Commander in Chief, Military Airlift Command, or any official
designated by the President to coordinate all civil and defense
mobilization activities, United may be required to provide
airlift services to the Military Airlift Command under the Civil
Reserve Air Fleet Program.  As of February 1, 1995, up to 34 B747
and 12 DC-10 aircraft operated, or to be operated by United could
be subject to such requirements.

     Fuel

     United's results of operations are significantly affected by
the price and availability of jet fuel.  Based on 1994 fuel
consumption, every $.01 change in the average annual
price-per-gallon of jet fuel caused a change of approximately $27
million in United's annual fuel costs.  The table below shows
United's fuel expenses, fuel consumption, average price per
gallon and fuel as a percent of total operating expenses for
annual periods from 1990 through 1994:

<TABLE>
<CAPTION>
<S>                   <C>      <C>      <C>      <C>       <C>
                      1994     1993     1992     1991      1990
Fuel expense,                                                    
  including tax                                                  
  (in millions)       $1,585   $1,718   $1,679   $1,674    $1,811
Gallons consumed                                                 
  (in millions)        2,697    2,699    2,529    2,338     2,253
Average cost per                                                 
  gallon (in cents)     58.8     63.6     66.4     71.6      80.4
% of total                                                       
  operating              12%      13%      14%      15%       18%
  expenses
</TABLE>


     United's average fuel cost per gallon in 1994 was 7.5% lower
than in 1993.  Changes in fuel prices are industry-wide
occurrences that benefit or harm United's competitors as well as
United.  Accordingly, lower fuel prices may be offset by
increased price competition and lower revenues for all air
carriers, including United.  There can be no assurance that
United will be able to increase its fares in response to any
increases in fuel prices in the future.

     In order to assure adequate supplies of fuel and to provide
a measure of control over fuel costs, United ships fuel on major
pipelines, maintains fuel storage facilities, and trades fuel to
locations where it is needed.  In 1994, almost all of United's
fuel was purchased under contracts with major U.S. and
international oil companies.  Most of these contracts are
terminable by United on short notice.  United also purchases
minor volumes of fuel on the spot market at some domestic
locations.  In addition, United purchases foreign fuel on a spot
basis from the Middle East, Caribbean and Far East and delivers
this to the West Coast.  Although United has not experienced any
problem with fuel availability in the past few years and does not
anticipate any in the near future,  it is impossible to predict
the future availability of jet fuel.  If there were major
reductions in the availability of jet fuel, United's business
would be adversely affected.

     The Omnibus Budget Reconciliation Act of 1993 imposes a 4.3
cent per gallon tax on commercial aviation jet fuel purchased for
use in domestic operations.  This new fuel tax is scheduled to
become effective October 1, 1995 and continue until October 1,
1998.  United, through the Air Transportation Association, is
actively lobbying for repeal of this tax.
  
     Insurance

     United carries liability insurance of a type customary in
the air transportation industry, in amounts which it deems
adequate, covering passenger liability, public liability and
property damage liability.  Insurance is subject to price
fluctuations from time to time.  The amount recoverable by United
under aircraft hull insurance covering all damage to its aircraft
is not subject to any deductible amount in the event of a total
loss.  In the event of a partial loss, however, such recovery is
subject to a per-occurrence deductible of $1,000,000 for B747s,
B757s, B767s and DC10s, $750,000 for B737-300s, B737-500s, and
A320s, and $500,000 for all other aircraft.

     Employees - Labor Matters

     On December 31, 1994, the Company and its subsidiaries had
approximately 77,900 employees, of which 76,068 were employed by
United (approximately ten percent of whom are part-time
employees) and 1,160 were employed by ATS.  Approximately 62% of
United's employees were represented by various labor
organizations.

     The employee groups, number of employees, labor organization
and current contract status for each of United's major collective
bargaining groups as of December 31, 1994 are as follows:
  
                         Number of                Contract Open
  Employee Group         Employees      Union     For Amendment

  Mechanics, ramp
  servicemen & other
  ground employees         22,464        IAM      July 12, 2000
  
  Flight
  attendants               16,906        AFA      April 1, 1996
  
  
  Pilots                    7,708        ALPA     April 12, 2000 *  
  
  *  However, certain provisions regarding Shuttle by United
     become amendable at a later date.

     United's relations with these labor organizations are
governed by the Railway Labor Act.  Under this Act, collective
bargaining agreements between United and these organizations
become amendable upon the expiration of their stated term.  If
either party wishes to modify the terms of any such agreement, it
must notify the other party before the contract becomes
amendable.  After receipt of such notice, the parties must meet
for direct negotiations and, if no agreement is reached, either
party may request that a mediator be appointed.  If no agreement
is reached, the National Mediation Board may determine, at any
time, that an impasse exists and may proffer arbitration.  Either
party may decline to submit to arbitration.  If arbitration is
rejected, a 30-day "cooling off" period commences, following
which the labor organization may strike and the airline may
resort to "self-help," including the imposition of its proposed
amendments and the hiring of replacement workers.




I
TEM 2.      PROPERTIES.

     Flight Equipment

     As of December 31, 1994, United's operating aircraft fleet
totaled 543 jet aircraft, of which 228 were owned and 315 were
leased.  These aircraft are listed below:


<TABLE>  
                        
                       Average                                   Average
  Aircraft Type      No. of Seats    Owned    Leased*   Total   Age (Years)
<CAPTION>  
  <S>                    <C>         <C>       <C>       <C>       <C>
  A320-200               144          --        21        21        1
  B727-222A              147          50        25        75       16
  B737-200               109          45        --        45       26
  B737-200A              109          --        24        24       15
  B737-300               126          10        91       101        6
  B737-500               108          27        30        57        3
  B747-100               393          18        --        18       23
  B747-200               352           2         7         9       16
  B747-400               400           3        21        24        3
  B757-200               188          33        55        88        3
  B767-200               168          19        --        19       12
  B767-300ER             211           3        20        23        2
  DC10-10                287          18        13        31       19
  DC10-30                298          --         8         8       15
  
  TOTAL OPERATING
  FLEET                              228       315       543       10
                                     ===       ===       ===       ==  
</TABLE>
                                     
    *  United' s aircraft leases have initial terms of 4 to 26
       years, and expiration dates range from 1996 through 2018.
       Under the terms of leases for 306 of the aircraft in the
       operating fleet, United has the right to purchase the
       aircraft at the end of the lease term, in some cases at fair
       market value and in others at fair market value or a
       percentage of cost.
       
       
     As of December 31, 1994, 73 of the 228 aircraft owned by
United were encumbered under transaction agreements.

     In 1994 United took delivery of 18 new aircraft.  United
acquired two B747-400s and sixteen A320-200s.

     In addition, United retired nineteen widebody aircraft in
1994, ten DC10-10s and nine B747-SPs.

     As of December 31, 1994, United had taken delivery of all
aircraft on order, with the exception of 34 B777-200 aircraft,
which are scheduled to be delivered between 1995 and 1999, and
United has arrangements with Airbus and A320 engine manufacturer
International Aero Engines to lease an additional 29 A320-200
aircraft, which are scheduled for delivery through 1998.  The
following table sets forth United's firm aircraft orders, options
and expected delivery schedules as of December 31, 1994:

<TABLE>

  Order Status  Aircraft Type   Number    To Be Delivered  Delivery Rate
<CAPTION>  
  <S>           <C>              <C>        <C>               <C>
  Firm Orders   B777-200          34        1995-1999         0-3 per month
  
  Total-Firms                     34*
  
  Options**     A320-200          50        1996-2001         0-3 per month
                B737***          162        1997-2002         0-5 per month
                B747-400          49        1997-2003         0-2 per year
                B757-200          39        1997-1999         0-2 per month
                B767-300ER         8        1997-1999         0-1 per month
                B777-200          34        1998-2000         0-1 per month
  
            Total-Options        342
</TABLE>

    *  In addition, United has agreed to lease an additional 29
       A320-200 aircraft.  Deliveries of these aircraft are
       expected to occur between 1995 and 1998.
  
   **  Rate of deliveries with respect to option aircraft assumes
       that all options are exercised and that all orders subject
       to reconfirmation are confirmed by United.
  
   *** Models 300, 400 and 500, at United's discretion.
  
  
     Ground Facilities

     In the vicinity of O'Hare, United owns a 106 acre complex
consisting of over one million square feet of office space for
its world headquarters, a computer facility and a training
center.  United operates reservation centers in or near eight
U.S. cities - Chicago, Denver, Detroit, Honolulu, Los Angeles,
San Francisco, Seattle and Washington, D.C.  United also operates
140 city ticket offices in the U.S., plus offices in the Pacific
and European countries served by United.

     United's Maintenance Operation Center ("MOC") at San
Francisco International Airport occupies 144 acres of land, three
million square feet of floor space and 12 aircraft hangar docks,
under leases expiring in 2013.  Most major aircraft and component
maintenance for United's fleet occurs at the MOC, including
aircraft acceptance and flight testing, and the installation,
testing and repairing of engines, electronics, and interior
fittings.  United also has a major facility at the Oakland,
California airport which is dedicated to airframe maintenance and
which includes a hangar with sufficient space to accommodate
maintenance work on four wide-bodied aircraft simultaneously.  As
of December 31, 1994, United employed more than 11,000 mechanics,
inspectors, engineers, and maintenance support personnel at the
MOC and over 1,600 at the Oakland facility.  United also has line
aircraft maintenance employees and facilities at 62 domestic and
international locations.

      In March 1994, United opened a new major aircraft
maintenance and overhaul facility in Indianapolis, operating
under a lease with the Indianapolis Airport Authority which
expires November 30, 2031.  Initially, the Indianapolis
Maintenance Center ("IMC") is being used for maintenance of
Boeing 737 aircraft.  In December 1994, United announced that it
will significantly expand its operations at IMC by maintaining
its fleets of Boeing 757 and 767 aircraft at the facility in the
future.  Construction of certain Boeing 737 airframe facilities
is still in process and construction of facilities for the other
fleet types will begin in 1995.  In connection with incentives
received, United has agreed to reach an $800 million capital
spending target and employ at least 7,500 individuals.

     On February 28, 1995, United relocated its Denver hub
operations to the new Denver International Airport.  Under a new
30-year lease and use agreement, expiring in 2023, United
eventually will occupy 44 gates and over one million square feet
of exclusive terminal building space.  The new airport is located
northeast of Stapleton International Airport and approximately 25
miles from downtown Denver.  Upon the opening of the new airport,
Stapleton will be closed to all aircraft operations.  United's
flight training center will continue to be located near Stapleton
and is under lease, including options to extend, until 2018.
This flight training center consists of four buildings with a
total of 300,000 square feet located on 22 acres of land
adjoining Stapleton.  The flight training center accommodates 26
flight simulators and over 90 computer-based training stations,
as well as cockpit procedures trainers, autoflight system
trainers and emergency evacuation trainers.

     United has entered into various leases relating to its use
of airport landing areas, gates, hangar sites, terminal buildings
and other airport facilities in most of the municipalities it
serves.  Major leases expire at O'Hare in 2018, San Francisco in
2011 and Washington Dulles in 2015.  In many cases United has
constructed, at its expense, the buildings it occupies on its
leased properties.  In general, buildings and fixtures
constructed by United on leased land are the property of the
lessor upon the expiration of such leases.  United also has
leased and improved ticketing, sales and general office space in
the downtown and outlying areas of most of the larger cities in
its system.  United believes its facilities are suitable and
adequate for its current requirements.  United will continue to
acquire equipment and facilities as necessary to support its
airline operations.

     Transfers of Assets

     In October 1994, UAL announced an agreement to sell for $119
million ten Dash 8 aircraft and spare parts owned by Air
Wisconsin, Inc. to Mesa Airlines, and United agreed to a ten year
extension of its United Express marketing agreement with Mesa
Airlines.  Two of the sales were completed in January 1995, four
more of the sales were completed in February 1995, and the rest
should take place by the end of the first quarter of 1995.




ITEM 3.   LEGAL PROCEEDINGS.

     The Company is involved from time to time in legal
proceedings incidental to the ordinary course of its business.
Such proceedings include claims brought by and against the
Company or its subsidiaries including claims seeking substantial
compensatory and punitive damages.  Such claims arise from
routine commercial disputes as well as incidents resulting in
bodily injury and damage to property.  The Company believes that
the potential liabilities in all of the bodily injury and
property damage actions are adequately insured and none of the
other actions are expected to have any material adverse effect on
the Company or its subsidiaries.

     Shareholder Suits

1.   Fry, et al. v. UAL Corp.  --  On February 21, 1990, a class
action complaint was filed in the U.S. District Court for the
Northern District of Illinois, Eastern Division, by several UAL
shareholders, on behalf of the class of UAL shareholders who sold
puts or common stock from October 29, 1987 through December 8,
1987.  The complaint alleges that UAL committed common law fraud
and violated Section 10(b) of the Exchange Act and Rule 10b-5
promulgated thereunder and the Illinois Deceptive Trade Practices
Act by falsely announcing that it intended to distribute proceeds
of the sales of non-core businesses as a special dividend, when
in fact it was negotiating a cash tender offer for the buyback of
shares.  Plaintiffs seek unspecified damages, plus fees and other
costs.  UAL filed a motion for summary judgment which is fully
briefed.  No trial date has been set.

2.   Kaufman v. UAL Corporation and Krasner, et al. v. UAL  --
The Company, together with certain officers and directors of the
Company and the Air Line Pilots Association, International and
the International Association of Machinists and Aerospace
Workers, are parties to two stockholder actions filed 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 plan of Recapitalization of the Company, on which
common stockholders voted on July 12, 1994, was false and
misleading, and further alleged that the proposed plan of
Recapitalization failed to maximize shareholder value.  The
Amended Complaint sought, among other things, a preliminary and
permanent injunction against consummation of the Plan of
Recapitalization.

     On June 21, 1994, plaintiffs filed a motion for preliminary
injunction to enjoin consummation of the Recapitalization.  On
July 1, 1994, the Company and the plaintiffs entered into a
memorandum of understanding relating to a settlement of the
Shareholder Actions.  On January 24, 1995, following due notice
to class member shareholders, the court, after a fairness hearing
approved the settlement, dismissed the complaint and awarded
plaintiffs' counsel $5.1 million in costs and attorneys' fees.

     Noise Proceedings

     United may be affected by legal proceedings brought by
owners of property located near certain airports.  Plaintiffs
generally seek to enjoin certain aircraft operations and/or to
obtain damages against airport operators and air carriers as a
result of alleged aircraft noise or air pollution.  Any liability
or injunctive relief imposed against airport operations or air
carriers could result in higher costs to United and other air
carriers.

     The ultimate disposition of the matters discussed in Item 3
hereof, and other claims affecting the Company, are not expected
to have a material adverse effect on the Company's financial
condition or results of operations.


                                

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     No matter was submitted to a vote of security holders of the
Company during the fourth quarter of 1994.


EXECUTIVE OFFICERS OF THE REGISTRANT

     Information regarding the executive officers of the Company is as
follows:

                              Office
                              Held
Name                     Age  Since   Position and Office

Gerald Greenwald         59   1994    Chairman and Chief
                                      Executive Officer

John A. Edwardson        45   1994    President

Stuart I. Oran           44   1994    Executive Vice
                                      President - Corporate
                                      Affairs and General Counsel

Joseph R. O'Gorman, Jr.  51   1991    Executive Vice President

James M. Guyette         50   1988    Executive Vice President

Paul G. George           43   1988    Senior Vice President -
                                      People of United  Air Lines,
                                      Inc. ("United")

Douglas A. Hacker        39   1994    Senior Vice President - Finance


     Mr. Greenwald has been Chairman and Chief Executive Officer
of the Company and United since July 12, 1994.  He previously
served as Chairman of Tatra Truck Company, Czech Republic 
(a truck manufacturer) from March 1993 until July 1994.  
Mr. Greenwald served as Vice Chairman of the Chrysler Corporation 
(an automotive manufacturer) from 1989 to 1990.  Prior thereto, 
he was employed by Chrysler for approximately 10 years
in a number of senior executive positions.  In 1990, Mr.
Greenwald was selected to serve as chief executive officer of
United Employee Acquisition Corp. in connection with the proposed
1990 employee acquisition of the Company.  Following the
termination of that proposed transaction, Mr. Greenwald served as
a managing director of Dillon Read & Co. Inc. (an investment
banking firm) in 1991 and as president of Olympia & York
Developments Limited (a real estate development company that was
in the process of a financial restructuring at the time Mr.
Greenwald agreed to serve as president and certain subsidiaries
of which filed for protection under federal bankruptcy laws in
connection with such restructuring) from April 1992 until March
1993.

     Mr. Edwardson has been President of the Company and United
and a member of the board of directors since July 12, 1994.
Prior to joining the Company, he served as Executive Vice
President and Chief Financial Officer of Ameritech Corporation 
(a telecommunications company) from June 1991 to July 1994. 
In July 1990, Mr. Edwardson was elected to serve as Chief Financial 
Officer of United Employee Acquisition Corp. in connection with 
the proposed 1990 employee acquisition of the Company.  Previously, 
he served as Executive Vice President and Chief Financial Officer of 
Imcera Group, Inc. (a chemical and mineral company), where he was 
responsible for strategic planning, human resources, and legal 
and financial functions from November 1988 to July 1990.  
Mr. Edwardson also served as Executive Vice President and
Chief Financial Officer of Northwest Airlines, Inc. (an air carrier)
from 1985 to 1988.

     Mr. Oran has been Executive Vice President - Corporate
Affairs and General Counsel of the Company and United since July
12, 1994.  Prior to joining the Company, he was a corporate
partner with Paul, Weiss, Rifkind, Wharton and Garrison, a law
firm he joined in 1974.

     Mr. O'Gorman has been Executive Vice President of the
Company since February 18, 1991.  He has been Executive Vice
President - Operations of United since April 30, 1992.  He had
served as Executive Vice President - Flight Services of United
since February 25, 1991.  Previously, Mr. O'Gorman served as
Executive Vice President - Operations of USAir Group (an air carrier)
from August 1990 until February 1991.  He served as United's Senior 
Vice President - Maintenance Operations from June 1988 to August 1990.

     Mr. Guyette has been Executive Vice President of the Company
since January 28, 1988.  He has been Executive Vice President -
Marketing and Planning of United since April 30, 1992.

     Mr. George has been Senior Vice President - People of United
since April 11, 1988.

     Mr. Hacker has been Senior Vice President - Finance and
chief financial officer of the Company since July 12, 1994.  He
has been Senior Vice President - Finance of United since March 8,
1993.  Prior to joining United, Mr. Hacker served in various
senior management positions at American Airlines, Inc. (an air carrier)
since July 1987 including Vice President - Corporate and Fleet Planning,
Vice President - Corporate Services, Vice President and Treasurer
and Vice President - Corporate Finance and Development.

          There are no family relationships among the executive
officers of the Company.  The executive officers of the Company
serve at the discretion of the board of directors.


                                
                                

                             PART II


ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
        STOCKHOLDER MATTERS.

     The Company's Common Stock, is traded principally on the New
York Stock Exchange (the "NYSE") under the symbol UAL, and are
also listed on the Chicago Stock Exchange and the Pacific Stock
Exchange.  The following sets forth for the periods indicated the
high and low sales prices per share of the Company's old common
stock outstanding immediately prior to the Recapitalization and
of the Common Stock on the NYSE Composite Tape.

OLD COMMON STOCK:
                          High                Low
  1993:
       1st quarter       $132 1/4            $110 3/4
       2nd quarter        149 3/4             118
       3rd quarter        150 1/2             121 5/8
       4th quarter        155 1/2             135 7/8


  1994:
       1st quarter        150                 123 3/4
       2nd quarter        130 1/2             115 1/8
       3rd quarter        130 1/2             125 1/2
        (through July 12)

COMMON STOCK:

  1994:
       3rd quarter        105                 86 3/4
        (from July 13)
       4th quarter        96 7/8              83 1/8

     The Recapitalization was consummated on July 12, 1994.  In
connection with the Recapitalization, holders of the Company's
old common stock received one-half of a share of Common Stock and
$84.81 for each share of old common stock.  As a result of the
foregoing, the price per share of old common stock is not
comparable to the price per share of the Common Stock.

     No dividends have been declared on the Company's common
stock since 1987.  The payment of any future dividends on the
Common Stock and the amount thereof will be determined by the
Board of Directors of the Company in light of earnings, the
financial condition of the Company and other relevant factors.
At March 1, 1995, based on reports by the Company's transfer
agent for the Company's Common Stock, there were 15,779 common
stockholders of record (which includes 4,949 holders of
record of the Company's old common stock, $5 par value, who have
not tendered their stock certificates as the result of the
Recapitalization).


ITEM 6. SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                          Year Ended December 31            
                                1994      1993      1992     1991     1990  
                                      (In Millions, Except Per Share)
<S>                            <C>       <C>       <C>      <C>      <C>
Operating revenues             $13,950   $13,325   $11,853  $10,706  $10,296
Earnings (loss) before
  extraordinary item and
  cumulative effect of
  accounting changes                77       (31)     (417)   (332)      94
Extraordinary loss on early
  extinguishment of debt,
  net of tax                        -        (19)       -       -        - 
Cumulative effect of
  accounting changes               (26)       -       (540)     -        - 
Net earnings (loss)                 51       (50)     (957)   (332)      94
Per share amounts:
  Earnings (loss) before
    extraordinary item and
    cumulative effect of
    accounting changes            0.76     (2.64)   (17.34) (14.31)    4.33
  Extraordinary loss on early
    extinguishment of debt          -      (0.76)       -       -        - 
  Cumulative effect of
    accounting changes           (1.37)       -     (22.41)     -        - 
  Net earnings (loss)            (0.61)    (3.40)   (39.75) (14.31)    4.33
Total assets at year end        11,764    12,840    12,257   9,876    7,983
Long-term debt and capital
  lease obligations, including
  current portion, and
  redeemable preferred stock
  at year end                    4,077     3,735     3,783   2,533    1,329
</TABLE>






ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
          RESULTS OF OPERATIONS


EMPLOYEE INVESTMENT TRANSACTION AND RECAPITALIZATION

      On July 12, 1994, the shareholders of UAL Corporation ("UAL") approved 
a plan of recapitalization that provides an approximately 55% equity and 
voting interest in UAL to certain employees of United Air Lines, Inc. 
("United") in exchange for wage concessions and work-rule changes.  The 
employees' equity interest will be allocated to individual employee accounts 
through the year 2000 under Employee Stock Ownership Plans ("ESOPs") which 
were created as a part of the recapitalization.  Since the ESOP shares will 
be allocated over time, the current ownership interest held by employees is 
substantially less than 55%.  The entire 55% ESOP voting interest is 
currently exercisable, which generally will be voted by the ESOP trustee at 
the direction of, and on behalf of, the employees participating in the 
ESOPs.  The employee interest may increase to up to 63%, depending on the 
average market value of UAL common stock in the year after the transaction 
closed.  Based on the average market value of UAL common stock through 
February 23, 1995, the market value of UAL common stock for the remainder of 
the measuring period would have to average at least $204 for any adjustment 
to be made in the ESOP percentage interest.  Pursuant to the terms of the 
plan of recapitalization, holders of old UAL common stock received 
approximately $2.1 billion in cash and the remaining 45% (subject to a 
possible reduction to not less than 37%) of the equity in the form of new 
common stock.  The conversion of certain convertible securities and the 
exercise of certain stock options could result in additional cash 
distributions of up to $428 million.  Distributions on account of stock 
option exercises would be reduced by cash proceeds received on the exercise 
of the options.  In connection with the recapitalization, United issued $370 
million of 10.67% debentures due in 2004 and $371 million of 11.21% 
debentures due in 2014 and UAL issued Series B 12 1/4% preferred stock with 
an aggregate liquidation preference of $410 million.  Approximately $169 
million of pretax costs were incurred in connection with the 
recapitalization, including transaction costs and severance payments to 
certain former United employees.

      The employee investment transaction has put in place a lower cost 
structure which allows United to compete more effectively against low-cost 
carriers and improve UAL's long-term financial viability.  The transaction 
also facilitated the creation of a low-cost short-haul operation, Shuttle by 
United ("Shuttle"), which began operating on October 1, 1994.  This service 
achieves lower costs through special work rules and wage rates for pilots, 
high station and aircraft utilization and minimal service amenities.  Based 
on its initial operations, the Shuttle has been well accepted by the 
marketplace and its costs are within expectations.  As a result, United 
expects the Shuttle will be able to sustain a competitive presence in the 
short-haul markets against low cost competitors.

      As a result of the recapitalization, UAL's capital structure became 
more highly leveraged, as UAL's equity decreased by approximately $1.7 
billion and debt increased $741 million at the time of the transaction.  
With the increase in debt and reduction in equity resulting from the 
recapitalization, UAL's exposure to certain industry risks could be greater 
than might have been the case prior to the recapitalization.  In addition, 
the transaction resulted in new labor agreements for certain employee groups 
and a new corporate governance structure, which was designed to achieve 
balance between the various employee-owner groups and public shareholders.  
The new labor agreements and governance structure could inhibit management's 
ability to alter strategy in a volatile, competitive industry by restricting 
certain operating and financing activities, including the sale of assets and 
the issuance of equity securities and the ability to furlough employees.  
UAL's ability to react to competition may be hampered further by the fixed 
long-term nature of these various agreements.  The success of the 
recapitalization is dependent upon a number of factors, including the state 
of the competitive environment in the airline industry, competitive 
responses to United's efforts, United's ability to achieve enduring cost 
savings through productivity improvements and the renegotiation of labor 
agreements at the end of the investment period.

      The employee investment transaction and recapitalization had an 
initial adverse effect on UAL's cash position as a result of the cash 
consideration paid to holders of old UAL common stock and certain other 
recapitalization costs.  However, the transaction is expected to result in 
an improvement to cash flow through the term of the employee investment.  
This improvement is expected to result from the employee concessions which 
reduce cash expenses, partially offset by the additional interest expense on 
the debentures, dividends on the preferred stock and foregone interest on 
the cash consideration distributed to holders of old UAL common stock.

      The employee investment transaction will reduce UAL's cash operating 
expenses due to wage and benefit reductions and work-rule changes.  These 
cash expense reductions will be offset by non-cash compensation charges for 
stock periodically committed to be released to employees under the ESOPs, 
additional interest expense on the debentures and foregone interest on the 
cash distributed to shareholders.  The amount of the non-cash compensation 
expense cannot be predicted, because it is based on the future fair value of 
UAL's stock.

      The ESOPs consist of two tax-qualified plans, as defined under the 
Internal Revenue Code, and one plan that is not tax qualified.  Tax 
deductions related to the ESOPs are partially based on factors unrelated to 
the future fair value of UAL's stock.  Accordingly, it is anticipated that 
tax provisions (credits) in future periods could be impacted by permanent 
differences between tax deductions and book expenses related to the ESOPs.  
Additionally, timing differences between tax deductions and book expenses 
related to the ESOPs could impact the balance of the net deferred tax asset 
in the future.


LIQUIDITY AND CAPITAL RESOURCES

Liquidity -

      UAL's total of cash and cash equivalents and short-term investments 
was $1.532 billion at December 31, 1994, compared to $1.828 billion at 
December 31, 1993.  Cash flows during the year were considerable.  The most 
significant was the distribution of $2.1 billion to holders of old UAL 
common stock under the recapitalization, which was partially funded by net 
proceeds of $735 million on the issuance of debentures and $400 million on 
the issuance of Series B preferred stock.  Subsequent to issuance, UAL 
repurchased $87 million of the Series B preferred stock to be held in 
treasury.  Other financing activities included principal payments under debt 
and capital lease obligations of $305 million and $87 million, respectively, 
and a $46 million reduction of short-term borrowings.  Cash flows from 
operating activities amounted to $1.334 billion.  Investing activities 
resulted in cash flows of $198 million.

      In 1994, United took delivery of 16 A320 aircraft and two B747 
aircraft.  With the exception of one B747, these aircraft were acquired 
under operating leases.  Property additions, including the B747 and spare 
parts, amounted to $636 million.  Property dispositions, including the sale 
and leaseback of the B747 aircraft purchased in 1994, five B737 aircraft and 
one B757 aircraft, resulted in proceeds of $432 million.

      As of December 31, 1994, UAL had a working capital deficit of $1.714 
billion as compared to $1.183 billion at December 31, 1993.  Historically, 
UAL has operated with a working capital deficit and, as in the past, UAL 
expects to meet all of its obligations as they become due.

      During 1993, UAL's balance of cash and cash equivalents decreased $85 
million while short-term investments increased $430 million.  Operating 
activities resulted in cash flows of $858 million, which more than offset 
cash used for net property additions and financing activities.  Investing 
activities, including the short-term investment increase and net property 
additions, used $740 million.  Property additions amounted to $1.496 
billion, including the purchase of 34 aircraft, and property dispositions 
resulted in proceeds of $1.165 billion, including the sale and leaseback of 
18 aircraft.  In all, 10 B737 aircraft, 16 B757 aircraft, four B747 
aircraft, eight B767 aircraft and five A320 aircraft were acquired, 
including purchases and leases.  Financing activities used $203 million.  
Reductions in short-term borrowings, capital lease obligations and long-term 
debt, including the early extinguishment of $500 million of senior 
subordinated notes, more than offset cash proceeds from the issuance of 
Series A preferred stock and long-term debt. 

      Operating activities in 1992 generated cash flows of $575 million, 
which more than offset cash used for net additions to property, resulting in 
a $306 million increase in cash, cash equivalents and short-term 
investments.  During 1992, $2.519 billion was spent on property 
additions, principally aircraft.  United acquired 25 B737 aircraft, 25 B757 
aircraft, 10 B767 aircraft and six B747 aircraft in 1992.  Of these, 18 
aircraft were purchased, 38 were purchased and then sold and leased back and 
10 were acquired in capital lease transactions.  Property dispositions 
provided cash proceeds of $2.367 billion.  In 1992, United also acquired 
certain Latin American route authorities and other related assets from Pan 
American World Airways, Inc.

Capital Commitments -

      At December 31, 1994, commitments for the purchase of property and 
equipment, principally aircraft, approximated $3.9 billion, after deducting 
advance payments.  An estimated $1.2 billion will be spent in 1995, $0.7 
billion in 1996, $1.3 billion in 1997, $0.5 billion in 1998 and $0.2 billion 
in 1999 and thereafter.  The major commitments are for the purchase of 
thirty-four B777 aircraft which are expected to be delivered between 1995 
and 1999.

      In addition to the B777 order, United has arrangements with Airbus 
Industrie and International Aero Engines to lease 29 A320 aircraft, which 
are scheduled for delivery through 1998.  At December 31, 1994, United also 
had options for an additional 162 B737 aircraft, 39 B757 aircraft, 34 B777 
aircraft, 49 B747 aircraft, 8 B767 aircraft and 50 A320 aircraft.  Under the 
terms of certain of these options which are exercisable during the period 
1995 through 1997, United would forfeit significant deposits on such options 
it does not exercise.  United continually reviews its fleet to determine 
whether aircraft acquisitions will be used to expand the fleet or to replace 
older aircraft, depending on market and regulatory conditions at the time of 
delivery.

Capital Resources -

      Funds necessary to finance aircraft acquisitions are expected to be 
obtained from internally generated funds, irrevocable external financing 
arrangements or other external sources.

      At December 31, 1994, UAL and United had an effective shelf 
registration statement on file with the Securities and Exchange Commission 
to offer up to $1.035 billion of securities, including secured and unsecured 
debt, equipment trust and pass through certificates, equity or a combination 
thereof.  UAL's ability to issue equity securities is limited by its 
certificate of incorporation, which was restated in connection with the 
recapitalization.  

      United's senior unsecured debt is rated BB by Standard and Poor's ("S 
& P") and Baa3 by Moody's Investors Service Inc. ("Moody's").  UAL's Series 
A and Series B preferred stocks are rated B+ by S & P and ba3 by Moody's.

      On February 3, 1995, UAL filed a registration statement with the 
Securities and Exchange Commission offering to exchange up to $600 million 
aggregate principal amount of convertible subordinated debentures, due 2025, 
for up to all shares of the outstanding Series A cumulative 6.25% 
convertible preferred stock.  Each $1,000 principal amount of debentures 
issued would be convertible into a combination of cash in the amount of 
$541.90 and approximately 3.192 shares of UAL common stock (equivalent to a 
conversion price of $143.50 per share of common stock).  To the extent that 
shares of Series A preferred stock are exchanged for the debentures, UAL's 
shareholders' equity will be reduced on a net basis by the aggregate fair 
value of the debentures issued.  A reduction in shareholders' equity will 
reduce surplus as defined under Delaware General Corporation Law ("DGCL").  
DGCL requires that dividends on outstanding capital stock may only be made 
from surplus or the net profits of the Company for the fiscal year in which 
the dividend is declared and/or the preceding fiscal year.

RESULTS OF OPERATIONS

      The results of operations in the airline business historically 
fluctuate significantly in response to general economic conditions.  This is 
because small fluctuations in yield (passenger revenue per revenue passenger 
mile) and cost per available seat mile can have a significant effect on 
operating results.  UAL anticipates industrywide fare levels, increasing 
low-cost competition, general economic conditions, fuel costs, international 
governmental policies and other factors will continue to affect its 
operating results.  

Summary of Results and Impact of Recapitalization -

      UAL's results of operations improved in 1994 as compared to 1993.  In 
1994, UAL recorded net earnings of $51 million, representing a loss per 
share of $0.61 after preferred stock dividends, compared to a 1993 net loss 
of $50 million, or $3.40 per share after preferred stock dividends.  
Included in 1994 were $169 million of pretax expenses incurred in connection 
with the recapitalization, of which $48 million were recorded in operating 
expenses.  The 1994 results also include an after tax charge of $26 million 
($1.37 per share) for the cumulative effect of adopting Statement of 
Financial Accounting Standards No. 112, "Employers' Accounting for 
Postemployment Benefits," which UAL adopted effective January 1, 1994.  The 
1993 results include an extraordinary loss of $19 million, $0.76 per share, 
on the early extinguishment of debt. 

      In connection with the recapitalization, each share of old common 
stock was converted to one half share of new common stock (and cash in lieu 
of fractional shares) and $84.81 in cash.  As a result, the number of 
outstanding shares was reduced proportionately.  Accordingly, the weighted 
average shares in the earnings per share calculations are based on the 
number of old common shares outstanding prior to the recapitalization and 
the reduced number of new common shares outstanding subsequent to the 
transaction.  Thus, a direct comparison of the earnings per share in 1994 
versus 1993 is not meaningful.  The earnings per share calculations 
subsequent to the transaction also include those ESOP shares which have been 
committed to be released to employees, if doing so is dilutive.  

      Management believes that a more complete understanding of UAL's 
results can be gained by viewing them on a pro forma, "fully distributed" 
basis.  This approach considers all ESOP shares which will ultimately be 
distributed to employees throughout the ESOP (rather than just the shares 
committed to be released) to be immediately outstanding and thus fully 
distributed.  Consistent with this method, the ESOP compensation expense and 
the one-time costs associated with the completion of the transaction, are 
excluded from fully distributed expenses.  On a fully distributed basis, 
UAL's net earnings for the 1994 third and fourth quarters would have been 
$233 million ($6.86 per share) and $67 million ($1.47 per share), 
respectively.  UAL's net earnings for the 1994 third and fourth quarters, as 
reported under generally accepted accounting principles, were $82 million 
($4.21 per share fully diluted) and $11 million (loss of $0.98 per share), 
respectively.

Other Factors Affecting Comparability -

      In 1994, United began recording certain air transportation price 
adjustments, which were previously recorded as commissions, as adjustments 
to revenue.  Operating revenue and expense amounts and related operating 
statistics for 1993 and prior periods have been adjusted to conform with the 
current presentation.

      Prior to the September 1993 merger of the Covia Partnership ("Covia") 
and Galileo Ltd., United's investments in these companies were carried on 
the equity basis.  United now owns 77% of Apollo Travel Services Partnership 
("ATS"), one of the companies formed in the merger, and its accounts are 
consolidated with those of United.  As a result, United's consolidated 
operating revenues and expenses have increased.  In 1993, UAL also 
transferred the operations of Air Wisconsin, Inc. to other parties, the 
effect of which was to reduce UAL's gross operating revenues and expenses.  
In addition, the sales of flight kitchen assets in late 1993 and early 1994 
had the effect of reducing United's salaries and related costs and 
increasing, to a lesser degree, food and beverage expense.  These changes 
have affected the 1994 comparisons to 1993 as indicated in the discussion 
which follows.

1994 Compared with 1993 - 

      Operating Revenues.   Operating revenues increased $625 million (5%).  
United's revenue per available seat mile increased 4% to 9.12 cents.  
Passenger revenues increased $337 million (3%) due primarily to a 7% 
increase in United's revenue passenger miles, partially offset by a 3% 
decrease in yield to 11.31 cents.  Domestic revenue passenger miles 
increased by 4.1 billion (7%) while international increased by 2.9 billion 
(8%).  Available seat miles increased 1% systemwide, as increases of 6% in 
the Pacific and 2% in the Atlantic were partially offset by decreases of 1% 
on domestic routes and 3% in Latin America.  As a result, United's system 
passenger load factor increased 4.0 points to 71.2%.  In addition, Air 
Wisconsin, Inc., which accounted for $159 million of passenger revenues in 
1993, accounted for no passenger revenue in 1994 as previously discussed.

      Cargo revenues increased $26 million (4%), due to increased freight 
revenues partially offset by decreased mail revenues.  Freight and mail 
revenue ton miles increased 3%; however, freight yield increased 5% while 
mail yield decreased 8%.  Other operating revenues increased $262 million 
(37%) primarily as a result of the consolidation of ATS, revenues resulting 
from the lease of Air Wisconsin, Inc. assets to other parties and an 
increase in fuel sales.

      Operating Expenses.   Operating expenses increased $367 million (3%).  
United's cost per available seat mile also increased 3% from 8.54 cents to 
8.79 cents, which includes certain one-time costs relating to the 
recapitalization and ESOP compensation expense.  Without these costs, 
United's cost per available seat mile would have been 8.64 cents.  Food and 
beverage costs increased $162 million (51%) due to the new catering 
arrangements resulting from the flight kitchen sales as discussed above.  
Commissions increased $96 million (7%) due principally to increased 
commissionable revenues.  An increase of $50 million (3%) in rentals and 
landing fees reflects rent associated with a higher number of aircraft on 
operating leases, including new aircraft acquired in the past year.  Aircraft 
maintenance increased $25 million (6%) as a result of increased 
vendor-provided maintenance due to the timing of maintenance cycles.  Other 
operating expenses increased $169 million (20%) due to the consolidation of 
ATS, depreciation in 1994 on Air Wisconsin, Inc. assets leased to others and 
higher fuel sales.

      Aircraft fuel expense decreased $148 million (9%), due to an 8% 
decrease in United's average price per gallon of fuel to 58.8 cents and a 
slight decrease in United's consumption.  Salaries and related costs 
decreased $81 million (2%) primarily due to lower wage rates for employees 
participating in the ESOPs and a lower number of employees as a result of 
the flight kitchen sales, partially offset by higher average wage rates for 
other employee groups, higher costs associated with medical benefits and $48 
million of one-time costs related to the recapitalization.  Depreciation and 
amortization decreased $39 million (5%) due principally to the transfer of 
Air Wisconsin, Inc. assets to other parties and the subsequent 
classification of depreciation on those assets in other expenses.  Purchased 
services decreased $36 million (4%), as certain services, principally 
computer reservations and communications, have been provided by ATS since 
the time of the merger.

      Other Income and Expense.   Other expense amounted to $350 million in 
1994 compared to $310 million in 1993.  Interest expense increased $14 
million (4%) due to higher average interest rates resulting from the 
debentures issued in July 1994, partially offset by the benefit of the 
extinguishment of $500 million of subordinated debt in 1993.  Interest 
capitalized decreased $10 million (20%) as a result of lower average advance 
payments on new aircraft and lower capitalized interest rates.  Interest 
income decreased $13 million (13%) due primarily to interest received in 
1993 in connection with the final settlement of certain pension benefits.  
United's equity in results of affiliates changed from a loss of $30 million 
in 1993 to earnings of $20 million in 1994 due primarily to a charge 
recorded by Galileo International in 1993 for the cost of eliminating 
duplicate facilities and operations after the merger of Covia and Galileo 
Ltd.  Included in "Miscellaneous, net" in 1994 were charges of $121 million 
for fees and costs incurred in connection with the employee investment 
transaction and recapitalization, a $22 million charge for minority 
interests in ATS and foreign exchange gains of $15 million.  Included in 
1993 was a $59 million charge to reduce the net book value of 15 DC-10 
aircraft to estimated realizable value, a $17 million gain resulting from 
the final settlement of certain pension benefits and foreign exchange losses 
of $20 million.

      Income Tax Provision.   The income tax provision for 1994 was 
significantly impacted by the nondeductibility of certain recapitalization 
costs and the statutory change in the deductibility of other expenses.

1993 Compared with 1992 -

      Operating Revenues.   Operating revenues increased $1.472 billion 
(12%).  Passenger revenues increased $1.280 billion (12%) due to a 9% 
increase in United's revenue passenger miles and a 3% increase in yield to 
11.61 cents.  United's domestic revenue passenger miles increased 6% on an 
increase of 8% in domestic available seat miles, resulting in a decrease of 
1.0 point in domestic passenger load factor to 65.2%.  International revenue 
passenger miles increased 14%.  Passenger traffic increased in substantially 
all international markets, especially in Latin America, where United began 
service in the first quarter of 1992.  Passenger load factors increased in 
Latin America, the Atlantic and the Pacific.  On a system basis, United's 
available seat miles increased 10% and passenger load factor decreased 0.2 
points to 67.2%.

      Cargo revenues increased $54 million (9%), due to increases of $31 
million in freight revenues and $23 million in mail revenues.  The freight 
revenue increase reflects volume increases largely attributable to increased 
international operations.  Contract services and other revenues increased 
$138 million (24%) primarily as a result of revenues generated by ATS in the 
1993 period subsequent to the merger.

      Operating Expenses.   Operating expenses increased $671 million (5%).  
United's cost per available seat mile decreased 4% to 8.54 cents.  The 
decrease in unit cost was largely due to the implementation of a cost 
reduction program in early 1993.  Salaries and related costs increased $198 
million (4%) primarily due to higher average wage rates and higher costs 
associated with pensions and health insurance.  Rentals and landing fees 
increased $163 million (12%) primarily reflecting rent associated with a 
larger number of aircraft on operating leases.  Commissions increased $136 
million (11%) due to increased revenues and slightly higher cargo commission 
rates.  Aircraft maintenance increased $55 million (17%) due principally to 
higher outside maintenance costs.  Purchased services increased $47 million 
(5%) due principally to higher computer reservations fees and higher costs 
associated with international operations, such as communications, navigation 
charges and security.  Depreciation and amortization increased $38 million 
(5%) due principally to newly acquired aircraft.  Aircraft fuel expense 
increased $34 million, as a 7% increase in fuel consumption was partially 
offset by a 4% decrease in the average price per gallon of fuel to 63.6 
cents.  Other operating expenses increased $85 million (11%) due principally 
to the consolidation of ATS after the merger.  Advertising and promotion 
decreased $52 million (24%) and food and beverages decreased $25 million 
(7%) due to cost reduction efforts.

      Other Income and Expense.   Other expense amounted to $310 million in 
1993 compared to $118 million in 1992.  Interest expense increased $30 
million due primarily to increased debt and capital lease obligations 
incurred in connection with aircraft financings.  Interest capitalized 
decreased $41 million (45%) due to lower advance payments on new aircraft.  
United's equity in the results of affiliates shifted from income of $42 
million in 1992, representing United's share of Covia earnings, to losses of 
$30 million in 1993, primarily due to a charge recorded by Galileo 
International for the cost of eliminating duplicate facilities and 
operations after the merger of Covia and Galileo Ltd.  Included in 
"Miscellaneous, net" were foreign exchange losses of $20 million in 1993 
compared to gains of $2 million in 1992.  Also included in 1993 was a charge 
of $59 million to reduce the net book value of 15 DC-10 aircraft to 
estimated net realizable value and a $17 million gain resulting from the 
final settlement for overpayment of annuities purchased in 1985 to cover 
certain vested pension benefits.  Interest income increased $29 million due 
principally to interest received in connection with the same settlement.  In 
1992, "Miscellaneous, net" also included gains on disposition of property of 
$32 million, a charge of $13 million to record the cash settlement of class 
action claims resulting from litigation relating to the use of airline fare 
data and charges of $8 million related to other litigation.

OTHER INFORMATION

Deferred Tax Asset -

      UAL's consolidated balance sheet at December 31, 1994 includes a net 
cumulative deferred tax asset of $631 million, compared to $714 million at 
December 31, 1993.  The net deferred tax asset is composed of approximately 
$1.9 billion of deferred tax assets and approximately $1.3 billion of 
deferred tax liabilities.  The deferred tax assets include, among other 
things, $537 million related to obligations for postretirement and other 
employee benefits, $472 million related to gains on sales and leasebacks, 
$262 million related to alternative minimum tax ("AMT") credit carryforwards 
and $58 million of federal and state net operating loss ("NOL") 
carryforwards.  The AMT credit carryforwards do not expire; the federal NOL 
carryforwards begin to expire in 2006 if not utilized prior to that time.  

      The majority of the deferred tax assets will be realized through 
reversals of existing deferred tax liabilities with similar reversal 
patterns.  To realize the benefits of the remaining deferred tax assets 
relating to temporary differences, UAL needs to generate approximately $1.2 
billion in future taxable income.

      Although United experienced book and tax losses in both 1993 and 1992, 
1994 resulted in book and taxable income.

<TABLE>
<CAPTION>

Following is a summary of UAL's pretax book income and taxable income, and 
the significant differences between them, for the last three years (in 
millions):
                                        1994        1993        1992 
<S>                                    <C>         <C>         <C>
Pretax book income (loss)              $ 171       $ (47)      $(656)
  Gains on sale and leasebacks            79          15         304 
  Depreciation, capitalized interest
    and transfers of tax benefits       (300)       (348)       (319)
  Rent expense                           122         142         127  
  Nondeductible employee meals            57          22          22
  Pension expense                        (46)       (156)        (95)
  Other employee benefits                 91          37          36 
  Gains on asset dispositions             (4)        (34)         (3)
  ESOP transaction costs                  55          -           - 
  Other, net                              19          54          33 
Taxable income (loss)                  $ 244       $(315)      $(551)
                                                   
</TABLE>

     While the losses in 1992 and 1993 were largely attributable to events 
beyond management's control, including the unanticipated duration of the 
recession in both the U. S. and other areas of the world and the 
proliferation of numerous low-cost air carriers, UAL has taken several steps 
to reduce costs and improve profitability.  Most notably, the employee 
investment transaction and recapitalization was partially responsible for 
UAL's improved operating results in 1994 versus 1993, and is expected to 
continue to improve the financial stability and profitability of the 
company.  The recapitalization put in place a lower cost structure which is 
designed to allow United to compete effectively against low-cost carriers.  
The transaction also facilitated the creation of a low-cost short-haul 
operation, Shuttle by United, the benefits of which are expected to increase 
as it expands into additional markets.  Other actions taken by UAL to 
improve profitability include the discontinuance of service at 15 
unprofitable domestic and international stations and the planned reduction 
of capacity in 1995 on certain unprofitable routes such as those to Hawaii.  
Resources are expected to be re-allocated to areas that currently benefit 
the company the most - the Shuttle and the expanding Denver hub.

     Severe competition in the airline industry, particularly by new entry 
and low-fare carriers, and the general economic outlook could continue to 
negatively affect United's operating results.  However, the benefits 
expected to be derived from the recapitalization and the new era of employee 
ownership, should further improve UAL's financial results.

     UAL's ability to generate sufficient amounts of taxable income from 
future operations is dependent upon numerous factors, including general 
economic conditions, inflation, oil prices, the state of the industry and 
other factors beyond management's control.  There can be no assurances that 
UAL will meet its expectation of future taxable income.  However, based on 
the above factors, including the extended period over which postretirement 
benefits will be recognized, and the indefinite carryforward period for AMT 
credits, management believes it is more likely than not that future taxable 
income will be sufficient to utilize the cumulative deferred tax assets at 
December 31, 1994.

Contingencies -

     United has been named as a Potentially Responsible Party at certain 
Environmental Protection Agency ("EPA") cleanup sites which have been 
designated as Superfund Sites.  At sites where the EPA has commenced 
remedial litigation, potential liability is joint and several.  United's 
alleged proportionate contributions at the sites are minimal.  Additionally, 
United has participated and is participating in remediation actions at 
certain other sites, primarily airports.  The estimated cost of these 
actions is accrued when it is determined that it is probable that United is 
liable.  Such accruals have not been material.  Environmental regulations 
and remediation processes are subject to future change, and determining the 
actual cost of remediation will require further investigation and 
remediation experience.  Therefore, the ultimate cost cannot be determined 
at this time.  However, while such cost may vary from United's current 
estimate, United believes the difference between its accrued reserve and the 
ultimate liability will not be material.

     UAL has certain other contingencies resulting from litigation and 
claims incident to the ordinary course of business.  Management believes, 
after considering a number of factors, including (but not limited to) the 
views of legal counsel, the nature of such contingencies and prior 
experience, that the ultimate disposition of these contingencies is not 
likely to materially affect UAL's financial condition, operating results or 
liquidity.

Energy Tax - 

     The Omnibus Budget Reconciliation Act of 1993 signed into law on August 
10, 1993, imposes a 4.3 cent per gallon tax on commercial aviation jet fuel 
purchased for use in domestic operations.  This new fuel tax is scheduled to 
become effective October 1, 1995, and continue until October 1, 1998.  Based 
on United's 1994 domestic fuel consumption of 1.7 billion gallons, the new 
fuel tax, when effective, is expected to increase United's operating 
expenses by approximately $75 million annually.  United, through the Air 
Transportation Association, is actively lobbying for repeal of this tax.

Foreign Currency Transactions -

     United generates revenues and incurs expenses in numerous foreign 
currencies; however, United mitigates its exposure to foreign exchange rate 
fluctuations by converting excess local currencies generated to U.S. 
dollars.  In addition, United has exposure to transaction gains and losses 
resulting from rate fluctuation.  The foreign exchange gains and losses 
recorded by UAL result from the impact of exchange rate changes on foreign 
currency-denominated assets and liabilities, primarily Japanese 
yen-denominated balances.  To the extent such balances are predictable, 
United attempts to minimize transaction gains and losses by investing in 
yen-denominated time deposits to offset the impact of rate changes on 
certain liabilities.  In addition, United entered into a foreign currency 
swap contract in 1994 to reduce exposure to currency fluctuations in 
connection with other long-term yen-denominated obligations.  Foreign 
currency gains and losses on the swap contract are included in income 
currently, exactly offsetting the foreign currency losses and gains on the 
obligations being hedged.

Changes Expected to Impact 1995 -

     In October 1994, United announced that it will discontinue service to 
15 unprofitable destinations by early 1995 and will reallocate resources 
elsewhere, including the Shuttle.  United will incur certain route 
restructuring costs, which are expected to be immaterial.  However, this 
restructuring is expected to result in improvements to operating earnings of 
approximately $25 million annually.  Also in October 1994, UAL announced an 
agreement to sell for $119 million ten Dash 8 aircraft and spare parts owned 
by Air Wisconsin, Inc. to Mesa Airlines, and United agreed to a ten year 
extension of its United Express marketing agreement with Mesa Airlines.  The 
sales are expected to take place in the first quarter of 1995.  In addition, 
increased rent associated with new airport facilities in Denver and Osaka is 
expected to increase 1995 operating expenses by approximately $140 million.

     In February 1995, United announced that it would put in place a new 
travel agency commission payment plan that offers a maximum of $50 for 
round-trip domestic tickets and a maximum of $25 for one-way domestic 
tickets.  The new commission plan will be implemented in the first quarter 
of 1995, and will apply to all tickets issued by U. S. travel agents for 
travel within and between the continental United States, Alaska, Hawaii, 
Puerto Rico and the U. S. Virgin Islands.  Litigation has been initiated 
challenging this payment plan.





I
TEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA




                 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Shareholders and Board of Directors,
      UAL Corporation:

      We have audited the accompanying statement of consolidated financial 
position of UAL Corporation (a Delaware corporation) and subsidiary 
companies as of December 31, 1994 and 1993, and the related statements of 
consolidated operations, consolidated cash flows and consolidated 
shareholders' equity for each of the three years in the period ended 
December 31, 1994.  These financial statements and the schedule referred 
to below are the responsibility of the Company's management.  Our 
responsibility is to express an opinion on these financial statements 
based on our audits.

      We conducted our audits in accordance with generally accepted 
auditing standards.  Those standards require that we plan and perform the 
audit to obtain reasonable assurance about whether the financial 
statements are free of material misstatement.  An audit includes 
examining, on a test basis, evidence supporting the amounts and 
disclosures in the financial statements.  An audit also includes assessing 
the accounting principles used and significant estimates made by 
management, as well as evaluating the overall financial statement 
presentation.  We believe that our audits provide a reasonable basis for 
our opinion.

      In our opinion, the consolidated financial statements referred to 
above present fairly, in all material respects, the financial position of 
UAL Corporation and subsidiary companies as of December 31, 1994 and 1993, 
and the results of their operations and their cash flows for each of the 
three years in the period ended December 31, 1994, in conformity with 
generally accepted accounting principles.

      As discussed in notes 7 and 16 to the consolidated financial 
statements, effective January 1, 1992, the Company changed its methods of 
accounting for income taxes and postretirement benefits other than 
pensions.

      Our audits were made for the purpose of forming an opinion on the 
basic financial statements taken as a whole.  The schedule referenced in 

Item 14(a)(2) herein is presented for purposes of complying with the 
Securities and Exchange Commission's rules and is not part of the basic 
financial statements.  This schedule has been subjected to the auditing 
procedures applied in the audit of the basic financial statements and, in 
our opinion, fairly states in all material respects the financial data 
required to be set forth therein in relation to the basic financial 
statements taken as a whole.



                                             /s/ ARTHUR ANDERSEN LLP

                                             ARTHUR ANDERSEN LLP
Chicago, Illinois
February 23, 1995



<TABLE>
<CAPTION>

                   UAL CORPORATION AND SUBSIDIARY COMPANIES

                     STATEMENT OF CONSOLIDATED OPERATIONS

                       (In Millions, Except Per Share)

                                                  Year Ended December 31   

                                               1994       1993       1992  
<S>                                          <C>        <C>         <C>
Operating revenues:
  Passenger                                   $12,295    $11,958    $10,678 
  Cargo                                           685        659        605 
  Other operating revenues                        970        708        570 

                                               13,950     13,325     11,853 
Operating expenses:
  Salaries and related costs                    4,679      4,760      4,562 
  ESOP compensation expense                       182         -          -  
  Aircraft fuel                                 1,585      1,733      1,699 
  Rentals and landing fees                      1,555      1,505      1,342 
  Commissions                                   1,426      1,330      1,194 
  Purchased services                              947        983        936 
  Depreciation and amortization                   725        764        726 
  Food and beverages                              479        317        342 
  Aircraft maintenance                            410        385        330 
  Personnel expenses                              248        263        271 
  Advertising and promotion                       165        163        215 
  Other operating expenses                      1,028        859        774 

                                               13,429     13,062     12,391 

Earnings (loss) from operations                   521        263       (538)
       
Other income (expense):       
  Interest expense                               (372)      (358)      (328)
  Interest capitalized                             41         51         92 
  Interest income                                  85         98         69 
  Equity in earnings (loss) of affiliates          20        (30)        42 
  Miscellaneous, net                             (124)       (71)         7 

                                                 (350)      (310)      (118)

Earnings (loss) before income taxes,
  extraordinary item and cumulative
  effect of accounting changes                    171        (47)      (656)

Provision (credit) for income taxes                94        (16)      (239)

Earnings (loss) before extraordinary item and
  cumulative effect of accounting changes          77        (31)      (417)
Extraordinary loss on early
  extinguishment of debt, net of tax               -         (19)        -  
Cumulative effect of accounting changes           (26)        -        (540)

Net earnings (loss)                           $    51    $   (50)   $  (957)

Per share:
  Earnings (loss) before extraordinary
    item and cumulative effect of
    accounting changes                        $  0.76    $ (2.64)   $(17.34)
  Extraordinary loss on early
    extinguishment of debt, net of tax             -       (0.76)        - 
  Cumulative effect of accounting changes       (1.37)        -      (22.41)

  Net loss                                    $ (0.61)   $ (3.40)   $(39.75)


              The accompanying notes to consolidated financial
            statements are an integral part of these statements.
</TABLE>



<TABLE>
<CAPTION>
                   UAL CORPORATION AND SUBSIDIARY COMPANIES

                 STATEMENT OF CONSOLIDATED FINANCIAL POSITION
                                (In Millions)


                                                           December 31     
Assets                                                 1994          1993  
<S>                                                   <C>           <C>
Current assets:                                                     
  Cash and cash equivalents                           $   500       $   437
  Short-term investments                                1,032         1,391
  Receivables, less allowance for doubtful                          
    accounts (1994 - $22; 1993 - $22)                     889         1,095
  Aircraft fuel, spare parts and supplies, less
    obsolescence allowance (1994 - $44;
    1993 - $70)                                           285           278
  Refundable income taxes                                  -             26 
  Deferred income taxes                                   151           124
  Prepaid expenses                                        335           362
                                                        3,192         3,713

                                                                    
Operating property and equipment:                                   
  Owned -                                                           
    Flight equipment                                    7,480         7,899
    Advances on flight equipment                          713           589
    Other property and equipment                        2,631         2,673
                                                       10,824        11,161
    Less - Accumulated depreciation and amortization    4,786         4,691
                                                        6,038         6,470
  Capital leases -                                                  
    Flight equipment                                    1,028         1,027
    Other property and equipment                          104           104
                                                        1,132         1,131
    Less - Accumulated amortization                       447           395
                                                          685           736
                                                        6,723         7,206

Other assets:                                                       
  Intangibles, less accumulated amortization                        
    (1994 - $267; 1993 - $213)                            814           866
  Deferred income taxes                                   480           590
  Other                                                   555           465
                                                        1,849         1,921

                                                                    
                                                      $11,764       $12,840


               The accompanying notes to consolidated financial
             statements are an integral part of these statements.
</TABLE>



<TABLE>
<CAPTION>
                   UAL CORPORATION AND SUBSIDIARY COMPANIES

                 STATEMENT OF CONSOLIDATED FINANCIAL POSITION
                       (In Millions, Except Share Data)

                                                           December 31     
Liabilities and Shareholders' Equity                   1994          1993  
<S>                                                   <C>           <C>
Current liabilities:
  Short-term borrowings                               $   269       $   315
  Long-term debt maturing within one year                 384           144
  Current obligations under capital leases                 76            62
  Advance ticket sales                                  1,020         1,036
  Accounts payable                                        651           599
  Accrued salaries, wages and benefits                    843           943
  Accrued aircraft rent                                   825           893
  Other accrued liabilities                               838           904
                                                        4,906         4,896
Long-term debt                                          2,887         2,702
Long-term obligations under capital leases                730           827
Other liabilities and deferred credits:
  Deferred pension liability                              520           571
  Postretirement benefit liability                      1,148         1,058
  Deferred gains                                        1,363         1,400
  Other                                                   477           148
                                                        3,508         3,177
Minority interest                                          49            35
Shareholders' equity:
  Preferred stock (Note 12) -
    Series A convertible preferred stock,
      $600 million aggregate liquidation value             -             30
    Series B preferred stock, $327 million
      aggregate liquidation value                          -             - 
    Class 1 ESOP convertible preferred stock,
      $227 million aggregate liquidation value             -             - 
  Common stock, $0.01 par value in 1994 and $5 par
    value in 1993; authorized, 100,000,000 shares;
    issued, 13,013,217 shares in 1994 and
    25,489,745 shares in 1993                              -            127 
  Additional capital invested                           1,287           932
  Retained earnings (deficit)                          (1,335)          249
  Unearned ESOP preferred stock                           (83)           - 
  Stock held in treasury-
    Preferred (Note 12)                                   (87)           - 
    Common, 574,111 shares in 1994 and 920,808
      shares in 1993                                      (74)          (65)
  Other                                                   (24)          (70)
                                                         (316)        1,203
Commitments and contingent liabilities (Note 19)                           
                                                      $11,764       $12,840

                The accompanying notes to consolidated financial
              statements are an integral part of these statements.
</TABLE>



<TABLE>
<CAPTION>

                     UAL CORPORATION AND SUBSIDIARY COMPANIES
                       STATEMENT OF CONSOLIDATED CASH FLOWS
                                   (In Millions)
                                                      Year Ended December 31   
                                                     1994      1993      1992  
<S>                                                 <C>       <C>       <C>
Cash and cash equivalents at beginning of year      $   437   $   522   $   449
Cash flows from operating activities:
  Net earnings (loss)                                    51       (50)     (957)
  Adjustments to reconcile to net cash provided by
    operating activities -
      ESOP compensation expense                         182        -         - 
      Cumulative effect of accounting change             26        -        540
      Extraordinary loss on debt extinguishment          -         19        - 
      Deferred pension expense                          276       242       165 
      Deferred postretirement benefit expense           145        89        75
      Depreciation and amortization                     725       764       726 
      Provision (credit) for deferred income taxes       78       (67)     (146)
      Undistributed (earnings) losses of affiliates     (19)       42       (27)
      Decrease (increase) in receivables                207        11      (133)
      Decrease (increase) in other current assets        40        24       (67)
      Increase (decrease) in advance ticket sales       (16)      (31)      183 
      Increase (decrease) in accrued income taxes       (11)        8       164 
      Increase (decrease) in accounts payable
        and accrued liabilities                        (389)     (163)      142 
      Amortization of deferred gains                    (85)      (83)      (82)
      Other, net                                        124        53        (8)
                                                      1,334       858       575
Cash flows from investing activities:
  Additions to property and equipment                  (636)   (1,496)   (2,519)
  Proceeds on disposition of property and equipment     432     1,165     2,367
  Decrease (increase) in short-term investments         376      (414)     (238)
  Acquisition of intangibles                             -          -      (150)
  Other, net                                             26         5         3
                                                        198      (740)     (537)
Cash flows from financing activities:
  Issuance of preferred stock                           400       591        - 
  Reacquisition of preferred stock                      (87)       -         - 
  Proceeds from issuance of long-term debt              735        99       198
  Repayment of long-term debt                          (305)     (695)     (115)
  Principal payments under capital leases               (87)      (55)      (50)
  Recapitalization distribution                      (2,070)       -          - 
  Increase (decrease) in short-term borrowings          (46)     (135)        1
  Cash dividends                                        (53)      (27)       - 
  Other, net                                             44        19         1
                                                     (1,469)     (203)       35 
Increase (decrease) in cash and cash equivalents
  during the year                                        63       (85)       73 

Cash and cash equivalents at end of year            $   500   $   437   $   522

                 The accompanying notes to consolidated financial
               statements are an integral part of these statements.
</TABLE>



<TABLE>
<CAPTION>
                                        UAL CORPORATION AND SUBSIDIARY COMPANIES
                                     STATEMENT OF CONSOLIDATED SHAREHOLDERS' EQUITY
                                             (In Millions, Except Per Share)

                                                                                 Unearned                            
                                                          Additional               ESOP                       
                                       Preferred  Common   Capital    Retained   Preferred  Treasury                
                                         Stock    Stock    Invested   Earnings    Stock      Stock     Other      Total 
<S>                                       <C>      <C>      <C>       <C>         <C>        <C>       <C>       <C>
Balance at December 31, 1991              $ -      $126     $  304    $ 1,289     $   -      $(105)    $(17)     $ 1,597
Year ended December 31, 1992:
 Net loss                                   -         -          -       (957)        -          -        -         (957)
 Exercises of stock options                 -         -          5          -         -          -        -            5 
 Issuance of treasury stock pursuant
  to Air Wis acquisition                    -         -         33          -         -         31        -           64
 Pension liability adjustment               -         -          -          -         -          -       (8)          (8)
 Other                                      -         -         (1)         -         -          -         6           5
Balance at December 31, 1992                -       126        341        332         -        (74)      (19)        706

Year ended December 31, 1993:
 Net loss                                   -         -          -        (50)        -          -        -          (50)
 Cash dividends declared on preferred
  stock ($5.54 per share)                   -         -          -        (33)        -          -        -          (33)
 Issuance of Series A preferred stock      30         -        561          -         -          -        -          591 
 Exercises of stock options                 -         1         25          -         -          -        -           26 
 Issuance of treasury stock
  under restricted stock plan               -         -          6          -         -         10      (16)           -
 Pension liability adjustment               -         -          -          -         -          -      (45)         (45)
 Other                                      -         -         (1)         -         -         (1)      10            8 
Balance at December 31, 1993               30       127        932        249         -        (65)     (70)       1,203

Year ended December 31, 1994:
 Net earnings                               -         -          -         51         -          -        -           51 
 Cash dividends declared on preferred
  stock ($6.25 per Series A share,
  $1.44 per Series B share)                 -         -          -        (59)        -          -        -          (59)
 Change in Series A stated value          (30)        -         30          -         -          -        -            - 
 Issuance of ESOP preferred stock           -         -        227          -      (227)         -        -            - 
 Issuance of Series B preferred stock       -         -        400          -         -          -        -          400 
 Exercises of stock options                 -         1         46          -         -          -        -           47 
 Issuance of treasury stock
  under restricted stock plan               -         -         (7)         -         -         17      (10)           -
 Acquisition of treasury shares             -         -          -          -         -       (113)       -         (113)
 Amortization of unearned compensation
  under ESOPs and restricted stock plan     -         -         38          -       144          -       21          203 
 Recapitalization                           -      (128)      (378)    (1,576)        -          -        -       (2,082)
 Pension liability adjustment               -         -          -          -         -          -       37           37 
 Other                                      -         -         (1)         -         -          -       (2)          (3)
Balance at December 31, 1994              $ -      $  -     $1,287    $(1,335)    $ (83)     $(161)    $(24)     $  (316)

          The accompanying notes to consolidated financial statements are an integral part of these statements.
</TABLE>



                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



(1) Summary of Significant Accounting Policies

      (a) Basis of Presentation-

      UAL Corporation ("UAL") is a holding company whose principal 
subsidiary is United Air Lines, Inc. ("United").  The consolidated financial 
statements include the accounts of UAL and all of its subsidiaries 
(collectively "the Company").  All significant intercompany transactions are 
eliminated.  Investments in affiliates are carried on the equity basis.

      (b) Accounting Changes-

      Effective January 1, 1994, the Company adopted Statement of Financial 
Accounting Standards ("SFAS") No. 112, "Employers' Accounting for 
Postemployment Benefits," resulting in a cumulative after-tax charge of $26 
million (see Note 16) and SFAS No. 115, "Accounting for Certain Investments 
in Debt and Equity Securities" (see Note 17).

      Effective January 1, 1992, the Company adopted SFAS No. 106, 
"Employers Accounting for Postretirement Benefits Other Than Pensions" (see 
Note 16) and SFAS No. 109, "Accounting for Income Taxes" (see Note 7).

      (c) Reclassification-

      In 1994, United began recording certain air transportation price 
adjustments, which were previously recorded as commissions, as adjustments 
to revenue.  Certain amounts in the Statements of Consolidated Operations 
for 1993 and 1992 and these Notes to Consolidated Financial Statements have 
been reclassified to conform with the current presentation.

      (d) Airline Revenues-

      Passenger fares and cargo revenues are recorded as operating revenues 
when the transportation is furnished.  The value of unused passenger tickets 
is included in current liabilities.

      (e) Foreign Currency Transactions-

      Monetary assets and liabilities denominated in foreign currencies are 
converted at exchange rates in effect at the balance sheet date.  The 
resulting foreign exchange gains and losses are charged or credited directly 
to income.  United has entered into a foreign currency swap contract to 
reduce exposure to certain currency fluctuations.  Foreign currency gains 
and losses on the contract are included in income currently, exactly 
offsetting the foreign currency losses and gains on the obligations.  
Foreign exchange gains and losses on foreign currency call options which 
were previously used to hedge foreign currency obligations were also charged 
or credited directly to income.

      (f) Cash and Cash Equivalents and Short-term Investments-

      Cash in excess of operating requirements is invested in short-term, 
highly liquid, income-producing investments.  Investments with an original 
maturity of three months or less on their acquisition date are classified as 
cash and cash equivalents.  Other investments are classified as short-term 
investments.

      (g) Aircraft Fuel, Spare Parts and Supplies-

      Aircraft fuel and maintenance and operating supplies are stated at 
average cost.  Flight equipment spare parts are stated at average cost less 
an obsolescence allowance.

      (h) Operating Property and Equipment-  

      Owned operating property and equipment is stated at cost.  Property 
under capital leases, and the related obligation for future minimum lease 
payments, are initially recorded at an amount equal to the then present 
value of those lease payments.

      Depreciation and amortization of owned depreciable assets is based on 
the straight-line method over their estimated service lives.  Leasehold 
improvements are amortized over the remaining period of the lease or the 
estimated service life of the related asset, whichever is less.  Aircraft 
are depreciated to estimated salvage values, generally over lives of 10 to 
25 years; buildings are depreciated over lives of 25 to 45 years; and other 
property and equipment are depreciated over lives of three to 15 years.

      Properties under capital leases are amortized on the straight-line 
method over the life of the lease, or in the case of certain aircraft, over 
their estimated service lives.  Lease terms are 10 to 19 years for aircraft 
and flight simulators and 25 years to 40 years for buildings.  Amortization 
of capital leases is included in depreciation and amortization expense.

      Maintenance and repairs, including the cost of minor replacements, are 
charged to maintenance expense accounts.  Costs of additions to and renewals 
of units of property are charged to property and equipment accounts.

      (i) Intangibles-

      Intangibles consist primarily of route acquisition costs, slots and 
intangible pension assets (see Note 15).  Route acquisition costs and slots 
are amortized over 40 years and 5 years, respectively.

      (j) Mileage Plus Awards-

      United accrues the estimated incremental cost of providing free travel 
awards earned under its Mileage Plus frequent flyer program when such award 
levels are reached.

      (k) Deferred Gains-  

      Gains on aircraft sale and leaseback transactions are deferred and 
amortized over the lives of the leases as a reduction of rental expense.

      (l) Interest Rate Swap Agreements-

      United enters into interest rate swap agreements to hedge interest 
rate exposure on certain obligations.  The differential to be paid or 
received under the swap agreements is charged or credited to interest 
expense or rental expense depending on the obligation.

(2) Employee Investment Transaction and Recapitalization

      On July 12, 1994, the shareholders of UAL approved a plan of 
recapitalization to provide an approximately 55% equity interest in UAL to 
certain employees of United in exchange for wage concessions and work-rule 
changes.  The employees' equity interest will be allocated to individual 
employees through the year 2000 under Employee Stock Ownership Plans 
("ESOPs") which were created as a part of the recapitalization.  The 
employee interest may increase to up to 63%, depending on the average market 
value of UAL common stock in the year after the transaction closed.  Based 
on the average market value of UAL common stock through February 23, 1995, 
the market value of UAL common stock for the remainder of the measuring 
period would have to average at least $204 for any adjustment to be made in 
the ESOP percentage interest.  Pursuant to the terms of the plan of 
recapitalization, holders of old UAL common stock received approximately 
$2.1 billion in cash and the remaining 45% (subject to decrease down to 37%) 
of the equity in the form of new common stock, which was issued at the rate 
of one half share of new common stock for each share of old common stock.  
The cash distribution was recorded as a $1.6 billion reduction in retained 
earnings, a $0.4 billion reduction in additional capital invested and a $0.1 
billion reduction in common stock.  In connection with the recapitalization, 
United issued $370 million of 10.67% debentures due in 2004 and $371 million 
of 11.21% debentures due in 2014 and UAL issued Series B 12 1/4% preferred 
stock with an aggregate liquidation preference of $410 million.  Pretax 
costs of $169 million were incurred in connection with the recapitalization, 
including transaction costs and severance payments to certain former United 
employees.  Of these costs, $48 million were recorded as operating expenses 
while the remaining $121 million were recorded in "Miscellaneous, net."

(3) Employee Stock Ownership Plans

      The ESOPs established as part of the recapitalization cover the 
pilots, U.S. management and salaried employees, and U.S. union ground 
employees.  The ESOPs include a "Leveraged ESOP", a "Non-Leveraged ESOP" and 
a "Supplemental ESOP".  Both the Leveraged ESOP and the Non-Leveraged ESOP 
are tax qualified plans while the Supplemental ESOP is not a tax qualified 
plan.  The purpose of having the three ESOPs is to deliver the agreed-upon 
shares to employees in a manner which utilizes the tax incentives available 
to tax qualified ESOPs to the greatest degree possible.  Accordingly, shares 
are delivered to employees primarily through the Leveraged ESOP, secondly, 
through the Non-Leveraged ESOP, and lastly, through the Supplemental ESOP.  

      The equity interests are being delivered to employees through two 
classes of preferred stock (Class 1 and Class 2 ESOP Preferred Stock, 
collectively "ESOP Preferred Stock") and the voting interests are being 
delivered through three separate classes of preferred stocks (Class P, M and 
S Voting Preferred Stock, collectively "Voting Preferred Stock").  The Class 
1 ESOP Preferred Stock will be issued to an ESOP trust in seven separate 
sales through January 1, 2000 under the Leveraged ESOP, one of which took 
place at the time of the recapitalization.  Based on Internal Revenue Code 
limitations, shares of the Class 2 ESOP Preferred Stock will either be 
contributed to the Non-Leveraged ESOP or allocated as "book-entry shares" to 
the Supplemental ESOP, annually through the year 2000.  The classes of 
preferred stock are described more fully in Note 12, Preferred Stock.

      The Leveraged ESOP and Non-Leveraged ESOP are being accounted for 
under AICPA Statement of Position 93-6, "Employers' Accounting for Employee 
Stock Ownership Plans" ("SOP").  For the Leveraged ESOP, as shares of the 
Class 1 ESOP Preferred Stock are sold to an ESOP trust, the Company reports 
the issuance as a credit to additional capital invested and a corresponding 
charge to unearned ESOP preferred stock.  As the shares are earned by 
employees in exchange for services performed, the shares are committed to be 
released.  ESOP compensation expense is recorded for the average fair value 
of the shares committed to be released during the period with a 
corresponding credit to unearned ESOP preferred stock for the cost of the 
shares.  Any difference between the fair value of the shares and the cost of 
the shares is charged or credited to additional capital invested.  For the 
Non-Leveraged ESOP, the Class 2 ESOP Preferred Stock is recorded as 
additional capital invested as the shares are committed to be contributed in 
exchange for employee services, with the offsetting entry to ESOP 
compensation expense.  The ESOP compensation expense is based on the average 
fair value of the shares committed to be contributed, in accordance with the 
SOP.  The Supplemental ESOP is being accounted for under Accounting 
Principle Board Opinion 25, "Accounting for Stock Issued to Employees."

      For the Class 2 ESOP Preferred Stock committed to be contributed to 
employees under the Supplemental ESOP, employees can elect to receive their 
"book entry" shares in cash upon termination of employment.  The fair value 
of such shares at December 31, 1994 was insignificant. 

      Shares of ESOP Preferred Stock are legally released or allocated to 
employee accounts as of year end.  Dividends on the ESOP Preferred Stock are 
also paid at the end of the year.  Dividends on unallocated shares are used 
by the ESOP to pay down the loan from UAL and are not considered dividends 
for financial reporting purposes.  Dividends on allocated shares are 
satisfied by releasing shares from the ESOP's suspense account to the 
employee accounts and are charged to equity.

      During 1994, the Company recorded $182 million of ESOP compensation 
expense for the period July 13 through December 31, 1994.  At December 31, 
1994, the year-end allocation of Class 1 ESOP Preferred Stock to employee 
accounts had not yet been completed.  There were 1,131,912 shares of Class 1 
ESOP Preferred Stock committed to be released and 657,673 shares held in 
suspense by the ESOP as of December 31, 1994.  For the Class 2 ESOP 
Preferred Stock, 316,472 shares were committed to be contributed to 
employees at December 31, 1994.  The fair value of the unearned ESOP shares 
recorded on the balance sheet at December 31, 1994 was $79 million.

(4) Affiliates

      United owns 38% of the Galileo International Partnership ("Galileo") 
through a wholly-owned subsidiary.  United's investment in Galileo, which 
owns the Apollo and Galileo computer reservations systems, is carried on the 
equity basis.  United also owns 77% of the Apollo Travel Services 
Partnership ("ATS"), which markets the Apollo computer reservations systems 
to travel agencies in the U. S. and Mexico, and its accounts are 
consolidated.  Prior to a September 1993 merger, United owned 50% of the 
Covia Partnership ("Covia") and 25.6% of Galileo Ltd., Galileo's and ATS's 
predecessor companies, which were accounted for on the equity basis.  The 
consolidation of ATS resulted in non-cash increases of $78 million in 
assets, $46 million in liabilities and $34 million in minority interests as 
of the date of the merger.

      Under operating agreements with Covia prior to the merger, United 
provided certain computer support services for, and purchased computer 
reservation services, communications and other information from, Covia.  
Revenues derived from the sale of services to Covia amounted to 
approximately $21 million in 1993 and $22 million in 1992.  The cost to 
United of services purchased from Covia amounted to approximately $168 
million in 1993 and $219 million in 1992.  Under operating agreements with 
Galileo subsequent to the merger, United purchases computer reservation 
services from Galileo and provides marketing, sales and communication 
services to Galileo.  Revenues derived from the sale of services to Galileo 
amounted to approximately $233 million in 1994 and $58 million in 1993.  The 
cost to United of services purchased from Galileo amounted to approximately 
$94 million in 1994 and $47 million in 1993.

<TABLE>
<CAPTION>

Summarized financial information of Galileo follows (in millions):

                                         December 31,     
                                     1994            1993 
<S>                                <C>           <C>
Current assets                       $134            $141
Non-current assets                    421             467
  Total assets                        555             608
Current liabilities                   195             173
Long-term liabilities                 321             440
  Total liabilities                   516             613
    Net assets                       $ 39            $ (5)


                                                 Period From
                                 Twelve Months   September 16,
                                     Ended       1993 Through
                                  December 31,   December 31,
                                      1994           1993    

Services revenues                     $801           $ 186
Costs and expenses                     752             327
Net earnings (loss)                   $ 49           $(141)
</TABLE>


During 1993, Galileo recorded $114 million of charges which included the 
cost of eliminating duplicate facilities and operations.

(5) Other Income (Expense) - Miscellaneous

<TABLE>
<CAPTION>

Other income (expense) - miscellaneous, net consisted of the following:

                                              1994      1993     1992 
                                                   (In Millions) 
<S>                                          <C>       <C>      <C>
     Foreign exchange gains or losses        $  15     $(20)    $  2 
     Amortization of hedge
       transaction costs                        (6)      (6)      (5)
     Net gains on disposition of property 
       or rights                                10        3       41
     Minority interests                        (22)      (1)      - 
     Recapitalization transaction costs       (121)      -        - 
     Write down of aircraft to
       net realizable value                     -       (59)      - 
     Gain on settlement of 1985
       annuity purchases                        -        17       - 
     Settlement of class action claims
       regarding airline fare data              -        -       (13)
     Other                                      -        (5)     (18)

                                             $(124)    $(71)    $  7 
</TABLE>



(6) Per Share Amounts

      Per share amounts were based on weighted average common shares 
outstanding - 18,791,587 in 1994, 24,345,857 in 1993 and 24,069,786 in 
1992.  Common stock equivalents, including ESOP shares committed to be 
released, were not included in the computations as they did not have a 
dilutive effect.  Per share amounts were calculated after providing for 
preferred stock dividends of $59 million in 1994 and $33 million in 1993.  
Earnings available to common stockholders were also reduced by $3 million 
in 1994 for the excess of amounts paid to reacquire UAL preferred stock 
over the liquidation preference of such stock.

      In connection with the July 1994 recapitalization, each old common 
share was exchanged for one half new common share.  As required under 
generally accepted accounting principles for transactions of this type, 
the historical weighted average shares outstanding have not been restated. 
 Thus, direct comparisons between 1994 and prior years' per share amounts 
are not meaningful.

(7) Income Taxes

      In 1994, the Company was subject to the alternative minimum tax 
("AMT").  The federal income tax liability is the greater of the tax 
computed using the regular tax system or the tax under the AMT system.  
Certain preferences, mainly depreciation adjustments, have caused 
alternative minimum taxable income and the resulting AMT liability to 
exceed regular taxable income and the regular tax liability.  The excess 
of the AMT liability over the regular tax liability produces AMT credits 
which are carried forward indefinitely.

<TABLE>
<CAPTION>

The provision (credit) for income taxes is summarized as follows:

                                  1994         1993        1992 
                                            (In Millions) 
             <S>                 <C>          <C>         <C>
             Current-
              Federal            $  12        $  52       $ (90)
              State                  4           (1)         (3)
                                    16           51         (93)
             Deferred-
              Federal               73          (75)       (129)
              State                  5            8         (17)
                                    78          (67)       (146)

                                 $  94        $ (16)      $(239)
</TABLE>


The income tax provision (credit) differed from amounts computed at the 
statutory federal income tax rate, as follows:

<TABLE>
<CAPTION>

                                           1994         1993       1992 
                                                    (In Millions)   
<S>                                      <C>          <C>        <C>
Income tax provision (credit)
  at statutory rate                      $  60        $ (17)     $(223)
State income taxes, net of
  federal income tax benefit                 6            5        (13)
Nondeductible employee meals                22            8          8 
Nondeductible ESOP transaction costs        21            -          - 
Foreign sales corporation benefit           (1)          (1)        (6)
Foreign tax credits                         (3)          (3)        (2)
Rate change effect                         (14)          (9)        -  
Other, net                                   3            1         (3)

Income tax provision (credit)
  as reported                            $  94        $ (16)     $(239)
</TABLE>


      The Company adopted SFAS No. 109 "Accounting for Income Taxes," 
effective January 1, 1992.  This statement provides for an asset and 
liability approach to accounting for income taxes.  The Company recognized 
a tax benefit of $40 million for the cumulative effect of adopting SFAS 
No. 109.  Deferred income taxes (credit) reflect the impact of "temporary 
differences" between amounts of assets and liabilities for financial 
reporting purposes and such amounts as measured by tax laws.  These 
temporary differences are determined in accordance with SFAS No. 109 and 
are more inclusive in nature than "timing differences" as determined under 
previously applicable accounting principles.

Temporary differences and carryforwards which give rise to a significant 
portion of deferred tax assets and liabilities for 1994 and 1993 are as 
follows:

<TABLE>
<CAPTION>
                                        1994                    1993          
                                Deferred    Deferred    Deferred    Deferred
                                  Tax         Tax         Tax         Tax
                                 Assets    Liabilities   Assets    Liabilities
                                               (In Millions)
<S>                             <C>        <C>          <C>        <C>
Employee benefits, including
  postretirement medical        $  537      $   13      $  599      $   31
Prepaid commissions                 -           52          -           49
Depreciation, capitalized
  interest and transfers of
  tax benefits                      -        1,074          -        1,119
Gains on sale and leasebacks       472          -          480          - 
Rent expense                       254          -          207          - 
AMT credit carryforward            262          -          195          - 
Foreign exchange
  gains and losses                  98          -           84          - 
Frequent flyer accrual              70          -           72          - 
Net operating loss
  carryforwards                     58          -           74          - 
Other                              134         115         272          70

                                $1,885      $1,254      $1,983      $1,269
</TABLE>



     The Company has determined, based on its history of operating 
earnings and expectations of future taxable income, that it is more likely 
than not that the deferred tax assets at December 31, 1994 will be 
realized.

     At December 31, 1994, UAL and its subsidiaries had $262 million of 
federal AMT credit carryforwards available for an indefinite period, $4 
million of general business credit carryforwards which expire between 2004 
and 2009, $40 million of state tax benefit from net operating loss 
carryforwards expiring between 1997 and 2009 and $18 million of federal 
tax benefit from net operating loss carryforwards expiring between 2006 
and 2009.

(8) Short-Term Borrowings

     At December 31, 1994 and 1993, United had outstanding $269 million 
and $315 million, respectively, in short-term borrowings, bearing average 
interest rates of 5.63% and 3.34%, respectively.  Receivables amounting to 
$426 million at December 31, 1994 and $367 million at December 31, 1993 
were pledged by United to secure repayment of such outstanding borrowings. 
 The maximum available amount of borrowings under this arrangement is $360 
million.

(9) Long-Term Debt

A summary of long-term debt, excluding current maturities, as of 
December 31 is as follows (interest rates are as of December 31, 1994):

<TABLE>
<CAPTION>

                                                      1994          1993  
                                                          (In Millions)
  <S>                                                <C>           <C>
  Secured notes, 5.525% to 11.54%, averaging
    8.38%, due through 2014                          $ 1,087       $ 1,462
  Debentures, 6.75% to 11.21%, averaging 10.03%,
    due 1997 to 2021                                   1,591         1,000
  Deferred purchase certificates, Japanese yen-
    denominated, 7.75%, due through 1998                 169           178
  Convertible debentures, 7.75%, due 2000
    through 2010                                          26            36
  Promissory notes, 5.75% to 6.82%, averaging
    6.03%, due through 1998                               34            41
                                                       2,907         2,717
  Unamortized discount on debt                           (20)          (15)
                                                     $ 2,887       $ 2,702
</TABLE>



      In connection with the July 1994 recapitalization, United issued 
$370 million of 10.67% debentures due in 2004 and $371 million of 11.21% 
debentures due in 2014.  The debentures are unsecured obligations.

      In the second quarter of 1993, United retired $500 million of senior 
subordinated notes.  The notes were scheduled to mature in 1995 ($150 
million) and 1998 ($350 million).  An extraordinary loss of $19 million, 
after tax benefits of $9 million, was recorded in the first quarter of 
1993, based on United's stated intention to retire the notes.

      The convertible debentures, which are obligations of Air Wis 
Services, Inc. ("Air Wis"), are convertible into shares of old UAL common 
stock, at the conversion price of $259.08 (equivalent to approximately 
$348.54 per share of new UAL common stock).  In addition, $4 million of 
these debentures and $3 million of similar debentures with a conversion 
price of $198.02 (equivalent to approximately $226.42 per share of new UAL 
common stock) are classified in current maturities.  In 1994, Air Wis 
reacquired $3 million of these debentures, resulting in an insignificant 
loss.

      In addition to scheduled principal payments, in 1994 the Company 
repaid secured notes in the principal amount of $218 million.  In January 
and February 1995, United repaid an additional $101 million in principal 
amount of secured notes and $150 million in principal amount of 
debentures, respectively, resulting in an insignificant loss.  At December 
31, 1994, United had outstanding a total of $316 million of long-term debt 
bearing interest at rates 85 to 128 basis points over the London interbank 
offered rate ("LIBOR").  In connection with certain of these debt 
financings, United has entered interest rate swap agreements to 
effectively fix interest rates at December 31, 1994 between 8.554% and 
8.6% on $71 million of notional amount (See Note 18).

      Maturities of long-term debt for each of the four years after 1995 
are:  1996 -- $119 million; 1997 -- $220 million; 1998 -- $188 million; 
and 1999 -- $48 million.  Various assets, principally aircraft, having an 
aggregate book value of $1.409 billion at December 31, 1994, were pledged 
under various loan agreements.

      At December 31, 1994, UAL and United had an effective shelf 
registration statement on file with the Securities and Exchange Commission 
to offer up to $1.035 billion of securities, including secured and 
unsecured debt, equipment trust and pass through certificates, equity or a 
combination thereof.  UAL's ability to issue equity securities is limited 
by its certificate of incorporation, which was restated in connection with 
the recapitalization.

(10) Lease Obligations

      The Company leases aircraft, airport passenger terminal space, 
aircraft hangars and related maintenance facilities, cargo terminals, 
other airport facilities, real estate, office and computer equipment and 
vehicles.

Future minimum lease payments as of December 31, 1994, under capital 
leases and operating leases having initial or remaining noncancelable 
lease terms of more than one year are as follows:

<TABLE>
<CAPTION>

                                                Operating       Capital
                                                  Leases         Leases 
                                                     (In Millions)
      <S>                                       <C>             <C>
      Payable during-
         1995                                   $ 1,337         $  142
         1996                                     1,358            144
         1997                                     1,343            139
         1998                                     1,377            144
         1999                                     1,199            119
         After 1999                              20,099            558

      Total minimum lease payments              $26,713          1,246
      Imputed interest (at rates of 5.3%
        to 12.2%)                                                 (440)

      Present value of minimum lease payments                      806

      Current portion                                              (76)

      Long-term obligations under capital leases                $  730
</TABLE>


      As of December 31, 1994, United leased 315 aircraft, 45 of which 
were under capital leases.  These leases have terms of four to 26 years, 
and expiration dates range from 1996 through 2018.  Under the terms of 
leases for 306 of the aircraft, United has the right of first refusal to 
purchase, at the end of the lease term, certain aircraft at fair market 
value and others at either fair market value or a percentage of cost.  
United has 21 Airbus A320-200 aircraft under 24-year operating leases 
which are cancelable upon eleven months notice during the initial 10 years 
of the leases.

      Amounts charged to rent expense, net of minor amounts of sublease 
rentals, were $1.222 billion in 1994, $1.208 billion in 1993, and $1.060 
billion in 1992.  Included in rent expense were insignificant amounts of 
contingent rentals, resulting from changes in interest rates for operating 
leases under which the rent payments are based on variable interest rates. 
 In connection with certain of these leases, United has entered interest 
rate swap agreements (See Note 18).

(11) Foreign Operations

      United conducts operations in various foreign countries, principally 
in the Pacific, Europe and Latin America.  Operating revenues from foreign 
operations were approximately $4.920 billion in 1994, $4.500 billion in 
1993 and $3.890 billion in 1992.

(12) Preferred Stock

      UAL is authorized to issue up to 16,000,000 shares of serial 
preferred stock, 25,000,000 shares each of Class 1 and Class 2 ESOP 
Preferred Stock, and an aggregate 25,100,000 shares of Class P, M, and S 
Voting Preferred Stock.

      At December 31, 1994, there were outstanding 5,999,900 shares of 
Series A cumulative 6.25% convertible preferred stock.  Effective March 
31, 1994, UAL changed the stated capital of the Series A preferred stock 
from $30 million ($5.00 per preferred share) to $60,000 ($0.01 per 
preferred share), with the difference being attributed to additional 
capital invested.  Subsequent to the recapitalization, each share of 
Series A preferred stock is convertible into $54.19 in cash and 
approximately 0.3195 shares of UAL common stock (equivalent to a 
conversion price of $143.38 per common share).  In December 1994, 100 
shares of Series A preferred stock were converted, resulting in the 
issuance of 31 shares of UAL common stock.  Under its terms, any portion 
of the convertible preferred stock is redeemable after April 30, 1996, at 
UAL's option, at $100 per share plus a premium which begins at 4.375% 
declining to zero ratably over seven years.  The Series A shares have an 
aggregate liquidation preference of $600 million, or $100 per share.

      On February 3, 1995, the Company filed a registration statement with 
the Securities and Exchange Commission offering to exchange up to $600 
million aggregate principal amount of convertible subordinated debentures, 
due 2025, for up to all shares of the outstanding Series A cumulative 
6.25% convertible preferred stock.  Each $1,000 principal amount of 
debentures issued would be convertible into a combination of cash in the 
amount of $541.90 and approximately 3.192 shares of new UAL common stock 
(equivalent to a conversion price of $143.50 per share of new common 
stock).  To the extent that shares of Series A preferred stock are 
exchanged for the debentures, the Company's shareholders' equity will be 
reduced on a net basis by the aggregate fair value of the debentures 
issued.  A reduction in shareholders' equity will reduce surplus as 
defined under Delaware General Corporation Law ("DGCL").  DGCL requires 
that dividends on outstanding capital stock may only be made from surplus 
or the net profits of the Company for the fiscal year in which the 
dividend is declared and/or the preceding fiscal year.

      In connection with the July 1994 recapitalization, UAL issued 
16,416,000 depositary shares, each representing 1/1000 of one share of 
Series B 12 1/4% preferred stock, resulting in net proceeds of $400 
million, which was recorded as additional capital invested.  The shares 
issued had an aggregate liquidation preference of $410 million, or $25 per 
depositary share ($25,000 per Series B preferred share), and a stated 
capital of $164 ($0.01 per Series B preferred share).  Under its terms, 
any portion of the Series B preferred stock or the depositary shares is 
redeemable for cash after July 11, 2004, at UAL's option, at the 
equivalent of $25 per depositary share, plus accrued dividends.  The 
Series B preferred stock is not convertible into any other securities, has 
no stated maturity and is not subject to mandatory redemption.  In the 
fourth quarter of 1994, UAL repurchased 3,336,400 depositary shares, 
representing 3,336.4 shares of Series B preferred stock, at an aggregate 
cost of $87 million to be held in treasury.  At December 31, 1994, there 
were outstanding 13,079,600 depositary shares representing 13,079.6 shares 
of Series B preferred stock.

      The Series A and B preferred stocks rank senior to all other 
preferred and common stocks as to receipt of dividends and amounts 
distributed upon liquidation.  The Series A and B preferred stocks have 
voting rights only to the extent required by law and with respect to 
charter amendments that adversely affect the preferred stock or the 
creation or issuance of any security ranking senior to the preferred 
stock.  Additionally, if dividends are not paid for six cumulative 
quarters, the Series A and Series B preferred shareholders together are 
entitled to elect two additional members to the UAL Board of Directors 
until all dividends are paid in full.

      At December 31, 1994, 1,789,585 shares of Class 1 ESOP Preferred 
Stock and no shares of Class 2 ESOP Preferred Stock were issued.  An 
aggregate of 17,675,345 shares of Class 1 and Class 2 ESOP Preferred Stock 
will be issued in connection with the recapitalization and establishment 
of the ESOPs (see notes 2 and 3).  Each share of ESOP Preferred Stock is 
convertible into one share of UAL common stock, subject to adjustment 
under certain conditions.  The stock has a par value of $0.01 per share, 
is nonvoting, and has a liquidation value of $126.96 per share plus all 
accrued and unpaid dividends.  The Class 1 ESOP Preferred Stock provides a 
fixed annual dividend of $8.8872 per share, which ceases on March 31, 
2000; the Class 2 does not pay a fixed dividend.

      Class P, M, and S Voting Preferred Stocks were established to 
provide the voting power to the employee groups participating in the 
ESOPs.  As of December 31, 1994, one share each of Class P, M and S Voting 
Preferred Stock were outstanding.  Additional Voting Preferred Stock will 
be issued as shares of the Class 1 and Class 2 ESOP Preferred Stock are 
allocated to employees.  In the aggregate, 17,675,345 shares of Voting 
Preferred Stock will be issued through the year 2000.  The Voting 
Preferred Stock at any time outstanding commands voting power for 
approximately 55% (subject to increase to up to 63%) of the vote of all 
classes of capital stock in all matters requiring a shareholder vote, 
other than for the election of members of the Board of Directors.  The 
Voting Preferred Stock will generally continue to represent approximately 
55% (subject to increase to up to 63%) of the aggregate voting power until 
the "Sunset".  The "Sunset" will occur when the common shares issuable 
upon conversion of the outstanding Class 1 and Class 2 ESOP Preferred 
Stock, plus any common equity and available unissued ESOP shares held in 
the ESOPs or any other employee benefit plans sponsored by the Company for 
the benefit of its employees, represent, in the aggregate less than 20% of 
the common equity and available unissued ESOP shares of the Company.  
Under current actuarial assumptions, the Company estimates that the 
"Sunset" will occur in the year 2016 if no additional purchases are made 
by eligible employee retirement plans.  The Voting Preferred Stock has a 
par value and liquidation preference of $0.01 per share.  The stock is not 
entitled to receive any dividends and is convertible into one 
ten-thousandth of a share of UAL common stock. 

(13) Common Shareholders' Equity

      In connection with the July 1994 recapitalization, each share of old 
common stock was converted to one half share of new common stock (and cash 
in lieu of fractional shares) and $84.81 in cash.  As a result, the number 
of outstanding shares was reduced proportionately.

<TABLE>
<CAPTION>

Changes in the number of shares of UAL common stock outstanding during the 
years ended December 31 were as follows:

                                         1994         1993         1992   
<S>                                  <C>           <C>          <C>
Old shares -
Shares outstanding at
  beginning of year                   24,568,937   24,238,482   23,758,106
Shares issued in connection
  with Air Wis merger                       -            -         443,593
Stock options exercised                   79,764      205,075       40,464
Shares issued from treasury
  under compensation arrangements          1,100      142,003        3,165
Shares acquired for treasury             (88,261)      (7,623)        (346)
Forfeiture of restricted stock            (9,800)      (9,000)      (6,500)
Other                                       (379)        -            -   
                                      24,551,361   24,568,937   24,238,482
Effect of recapitalization           (12,275,680)        -            -

New shares -
Stock options exercised                  237,505         -            -
Shares issued from treasury under 
  compensation arrangements              112,767         -            -
Shares acquired for treasury            (186,898)        -            -
Other                                         51         -            -   
Shares outstanding at end of year     12,439,106   24,568,937   24,238,482
</TABLE>



      At December 31, 1994 and 1993, UAL held 574,111 and 920,808 shares, 
respectively, of common stock in treasury.

      There is a preferred share purchase right associated with each share 
of outstanding UAL common stock.  As long as the rights are associated 
with the shares of UAL common stock, each new share of common stock issued 
by UAL, including shares of common stock into which the ESOP convertible 
preferred stock and the Series A preferred stock are convertible, will 
include one right.  Upon the occurrence of certain events, each right will 
entitle its holder to purchase one one-hundredth of a share of Series C 
junior participating preferred stock, without par value, for $185 (subject 
to antidilution provisions).  The rights will become exercisable ten 
business days after any person or group announces its beneficial ownership 
of 15% or more of UAL common stock, or announces an offer for 30% or more 
of UAL common stock.  If any person or group acquires 15% or more of UAL 
common stock (other than the ESOP trustee, ALPA, the IAM and the 
beneficial owners of UAL common stock eligible to report and reporting on 
Schedule 13G under the Securities Exchange Act of 1934), each right will 
entitle its holder (except the acquiring party) to buy common stock of UAL 
having a market value of three times the exercise price of the right.  If, 
after the rights become exercisable, UAL is involved in a merger or sells 
more than 50% of its assets or earning power, each right will entitle its 
holder to buy common stock of the surviving entity having a market value 
of three times the exercise price of the right.  UAL has the right to 
redeem the rights for $0.05 per right prior to the time they become 
exercisable.  The rights expire on December 31, 1996.  The rights 
agreement provides that the transactions associated with the 
recapitalization did not and will not cause the rights to become 
exercisable as a result thereof.

(14) Stock Options and Awards

      The Company has granted options to purchase common stock to various 
officers and employees.  The option price for all stock options is at 
least 100% of the fair market value of UAL common stock at the date of 
grant.  Options generally vest and become exercisable in up to five equal, 
annual installments beginning one year after the date of grant, and 
generally expire in 10 years.

      Prior to 1992, stock appreciation rights ("SARs") were granted in 
tandem with certain stock options.  On exercise of these SARs, holders 
would receive, in cash, 100% of the appreciation in fair market value of 
the shares subject to the SAR.  The estimated payment value of SARs, net 
of market value adjustments, was charged to earnings over the vesting 
period.  In 1992, all active officers relinquished their SARs but retained 
the tandem stock options.  As a result of the 1994 recapitalization, all 
outstanding options became fully vested at the time of the transaction and 
the holders of such options became eligible to exercise the cashless 
exercise features of stock options.  Under a cashless exercise, the 
Company withholds, at the election of the optionee, from shares that would 
otherwise be issued upon exercise that number of shares having a fair 
market value equal to the exercise price and related income taxes.  For 
outstanding options eligible for cashless exercise, changes in the market 
price of the stock are charged to earnings currently.  At December 31, 
1994, 12,927 SARs were outstanding with an average exercise price of 
$75.70 per old share and option holders were eligible for cashless 
exercise in connection with 1,068,173 outstanding options with an average 
exercise price of $133.76 per old share.  The expense (credit) recorded 
for SARs and cashless exercises was $15 million in 1994, $1 million in 
1993 and $(1) million in 1992.

      Stock options which were outstanding at the time of the 
recapitalization are exercisable for shares of old common stock, each of 
which is in turn converted into one half share of new common stock and 
$84.81 in cash upon exercise.  Subsequent to the recapitalization, the 
Company granted stock options which are exercisable for shares of new 
common stock.

<TABLE>
<CAPTION>

Stock option activity for the past three years was as follows:

                             New Share
                              Options            Old Share Options        
                                1994        1994        1993        1992  
<S>                          <C>         <C>         <C>         <C>

Outstanding at beginning
  of year                         -      1,673,782   1,864,555   1,318,603
Granted                       959,500          -        65,750     686,500
Exercised                         -       (554,771)   (205,075)    (40,464)
Surrendered upon
  exercise of SARs                -         (1,000)    (16,198)     (8,334)
Terminated                    (13,500)     (36,911)    (35,250)    (91,750)
Outstanding at end
  of year                     946,000    1,081,100   1,673,782   1,864,555

Exercisable at 
  end of year                 150,000    1,081,100     733,782     603,180
Reserved for future
  grants at end of year       454,000          -       300,111     330,611

Average option price:
Per old share -
  Exercised                      N/A     $   95.32   $   87.61   $   88.16
  Outstanding at end of year     N/A     $  132.77   $  120.21   $  116.11

Per new share -
  Exercised                       -      $   21.02 (1)    N/A         N/A 
  Outstanding at end of year $  90.36    $   95.92 (1)    N/A         N/A 

(1)  Represents the new share equivalent of the old share options.
</TABLE>


      The expiration dates for options outstanding as of December 31, 1994 
ranged from January 12, 1995 to December 15, 2004.  At December 31, 1994, 
outstanding options were held by 199 officers and key employees.

      The Company has also awarded shares of restricted stock to key officers 
and employees.  These restricted shares generally vest over a five-year 
period.  Unvested shares are subject to certain transfer restrictions and 
forfeiture under certain circumstances.  Unearned compensation, representing 
the fair market value of the stock on the date of award, is amortized to 
salaries and related costs over the vesting period.  During 1993, 138,500 
restricted shares were issued from treasury stock and awarded to employees.  
No restricted shares were issued during 1992.  In 1994, 1993 and 1992, 9,800, 
9,000 and 6,500 shares, respectively, were forfeited and returned to treasury 
stock.  As a result of the 1994 recapitalization, all outstanding restricted 
shares became vested at the time of the transaction and $12 million of 
compensation expense was recorded for the remaining balance of unearned 
compensation attributable to the outstanding shares.  In 1994, subsequent to 
the recapitalization, 112,767 restricted shares of new common stock were 
issued from treasury, of which 66,500 were still restricted as of December 
31, 1994.  Additionally, 29,733 shares were reserved for future award.

(15) Retirement Plans

      The Company has various retirement plans which cover substantially all 
employees.  Defined benefit plans covering certain employees (primarily union 
ground employees) provide a stated benefit for specified periods of service, 
while defined benefit plans for other employees provide benefits based on 
employees' years of service and average compensation for a specified period 
of time before retirement.  Pension costs are funded to at least the minimum 
level required by the Employee Retirement Income Security Act of 1974.  The 
company also provides several defined contribution plans which cover 
substantially all U. S. employees who have completed one year of service.  
For certain groups of employees (primarily pilots), the company contributes 
an annual amount on behalf of each participant, calculated as a percentage of 
the participants' earnings or a percentage of the participants' contributions.

<TABLE>
<CAPTION>

      The following table sets forth the defined benefit plans' funded status 
and amounts recognized in the statement of consolidated financial position as 
of December 31:
                                             1994             1993    
                                          Accumulated      Accumulated
                                            Benefits         Benefits 
                                            Exceed           Exceed   
                                            Assets           Assets   
                                                  (In Millions)
<S>                                         <C>              <C>

Actuarial present value of
  accumulated benefit obligation            $4,191           $4,200

Actuarial present value of
  projected benefit obligation              $4,577           $5,025
Plan assets at fair value                    3,785            3,589

Projected benefit obligation
  in excess of plan assets                     792            1,436
Unrecognized net gain (loss)                   (13)            (624)
Prior service cost not yet recognized
  in net periodic pension cost                (523)            (455)
Remaining unrecognized net asset                (3)              16
Adjustment required to
  recognize minimum liability                  302              346
Pension liability recognized in the
  statement of consolidated financial
  position                                  $  555           $  719
</TABLE>



      For the valuation of pension obligations as of December 31, 1994 and 
1993, the weighted average discount rates used were 8.75% and 7.5%, 
respectively, and the rates of increase in compensation were 3.15% and 
4.0%, respectively.  Substantially all of the accumulated benefit 
obligation is vested.

      Total pension expense for all retirement plans (including defined 
contribution plans) was $350 million in 1994, $346 million in 1993, and 
$324 million in 1992.

      Plan assets are invested primarily in governmental and corporate 
debt instruments and corporate equity securities.  The expected average 
long-term rate of return on plan assets at December 31 was 9.75% for 1994, 
9.75% for 1993 and 10.25% for 1992.  

<TABLE>
<CAPTION>

      The net periodic pension cost of defined benefit plans included the 
following components:
                                         1994        1993        1992 
                                                 (In Millions)
<S>                                     <C>         <C>         <C>
      Service cost - benefits earned
        during the year                 $ 216       $ 186       $ 180
      Interest cost on projected 
        benefit obligation                379         356         320
      Actual (return) loss on
        plan assets                        28        (310)       (289)
      Net amortization and deferral      (351)         19          24 

      Net periodic pension cost         $ 272       $ 251       $ 235
</TABLE>



(16) Other Employee Benefits

      The Company provides certain health care benefits, primarily in the 
U. S., to retirees and eligible dependents.  Benefits are generally funded 
from company assets on a current basis, although amounts sufficient to pay 
claims incurred, but not yet paid, are held in trust.  Certain plan 
benefits are subject to co-payments, deductibles and other limits 
described in the plans and the benefits are reduced once a retiree becomes 
eligible for Medicare.  The Company also provides certain life insurance 
benefits to retirees.  The assets to fund retiree life insurance benefits 
are being held in a deposit trust administration fund with a major 
insurance company.  The Company has reserved the right, subject to 
collective bargaining agreements, to modify or terminate the health care 
and life insurance benefits for both current and future retirees.

      Effective January 1, 1992, the Company adopted SFAS No. 106, 
"Employers' Accounting for Postretirement Benefits Other Than Pensions".  
This standard requires that the expected cost of postretirement benefits 
be charged to expense during the years in which employees render service.  
Upon adoption, the Company recorded a one-time pretax charge of $925 
million ($580 million after tax) as the cumulative effect of accounting 
change.


<TABLE>
<CAPTION>
Information on the plans' funded status, on an aggregate basis at 
December 31, follows (in millions):

                                             1994       1993 
<S>                                         <C>        <C>
Accumulated postretirement
  benefit obligation:
    Retirees                                $  383     $  416
    Other fully eligible participants          183        236
    Other active participants                  590        679

  Total accumulated postretirement
    benefit obligation                       1,156      1,331
  Unrecognized net gain (loss)                 138       (149)
  Fair value of plan assets                    (95)       (91)

Accrued postretirement benefit obligation   $1,199     $1,091
</TABLE>



<TABLE>
<CAPTION>
Net postretirement benefit costs included the following components (in 
millions):

                                             1994       1993       1992 
<S>                                         <C>        <C>        <C>
Service cost - benefits attributed to
  service during the period                 $ 46       $ 38       $ 28
Amortization of unrecognized net loss          3          3          -
Interest cost on benefit obligation           95         92         83

Net postretirement benefit costs            $144       $133       $111
</TABLE>



      The discount rate used to estimate the accumulated postretirement 
benefit obligation as of December 31, 1994 and 1993 was 8.75% and 7.5%, 
respectively.  The assumed health care cost trend rate was 10% and 11% for 
1994 and 1993, respectively, declining annually to a rate of 4% by the year 
2001 and remaining level thereafter.  The effect of a 1% increase in the 
assumed health care cost trend rate would increase the accumulated 
postretirement benefit obligation at December 31, 1994, by $150 million and 
the aggregate of the service and interest cost components of net 
postretirement benefit cost for 1994 by $22 million.

      The Company adopted SFAS No. 112, "Employers' Accounting for 
Postemployment Benefits," effective January 1, 1994.  SFAS No. 112 requires 
recognition of the liability for postemployment benefits during the period 
of employment.  Such benefits include company paid continuation of group 
life insurance and medical and dental coverage for certain employees after 
employment but before retirement.  The effect of adopting SFAS No. 112 was a 
cumulative charge for recognition of the transition liability of $42 
million, before tax benefits of $16 million.  The ongoing expenses related 
to postemployment benefits will vary based on actual claims experience.

(17) Investments in Debt Securities

      The Company adopted SFAS No. 115, "Accounting for Certain Investments 
in Debt and Equity Securities," effective January 1, 1994.  The Company's 
investments in such securities are included in "Cash and cash equivalents" 
and "Short-term investments."  The following information pertains to the 
Company's investments in such securities at December 31, 1994 (in millions):

<TABLE>
<CAPTION>

                                           Gross
                              Aggregate  Unrealized             Average
                                Fair      Holding     Cost      Maturity
                                Value      Losses     Basis     (Months)

<S>                           <C>        <C>         <C>        <C>
Available-for-sale:
  U.S. government agency
   debt securities             $  334      $ 2        $  336       9
  Corporate debt securities    $  341      $ 2        $  343      10
  Other debt securities        $  146      $ 1        $  147       8

Held-to-maturity:
  U.S. government agency
   debt securities             $   97      $ -        $   97       6
  Corporate debt securities    $  222      $ -        $  222       4
  Other debt securities        $  384      $ -        $  384       2
</TABLE>


      The net unrealized holding loss on available-for-sale securities 
of $5 million has been recorded as a component of shareholders' equity, 
net of related tax benefits.  The proceeds from sales of 
available-for-sale securities were $255 million in 1994.  Such sales 
resulted in insignificant gross realized gains and losses, based on the 
cost of the specific securities sold.  These gains and losses were 
included in interest income for the year.

(18) Financial Instruments and Off-Balance-Sheet Risk

      Balance Sheet Financial Instruments: Fair Values

      The carrying amounts reported in the consolidated balance sheets 
for cash and cash equivalents, short-term investments classified as 
"held-to-maturity", and short-term borrowings approximate fair value due 
to the immediate or short-term maturities of these financial 
instruments.  Investments in debt securities classified as 
"available-for-sale" are stated at fair value based on the quoted market 
prices for the securities (see note 17).  

      The fair value of long term debt, including debt due within one 
year, is primarily based on the quoted market prices for the same or 
similar issues or on the then current rates offered for debt with 
similar terms and maturities.  The fair value of long-term debt, 
including debt due within one year, at December 31, 1994 and 1993 was 
$2.983 billion and $3.041 billion, respectively, compared with carrying 
values of $3.271 billion and $2.846 billion.

      Off Balance Sheet Financial Instruments:  Risks and Fair Values

      United has entered interest rate swap agreements in order to 
manage the interest rate exposure associated with certain variable rate 
debt and leases.  The swap agreements have remaining terms averaging 16 
years, corresponding to the terms of the related debt or lease 
obligations.  Under the agreements, United makes payments to 
counterparties at fixed rates and in return receives payments based on 
LIBOR.  United's theoretical risk in the swaps is the cost of replacing 
the contracts at current market interest rates in the event of default 
by any of the counterparties; however, United does not anticipate such 
default since the counterparties are major financial institutions with 
investment grade ratings by all rating agencies.  In addition, the risk 
of such default is mitigated by provisions in the contracts which 
require either party to post increasing amounts of collateral as the 
value of the contract moves against them.  Counterparty credit risk is 
further minimized by periodic settlements throughout the duration of the 
contract.  At December 31, 1994, a notional amount of $479 million of 
interest rate swap agreements effectively fixed interest rates between 
8.02% and 8.65% on such obligations.  The fair values to United of 
interest rate swap agreements at December 31, 1994 and 1993 were $26 
million and $(8) million, respectively, taking into account interest 
rates in effect at the time.

      In the first quarter of 1994, United entered into a ten-year 
foreign currency swap contract to reduce exposure to currency 
fluctuations in connection with 29 billion of Japanese yen-denominated 
obligations.  The currency swap contract, which was designated as a 
hedge, effectively fixed, at then current exchange rates, future 
principal, interest and lease payments.  The currency swap contract 
exactly matches the cash flows and maturities of the obligations it 
hedges.  At December 31, 1994, the swap contract had a notional amount 
of $293 million, which will reduce periodically as payments are made.  
The fair value of the currency swap contract to United at December 31, 
1994 was approximately $23 million based on the reduction in the yen to 
dollar exchange rate since United entered into the contract.

      United's theoretical risk in the currency swap is the cost of 
replacing the contract at current market rates in the event of default 
by the counterparty; however, United does not anticipate such default 
since the counterparty is a major money center bank with an investment 
grade rating by all rating agencies.  Furthermore, the risk of such 
default is mitigated by provisions in the contract which require either 
party to post increasing amounts of collateral as either their credit 
rating deteriorates or the value of the contract moves against them.  
Counterparty credit risk is minimal since currency is exchanged 
simultaneously throughout the duration of the contract.

      The currency swap replaced short-term foreign currency call 
options and forward contracts which expired under their own terms, 
resulting in an insignificant loss that was included in income, 
offsetting the insignificant gain recorded from the related obligations 
that were being hedged.  In October 1994, United terminated the portion 
of the foreign currency swap contract hedging future interest payments 
in connection with the Japanese yen-denominated obligations.  While this 
portion of the contract was in effect, foreign currency gains and losses 
on it were deferred and included in interest as it accrued.  The gain 
resulting from the contract termination, net of losses previously 
deferred in connection with the interest payments, is being deferred and 
amortized over the remaining life of the obligations.

      Financial Guarantees

      As of December 31, 1994, United had guaranteed $77 million of 
indebtedness of affiliates.

      Special facility revenue bonds have been issued by certain 
municipalities to build or improve airport facilities leased by United.  
Under the lease agreements, United is required to make rental payments 
in amounts sufficient to pay the maturing principal and interest 
payments on the bonds.  At December 31, 1994, $860 million principal 
amount of such bonds was outstanding.  As of December 31, 1994, UAL and 
United had jointly guaranteed $35 million of such bonds and United had 
guaranteed $834 million of such bonds, including accrued interest.  
Included in this amount are bonds issued by the City of Denver in 
connection with the construction of certain United facilities at Denver 
International Airport, which will replace Stapleton International 
Airport in 1995.

      Transfers of the tax benefits of accelerated depreciation and 
investment tax credits associated with the acquisition of certain 
equipment have been made previously by United to various tax lessors 
through tax lease transactions.  Proceeds from tax benefit transfers 
were recognized as income in the year the lease transactions were 
consummated.  The subject equipment is being depreciated for book 
purposes.  United has agreed to indemnify (guaranteed in some cases by 
UAL) the tax lessors against loss of such benefits in certain 
circumstances and has agreed to indemnify others for loss of tax 
benefits in limited circumstances for certain used aircraft purchased by 
United subject to previous tax lease transactions.  Certain tax lessors 
have required that letters of credit be issued in their favor by 
financial institutions as security for United's indemnity obligations 
under the leases.  The outstanding balance of such letters of credit 
totaled $58 million at December 31, 1994.  At that date, United had 
granted mortgages on aircraft and engines having a total book value of 
$238 million as security for indemnity obligations under tax leases and 
letters of credit.

      Concentration of Credit Risk

      The Company does not believe it is subject to any significant 
concentration of credit risk.  Most of the Company's receivables result 
from sales of tickets to individuals through travel agents, company 
outlets or other airlines, often through the use of major credit cards.  
These receivables are short term, generally being settled shortly after 
the sale.

(19) Commitments and Contingent Liabilities

      The Company has certain contingencies resulting from litigation 
and claims (including environmental issues) incident to the ordinary 
course of business.  Management believes, after considering a number of 
factors, including (but not limited to) the views of legal counsel, the 
nature of contingencies to which the Company is subject and its prior 
experience, that the ultimate disposition of these contingencies is not 
expected to materially affect UAL's consolidated financial position or 
results of operations.

      At December 31, 1994, commitments for the purchase of property and 
equipment, principally aircraft, approximated $3.9 billion after 
deducting advance payments.  An estimated $1.2 billion is expected to be 
expended during 1995, $0.7 billion in 1996, $1.3 billion in 1997, $0.5 
billion in 1998 and $0.2 billion in 1999 and thereafter.  The major 
commitments are for the purchase of thirty-four B777 aircraft, which are 
expected to be delivered between 1995 and 1999.

      In addition to the B777 order, United has arrangements with Airbus 
and International Aero Engines to lease an additional 29 A320 aircraft, 
which are scheduled for delivery through 1998.  Under the agreement, 
United is making advance payments through 1998 which are refundable upon 
delivery of each aircraft.

      At December 31, 1994, United also had purchase options for 162 
B737 aircraft, 39 B757 aircraft, 34 B777 aircraft, 49 B747 aircraft, 8 
B767 aircraft and 50 A320 aircraft.  Under the terms of certain of these 
options which are exercisable during the period 1995 through 1997, 
United would forfeit significant deposits on such options it does not 
exercise.  Consistent with its revised capital spending plan, United has 
recently cancelled options on certain aircraft.

      United's Indianapolis Maintenance Center began operation in March 
1994, initially performing maintenance on B737 aircraft.  In December 
1994, the UAL Board of Directors approved the relocation of B757 and 
B767 airframe maintenance to the Indianapolis Maintenance Center.  
Construction of certain B737 airframe facilities is still in process and 
construction of facilities for the other fleet types will begin in 1995. 
 The facilities are being financed primarily with tax-exempt bonds and 
other capital sources.  In connection with incentives received, United 
has agreed to reach an $800 million capital spending target and employ 
at least 7,500 individuals.


(20) Statement of Consolidated Cash Flows - Supplemental Disclosures


<TABLE>
<CAPTION>
      Supplemental disclosures of cash flow information and non-cash 
investing and financing activities were as follows:

                                            1994       1993      1992 
                                                  (In Millions)
    <S>                                    <C>        <C>       <C>
    Cash paid during the year for:
      Interest (net of amounts 
        capitalized)                       $302       $330      $200
      Income taxes                         $ 69       $135      $ 30

    Non-cash transactions:
      Capital lease obligations
        incurred                           $ -        $ 70      $276
      Long-term debt incurred in
        connection with additions
        to equipment                       $ 21       $487      $755
      Increase in pension intangible       $ 13       $ 19      $  8
      Net unrealized loss on investments   $  3       $ -       $ - 
      Issuance of treasury stock in
        exchange for Air Wis common
        stock                              $ -        $ -         64
</TABLE>


(21) Other Matters

      In April 1993, UAL transferred the Air Wisconsin, Inc. operations at 
Dulles to Atlantic Coast Airlines.  In September 1993, UAL transferred 
certain Air Wisconsin, Inc. operations at O'Hare to United Feeder 
Services.  In December 1993, UAL transferred the jet operations of Air 
Wisconsin, Inc. to CJT Holdings.  These operations are being conducted by 
the counterparties in these agreements under the United Express trade 
name.  In October 1994, UAL announced an agreement to sell for $119 
million ten Dash 8 aircraft and spare parts owned by Air Wisconsin, Inc. 
to Mesa Airlines, and United agreed to a ten year extension of its United 
Express marketing agreement with Mesa Airlines.  The sales will take place 
in the first quarter of 1995. 

      In 1993, United reached agreements to sell assets related to the 
operation of 16 of its flight kitchens to Dobbs International Services, 
Inc. and Caterair International Corp. for $119 million.  These asset sales 
were completed by June 1994 and resulted in an insignificant gain.  Under 
the agreements, the purchasers are providing catering services for United 
at the airports served by the flight kitchens for seven years.

(22) Selected Quarterly Financial Data (Unaudited)

<TABLE>
<CAPTION>

                                  1st       2nd       3rd       4th
                                Quarter   Quarter   Quarter   Quarter    Year  
                                             (In Millions)
<S>                             <C>       <C>       <C>       <C>       <C>

1994:
  Operating revenues            $3,195    $3,502    $3,814    $3,439    $13,950
  Earnings (loss) from
    operations                     (36)      167       312        78        521 
  Earnings (loss) before
    cumulative effect of
    accounting changes             (71)       55        82        11         77 
  Cumulative effect of
    accounting changes             (26)       -         -          -        (26)
  Net earnings (loss)           $  (97)   $   55    $   82    $   11    $    51 
  Per share amounts, primary:
    Earnings (loss) before
      cumulative effect of
      accounting changes        $(3.31)   $ 1.89    $ 4.24    $(0.98)   $  0.76 
    Cumulative effect of
      accounting changes         (1.06)       -         -         -       (1.37)
    Net earnings (loss)         $(4.37)   $ 1.89    $ 4.24    $(0.98)   $ (0.61)
  Net earnings (loss)
    per share, fully diluted    $(4.37)   $ 1.89    $ 4.21    $(0.98)   $ (0.61)

1993:
  Operating revenues            $3,053    $3,296    $3,629    $3,347    $13,325
  Earnings (loss) from
    operations                    (121)       84       281        19        263 
  Earnings (loss) before
    extraordinary item            (138)       22       149       (64)       (31)
  Extraordinary loss on
    early extinguishment
    of debt                        (19)       -         -          -        (19)
  Net earnings (loss)           $ (157)   $   22    $  149    $  (64)   $   (50)
  Per share amounts, primary:
    Earnings (loss) before
      extraordinary item        $(5.92)   $ 0.54    $ 5.74    $(3.02)   $ (2.64)
    Extraordinary loss on
      early extinguishment
      of debt                    (0.77)       -         -         -       (0.76)
    Net earnings (loss)         $(6.69)   $ 0.54    $ 5.74    $(3.02)   $ (3.40)
  Net earnings (loss)
    per share, fully diluted    $(6.69)   $ 0.54    $ 5.21    $(3.02)   $ (3.40)
</TABLE>



      In 1994, United began recording certain air transportation price 
adjustments, which were previously recorded as commissions, as adjustments 
to revenue.  The revenue amounts for 1993 above have been reclassified to 
conform with the current presentation.

      The Company adopted SFAS No. 112, "Employers' Accounting for 
Postemployment Benefits," effective January 1, 1994.  The effect of 
adopting SFAS No. 112 was a cumulative charge for recognition of the 
transition liability of $42 million, before tax benefits of $16 million.

      In connection with the July 1994 recapitalization, the Company 
incurred pretax costs of $19 million, $22 million and $128 million in the 
first, second and third quarters, respectively, including transaction 
costs and severance payments to certain former United employees.  Of these 
costs, $48 million were recorded as operating expenses in the third 
quarter, while the remaining costs were recorded in "Miscellaneous, net."

      In the second quarter of 1993, United retired $500 million of senior 
subordinated notes.  An extraordinary loss of $19 million, net of tax 
benefits of $8 million, was recorded in the first quarter of 1993, based 
on United's stated intention to retire the notes.

      In the third quarter of 1993, United recorded a charge of $59 
million to reduce the net book value of 15 DC-10 aircraft to estimated net 
realizable value.  In addition, third quarter earnings included a $17 
million gain and interest income of $27 million resulting from the final 
settlement for overpayment of annuities purchased in 1985 to cover certain 
vested pension benefits.  The 1993 fourth quarter included $53 million of 
equity in the loss of Galileo, which primarily reflects United's share of 
a charge recorded by Galileo for the cost of eliminating duplicate 
facilities and operations.

<TABLE>
<CAPTION>

      Earnings per share were calculated after providing for the following 
preferred stock dividend requirements (in millions):

                              1st       2nd       3rd       4th
                            Quarter   Quarter   Quarter   Quarter    Year  
<S>                           <C>       <C>       <C>       <C>      <C>

1994                          $ 9       $ 9       $20       $21      $59
1993                          $ 6       $ 9       $ 9       $ 9      $33
</TABLE>


      Earnings available to common stockholders were also reduced by $3 
million in the 1994 fourth quarter and twelve-month period for the excess 
of amounts paid to reacquire UAL preferred stock over the liquidation 
preference of such stock.  In the 1994 and 1993 third quarters, primary 
per share amounts were based on weighted average common shares and common 
equivalents outstanding, including ESOP shares committed to be released.  
Fully diluted per share amounts assume the exercise of stock options and 
vesting of restricted stock at the beginning of the periods and, for the 
1993 third quarter, the conversion of convertible preferred stock and 
elimination of related dividends.  The fully diluted per share amount for 
the 1994 third quarter does not assume conversion of convertible preferred 
stock since the effect is antidilutive.  In the computations for the 1994 
and 1993 first, second and fourth quarters and year, common stock 
equivalents were not included as they did not have a dilutive effect.

      In connection with the July 1994 recapitalization, each old common 
share was exchanged for one half new common share.  As required under 
generally accepted accounting principles for transactions of this type, 
the historical weighted average shares outstanding have not been restated. 
 Thus, direct comparisons between 1994 and 1993 per share amounts are not 
meaningful.

      The sum of quarterly earnings per share amounts is not the same as 
annual earnings per share amounts because of changing numbers of shares 
outstanding.


I
TEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE.

     No reportable event has occurred.




                         PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

    Information regarding the directors of the Company 
and the information required by Item 405 of Regulation S-K shall be
incorporated by reference from the Company's definitive proxy
statement for its 1995 Annual Meeting of Stockholders or shall be
added hereto by an amendment to this Form 10-K, in either case
within the time required by the instructions to Form 10-K.
Information regarding the executive officers of the Company is
included in Part I of this Form 10-K under the caption "Executive
Officers of the Registrant."



ITEM 11.  EXECUTIVE COMPENSATION.

    Information regarding this Item shall be incorporated by
reference from the Company's definitive proxy statement for its
1995 Annual Meeting of Stockholders or shall be added hereto by an
amendment to this Form 10-K, in either case within the time
required by the instructions to Form 10-K.



ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
          AND MANAGEMENT.

    Information regarding this Item shall be incorporated by
reference from the Company's definitive proxy statement for its
1995 Annual Meeting of Stockholders or shall be added hereto by an
amendment to this Form 10-K, in either case within the time
required by the instructions to Form 10-K.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

    Information regarding this Item shall be incorporated by
reference from the Company's definitive proxy statement for its
1995 Annual Meeting of Stockholders or shall be added hereto by an
amendment to this Form 10-K, in either case within the time
required by the instructions to Form 10-K.



                         PART IV


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
          ON FORM 8-K.

(a)  1.        The financial statements required
               by this item are listed in Item 8, "Financial
               Statements and Supplementary Data" herein.
               
     2.        The financial statement schedule required by
               this item is listed below:


For the years ended December 31, 1994, 1993 and 1992:

      II--Valuation and qualifying accounts

     
               All other schedules are omitted because they are
               not applicable, not required or the required
               information is shown in the consolidated financial
               statements or notes thereto.
     
     
     3.        The exhibits required by this item are listed in
               "Index to Exhibits" herein.


(b)  Reports on Form 8-K.

     No reports on Form 8-K have been filed during the fourth quarter
of 1994.


<TABLE>
<CAPTION>
                                          UAL Corporation and Subsidiary Companies

                                       Schedule II--Valuation and Qualifying Accounts

                                            For the Year Ended December 31, 1994



                                                   Balance at        Additions Charged to                         Balance at
                                                   Beginning      Costs and           Other                         End of
           Description                              of Year       Expenses          Accounts       Deductions        Year   
                                                                     (In Millions)

<S>                                               <C>              <C>              <C>            <C>             <C>
Reserve deducted from asset to which it applies:

    Allowance for doubtful accounts               $ 22             $ 25             $ -            $ 25(1)         $ 22

    Obsolescence allowance - 
      Flight equipment spare parts                $ 70             $ 12             $ 4            $ 42(2)         $ 44


               
(1) Deduction from reserve for purpose for which reserve was created.

(2) Includes deduction from reserve for parts dispositions and write-offs and $22 million of reserves transferred in 
    connection with parts transferred to fixed asset accounts.
</TABLE>




<TABLE>
<CAPTION>
                                          UAL Corporation and Subsidiary Companies

                                       Schedule II--Valuation and Qualifying Accounts

                                            For the Year Ended December 31, 1993



                                                  Balance at         Additions Charged to                         Balance at
                                                  Beginning       Costs and           Other                         End of
           Description                             of Year        Expenses          Accounts       Deductions        Year   
                                                                     (In Millions)

<S>                                               <C>              <C>              <C>            <C>             <C>
Reserve deducted from asset to which it applies:

    Allowance for doubtful accounts               $ 12             $ 19             $ 7            $ 16(1)         $ 22

    Obsolescence allowance - 
      Flight equipment spare parts                $ 46             $ 12             $27            $ 15(1)         $ 70


               
(1) Deduction from reserve for purpose for which reserve was created.
</TABLE>




<TABLE>
<CAPTION>

                                          UAL Corporation and Subsidiary Companies

                                       Schedule II--Valuation and Qualifying Accounts

                                            For the Year Ended December 31, 1992



                                                  Balance at         Additions Charged to                         Balance at
                                                  Beginning       Costs and           Other                         End of
           Description                             of Year        Expenses          Accounts       Deductions        Year   
                                                                     (In Millions)

<S>                                               <C>              <C>              <C>            <C>             <C>
Reserve deducted from asset to which it applies:

    Allowance for doubtful accounts               $ 13             $18              $ -            $ 19(1)         $ 12

    Obsolescence allowance - 
      Flight equipment spare parts                $ 67             $12              $ 2            $ 35(2)         $ 46


               
(1) Deduction from reserve for purpose for which reserve was created.

(2) Includes deduction from reserve for parts dispositions and write-offs and $15 million of reserves transferred in 
    connection with parts transferred to non-operating property.

</TABLE>


                           INDEX TO EXHIBITS
 
 Exhibit Number               Description
 
 3.1               Restated Certificate of Incorporation as
                    filed in Delaware on July 12, 1994, as
                    corrected on February 2, 1995 (filed as
                    Exhibit 3.1 to Registrant's Form S-4
                    Registration Statement (Registration No. 33-
                    57579 and incorporated herein by reference).
 
 3.2               By-laws, as amended on July 12, 1994 (filed
                    as Exhibit 3.2 to Registrant's Quarterly
                    Report on Form 10-Q for the quarter ended
                    June 30, 1994 and incorporated herein by
                    reference).
 
 4.1               Rights Agreement dated as of December 11,
                    1986 between Registrant and First Chicago
                    Trust Company of New York, as Rights Agent,
                    as amended.
 
 4.2               Deposit Agreement dated as of July 12, 1994
                    between UAL Corporation and holders from time
                    to time of Depositary Receipts described
                    herein (filed as Exhibit 4.2 to Registrant's
                    Quarterly Report on Form 10-Q for the quarter
                    ended June 30, 1994 and incorporated herein
                    by reference).
 
                   Registrant's indebtedness under any single
                    instrument does not exceed 10% of
                    Registrant's total assets on a consolidated
                    basis.  Copies of such instruments will be
                    furnished to the Securities and Exchange
                    Commission upon request.
 
 10.1              Amended and Restated Agreement and Plan of
                    Recapitalization, dated as of March 25, 1994
                    (the "Recapitalization Agreement"), as
                    amended, among UAL Corporation, the Air Line
                    Pilots Association, International and the
                    International Association of Machinists and
                    Aerospace Workers (filed as Exhibit A to
                    Exhibit 10.1 of UAL Corporation's (File No. 1-
                    6033) Form 8-K dated June 2, 1994 and
                    incorporated herein by reference; amendment
                    thereto filed as Exhibit 10.1 of UAL
                    Corporation's (File 1-6033) Form 8-K dated
                    June 29, 1994 and incorporated herein by
                    reference).
 
 10.2              Waiver and Agreement, dated as of December
                    23, 1994, to the Recapitalization Agreement
                    among UAL Corporation, the Air Line Pilots
                    Association, International and the
                    International Association of Machinists and
                    Aerospace Workers.
 
 10.3              Third Amendment, dated as of March 15, 1995,
                    to the Recapitalization Agreement among UAL
                    Corporation, the Air Line Pilots Association,
                    International and the International
                    Association of Machinists and Aerospace
                    Workers.
 
 10.4              UAL Corporation Employee Stock Ownership
                    Plan, effective as of July 12, 1994 (filed as
                    Exhibit 10.1 to Registrant's Quarterly Report
                    on Form 10-Q for the quarter ended September
                    30, 1994 and incorporated herein by
                    reference).
 
 10.5              UAL Corporation Employee Stock Ownership Plan
                    Trust Agreement between UAL Corporation and
                    State Street Bank and Trust Company,
                    effective July 12, 1994 (filed as Exhibit
                    10.2 to Registrant's Quarterly Report on Form
                    10-Q for the quarter ended September 30, 1994
                    and incorporated herein by reference).
 
 10.6              UAL Corporation Supplemental ESOP, effective
                    as of July 12, 1994 (filed as Exhibit 10.3 to
                    Registrant's Quarterly Report on Form 10-Q
                    for the quarter ended September 30, 1994 and
                    incorporated herein by reference).
 
 10.7              UAL Corporation Supplemental ESOP Trust
                    Agreement between UAL Corporation and State
                    Street Bank and Trust Company, effective July
                    12, 1994 (filed as Exhibit 10.4 to
                    Registrant's Quarterly Report on Form 10-Q
                    for the quarter ended September 30, 1994 and
                    incorporated herein by reference).
 
 10.8              Preferred Stock Purchase Agreement, dated as
                    of March 25, 1994, between UAL Corporation
                    and State Street Bank and Trust Company
                    (filed as Exhibit 10.5 to Registrant's
                    Quarterly Report on Form 10-Q for the quarter
                    ended September 30, 1994 and incorporated
                    herein by reference).
 
 10.9              Amendment No. 1 to Preferred Stock Purchase
                    Agreement, dated as of June 2, 1994, between
                    UAL Corporation and State Street Bank and
                    Trust Company (filed as Exhibit 10.6 to
                    Registrant's Quarterly Report on Form 10-Q
                    for the quarter ended September 30, 1994 and
                    incorporated herein by reference).
 
 10.10             Class I Junior Preferred Stockholders'
                    Agreement dated as of June 12, 1994 (filed as
                    Exhibit 10.12 to Registrant's Quarterly
                    Report on Form 10-Q for the quarter ended
                    September 30, 1994 and incorporated herein by
                    reference).
 
 10.11             Class SAM Preferred Stockholders' Agreement
                    dated as of July 12, 1994 (filed as Exhibit
                    10.13 to Registrant's Quarterly Report on
                    Form 10-Q for the quarter ended September 30,
                    1994 and incorporated herein by reference).
 
 10.12             First Refusal Agreement dated as of July 12,
                    1994, as amended by First Amendment dated as
                    of February 24, 1995.
 
 10.13             UAL Corporation 1981 Incentive Stock Plan, as
                    amended.
 
 10.14             UAL Corporation 1988 Restricted Stock Plan,
                    as amended.
 
 10.15             UAL Corporation Incentive Compensation Plan,
                    as amended.
 
 10.16             UAL Corporation Retirement Plan for Outside
                    Directors, as amended (filed as Exhibit 10.1
                    to Registrant's Quarterly Report on Form 10-Q
                    for the quarter ended March 31, 1994 and
                    incorporated herein by reference).
 
 10.17             Description of Complimentary Travel and Cargo
                    Carriage Benefits for UAL Directors (filed as
                    Exhibit 10.1 to Registrant's Quarterly Report
                    on Form 10-Q for the quarter ended March 31,
                    1994 and incorporated herein by reference).
 
 10.18             UAL Corporation 1992 Stock Plan for Outside
                    Directors, as amended on December 15, 1994.
 
 10.19             UAL Corporation 1995 Directors Plan.
 
 10.20             Employment Agreement between UAL Corporation
                    and Gerald Greenwald (filed as Exhibit 10.5
                    to Registrant's Quarterly Report on Form 10-Q
                    for the quarter ended June 30, 1994 and
                    incorporated herein by reference).
 
 10.21             Amendment No. 1 to Employment Agreement
                    between UAL Corporation and Gerald Greenwald
                   (filed as Exhibit 10.6 to Registrant's
                    Quarterly Report on Form 10-Q for the quarter
                    ended June 30, 1994 and incorporated herein
                    by reference).
 
 10.22             Restricted Stock Deposit Agreement between
                    UAL Corporation and Gerald Greenwald (filed
                    as Exhibit 10.7 to Registrant's Quarterly
                    Report on Form 10-Q for the quarter ended
                    June 30, 1994 and incorporated herein by
                    reference).
 
 10.23             1988 Restricted Stock Plan Deposit Agreement
                    between UAL Corporation and Gerald Greenwald
                   (filed as Exhibit 10.8 to Registrant's
                    Quarterly Report on Form 10-Q for the quarter
                    ended June 30, 1994 and incorporated herein
                    by reference).
 
 10.24             Non-Qualified Stock Option Agreement between
                    UAL Corporation and Gerald Greenwald (filed
                    as Exhibit 10.9 to Registrant's Quarterly
                    Report on Form 10-Q for the quarter ended
                    June 30, 1994 and incorporated herein by
                    reference).
 
 10.25             Restricted Stock Deposit Agreement between
                    UAL Corporation and John A. Edwardson
                   (filed as Exhibit 10.10 to Registrant's
                    Quarterly Report on Form 10-Q for the quarter
                    ended June 30, 1994 and incorporated herein
                    by reference).
 
 10.26             Restricted Stock Deposit Agreement between
                    UAL Corporation and Stuart I. Oran (filed as
                    Exhibit 10.12 to Registrant's Quarterly
                    Report on Form 10-Q for the quarter ended
                    June 30, 1994 and incorporated herein by
                    reference).
 
 10.27             Letter Agreement No. 6-1162-JCM-500 dated
                    December 9, 1994 to Agreement dated December
                    18, 1990 between The Boeing Company, as
                    seller, and United Air Lines, Inc., and
                    United Worldwide Corporation, as buyer, for
                    the acquisition of Boeing 777-200 aircraft
                    (as previously amended and supplemented, "777-
                    200 Purchase Agreement" (filed as Exhibit
                    10.7 to Registrant's Annual Report on Form
                    10-K for the year ended December 31, 1990 and
                    incorporated herein by reference; supplements
                    thereto filed as (i) Exhibits 10.1, 10.2 and
                    10.22 to Registrant's Quarterly Report on
                    Form 10-Q for the quarter ended June 30,
                    1993, (ii) Exhibit 10.2 to Registrant's
                    Annual Report on Form 10-K for the year ended
                    December 31, 1993, and (iii) Exhibit 10.14 to
                    Registrant's Quarterly Report on Form 10-Q
                    for the quarter ended June 30, 1994, and
                    incorporated herein by reference)).  (Exhibit
                    10.27 hereto is filed with a request for
                    confidential treatment of certain portions.)
 
 10.28             Letter Agreement 6-1171-FT-831 dated February
                    22, 1995 to 777-200 Purchase Agreement.
                    (Exhibit 10.28 hereto is filed with a request
                    for confidential treatment of certain
                    portions.)

 10.29             Letter Agreements dated January 31, 1995 to
                    Agreement dated December 18, 1990 between The
                    Boeing Company, as seller, and United Air
                    Lines, Inc., and United Worldwide
                    Corporation, as buyer, for the acquisition of
                    Boeing 747-400 aircraft (as previously
                    amended and supplemented, "747-400 Purchase
                    Agreement" (filed as Exhibit 10.8 to
                    Registrant's Annual Report on Form 10-K for
                    the year ended December 31, 1990, and
                    incorporated herein by reference; supplements
                    thereto filed as (i) Exhibits 10.4 and 10.5
                    to Registrant's Annual Report on Form 10-K
                    for the year ended December 31, 1991, (ii)
                    Exhibits 10.3, 10.4, 10.5, 10.6 and 10.22 to
                    Registrant's Quarterly Report on Form 10-Q
                    for the quarter ended June 30, 1993, (iii)
                    Exhibit 10.3 to Registrant's Annual Report on
                    Form 10-K for the year ended December 31,
                    1993, and (iv) Exhibit 10.14 to Registrant's
                    Quarterly Report on Form 10-Q for the quarter
                    ended June 30, 1994, and incorporated herein
                    by reference)).  (Exhibit 10.29 hereto is
                    filed with a request for confidential
                    treatment of certain portions.)
 
 10.30             Letter Agreement dated February 28, 1995 to
                    747-400 Purchase Agreement.  (Exhibit 10.30
                    hereto is filed with a request for
                    confidential treatment of certain portions.)
 
 10.31             Letter Agreement dated February 10, 1995 to
                    A320 Purchase Agreement dated August 10, 1992
                    between AVSA, S.A.R.L., as seller, and United
                    Air Lines, Inc., as buyer, for the
                    acquisition of Airbus Industrie A320-200
                    model aircraft (as previously amended and
                    supplemented, "A320-200 Purchase Agreement"
                    (filed as Exhibit 10.14 to Registrant's
                    Annual Report on Form 10-K for the year ended
                    December 31, 1992, and incorporated herein by
                    reference; supplements thereto filed as (i)
                    Exhibits 10.4 and 10.5 to Registrant's Annual
                    Report on Form 10-K for the year ended
                    December 31, 1993, and (ii) Exhibits 10.15
                    and 10.16 to Registrant's Quarterly Report on
                    Form 10-Q for the quarter ended June 30,
                    1994, and incorporated herein by reference)).
                    (Exhibit 10.31 hereto is filed with a request
                    for confidential treatment of certain
                    portions.)
 
 10.32             Agreement dated March 1, 1990 between The
                    Boeing Company and United Air Lines, Inc., as
                    amended and supplemented, for the acquisition
                    of Boeing 767-300ER aircraft (filed as
                    Exhibit (10)L to Registrant's Annual Report
                    on Form 10-K for the year ended December 31,
                    1989, and incorporated herein by reference;
                    supplements thereto filed as (i) Exhibits
                    10.7, 10.8, 10.9 and 10.10 to Registrant's
                    Annual Report on Form 10-K for the year ended
                    December 31, 1991, (ii) Exhibits 10.7, 10.8,
                    10.9, 10.10, 10.11, 10.12, 10.13 and 10.22 to
                    Registrant's Quarterly Report on Form 10-Q
                    for the quarter ended June 30, 1993, and
                    (iii) Exhibit 10.14 to Registrant's Quarterly
                    Report on Form 10-Q for the quarter ended
                    June 30, 1994, and incorporated herein by
                    reference). 
 
 10.33             Agreement dated April 26, 1989 between The
                    Boeing Company and United Air Lines, Inc., as
                    amended and supplemented, for the acquisition
                    of Boeing 757-200 and 737 aircraft (filed as
                    Exhibit (10)K to Registrant's Annual Report
                    on Form 10-K for the year ended December 31,
                    1989, and incorporated herein by reference;
                    supplements thereto filed as (i) Exhibits
                    10.12 and 10.13 to Registrant's Annual Report
                    on Form 10-K for the year ended December 31,
                    1991, (ii) Exhibits 10.14, 10.15, 10.16,
                    10.17, 10.18, 10.19 and 10.22 to Registrant's
                    Quarterly Report on Form 10-Q for the quarter
                    ended June 30, 1993, and (iii) Exhibit 10.14
                    to Registrant's Quarterly Report on Form 10-Q
                    for the quarter ended June 30, 1994, and
                    incorporated herein by reference).
 
 10.34             An amended and restated agreement, dated
                    March 19, 1992, between The Boeing Company
                    and United Air Lines, Inc., for the
                    acquisition of Boeing 737 aircraft (filed as
                    Exhibit 10.15 to Registrant's Annual Report
                    on Form 10-K for the year ended December 31,
                    1992, and incorporated herein by reference;
                    supplements thereto filed as (i) Exhibits 10.20,
                    10.21 and 10.22 to Registrant's Quarterly
                    Report on Form 10-Q for the quarter ended
                    June 30, 1993, and (ii) Exhibit 10.14 to
                    Registrant's Quarterly Report on Form 10-Q
                    for the quarter ended June 30, 1994, and
                    incorporated herein by reference).
 
 10.35             Letter Agreement among the State of Indiana,
                    the City of Indianapolis, the Indianapolis
                    Airport Authority and United Air Lines, Inc.
                    dated as of December 1, 1994, amending the
                    Agreement among the State of Indiana, the
                    City of Indianapolis, the Indianapolis
                    Airport Authority and United Air Lines, Inc.
                    dated November 21, 1991, concerning United's
                    aircraft maintenance facility (filed as
                    Exhibit 10.29 to Registrant's Annual Report
                    on Form 10-K for the year ended December 31,
                    1991, and incorporated herein by reference;
                    supplements thereto filed as Exhibits 10.9
                    and 10.10 to Registrant's Annual Report on
                    Form 10-K for the year ended December 31,
                    1993, and incorporated herein by reference).
 
 10.36             United Supplemental Retirement Plan (filed as
                    Exhibit 10.42 to Registrant's Annual Report
                    on Form 10-K for the year ended December 31,
                    1992, and incorporated herein by reference).
 
 10.37             Description of Officer Benefits.
 
 10.38             Form of Severance Agreement between UAL
                    Corporation and certain officers of United
                    Air Lines, Inc. (filed as Exhibit 10.27 to
                    Registrant's Form 10-Q for the quarter ended
                    June 30, 1993 and incorporated herein by
                    reference).
 
 11                Calculation of fully diluted net earnings
                    per share.
 
 12.1              Computation of Ratio of Earnings to Fixed
                    Charges.
 
 12.2              Computation of Ratio of Earnings to Fixed
                    Charges and Preferred Stock Dividend
                    Requirements.
 
 21                List of Registrant's subsidiaries.
 
 23.1              Consent of Independent Public Accountants.

 24                Power of Attorney (included as a part of the
                    signature page of the Registrant's report on
                    Form 10-K for the year ended December 31,
                    1994 and incorporated herein by reference).
 
 27                Financial Data Schedule.
 
 99.1              Annual Report on Form 11-K for Employees'
                    Stock Purchase Plan of UAL Corporation.






SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                         UAL CORPORATION



                        By: /s/ Gerald Greenwald
                            Gerald Greenwald
                            Chairman and Chief Executive
                            Officer and a Director
                            (Principal Executive Officer)




                        By: /s/ Douglas A. Hacker
                            Douglas A. Hacker
                            Senior Vice President - Finance
                            (Principal Financial Officer
                            and Principal Accounting Officer)





March 8, 1995



     Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant as Directors as of March 8,
1995.  Each person whose signature appears below constitutes and
appoints Gerald Greenwald and Douglas A. Hacker, and each of
them, the true and lawful attorneys-in-fact and agents of the
undersigned, with full power of substitution and resubstitution,
for and in the name, place and stead of the undersigned, in any
and all capacities, to sign any and all amendments to this
report, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and
Exchange Commission, and hereby grant to such attorneys-in-fact
and agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to
be done, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.



/s/ Gerald Greenwald               /s/ Harlow Osteboe
Gerald Greenwald                   Harlow Osteboe
                                   
                                   
/s/ John A. Edwardson              /s/ John F. Peterpaul
John A. Edwardson                  John F. Peterpaul
                                   
                                   
/s/ Duane D. Fitzgerald            /s/ Paul E. Tierney, Jr.
Duane D. Fitzgerald                Paul E. Tierney, Jr.
                                   
                                   
/s/ Richard D. McCormick           /s/ John K. Van de Kamp
Richard D. McCormick               John K. Van de Kamp
                                   
                                   
/s/ John F. McGillicuddy           /s/ Joseph V. Vittoria
John F. McGillicuddy               Joeseph V. Vittoria
                                   
                                   
/s/ James J. O'Connor              /s/ Paul A. Volcker
James J. O'Connor                  Paul A. Volcker







                                                      Exhibit 4.1
                                                                 
                                                       As Amended
                                                    July 12, 1994



_________________________________________________________________
_________________________________________________________________




                        RIGHTS AGREEMENT


                     ______________________


                         UAL CORPORATION
                                
                               And
                                
                                
             First Chicago Trust Company of New York
                                
                          Rights Agent


                     ______________________





                  Dated as of December 11, 1986



_________________________________________________________________
_________________________________________________________________




                        TABLE OF CONTENTS
Section                                                   Page
   1      Certain Definitions...........................    1
                                                            
   2      Appointment of Rights Agent...................    4
                                                            
   3      Issue of Right Certificates...................    5
                                                            
   4      Form of Right Certificates....................    5
                                                            
   5      Countersignatures and Registration............    6
                                                            
   6      Transfer, Split Up, Combination and               
          Exchange of Right Certificates;                   
          Mutilated, Destroyed, Lost or Stolen              
          Right Certificates ...........................    7
                                                            
   7      Exercise of Rights; Purchase Price;               
          Expiration Date of Rights.....................    8
                                                            
   8      Cancellation and Destruction of                   
          Right Certificates ...........................   10
                                                            
   9      Reservation and Availability of                   
          Shares of Preferred Stock ....................   11
                                                            
   10     Preferred Stock Record Date ..................   12
                                                            
   11     Adjustment of Purchase Price,                     
          Number and Kind of Shares or                      
          Number of Rights .............................   13
                                                            
   12     Certification of Adjusted Purchase                
          Price or Number of Shares ....................   24
                                                            
   13     Consolidation, Merger or Sale or                  
          Transfer of Assets or Earning Power...........   25
                                                            
   14     Fractional Rights and Fractional                  
          Shares .......................................   27
                                                            
   15     Rights of Action .............................   29
                                                            
                                                            
                                                            
Section                                                   Page
   16     Agreement of Right Holders ...................   29
                                                            
   17     Right Certificate Holder Not Deemed               
          a Stockholder ................................   30
                                                            
   18     Concerning the Rights Agent ..................   30
                                                            
   19     Merger or Consolidation or Change                 
          of Name of Rights Agent ......................   31
                                                            
   20     Duties of Rights Agent .......................   32
                                                            
   21
     Change of Rights Agent .......................   34
                                                            
   22     Issuance of New Right Certificates ...........   35
                                                            
   23     Redemption ...................................   36
                                                            
   24     Notice of Proposed Actions ...................   37
                                                            
   25     Notices ......................................   38
                                                            
   26     Supplements and Amendments ...................   39
                                                            
   27     Successors ...................................   40
                                                            
   28     Benefits of this Agreement ...................   40
                                                            
   29     Delaware Contract ............................   40
                                                            
   30     Counterparts .................................   40
                                                            
   31     Descriptive Headings .........................   40
                                                            



EXHIBIT A -- Certificate of Designation, Preferences and Rights

EXHIBIT B -- Form of Right Certificate

                        RIGHTS AGREEMENT

     This Agreement, dated as of December 11, 1986, between UAL
Corporation, a Delaware corporation (the "Company"), and First
Chicago Trust Company of New York, a New York corporation (the
"Rights Agent").


                       W I T N E S S E T H

     WHEREAS, the Board of Directors of the Company has
authorized and declared a dividend (the "Dividend") of one Right
for each outstanding share of Common Stock, par value $0.01 per
share, of the Company outstanding on the record date for the
Dividend, each Right representing the right to purchase one one-
hundredth of a share of Series C Junior Participating Preferred
Stock of the Company having the rights and preferences set forth
in the form of Certificate of Designation, Rights and Preferences
attached hereto as Exhibit A ("Preferred Stock") upon the terms
and subject to the conditions hereinafter set forth;

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

     Section 1. Certain Definitions.  For purposes of this
Agreement, the following terms have the meanings indicated:

     (a)  "Acquiring Person" means any Person who, together with
all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding (after giving effect to full conversion into
Common Stock of outstanding shares of ESOP Convertible Preferred
Stock and, upon issuance, of the Available Unissued ESOP Shares),
but shall not include the Company, any of its Subsidiaries, any
employee benefit plan formed by the Company or any of its
Subsidiaries or any Person organized, appointed or established by
the Company or any of its Subsidiaries for or pursuant to the
terms of any such plan; provided that (i) in the event that the
Company repurchases shares of Common Stock pursuant to a tender
offer, and solely as a result thereof, such Person, together with
all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding (after giving effect to full conversion into
Common Stock of outstanding shares of ESOP Convertible Preferred
Stock and, upon issuance, of the Available Unissued ESOP Shares),
such Person shall not be an Acquiring Person if immediately after
ten days after the completion of the Company's repurchases of
shares pursuant to the tender offer, such Person is no longer the
Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding (after giving effect to full conversion into
Common Stock of outstanding shares of ESOP Convertible Preferred
Stock and, upon issuance, of the Available Unissued ESOP Shares),
and (ii) any Person that, together with all Affiliates and
Associates of such Person is as of the date of Amendment No. 2 to
this Agreement the Beneficial Owner of 15% or more but less than
20% of the shares of Common Stock outstanding as of such date
shall not be an Acquiring Person until such time, if any, as such
Person acquires one or more additional shares of Common Stock;
and provided further that each of the ESOP Trustee and each of
the Unions (as such terms are defined in the Agreement and Plan
of Recapitalization, dated March 25, 1994 (as amended, the
"Recapitalization Agreement"), among the Company, Air Line Pilots
Association International ("ALPA") and International Association
of Machinists and Aerospace Workers ("IAM")) shall not be deemed
to be an Acquiring Person by reason of either the effectiveness
of the Recapitalization Agreement or the undertaking or
consummation of any transactions contemplated by the
Recapitalization Agreement or the Schedules or other attachments
thereto; and provided further that any Person who becomes a
Beneficial Owner of Common Stock and is eligible to report, and
reports, such Beneficial Ownership on Schedule 13G promulgated
under the Securities Exchange Act of 1934 shall not be deemed an
Acquiring Person so long as such Person continues to be eligible
to report, and reports, such Beneficial Ownership on a Schedule
13G.

     (b)  "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as in effect on the date hereof.

     (c)  A Person shall be deemed the "Beneficial Owner" of any
securities:

          (i) which such Person or any of such Person's
     Affiliates or Associates beneficially owns, directly or
     indirectly;


          (ii) which such Person or any of such Person's
     Affiliates or Associates has (A) the right to acquire
     (whether such right is exercisable immediately or only after
     the passage of time) pursuant to any agreement, arrangement
     or understanding, or upon the exercise of conversion rights,
     exchange rights, rights (other than these Rights), warrants
     or options, or otherwise, or (B) the right to vote pursuant
     to any agreement, arrangement or understanding; and

          (iii) which are beneficially owned, directly or
     indirectly, by any other Person with which such Person or
     any of such Person's Affiliates or Associates has any
     agreement, arrangement or understanding for the purpose of
     acquiring, holding, voting or disposing of any securities of
     the Company;

provided, however, that no Person shall be deemed the Beneficial
Owner of any securities solely because such Person has been
granted a revocable proxy to vote such shares.

          (d) "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive
order to close.

          (e) "Close of Business" on any given date shall mean
5:00 p.m., New York time, on such date; provided, however, that
if such date is not a Business Day it shall mean 5:00 p.m., New
York time, on the next succeeding Business Day.

          (f) "Common Stock" shall mean the Common Stock, par
value $0.01 per share, of the Company, except that "Common Stock"
when used with reference to any Person other than the Company
shall mean the class of common stock with the greatest aggregate
voting power of the outstanding classes of common stock with
respect to the election of directors of such Person or, if such
Person is a subsidiary of another Person, the Person which
ultimately controls such first-mentioned Person.

          (g) "Continuing Director" shall mean (i) any member of
the Board of Directors of the Company, while such Person is a
member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or
Associate, and was a member of the Board prior to the date of
this Agreement, or (ii) any Person who subsequently becomes a
member of the Board, while such Person is a member of the Board,
who is not an Acquiring Person, or an Affiliate or Associate of
an Acquiring Person, or a representative of an Acquiring Person
or of any such Affiliate or Associate, if such Person's
nomination for election or election to the Board is recommended
or approved by a majority of the Continuing Directors.

          (h)  "Person" shall mean any individual, firm, trust,
association, corporation, partnership or other entity.

          (i)  "Stock Acquisition Date" shall mean the first date
of public announcement by the Company or an Acquiring Person that
an Acquiring Person has become such.

          (j)  "Subsidiary" of any Person means any other Person
of which securities or other ownership interests having ordinary
voting power, in the absence of contingencies, to elect a
majority of the board of directors or other Persons performing
similar functions are at the time directly or indirectly owned by
such first Person.

          (k)  "Triggering Event" shall mean any Section
11(a)(ii) event or any Section 13 event.

          (l)  "Available Unissued ESOP Shares" shall have the
same meaning as the term "Available Unissued ESOP Shares" in
Article FIFTH, Section 1.5 of the Restated Certificate of
Incorporation of the Company (the "Restated Certificate").

          (m)  "ESOP Convertible Preferred Stock" shall mean,
collectively, the Class 1 ESOP Convertible Preferred Stock, par
value $0.01 per share, of the Company, together with the Class 2
ESOP Convertible Preferred Stock, par value $0.01 per share, of
the Company.

          (n)  "Voting Preferred Stock" shall have the same
meaning as the term "Voting Preferred Stocks" in Article FOURTH,
Part II Section 2.41 of the Restated Certificate.

          Section 2. Appointment of Rights Agent.  The Company
hereby appoints the Rights Agent to act as agent for the Company
in accordance with the terms and conditions hereof and the Rights
Agent hereby accepts such appointment.  The Company may from time
to time appoint such Co-Rights Agents as it may deem necessary or
desirable.

          Section 3. Issue of Right Certificates.  Until the
Close of Business on the tenth day following the Stock
Acquisition Date (such date being hereinafter referred to as the
"Distribution Date") (x) the Rights will be evidenced by the
certificates for the Common Stock and the certificates for the
Voting Preferred Stock, as the case may be, registered in the
names of the holders of the Common Stock and the Voting Preferred
Stock, respectively (which certificates shall be deemed also to
be Right Certificates) and not by separate Right Certificates,
and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Stock
and Voting Preferred Stock, as the case may be.  As soon as
practicable after the Distribution Date, the Rights Agent will
mail, by registered, insured, postage prepaid mail, to each
record holder of the Common Stock and the Voting Preferred Stock,
as the case may be, as of the Close of Business on the
Distribution Date, as shown by the records of the Company, at the
address of such holder shown on such records, a Right
Certificate, in the form of Exhibit B hereto, evidencing: (a)
with respect to each share of Common Stock - one Right for each
share of Common Stock, and (b) with respect to each share of
Voting Preferred Stock - a number of Rights equal to the result
of dividing (x) the sum of (A) the number of shares of Common
Stock into which the ESOP Convertible Preferred Stock then
outstanding is convertible and (B) the number of Available
Unissued ESOP Shares by (y) the number of shares of Voting
Preferred Stock then outstanding (such result, the "Voting
Preferred Stock Fraction").

          Section 4. Form of Right Certificates.

          (a)  The Right Certificates (and the forms of election
to purchase shares and of assignment to be printed on the reverse
thereof) shall be substantially the same as Exhibit B hereto and
may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto
or with any rule or regulation of any stock exchange on which the
rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Section 22 hereof, the Right
Certificates, whenever issued, shall be dated as of the date
hereof and on their face shall entitle the holders thereof to
purchase such number of shares of Preferred Stock as shall be set
forth therein at the price per share set forth therein (the
"Purchase Price"), but the number of such shares and the Purchase
Price shall be subject to adjustments as provided herein.

          (b)  Any Right Certificate representing Rights
beneficially owned by any Person referred to in clauses (i), (ii)
or (iii) of the first sentence of Section 7(e) shall (to the
extent feasible) contain the following legend:

          The Rights represented by this Right Certificate are or
          were beneficially owned by a Person who was or became
          an Acquiring Person or an Affiliate or Associate of an
          Acquiring Person (as such terms are defined in the
          Rights Agreement).  This Right Certificate and the
          Rights represented hereby may be or may become null and
          void in the circumstances specified in Section 7(e) of
          such Agreement.

          Section 5.  Countersignature and Registration.  The
Right Certificates shall be executed on behalf of the Company by
its Chairman, President and Chief Executive Officer, its Vice
Chairman and Chief Financial Officer, or any Vice President,
either manually or by facsimile signature, and have affixed
thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature.  The Right
Certificates shall be manually countersigned by the Rights Agent
and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance
and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, issued
and delivered with the same force and effect as though the person
who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed
on behalf of the Company by any person who, at the actual date of
the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although
at the date of the execution of this Rights Agreement any such
person was not such an officer.

          Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at one of its offices in New York City,
New York, books for registration and transfer of the Right
Certificates issued hereunder.  Such books shall show the names
and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each
of the Right Certificates, the Certificate number, and the date
of each of the Right Certificates.

          Section 6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. At any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on
the Expiration Date (as such term is hereinafter defined), any
Right Certificate or Certificates, may be transferred, split up,
combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like
number of shares of Preferred Stock as the Right Certificate or
Right Certificates surrendered then entitled such holder to
purchase.  Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate shall make such request
in writing delivered to the Rights Agent, and shall surrender the
Right Certificate or Right Certificates to be transferred, split
up, combined or exchanged at the principal office of the Rights
Agent.  Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate or
Certificates until the registered holder of the Rights has
complied with the requirements of Section 7(f).  Upon
satisfaction of the foregoing requirements, the Rights Agent
shall, subject to Sections 4(b), 7(e) and 14, countersign and
deliver to the Person entitled thereto a Right Certificate or
Certificates as so requested.  The Company may require payment of
a sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer, split up, combination
or exchange of Right Certificates.

          Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery
to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.

          Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.

     (a) Subject to Section 23(a), the registered holder of any
Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein, including Sections 7(e) and
(f), 9(e) and 11(a)(iii)) in whole or in part at any time after
the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the principal office of the
Rights Agent in Chicago, Illinois, together with payment of the
Purchase Price for each one one-hundredth of a share of Preferred
Stock as to which the Rights are exercised, at or prior to the
Close of Business on the earlier of (i) December 31, 1996 (the
"Final Expiration Date"), or (ii) the date, if any, on which the
Rights are redeemed as provided in Section 23; such earlier date
being herein referred to as the "Expiration Date".

     (b)  The Purchase Price for each share of Preferred Stock
shall initially be $18,500 (i.e., $185 for each one one-hundredth
of a share of Preferred Stock pursuant to the exercise of a
Right), shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in
lawful money of the United States of America.

     (c)  Subject to Section 20(j), upon receipt of a Right
Certificate, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the shares to be
purchased and an amount equal to any applicable transfer tax in
cash, or by certified check or money order payable to the order
of the Company, the Rights Agent shall thereupon promptly (i)
requisition from any transfer agent of the Preferred Stock of the
Company certificates for the number of shares of Preferred Stock
to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, (ii) as provided
in Section 14(b), at the election of the Company, cause
depositary receipts in lieu of fractional shares of Preferred
Stock in integral multiples of one-hundredth of a share to be
issued, (iii) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14 hereof and (iv) promptly
after receipt of such certificates and/or depositary receipts
cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder, and, when
appropriate, after receipt promptly deliver such cash to or upon
the order of the registered holder of such Right Certificate.  If
the Company is obligated to deliver Common Stock, other
securities or assets pursuant to this Agreement, the Company will
make all arrangements necessary so that such other securities and
assets are available for delivery by the Rights Agent, if and
when appropriate.

          (d)  In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Right Certificate or to
his duly authorized assigns, subject to the provisions of Section
14 hereof.

          (e)  Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)
(ii) event, any Rights beneficially owned by (i) an Acquiring
Person or an Associate or Affiliate of an Acquiring Person, (ii)
a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person
becomes such or (iii) a transferee of an Acquiring Person(or of
any such Associate or Affiliate) who becomes a transferee prior
to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either  (A) a transfer (whether
or not for consideration) from the Acquiring Person (or any such
Associate of Affiliate) to holders of equity interests in such
Acquiring Person (or in any such Associate or Affiliate) or to
any Person with whom the Acquiring Person (or any such Associate
or Affiliate) has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is
part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e),
shall become null and void without any further action, and no
holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this
Agreement or otherwise.  The Company shall use all reasonable
efforts to insure that the provisions of this Section 7(e) and
Section 4(b) are complied with, but shall have no liability to
any holder of Right Certificates or other Person as a result of
its failure to make any determinations with respect to an
Acquiring Person or its Affiliates and Associates or any
transferee of any of them hereunder.

          (f)  Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder of Rights upon the occurrence of any purported transfer
pursuant to Section 6 or exercise pursuant to this Section 7
unless such registered holder (i) shall have completed and signed
the certificate contained in the form of assignment or election
to purchase, as the case may be, set forth on the reverse side of
the Right Certificate surrendered for such transfer or exercise,
as the case may be, (ii) shall not have indicated an affirmative
response to clause 1 or 2 thereof and (iii) shall have provided
such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof
as the Company shall reasonably request.

          Section 8. Cancellation and Destruction of Right
Certificates.  All Right Certificates surrendered for the purpose
of exercise, transfer, split up, combination or exchange shall,
if surrendered to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled
by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Rights Agreement.  The Company shall deliver to the Rights Agent
for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Right Certificates to
the Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.

          Section 9. Reservation and Availability of Shares of
Preferred Stock.

          (a)  The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and
unissued shares of Preferred Stock or its authorized and issued
shares of Preferred Stock held in its treasury, the number of
shares of Preferred Stock that will be sufficient to permit the
exercise in full of all outstanding Rights.

          (b)  So long as the Preferred Stock issuable upon the
exercise of Rights may be listed on any national securities
exchange, the Company shall use its best efforts, from and after
such time as the Rights become exercisable, to cause all shares
reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.

          (c)  The Company covenants and agrees that it will take
all such action as may be necessary to insure that all shares of
Preferred Stock delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable shares.

          (d)  The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any shares
of Preferred Stock upon the exercise of Rights.  The Company
shall, not, however, be required to pay any transfer tax which
may be payable in respect of any transfer involved in the
transfer or delivery of Right Certificates or the issuance or
delivery of certificates for Preferred Stock in a name other than
that of the registered holder of the Right Certificate evidencing
Rights surrendered for exercise or to issue or deliver any
certificates for shares of Preferred Stock upon the exercise of
any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.

          (e)  The Company shall use its best efforts (i) to
file, as soon as practicable following the earliest date after
the occurrence of a Section 11(a)(ii) event as of which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11(a)(iii),
or as soon as is required by law following the Distribution Date,
as the case may be, a registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to
the securities issuable upon exercise of the Rights, (ii) to
cause such registration statement to become effective as soon as
practicable after such filing and (iii) to cause such
registration statement to remain effective (with a prospectus at
all times meeting the requirements of the Securities Act) until
the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date.  The
Company will also take such action as may be appropriate under,
or to ensure compliance with, the securities or blue sky laws of
the various states in connection with the exercisability of the
Rights.  The Company may temporarily suspend, for a period of
time not to exceed 90 days after the date set forth in clause (i)
of the first sentence of this Section 9(e), the exercisability of
the Rights in order to prepare and file such registration
statement and permit it to become effective.  Upon any such
suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect.  Notwithstanding any such
provision of this Agreement to the contrary, the Rights shall not
be exercisable for securities in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been
obtained, such exercise therefor shall not be permitted under
applicable law or a registration statement in respect of such
securities shall not have been declared effective.

          Section 10.  Preferred Stock Record Date.  Each person
in whose name any certificate for shares of Preferred Stock is
issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Stock
represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if
the date of such surrender and payment is a date upon which the
Preferred Stock transfer books of the Company are closed, such
person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next
succeeding business day on which the Preferred Stock transfer
books of the Company are open.  Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate shall
not be entitled to any rights of a stockholder of the Company
with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.

          Section 11.  Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights.  The Purchase Price, the
number and kind of shares covered by each Right and the number of
Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.

                (a)(i) In the event the Company shall at any time
      after the date of this Agreement (A) declare a dividend on
      the Preferred Stock payable in shares of Preferred Stock,
      (B) subdivide the outstanding Preferred Stock, (C) combine
      the outstanding Preferred Stock into a smaller number of
      shares or (D) issue any shares of its capital stock in a
      reclassification of the Preferred Stock (including any such
      reclassification in connection with a consolidation or
      merger in which the Company is the continuing corporation),
      except as otherwise provided in this Section 11(a), the
      Purchase Price in effect at the time of the record date for
      such dividend or of the effective date of such subdivision,
      combination or reclassification, and the number and kind of
      shares of capital stock issuable on such date, shall be
      proportionately adjusted so that the holder of any Right
      exercised after such time shall be (except as otherwise
      provided herein, including Section 7(e)) entitled to
      receive the aggregate number and kind of shares of capital
      stock which, if such Right had been exercised immediately
      prior to such date and at a time when Preferred Stock
      transfer books of the Company were open, he would have
      owned upon such exercise and been entitled to receive by
      virtue of such dividend, subdivision, combination or
      reclassification.

               (ii)  If any Person, alone or together with its
     Affiliates and Associates, shall, at any time after the date
     of this Agreement, become the Beneficial Owner of 15% or
     more of the shares of Common Stock then outstanding (after
     giving effect to full conversion into Common Stock of
     outstanding shares of ESOP Convertible Preferred Stock and,
     upon issuance, of the Available Unissued ESOP Shares), then
     proper provision shall promptly be made so that each holder
     of a Right shall (except as otherwise provided herein,
     including Section 7(e)) thereafter be entitled to receive,
     upon exercise thereof at the Purchase Price in effect
     immediately prior to the first occurrence of a Section
     11(a)(ii) event, in lieu of Preferred Stock, such number of
     duly authorized, validly issued, fully paid and
     nonassessable shares of Common Stock of the Company (such
     number of shares being referred to herein as the "Adjustment
     Shares") as shall be equal to the result obtained by
     dividing (x) the product obtained by multiplying the
     Purchase Price in effect immediately prior to the first
     occurrence of a Section 11(a)(ii) event by the number of one
     one-hundredths of a share of Preferred Stock for which a
     Right was exercisable immediately prior to such first
     occurrence by (y) 33 1/3% of the current market price
     (determined pursuant to Section 11(d)(i)) per share of
     Common Stock on the date of such first occurrence; provided
     that if the transaction that would otherwise give rise to
     the foregoing adjustment is also subject to the provisions
     of Section 13, then only the provisions of Section 13 shall
     apply and no adjustment shall be made pursuant to this
     Section 11(a)(ii).  After any Section 11(a)(ii) event the
     Purchase Price shall be adjusted to equal the product
     obtained under clause (x) above.  After any Person has
     become an Acquiring Person, the Company shall not enter into
     any transaction if at the time of or immediately after such
     transaction there are any rights, warrants, instruments or
     securities outstanding or any agreements or arrangements
     which, as a result of the consummation of such transaction,
     would substantially diminish or otherwise eliminate the
     benefits intended to be afforded by the Rights.

               (iii)  If the number of shares of Common Stock
     which are authorized by the Company's certificate of
     incorporation but not outstanding or reserved for issuance
     other than upon exercise of the Rights is not sufficient to
     permit the exercise in full of the Rights in accordance with
     Section 11(a)(ii), the Company shall, with respect to each
     Right, make adequate provision to substitute for the
     Adjustment Shares, upon payment of the Purchase Price then
     in effect, (A) (to the extent available) Common Stock and
     then, (B) (to the extent available) other equity securities
     of the Company which the Board of Directors of the Company
     (or, if at such time there is an Acquiring Person, a
     majority of the Continuing Directors) has determined to be
     essentially equivalent to shares of Common Stock in respect
     to dividend, liquidation and voting rights (such securities
     being referred to herein as "common stock equivalents") and
     then, if necessary, (C) other equity or debt securities of
     the Company, cash or other assets, a reduction in the
     Purchase Price or any combination of the foregoing, having
     an aggregate value (as determined by the Board of Directors
     of the Company based upon the advice of a nationally
     recognized investment banking firm selected by the Board of
     Directors of the Company) equal to the value of the
     Adjustment Shares; provided that (x) the Company may, and
     (y) if the Company shall not have made adequate provision as
     required above to deliver value within 30 days following the
     later of the first occurrence of a Section 11(a)(ii) event
     and the first date that the right to redeem the Rights
     pursuant to Section 23 shall expire, then the Company shall
     be obligated to, deliver, upon the surrender for exercise of
     a Right and without requiring payment of the Purchase Price,
     shares of Common Stock, common stock equivalents, other
     equity or debt securities of the Company, cash or other
     assets or any combination of the foregoing, having an
     aggregate value (as determined by the Board of Directors of
     the Company based upon the advice of a nationally recognized
     investment banking firm selected by the Board of Directors
     of the Company) equal to the excess of the value of the
     Adjustment Shares over the Purchase Price.  If the Board of
     Directors of the Company shall determine in good faith that
     it is likely that sufficient additional shares of Common
     Stock could be authorized for issuance upon exercise in full
     of the Rights, the 30 day period set forth above (such
     period, as it may be extended, being referred to herein as
     the "Substitution Period") may be extended to the extent
     necessary, but not more than 90 days following the first
     occurrence of a Section 11(a)(ii) event, in order that the
     Company may seek stockholder approval for the authorization
     of such additional shares.  To the extent that the Company
     determines that some action is to be taken pursuant to the
     first and/or second sentence of this Section 11(a)(iii), the
     Company (X) shall provide, subject to Section 7(e), that
     such action shall apply uniformly to all outstanding Rights
     and (Y) may suspend the exercisability of the Rights until
     the expiration of the Substitution Period in order to seek
     any authorization of additional shares and/or to decide the
     appropriate form and value of any consideration to be
     delivered as referred to in such first and/or second
     sentence.  If any such suspension occurs, the Company shall
     issue a public announcement stating that the exercisability
     of the Rights has been temporarily suspended, as well as a
     public announcement at such time as the suspension is no
     longer in effect.  For purposes of this Section 11(a)(iii),
     the value of the Common Stock shall be the current market
     price per share of Common Stock (as determined pursuant to
     Section 11(d)) on the later of the date of the first
     occurrence of a Section 11(a)(ii) event and the first date
     that the right to redeem the Rights pursuant to Section 23
     shall expire; any "common stock equivalent" shall be deemed
     to have the same value as the Common Stock on such date; and
     the value of other securities or assets shall be determined
     pursuant to Section 11(d)(iii).

          (b)  In case the Company shall fix a record date for
the issuance of rights or warrants to all holders of Preferred
Stock entitling them (for a period expiring within 45 calendar
days after such record date) to subscribe for or purchase
Preferred Stock (or having the same rights, privileges and
preferences as the Preferred Stock (an "equivalent preferred
stock") or securities convertible into Preferred Stock or
equivalent preferred stock) at a price per share of Preferred
Stock or equivalent preferred stock (or having a conversion price
per share, if a security convertible into Preferred Stock or
equivalent preferred stock) less than the current market price
per share of Preferred Stock (as defined in Section 11(d)) on
such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price
in effect immediately prior to such record date by a fraction, of
which the numerator shall be the number of shares of Preferred
Stock outstanding on such record date plus the number of shares
of Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock and/or equivalent
preferred stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered)
would purchase at such current market price and of which the
denominator shall be the number of shares of Preferred Stock
outstanding on such record date plus the number of additional
shares of Preferred Stock or equivalent preferred stock to be
offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible).  In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent.  Shares of Preferred Stock owned by or held for the
account of the Company shall not be deemed outstanding for the
purpose of any such computation.  Such adjustment shall be made
successively whenever such a record date is fixed; and in the
event that such rights or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.

          (c)  In case the Company shall fix a record date for
the making of a distribution to all holders of Preferred Stock
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness or assets (other than a
regular periodic cash dividend at a rate not in excess of 125% of
the rate of the last cash dividend theretofore paid or a dividend
payable in Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase
Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, of which the numerator shall be
the current market price per share of Preferred Stock (as defined
in Section 11(d)) on such record date, less the fair market value
(as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one share of
Preferred Stock and of which the denominator shall be such
current market price per share of Preferred Stock.  Such
adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so
made, the Purchase Price shall again be adjusted to be the
Purchase Price which would then be in effect if such record date
had not been fixed.

          (d)(i)  For the purpose of any computation
     hereunder other than computations made pursuant to Section
     11(a)(iii) or 14, the "current market price" per share of
     Common Stock on any date shall be deemed to be the average
     of the daily closing prices per share of such Common Stock
     for the 30 consecutive Trading Days immediately prior to
     such date; for purposes of computations made pursuant to
     Section 11(a)(iii), the "current market price" per share of
     Common Stock on any date shall be deemed to be the average
     of the daily closing prices per share of such Common Stock
     for the 10 consecutive Trading Days immediately following
     such date; and for purposes of computations made pursuant to
     Section 14, the "current market price" per share of Common
     Stock for any Trading Day shall be deemed to be the closing
     price per share of Common Stock for such Trading Day;
     provided that if the current market price per share of the
     Common Stock is determined during a period following the
     announcement by the issuer of such Common Stock of (A) a
     dividend or distribution on such Common Stock payable in
     shares of such Common Stock or securities exercisable for or
     convertible into shares of such Common Stock (other than the
     Rights), or (B) any subdivision, combination or
     reclassification of such Common Stock, and prior to the
     expiration of the requisite 30 Trading Day or 10 Trading Day
     period, as set forth above, after the ex-dividend date for
     such dividend or distribution, or the record date for such
     subdivision, combination or reclassification, then, and in
     each such case, the "current market price" shall be properly
     adjusted to take into account ex-dividend trading.  The
     closing price for each day shall be the last sale price,
     regular way, or, in case no such sale takes place on such
     day, the average of the closing bid and asked prices,
     regular way, in either case as reported in the principal
     consolidated transaction reporting system with respect to
     securities listed or admitted to trading on the New York
     Stock Exchange or, if the shares of Common Stock are not
     listed or admitted to trading on the New York Stock
     Exchange, on the principal national securities exchange on
     which the shares of Common Stock are listed or admitted to
     trading or, if the shares of Common Stock are not listed or
     admitted to trading on any national securities exchange, the
     last quoted price or, if not so quoted, the average of the
     high bid and low asked prices in the over-the-counter
     market, as reported by the National Association of
     Securities Dealers, Inc. Automated Quotation System
     ("NASDAQ") or such other system then in use or, if on any
     such date the shares of Common Stock are not quoted by any
     such organization, the average of the closing bid and asked
     prices as furnished by a professional market maker making a
     market in the Common Stock selected by the Board of
     Directors of the Company.  If on any such date no market
     maker is making a market in the Common Stock, the fair value
     of such shares on such date as determined in good faith by
     the Board of Directors of the Company shall be used.  If the
     Common Stock is not publicly held or not so listed or
     traded, the "current market price" per share means the fair
     value per share as determined in good faith by the Board of
     Directors of the Company, or, if at the time of such
     determination there is an Acquiring Person, by a majority of
     the Continuing Directors or if there are no Continuing
     Directors, by a nationally recognized investment banking
     firm selected by the Board of Directors, which determination
     shall be described in a statement filed with the Rights
     Agent and shall be conclusive for all purposes.

               (ii)  For the purpose of any computation
     hereunder, the "current market price" per share of Preferred
     Stock shall be determined in the same manner as set forth
     above for the Common Stock in Section 11(d)(i) (other than
     the last sentence thereof).  If the "current market price"
     per share of Preferred Stock cannot be determined in such
     manner, the "current market price" per share of Preferred
     Stock shall be conclusively deemed to be an amount equal to
     100 (as such number may be appropriately adjusted for such
     events as stock splits, stock dividends and
     recapitalizations with respect to the Common Stock occurring
     after the date of this Agreement) multiplied by the current
     market price per share of Common Stock (as determined
     pursuant to Section 11(d)(i) (other than the last sentence
     thereof)).  If neither the Common Stock nor the Preferred
     Stock is publicly held or so listed or traded, the "current
     market price" per share of the Preferred Stock shall be
     determined in the same manner as set forth in the last
     sentence of Section 11(d)(i).  For all purposes of this
     Agreement, the "current market price" of one one-hundredth
     of a share of Preferred Stock shall be equal to the "current
     market price" of one share of Preferred Stock divided by
     100.

          (iii)  For the purpose of any computation hereunder,
     the value of any securities or assets other than Common
     Stock or Preferred Stock shall be the fair value as
     determined in good faith by the Board of Directors of the
     Company, or, if at the time of such determination there is
     an Acquiring Person, by a majority of the Continuing
     Directors then in office, or, if there are no Continuing
     Directors, by a nationally recognized investment banking
     firm selected by the Board of Directors, which determination
     shall be described in a statement filed with the Rights
     Agent and shall be conclusive for all purposes.

          (e)  No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however, that
any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment.  All calculations under
this Section 11 shall be made to the nearest cent or to the
nearest ten-thousandth of a share as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 but postponed under such
sentence shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such
adjustment or (ii) the date of the expiration of the right to
exercise any Rights.

          (f)  In the event that at any time, as a result of an
adjustment made pursuant to Section 11(a), the holder of any
Right thereafter exercised shall become entitled to receive any
shares of capital stock of the Company other than shares of
Preferred Stock, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
shares contained in Section 11(a) through (c), inclusive, and the
provisions of Sections 7, 9, 10 and 13 with respect to the shares
of Preferred Stock shall apply on like terms to any such other
shares.

          (g)  All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of shares of Preferred Stock purchasable from
time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.

          (h)  Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of
the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately prior
to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of
shares (calculated to the nearest ten-thousandth) obtained by (i)
multiplying (x) the number of shares covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price
and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase
Price.

          (i)  The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights,
in substitution for any adjustment in the number of shares of
Preferred Stock purchasable upon the exercise of a Right.  Each
of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for one one-hundredth of a share of
Preferred Stock.  Each Right held of record prior to such
adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price.  The Company
shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be
made.  This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later
than the date of the public announcement.  If Right Certificates
have been issued, upon each adjustment of the number of Rights
pursuant to this Section ll(i) the Company shall, as promptly as
practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates
evidencing, subject to Section 14, the additional Rights to which
such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may
bear, at the option of the Company, the adjusted Purchase Price)
and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public
announcement.

          (j)  Irrespective of any adjustment or change in the
Purchase Price or the number of shares of Preferred Stock
issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares which were
expressed in the initial Right Certificates issued hereunder.

          (k)  Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par value,
if any, of the shares of Preferred Stock issuable upon exercise
of the Rights, the Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue fully paid and
nonassessable shares of such Preferred Stock at such adjusted
Purchase Price.

          (1)  In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of
a record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuing to the
holder of any Right exercised after such record date the shares
of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the
shares of Preferred Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder
a due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.

          (m)  Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reduction in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that
it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred
Stock, issuance wholly for cash of any Preferred Stock at less
than the current market price, issuance wholly for cash of
Preferred Stock or securities which by their terms are
convertible into or exchangeable for Preferred Stock, stock
dividends or issuance of rights, options or warrants referred to
hereinabove in this Section 11, hereafter made by the Company to
its common and/or preferred stockholders, shall not be taxable to
such common or preferred stockholders.

          (n)  The Company covenants and agrees that it shall
not, at any time after the Distribution Date, (i) consolidate
with any other Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof), (ii)
merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o)
hereof), or (iii) sell or transfer (or permit any Subsidiary to
sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or
other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior
to, simultaneously with or immediately after such consolidation,
merger or sale, the shareholders of the Person whose Common
Shares are issuable pursuant to the exercise of the Rights under
Section 13(a) shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and
Associates.

          (o)  The Company covenants and agrees that, after the
Distribution Date, it will not, except as Permitted by Section 23
or Section 26 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the
Rights.

          (p)  Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Rights Dividend Declaration Date and prior to the
Distribution Date (i) declare a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller
number of shares, the number of Rights associated with each share
of Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number
of Rights associated with each share of Common Stock immediately
prior to such event by a fraction the numerator of which shall be
the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of
such event; provided, however, that an adjustment in accordance
with this subsection 11(p) shall not be made as a result of the
execution of the Recapitalization Agreement or the consummation
of the transactions contemplated thereby.  Anything in this
Agreement to the contrary notwithstanding, the number of Rights
associated with each share of Voting Preferred Stock issued or
delivered prior to the Distribution Date shall be proportionately
adjusted if the number of Rights associated with each share of
Common Stock is adjusted as stated in the preceding sentence, as
may be necessary to ensure that the number of Rights associated
with each outstanding share of Voting Preferred Stock shall be at
all times equal to the product of (I) the number of Rights then
associated with each share of Common Stock and (II) the Voting
Preferred Stock Fraction.

          Section 12.  Certification of Adjusted Purchase Price
or Number of Shares.  Whenever an adjustment is made as provided
in Sections 11 and 13, the Company shall (a) promptly prepare a
certificate setting forth such adjustment, and a brief statement
of the facts accounting for such adjustment, (b) promptly file
with the Rights Agent and with each transfer agent for the
Preferred Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in
accordance with Section 25.

          Section 13.  Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.  In the event following the Stock
Acquisition Date, directly or indirectly, (a) the Company shall
consolidate with, or merge with and into, any other Person (other
than a subsidiary of the Company in a transaction that complies
with Section 11(o)) and the Company shall not be the continuing
or surviving corporation, (b) any Person (other than a subsidiary
of the Company in a transaction that complies with Section 11(o))
shall consolidate, merge with and into the Company, the Company
shall be the continuing or surviving corporation of such merger
and, in connection with such merger, all or part of the Common
Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or
(c) the Company shall sell or otherwise transfer, including by
liquidation, dissolution, sale or lease (or one or more of its
subsidiaries shall sell or otherwise transfer), in one or more
related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its
subsidiaries (taken as a whole) to any Person or Persons, then,
and in each such case, proper provision shall be made so that (i)
each holder of a Right shall thereafter have the right to
receive, upon the exercise thereof at the then-current exercise
price for the number of shares of Preferred Stock for which a
Right is then exercisable in accordance with the terms of this
Agreement, such number of shares of Common Stock of such other
Person (or in the case of any transaction described in clause (c)
above, the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to
such transaction or transactions) as shall be equal to the result
obtained by (x) multiplying the then-current Purchase Price per
full share of Preferred Stock by the number of shares of
Preferred Stock for which a Right is then exercisable and
dividing that product by (y) 33 1/3% of the current market price
per share of the Common Stock of such other Person (determined
pursuant to Section 11(d) on the date of consummation of such
consolidation, merger, sale or transfer), and such Common Stock
shall be validly authorized and issued, fully paid and
nonassessable, and freely tradable and not subject to any liens,
encumbrances, rights of first refusal or adverse claims;
provided, however, that if the holders of shares of Common Stock
of such other Person have received after the Stock Acquisition
Date, or will receive after the Stock Acquisition Date due to a
declaration or distribution that has as its record date for those
entitled to receive such declaration or distribution a date prior
to the tenth Business Day after the date of consummation of such
consolidation, merger, sale or transfer, in their capacity as a
holder of such Common Stock, (i) any rights, warrants or options
to purchase such Common Stock or to purchase any other security,
asset (including cash) or evidence of indebtedness, at less than
its current market value, or (ii) any other security, asset
(including cash) or evidence of indebtedness of such other Person
(in all events other than ordinary regular and periodic cash
dividends) then each holder of a Right shall have the right to
receive, for no additional consideration, and in addition to such
number of shares of Common Stock specified above, such rights,
warrants or options or other security, asset (including cash) or
evidence of indebtedness, that such holder would have been
entitled to receive if it had been the holder of such number of
shares of Common Stock specified above at the time of such
issuance, declaration or distribution of such rights, warrants or
options, or other security, asset (including cash) or evidence of
indebtedness, and provided further that if the Person whose
Common Stock would otherwise be issuable pursuant to the exercise
of the Rights under this Section 13(a) is a direct or indirect
Subsidiary of a Person (the "Parent") that has shares registered
pursuant to Section 12 of the Securities Exchange Act of 1934,
then the shares of Common Stock to be issued, pursuant to such
exercise of the Rights shall be the shares of Common Stock of the
Parent; (ii) the issuer of such Common Stock shall thereafter be
liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such issuer; and (iv) such
issuer shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock
in accordance with Section 9) in connection with such
consummation as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to the shares of its Common Stock thereafter
deliverable upon the exercise of the Rights.

          The Company shall not consummate any such
consolidation, merger, combination, sale or transfer unless the
Person required pursuant to the preceding paragraph to issue
Common Stock shall have a sufficient number of authorized shares
of its Common Stock which are not outstanding or otherwise
reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 and unless prior
thereto the Company and such Person shall have executed and
delivered to the Rights Agent a supplemental agreement providing
for the terms set forth in the preceding paragraph of this
Section and providing that, as soon as practicable after the date
of any consolidation, merger, combination, sale or transfer
mentioned therein, such Person will

               (i)  prepare and file a registration statement
     under the Securities Act with respect to the securities
     issuable upon exercise of the Rights, and will use its best
     efforts to cause such registration statement (A) to become
     effective as soon as practicable after such filing and (B)
     to remain effective (with a prospectus at all times meeting
     the requirements of the Securities Act) until the Expiration
     Date and
     
               (ii)  deliver to holders of the Rights historical
     financial statements for such Person and each of its
     Affiliates which comply in all respects with the
     requirements for registration on Form 10 under the
     Securities Exchange Act of 1934, as amended.

          The provisions of this Section 13 shall similarly apply
to successive mergers, consolidations, combinations, sales or
other transfers.  If any Section 13 event shall occur at any time
after the occurrence of a Section 11(a)(ii) event, the Rights
which have not theretofore been exercised shall thereafter become
exercisable in the manner described in this Section 13.

          Section 14.  Fractional Rights and Fractional Shares.

          (a) The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates which
evidence fractional Rights.  In lieu of such fractional Rights,
there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right.  For the
purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable.  The
closing price for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted
to trading on any national securities exchange, the average of
the high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ.  If on any such date the Rights are not
quoted by any such organization, the fair value of the Rights on
such date as determined in good faith by the Board of Directors
of the Company shall be used.

          (b)  The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one-hundredth of a share) upon
exercise of the Rights or to distribute certificates which
evidence fractional shares of Preferred Stock (other than
fractions which are integral multiples of one-hundredth of a
share).  Fractions of shares of Preferred Stock in integral
multiples of one-hundredth of a share may, at the election of the
Company be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary
selected by it provided that such agreement shall provide that
the holders of such depositary receipts shall have all of the
rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Stock.  In lieu of fractional
shares of Preferred Stock that are not integral multiples of one-
hundredth of a share, there shall be paid to the registered
holders of Right Certificates at the time such Right Certificates
are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of a share of Preferred
Stock.  For purposes of this Section 14(b), the current market
value of a share of Preferred Stock shall be the closing price of
a share of Preferred Stock (as determined pursuant to Section
11(d)) for the Trading Day immediately prior to the date of such
exercise.

          (c)  Following the occurrence of any Triggering Event,
the Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights.  In lieu of fractional
shares of Common Stock, the Company shall pay to the registered
holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same
fraction of the current market price of a share of Common Stock.
For purposes of this Section 14(c), the current market price of a
share of Common Stock shall be the closing price of a share of
Common Stock (as determined pursuant to Section 11(d)(i)) for the
Trading Day immediately prior to the date of such exercise or
exchange.

          (d)  The holder of a Right by the acceptance of the
Rights expressly waives his right to receive any fractional
Rights or any fractional shares (other than fractions which are
integral multiples of one-hundredth of a share) upon exercise of
a Right.

          Section 15.  Rights of Action.  All rights of action in
respect of this Agreement are vested in the respective registered
holders of the Right Certificates; and any registered holder of
any Right Certificate, without the consent of the Rights Agent or
of the holder of any other Right Certificate may, in his own
behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for
any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief
against actual or threatened violations of, the obligations of
any Person subject to this Agreement.

          Section 16.  Agreement of Right Holders.  Every holder
of a Right by accepting the same consents and agrees with the
Company and the Rights Agent and with every other holder of a
Right that:

          (a)  prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock
or Voting Preferred Stock;

          (b)  after the Distribution Date, the Right
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the principal office of the Rights
Agent, duly endorsed or accompanied by a proper instrument of
transfer; and

          (c)  subject to Sections 6 and 7, the Company and the
Rights Agent may deem and treat the person in whose name the
Right Certificate (or, prior to the Distribution Date, the
associated Common Stock Certificate and Voting Preferred Stock
Certificate, as the case may be) is registered as the absolute
owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Stock Certificate and
Voting Preferred Stock Certificate, as the case may be, made by
anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights
Agent, subject to the last sentence of Section 7(e), shall be
affected by any notice to the contrary.

          Section 17.  Right Certificate Holder Not Deemed a
Stockholder.  No holder, as such, of any Right Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of Preferred Stock or any other securities of
the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon
the holder of any Right Certificate, as such, any of the rights
of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in
Section 24), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the
provisions hereof.

          Section 18.  Concerning the Rights Agent.  The Company
agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of
its duties hereunder.  The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss,
liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the
costs and expenses of defending against any claim of liability in
the premises.

          The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this
Agreement in reliance upon any Right Certificate or certificate
for Preferred Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons.

          Section 19.  Merger or Consolidation or Change of Name
of Rights Agent.  Any corporation into which the Rights Agent or
any successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 21.  In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the
Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates
either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Agreement.

          In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates shall
have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in
its prior name or in its changed name; and in all such cases such
Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.

          Section 20.  Duties of Rights Agent.  The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:

          (a)  The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted
by it in good faith and in accordance with such opinion.

          (b)  Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the
Company prior to taking or suffering any action hereunder, such
fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman,
President and Chief Executive Officer, the Vice Chairman and
Chief Financial Officer, or any Vice President and by the
Treasurer or any Assistant Treasurer or the Secretary or any
Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it
under the provisions of this Agreement in reliance upon such
certificate.

          (c)  The Rights Agent shall be liable hereunder only
for its own negligence, bad faith or willful misconduct.

          (d)  The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in
this Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same, but
all such statements and recitals are and shall be deemed to have
been made by the Company only.

          (e)  The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement
or in any Right Certificate;  nor shall it be responsible for any
change in the exercisability of the Rights (including the Rights
becoming void pursuant to Section 7(e)) or any adjustment in the
terms of the Rights (including the manner, method or amount
thereof) provided for in Sections 3, 11, 13 or 23, or the
ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice of any such
adjustment);  nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or
reservation of any shares of Preferred Stock to be issued
pursuant to this Agreement or any Right Certificate or as to
whether any shares of Preferred Stock will, when issued, be
validly authorized and issued, fully paid and nonassessable.

          (f)  The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.

          (g)  The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder from the Chairman, President and Chief Executive
Officer, the Vice Chairman and Chief Financial Officer, or any
Vice President or the Secretary or any Assistant Secretary or the
Treasurer or any Assistant Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with
its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with
instructions of any such officer.

          (h)  The Rights Agent and any shareholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or become
peculiarly interested in any transaction in which the Company may
be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights
Agent under this Agreement.  Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company,
or for any other legal entity.

          (i)  The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.

          (j)  If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of
election to purchase, as the cases may be, has either not been
completed or indicates an affirmative response to clause 1 or 2
thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first
consulting with the Company.

          Section 21.  Change of Rights Agent.  The Rights Agent
or any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon 30 days' notice in writing
mailed to the Company and to each transfer agent of the Common
Stock, the Voting Preferred Stock and the Preferred Stock by
registered or certified mail, and to the holders of the Right
Certificates by first-class mail.  The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days' notice
in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Common
Stock and the Preferred Stock by registered or certified mail,
and to the holders of the Right Certificates by first-class mail.
If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor
to the Rights Agent.  If the Company shall fail to make such
appointment within a period of 30 days after such removal or
after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who shall, with such notice
submit his Right Certificate for inspection by the Company), then
the registered holder of any Right Certificate may apply to any
court of competent Jurisdiction for the appointment of a new
Rights Agent.  Any successor Rights Agent, whether appointed by
the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States
or of the State of Delaware, Illinois or New York, in good
standing, having its principal office in the State of Illinois or
New York, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (b) an
affiliate of a corporation described in clause (a).  After
appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or
deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose.  Not later
than the effective date of any such appointment the Company shall
file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and the Voting
Preferred Stock and mail a notice thereof in writing to the
registered holders of the Right Certificates.  Failure to give
any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.

          Section 22.  Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price per share and the number or kind or
class of shares of stock or other securities or property
purchasable under the Right Certificates made in accordance with
the provisions of this Agreement.

          Section 23.  Redemption.

          (a) The Company may, at its option, at any time prior
to the earlier of (i) the Close of Business on the tenth Business
Day following the Stock Acquisition Date or (ii) the Final
Expiration Date, elect to redeem all but not less than all the
then outstanding Rights at a redemption price of $.05 per Right
(such redemption price being hereinafter referred to as the
"Redemption Price"); provided, however, if the Board of Directors
of the Company authorizes redemption of the Rights in either of
the circumstances set forth in clauses (i) and (ii) below, then
there must be Continuing Directors then in office and such
authorization shall require the concurrence of a majority of such
Continuing Directors: (i) such authorization occurs on or after
the time a Person becomes an Acquiring Person, or (ii) such
authorization occurs on or after the date of a change (resulting
from a proxy or consent solicitation) in a majority of the
directors in office at the commencement of such solicitation if
any Person who is a participant in such solicitation has stated
(or, if upon the commencement of such solicitation, a majority of
the Board of Directors of the Company has determined in good
faith) that such Person (or any of its Affiliates or Associates)
intends to take, or may consider taking, any action which would
result in such Person becoming an Acquiring Person or which would
cause the occurrence of a Triggering Event unless, concurrent
with such solicitation, such Person (or one or more of its
Affiliates or Associates) is making a cash tender offer pursuant
to a Schedule 14D-1 (or any successor form) filed with the
Securities and Exchange Commission for all outstanding shares of
Common Stock not beneficially owned by such Person (or by its
Affiliates or Associates); provided further, however, that if,
following the occurrence of a Stock Acquisition Date and
following the expiration of the right of redemption hereunder but
prior to any Triggering Event, (i) a Person who is an Acquiring
Person shall have transferred or otherwise disposed of a number
of shares of Common Stock in one transaction or series of
transactions, not directly or indirectly involving the Company or
any of its Subsidiaries, which did not result in the occurrence
of a Triggering Event or if the Company (with the approval of the
Continuing Directors) shall have issued additional equity, in
either instance such that such Person is thereafter a Beneficial
Owner of 10% or less of the outstanding shares of Common Stock,
and (ii) there are no other Persons, immediately following the
occurrence of the event described in clause (i), who are
Acquiring Persons, then the right of redemption shall be
reinstated and thereafter be subject to the provisions of this
Section 23.  Notwithstanding anything contained in this Agreement
to the contrary, the Rights shall not be exercisable after the
first occurrence of a Section 11(a)(ii) event until such time as
the Company's right of redemption hereunder has expired.

          (b)  Immediately upon the action of the Board of
Directors of the Company electing to redeem the Rights, the
Company shall make a public announcement thereof, and from and
after the tenth day after the date of such announcement, without
any further action and without any further notice, the right to
exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption
Price.  As soon as practicable after the action of the Board of
Directors ordering the redemption of the Rights, the Company
shall give notice of such redemption to the holders of the then
outstanding Rights by mailing such notice to all such holders at
their last addresses as they appear upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the
registry books of the Transfer Agent for the Common Stock and the
Voting Preferred Stock.  Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice.  Each such notice of redemption will state
the method by which the payment of the Redemption Price will be
made.

          Section 24.  Notice of Proposed Actions.  In case the
Company shall propose (a) to pay any dividend payable in stock of
any class to the holders of its Preferred Stock or to make any
other distribution to the holders of its Preferred Stock (other
than a regular periodic cash dividend at a rate not in excess of
125% of the rate of the last cash dividend theretofore paid), or
(b) to offer to the holders of its Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other
securities, rights or options, or (c) to effect any
reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding
shares of Preferred Stock), or (d) to effect any consolidation or
merger into or with, or to effect any sale or other transfer (as
specified in Section 1.3) (or to permit one or more of its
subsidiaries to effect any sale or other transfer), in one or
more transactions, of more than 50% of the assets or earning
power of the Company and its subsidiaries (taken as a whole) to
any other Person, or (e) to effect the liquidation, dissolution
or winding up of the Company, then, in each such case, the
Company shall give to each holder of a Right, in accordance with
Section 25, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend,
distribution of rights or Rights, or the date on which such
reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of Common Stock,
Voting Preferred Stock and/or Preferred Stock, if any such date
is to be fixed, and such notice shall be so given in the case of
any action covered by clause (a) or (b) above at least twenty
days prior to the record date for determining holders of the
Preferred Stock for purposes of such action, and in the case of
any such other action, at least twenty days prior to the date of
the taking of such proposed action or the date of participation
therein by the holders of Common Stock, Voting Preferred Stock
and/or Preferred Stock, whichever shall be the earlier.  The
failure to give notice required by this Section 24 or any defect
therein shall not affect the legality or validity of the action
taken by the Company or the vote upon any such action.

          Section 25.  Notices.  Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the
holder of any Right Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:

               Vice President and Secretary
               UAL Corporation
               Post Office Box 66919
               Chicago, Illinois 60666

Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Right Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first class
mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:

               First Chicago Trust Company of New York
               30 West Broadway
               New York, NY 10007-2192
               Attn: Tenders and Exchanges

Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Right Certificate shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the
Company.

          Section 26.  Supplements and Amendments.  Prior to the
Distribution Date and subject to the penultimate sentence of this
Section 26, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates
representing shares of Common Stock and Voting Preferred Stock.
From and after the Distribution Date and subject to the
penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of
Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, (iii)
to shorten or lengthen any time period hereunder (which
lengthening or shortening, following the first occurrence of an
event set forth in clauses (i) and (ii) of the first proviso to
Section 23(a) hereof, shall be effective only if there are
Continuing Directors and shall require the concurrence of a
majority of such Continuing Directors), or (iv) to change or
supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights
Certificates; provided, this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence,
(A) a time period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights.  Upon the delivery of a
certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance
with the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment.  Notwithstanding anything contained
in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price, the Final
Expiration Date, the Purchase Price or the number of one one-
hundredths of a share of Preferred Stock for which a Right is
exercisable.  Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock and Voting Preferred
Stock, as the case may be.

          Section 27.  Successors.  All the covenants and
provisions of this Agreement by or for the benefit of the Company
or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.

          Section 28.  Benefits of this Agreement.  Nothing in
this Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the
registered holders of the Right Certificates any legal or
equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right
Certificates.

          Section 29.  Delaware Contract.  This Agreement and
each Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all
purposes shall be governed. by and construed in accordance with
the laws of such state applicable to contracts to be made and
performed entirely within such state.

          Section 30.  Counterparts.  This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and
the same instrument.

          Section 31.  Descriptive Headings.  Descriptive
headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.

IN WITNESS WHEREOF, the parties hereto have caused this agreement
to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first
above written.


ATTEST:                            UAL CORPORATION

By: /s/ Marlys N. Clark            By: /s/ John L. Cowan
    Assistant Secretary                 Title:  

ATTEST:                            FIRST CHICAGO TRUST COMPANY
                                   OF NEW YORK

By: /s/ John Bagdonas              By: /s/ John Bambach
    Production Officer                  Title:  Vice President


                                                       EXHIBIT A




           CERTIFICATE OF DESIGNATION, PREFERENCES AND
     RIGHTS OF SERIES C JUNIOR PARTICIPATING PREFERRED STOCK
                                
                               Of
                                
                         UAL CORPORATION
                                
                                
     Pursuant to Section 151 of the General Corporation Law
                    of the State of Delaware



          We, _________________, Chairman, President and Chief
Executive Officer, and ______________, Vice President and
Secretary, of UAL Corporation, a corporation organized and
existing under the General Corporation Law of the State of
Delaware, in accordance with the provisions of Section 103
thereof, DO HEREBY CERTIFY:

          That pursuant to the authority conferred upon the Board
of Directors by the Restated Certificate of Incorporation of the
said Corporation, the said Board of Directors on December 11,
1986, adopted the following resolution creating a series of Seven
Hundred Thousand (700,000) shares of Preferred Stock designated
as Series C Junior Participating Preferred Stock:

          RESOLVED, that pursuant to the authority vested in the
Board of Directors of this Corporation in accordance with the
provisions of its Restated Certificate of Incorporation, a series
of Preferred Shares of the Corporation be, and it hereby is,
created and classified, and that the designation and amount
thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of
such series, and the qualifications, limitations or restrictions
thereof are as follows:



          Section 1.  Designation and Amount.  The shares of such
series shall be designated, as "Series C Junior Participating
Preferred Stock" (the "Series C Preferred Stock") and the number
of shares constituting such series shall be 1,250,000.

          Section 2.  Dividends and Distributions.

          (A)  The holders of shares of Series C Preferred Stock
shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the fifteenth day
of January, April, July and October in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series C
Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $10 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times
the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares
of Common Stock (by reclassification or otherwise), declared on
the Common Stock, par value $.01 per share, of the Corporation
("Common Stock") since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series C Preferred Stock.  In the event
the Corporation shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such
case the amount to which holders of shares of Series C Preferred
Stock were entitled immediately prior to such event under clause
(b) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.

          The Corporation shall declare a dividend or
distribution on the Series C Preferred Stock as provided in this
paragraph (A) immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable
in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $10.00 per share on the Series C Preferred Stock
shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.

          Dividends shall begin to accrue and be cumulative on
outstanding shares of Series C Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such
shares of Series C Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for the determination of holders
of shares of Series C Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment
Date.  Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series C Preferred Stock in an
amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on
a share-by-share basis among all such shares at the time
outstanding.  The Board of Directors may fix a record date for
the determination of holders of shares of Series C Preferred
Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 60 days
prior to the date fixed for the payment thereof.

          Section 3.  Voting Rights.  The holders of shares of
Series C Preferred Stock shall have the following voting rights:

          (A)  Subject to the provision for adjustment herein-
after set forth, each share of Series C Preferred Stock shall
entitle the holder thereof to 100 votes on all matters submitted
to a vote of the stockholders of the Corporation.  In the event
the Corporation shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such
case the number of votes per share to which holders of shares of
Series C Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

          (B)  Except as otherwise provided herein or by law, the
holders of shares of Series C Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.

          (C)  If the equivalent of six quarterly dividends
payable on the Series C Preferred Stock or any other series of
preferred stock of the Corporation are in default, the number of
directors of the Corporation shall be increased by two and the
holders of all such series in respect of which such a default
exists, voting as a class without regard to series, will be
entitled to elect two additional directors at the next annual
meeting and each subsequent meeting, until all cumulative
dividends have been paid in full or until noncumulative dividends
have been paid regularly for at least one year.

          (D)  Except as set forth herein, holders of Series C
Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.

          Section 4. Certain Restrictions.

          (A)  Whenever quarterly dividends or other dividends or
distributions payable on the Series C Preferred Stock as provided
in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on
shares of Series C Preferred Stock outstanding shall have been
paid in full, the Corporation shall not


               (i)  declare or pay dividends on, make any other
     distributions on, or redeem or purchase or otherwise acquire
     for consideration any shares of stock ranking junior (either
     as to dividends or upon liquidation, dissolution or winding
     up) to the Series C Preferred Stock;

               (ii)  declare or pay dividends on or make any
     other distributions on any shares of stock ranking on a
     parity (either as to dividends or upon liquidation,
     dissolution or winding up) with the Series C Preferred
     Stock, except dividends paid ratably on the Series C
     Preferred Stock and all such parity stock on which dividends
     are payable or in arrears in proportion to the total amounts
     to which the holders of all such shares are then entitled;

               (iii)  redeem or purchase or otherwise acquire for
     consideration shares of any stock ranking on a parity
     (either as to dividends or upon liquidation, dissolution or
     winding up) with the Series C Preferred Stock, provided that
     the Corporation may at any time redeem, purchase or
     otherwise acquire shares of any such parity stock in
     exchange for shares of any stock of the Corporation ranking
     junior (either as to dividends or upon dissolution,
     liquidation or winding up) to the Series C Preferred Stock;
     or
     
               (iv)  purchase or otherwise acquire for
     consideration any shares of Series C Preferred Stock, or any
     shares of stock ranking on a parity with the Series C
     Preferred Stock, except in accordance with a purchase offer
     made in writing or by publication (as determined by the
     Board of Directors) to all holders of such shares upon such
     terms as the Board of Directors, after consideration of the
     respective annual dividend rates and other relative rights
     and preferences of the respective series and classes, shall
     determine in good faith will result in fair and equitable
     treatment among the respective series or classes.

          (B)  The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the
Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in
such manner.

          Section 5. Reacquired Shares.  Any shares of Series C
Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof.  All such shares
shall upon their cancellation become authorized but unissued
shares of preferred stock and may be reissued as part of a new
series of preferred stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.

          Section 6. Liquidation, Dissolution or Winding Up.
Subject to (a) the rights of the holders of preferred stock of
the Corporation ranking senior to the Series C Preferred Stock as
to dividends and amounts payable upon any voluntary or
involuntary liquidation, dissolution or winding up and (b) any
other provision of the Certificate of Incorporation of the
Corporation, upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, no distribution
shall be made (1) to the holders of shares of stock ranking
junior (either as to dividends or upon any voluntary or
involuntary liquidation, dissolution or winding up) to the Series
C Preferred Stock unless, prior thereto, the holders of shares of
the Series C Preferred Stock shall have received $100.00 per
share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of
such payment, provided that the holders of shares of Series C
Preferred Stock shall be entitled to receive an aggregate amount
per share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of Common Stock, or (2) to the
holders of stock ranking on a parity (either as to dividends or
upon any voluntary or involuntary liquidation, dissolution or
winding up) with the Series C Preferred Stock, except
distributions made ratably on the Series C Preferred Stock and
all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such
voluntary or involuntary liquidation, dissolution or winding up.
In the event the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the aggregate amount to which holders of
shares of Series C Preferred Stock were entitled immediately
prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount
by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.

          Section 7.  Consolidation, Merger, etc.  In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
the shares of Series C Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to
the provision for adjustment hereinafter set forth) equal to 100
times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which
or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of
Series C Preferred Stock shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.

          Section 8. No Redemption.  The shares of Series C
Preferred Stock shall not be redeemable.

          Section 9. Ranking.  The Series C Preferred Stock shall
rank junior to all other series of the Corporation's preferred
stock, whether now or hereafter outstanding, as to dividends and
amounts payable upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, unless the terms of
any such series shall provide otherwise.

          Section 10.  Amendment.  The Certificate of
Incorporation of the Corporation shall not be amended in any
manner which would materially alter or change the powers,
preferences or special rights of the Series C Preferred Stock so
as to affect them adversely without the affirmative vote of the
holders of two-thirds or more of the outstanding shares of Series
C Preferred Stock, voting together as a single class.

IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the
Penalties of Perjury this eleventh day of December, 1986.



                                   ___________________________
                                   Chairman, President and
                                   Chief Executive Officer



                                   ___________________________
                                   Vice President and Secretary






                                                       EXHIBIT B



                   [Form of Right Certificate]


No. R -                                                   Rights

     NOT EXERCISABLE AFTER THE EARLIER OF DECEMBER 31, 1996
     AND THE DATE ON WHICH THE RIGHTS EVIDENCED HEREBY ARE
     REDEEMED BY THE COMPANY AS SET FORTH IN THE RIGHTS
     AGREEMENT.  AS SET FORTH IN THE RIGHTS AGREEMENT,
     RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR
     BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR
     ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE
     RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON
     BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY
     BE NULL AND VOID.  [THE RIGHTS REPRESENTED BY THIS
     RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
     PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
     AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS
     SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).  THIS
     RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
     BE OR MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
     SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]*

                        RIGHT CERTIFICATE
                                
                         UAL CORPORATION

          This Right Certificate certifies that
_____________________, or registered assigns, is the registered
holder of the number of Rights set forth above, each of which
entitles the holder (upon the terms and subject to the conditions
set forth in the Rights Agreement dated as of December 11, 1986
between UAL Corporation, a Delaware corporation (the "Company"),
and First Chicago Trust Company of New York, as amended the
"Rights Agreement")), to purchase from the Company, at any time

*  If applicable, insert this portion of the legend and delete
   preceding sentence.

after the Distribution Date and prior to the Expiration Date, one
one-hundredth[s] of a fully paid, nonassessable share of Series C
Junior Participating Preferred Stock (the "Preferred Stock") of
the Company at a purchase price of $185 per one one-hundredth of
a share (the "Purchase Price"), payable in lawful money of the
United States of America, upon surrender of this Right
Certificate, with the form of election to purchase and related
certificate duly executed, and payment of the Purchase Price at
an office of the Rights Agent designated for such purpose.

          Terms used herein and not otherwise defined herein have
the meanings assigned to them in the Rights Agreement.

          The number of Rights evidenced by this Right
Certificate (and the number and kind of shares issuable upon
exercise of each Right) and the Purchase Price set forth above
are as of December 22, 1986, and may have been or in the future
be adjusted as a result of the occurrence of certain events, as
more fully provided in the Rights Agreement.

          Upon the occurrence of a Section 11(a)(ii) event, if
the Rights evidenced by this Right Certificate are beneficially
owned by (a) an Acquiring Person or an Associate or Affiliate of
an Acquiring Person, (b) a transferee of an Acquiring Person (or
any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (c) under certain
circumstances specified in the Rights Agreement, a transferee of
an Acquiring Person (or any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such, such Rights shall become null and void, and
no holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) event.

          This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Right Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement.

          Upon surrender at the principal office or offices of
the Rights Agent designated for such purpose and subject to the
terms and conditions set forth in the Rights Agreement, any
Rights Certificate or Certificates may be transferred or
exchanged for another Rights Certificate or Certificates
evidencing a like number of Rights as the Rights Certificate or
Certificates surrendered.

          Subject to the provisions of the Rights Agreement, the
Board of Directors of the Company may, at its option, at any time
prior to the earlier of (i) the Close of Business on the tenth
business day after the Stock Acquisition Date and (ii) the Final
Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $.05 per Right.

          No fractional shares of Preferred Stock will be issued
upon the exercise of any Right or Rights evidenced hereby (other
than fractions which are multiples of one one-hundredth of a
share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.  If this Right Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof
another Right Certificate or Certificates for the number of whole
Rights not exercised.

          No holder of this Right Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the
holder of the shares of capital stock which may at any time be
issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this Right Certificate shall have
been exercised as provided in the Rights Agreement.

          This Right Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the
Rights Agent.

          IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal by its
authorized officers.


Dated as of ________________, 19__

                              UAL CORPORATION


                              By _____________________________
                                 Title:




[SEAL]

Attest:


______________________________
          Secretary




Countersigned:

FIRST CHICAGO TRUST COMPANY
OF NEW YORK, as Rights Agent


By____________________________
  Authorized Signature





            Form of Reverse Side of Right Certificate


                       FORM OF ASSIGNMENT
                                
            (To be executed if the registered holder
           desires to transfer the Right Certificate.)


FOR VALUE RECEIVED ______________________________________________

hereby sells, assigns and transfers unto ________________________

_________________________________________________________________
          (Please print name and address of transferee)

_________________________________________________________________

this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint __________________________ Attorney, to transfer the
within Right Certificate on the books of the within-named
Company, with full power of substitution.

Date:  ________________________, 19__



                                   ______________________________
                                   Signature


Signature Guaranteed:






                           Certificate

          The undersigned hereby certifies by checking the
appropriate boxes that:

          (1)  the Rights evidenced by this Right Certificate
____ are ____ are not being assigned by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the
Rights Agreement);

          (2)  after due inquiry and to the best knowledge of the
undersigned, it ____ did ____ did not acquire the Rights
evidenced by this Right Certificate from any Person who is, was
or became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.


Date: _______________, 19__        _____________________________
                                   Signature





                    _________________________


          The signatures to the foregoing Assignment and
Certificate must correspond to the name as written upon the face
of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.

                    _________________________










                  FORM OF ELECTION TO PURCHASE

(To be executed if the registered holder desires to exercise
Rights represented by the Right Certificate.)

To:  UAL Corporation

          The undersigned hereby irrevocably elects to exercise
_____________ Rights represented by this Right Certificate to
purchase shares of Preferred Stock issuable upon the exercise of
the Rights (or such other securities of the Company or of any
other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such securities be
issued in the name of and delivered to:

Please insert social security
or other identifying number

_________________________________________________________________
                 (Please print name and address)

_________________________________________________________________

          If such number of Rights shall not be all the Rights
evidenced by this Right Certificate, a new Right Certificate for
the balance of such Rights shall be registered in the name of and
delivered to:

Please insert social security
or other identifying number

_________________________________________________________________
                 (Please print name and address)

_________________________________________________________________

Dated: _________________, 19__

                                   ______________________________
                                   Signature

Signature Guaranteed:



                           Certificate

          The undersigned hereby certifies by checking the
appropriate boxes that:

          (1)  the Rights evidenced by this Right Certificate
____ are ____are not being exercised by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the
Rights Agreement);

          (2)  after due inquiry and to the best knowledge of the
undersigned, it ____did ____did not acquire the Rights evidenced
by this right Certificate from any Person who is, was or became
an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.

Dated: ______________, 19__        _____________________________
                                   Signature


                     _______________________


          The signature of the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face
of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.

                     _______________________







                                                    Exhibit 10.2
            
            
            Waiver and Agreement dated as of
            December 23, 1994 with respect to the
            Amended and Restated Agreement and Plan
            of Recapitalization dated as of March
            25, 1994 among UAL Corporation and Air
            Line Pilots Association, International
            and International Association of
            Machinists and Aerospace Workers (the
            "Agreement").

WHEREAS, Section 5.7 of the Agreement provides for the
implementation of certain rights and restrictions with respect to
the purchase of UAL Corporation stock ("UAL Shares") by employees
of United Air Lines, Inc. including a requirement that no UAL
Shares may be acquired through the directed account plan, the
401(k) plans and the stock purchase plan during the six month
period ending on the last day of the Measuring Period, as defined
in Section 1.10 of the Agreement, and

WHEREAS, the Association of Flight Attendants is not a party to,
and is not bound by the terms of, the Agreement.

NOW, THEREFORE, it is agreed as follows:

1.   To the extent Section 5.7 would apply to the rights of
flight attendants to acquire or dispose of UAL Shares including
any requirement for the suspension of the purchase of UAL Shares
by the flight attendant 401(k) plan or by flight attendants
through the stock purchase plan, such
 requirement is hereby
waived by the parties hereto.

2.   Except as specifically modified hereby, the Agreement shall
remain in full force and effect in accordance with its terms.

IN WITNESS WHEREOF, the parties hereto have caused this Waiver
and Agreement to be executed by their respective authorized
officers as of the day and year first above written.


AIR LINE PILOTS ASSOCIATION,       INTERNATIONAL ASSOCIATION OF
INTERNATIONAL                      MACHINISTS AND AEROSPACE WORKERS



By: /s/ Harlow B. Osteboe          By:  /s/ Kenneth W. Thiede

Name:  Harlow B. Osteboe           Name:  Kenneth W. Thiede
Title: UAL-MEC Chairman            Title:  President and
                                           General Chairman



UAL CORPORATION



By: /s/ Douglas A. Hacker

Name:  Douglas A. Hacker
Title:  Senior Vice President - Finance



                                                Exhibit 10.3
            
            
            THIRD AMENDMENT dated as of March 15,
            1995 to the Amended and Restated
            Agreement and Plan of
            Recapitalization dated as of March
            25, 1994 among UAL Corporation, the
            Air Line Pilots Association,
            International and the International
            Association of Machinists and
            Aerospace Workers (the "Agreement").


                    W I T N E S S E T H


     WHEREAS, Section 5.7 of the Agreement provides for the
implementation of certain rights and restrictions with
respect to the purchase of UAL Corporation common stock,
$0.01 par value ("UAL Shares"), by employees of United Air
Lines, Inc. through certain employee plans, including a
requirement that no UAL Shares may be acquired through the
directed account plan, the 401(k) plans and the stock
purchase plan during the six month period ending on the last
day of the Measuring Period, as defined in Section 1.10 of
the Agreement, and

     WHEREAS, the parties to the Agreement believe it is
appropriate to relax that purchase restriction as and to the
extent hereinafter set forth.

     NOW, THEREFORE, it is agreed as follows:

     1.   Effective March 15, 1995, clause (D) appearing at
the end of Section 5.7 of the Agreement is amended to be as
follows:

          "(D) if on any day during the period
          commencing on March 15, 1995 and ending
          on the last day
 of the Measuring Period,
          as defined in Section 1.10, the closing
          price of New Shares on one or more of
          the New York Stock Exchange, the Chicago
          Stock Exchange and the Pacific Stock
          Exchange equals or exceeds $150.00 per
          New Share, no New Shares may be acquired
          through such plans during the remainder
          of the Measuring Period."

     2.   Except as specifically modified hereby, the
Agreement shall remain in full force and effect in
accordance with its terms.

     3.   This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were
upon the same instrument.  This Agreement shall become
effective when each party hereto shall have received
counterparts hereto (which may be by facsimile transmission)
signed by all of the other parties hereto.

     IN WITNESS WHEREOF, the parties hereto have caused this
Third Amendment to be executed by their respective
authorized officers as of the day and year first above
written.

AIR LINE PILOTS ASSOCIATION,       INTERNATIONAL ASSOCIATION OF
INTERNATIONAL                   MACHINISTS AND AEROSPACE WORKERS


By:/s/ Harlow B. Osteboe      By:/s/ Kenneth W. Thiede
Name:  Harlow B. Osteboe        Name:  Kenneth W. Thiede
Title:  UAL-MEC Chairman        Title:  President and
                                        General Chairman


UAL CORPORATION


By:/s/ Douglas A. Hacker
Name:  Douglas A. Hacker
Title:  Senior Vice President - Finance





                                                 Exhibit 10.12
                                                                 
                                                       As Amended
                                                February 24, 1995
                                
                                
                     FIRST REFUSAL AGREEMENT


     This Agreement (the "Agreement") has been made and entered
into as of this 12th day of July, 1994 by and among UAL
Corporation, a Delaware corporation (the "Company"), The Air Line
Pilots Association, International ("ALPA"), pursuant to its
authority as the collective bargaining representative for the
crafts or class of pilots employed by United Airlines, Inc.
("United"), and The International Association of Machinists and
Aerospace Workers ("IAM"), 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, and the Salaried/Management Employee Director (as defined
in Article FIFTH, Section 1.66 of the Restated Certificate (as
defined below)) on behalf of the salaried and management
employees of United who are not represented by any collective
bargaining organization (the "SAM") (ALPA, IAM and the SAM,
together, the "Employee Groups").

     WHEREAS, pursuant to the terms of and schedules to the
Agreement and Plan of Recapitalization, dated as of March 25,
1994, by and among the Company, ALPA
 and the IAM (as amended, the
"Recapitalization Agreement"), including the terms of the
restated certificate of incorporation of the Company to be
effective as of the Effective Time (as defined in the
Recapitalization Agreement) (the "Restated Certificate"), neither
(i) a Non-Dilutive Issuance (as defined in Article FIFTH, Section
3.4(b)(vii) of the Restated Certificate) nor (ii) the issuance of
Permitted Bankruptcy Equity (as defined in Article FIFTH, Section
3.4(b)(vii)(B) of the Restated Certificate) (a "Bankruptcy
Issuance") shall constitute an Other Extraordinary Matter (as
defined in Article FIFTH, Section 3.4(b) of the Restated
Certificate) if, among other things, such issuance is subject to
the right of first refusal provided for hereunder; and

     WHEREAS, the parties hereto have entered into this Agreement
in order to effectuate the terms and intent of the
Recapitalization Agreement and the Restated Certificate with
respect to the Company's grant of such right of first refusal to
the Employee Groups in connection with such Non-Dilutive Issuance
and/or such Bankruptcy Issuance;

     NOW, THEREFORE, in consideration of the foregoing premises,
the mutual covenants herein contained and other good and valuable
consideration the receipt of which is hereby acknowledged, the
parties hereto hereby agree as follows:

1.  Right of First Refusal.

     A.  If, during the term of this Agreement, the Company
proposes to issue Equity Securities (as defined in Article FIFTH,
Section 1.37 of the Restated Certificate) pursuant to a
transaction which would constitute an Other Extraordinary Matter
pursuant to Article FIFTH, Section 3.4(b) of the Restated
Certificate or would not constitute an Other Extraordinary Matter
pursuant to Article FIFTH, Section 3.4(b)(vii)(A) or (B) of the
Restated Certificate (a "Proposed Equity Issuance"), the Company,
prior to making such Proposed Equity Issuance, shall provide each
of the Employee Groups with a written statement of the specific
terms of such Proposed Equity Issuance (the "Proposed Sale
Notice"); provided, however, that the issuance of Equity
Securities in exchange for the Series A Convertible Preferred
Stock, without par value (the "Series A Preferred Stock") of the
Company, or any underlying Equity Security upon the conversion of
any Equity Security so issued in exchange, shall not constitute a
Proposed Equity Issuance.  Each of the Employee Groups shall then
have 30 days to provide to the Company a binding commitment to
purchase up to its respective Proportionate Percentage (as
defined in subsection D below) of the Equity Securities proposed
to be issued in such Proposed Equity Issuance on terms that are
Equivalent (as defined in subsection E below) to the terms set
forth in the Proposed Sale Notice (the "Purchase Commitment"),
and the Company shall not consummate the Proposed Equity Issuance
during such 30 day period.  If the Company consummates a Proposed
Equity Issuance within 180 days of the end of the 30 day notice
period with respect thereto, it shall honor all the timely
Purchase Commitments and shall reduce the amount of securities
offered pursuant to the Proposed Equity Issuance by the amount of
securities covered by such Purchase Commitments.

     B.  In addition to and not in limitation of the foregoing,
if one or more Employee Groups submit a Purchase Commitment
within the 30 day period provided for in subsection A above and
any other Employee Group either (i) indicates in writing during
such period that it does not intend to submit a Purchase
Commitment for all of its Proportionate Percentage of the
Proposed Equity Issuance or (ii) does not submit a Purchase
Commitment for all of its Proportionate Percentage of the
Proposed Equity Issuance within such 30 day period, then the
Company, prior to consummating a Proposed Equity Issuance, must
provide each of the Employee Groups that submitted a Purchase
Commitment for all of its Proportionate Percentage of the
Proposed Equity Issuance with the opportunity to provide an
additional purchase commitment with respect to the portion of the
Proposed Equity Issuance that is not subject to a Purchase
Commitment (an "Additional Purchase Commitment") within the last
to expire of (a) 15 days after receipt of written notice from the
Company of the opportunity to make an Additional Purchase
Commitment and (b) the unexpired portion of the 30 day period
referred to in subsection A above which remains after receipt of
written notice from the Company that any portion of the Proposed
Equity Issuance is not subject to a Purchase Commitment from any
other Employee Group (such longer period, the "APC Period").  The
Company shall not consummate the Proposed Equity Issuance during
such APC Period and if the Company consummates a Proposed Equity
Issuance within 180 days of the end of the notice period referred
to in the preceding sentence, it shall honor all the timely
Additional Purchase Commitments and shall reduce the amount of
securities offered pursuant to the Proposed Equity Issuance to
any person or entity other than the Employee Groups by the amount
of securities covered by such Additional Purchase Commitments.

     C.  Notwithstanding anything set forth in subsection B to
the contrary, if more than one Employee Group submit Additional
Purchase Commitments which in the aggregate are in excess of the
securities being offered pursuant to the Proposed Equity
Issuance, the Company shall accept such Additional Purchase
Commitments in proportion to the relative proportion that such
Employee Groups Proportionate Percentages bear to each other;
provided, however, that in no event shall any Employee Group be
obligated to purchase Equity Securities in excess of the amount
set forth in its Additional Purchase Commitment.

     D.  For the purposes of this Agreement, "Proportionate
Percentage" shall mean, for each of the Employee Groups, the
following:

               ALPA:     46.23%
               IAM:      37.13%
               SAM:      16.64%

     E.  For the purpose of this Agreement,"Equivalent" shall
mean, in connection with a Proposed Equity Issuance, a Purchase
Commitment on substantially the same terms as that set forth in a
Proposed Sale Notice.  If any Proposed Sale Notice provides for
consideration other than cash to be paid to the Company (the "Non-
Cash Consideration"), a Purchase Commitment must provide for
consideration to be paid to the Company, whether in cash or
otherwise, with a fair market value, as determined by the board
of directors of the Company, equal to the Non-Cash Consideration
to be paid to the Company pursuant to the Proposed Sale Notice in
order for such Purchase Commitment to be deemed Equivalent for
the purpose of subsection A above.

     F.  In the event that no Employee Group submits a Purchase
Commitment within the time period provided for in subsection A
above or the Purchase Commitments and Additional Purchase
Commitments, if any, submitted are for less than all of the
securities being offered in the Proposed Equity Issuance, the
Company may then consummate the Proposed Equity Issuance of such
securities not subject to Purchase Commitments or Additional
Purchase Commitments only upon the terms set forth in the
Proposed Sale Notice.  Such Proposed Equity Issuance may not be
consummated unless it is consummated (i) within 180 days after
the later of the 30 day period provided for in subsection A above
or, if applicable, the APC Period provided for in subsection B
above and (ii) on the specific terms set forth in the Proposed
Sale Notice.  Any subsequent Proposed Equity Issuance proposed by
the Company shall be subject to each of the provisions and
requirements of this Section 1 as if the prior Proposed Equity
Issuance that was not consummated for any reason never was
proposed by the Company.

     G.  Notwithstanding anything contained in this Section 1 to
the contrary, the provisions of this Section 1 shall be
inapplicable to issuances of Equity Securities (a) in accordance
with Article FIFTH, Subsection 3.4(b)(vii)(C) of the Restated
Certificate, or (b) in exchange for the Series A Preferred Stock
or upon the conversion of any Equity Security so issued in
exchange.

     H.  The Salaried/Management Employee Director may consult
with the senior executive of United having responsibility for
human resources concerning the exercise of any rights under this
Agreement.  The Company shall assist the Salaried/Management
Director in the exercise of such rights, including providing
administrative and logistical support in disseminating Proposed
Sale Notices to the Salaried/Management Employees and collating
and processing any Purchase Commitments and Additional Purchase
Commitments received from such employees and, if requested, shall
similarly assist ALPA and the IAM.

     I.  To the extent consistent with its policies and
practices, United may, but shall not be obligated to, assist the
SAM Employee Group (to the same extent that either of the other
Employee Groups assists its members) in the exercise of their
rights under this Agreement in order to enable them to consummate
their Purchase Commitments made hereunder.

2.   Term.  This Agreement shall terminate and be of no further
force or effect upon the Termination Date (as defined in the
Restated Certificate).

3.   Assignments.  All right, title and interest in and to, and
all benefits and obligations arising under, this Agreement may be
assigned in whole or in part by any of the Employee Groups to any
of the Existing Plans and/or the ESOPs (as defined in Article
FIFTH, Sections 1.41 and 1.39 of the Restated Certificate,
respectively) without the consent of any other party hereto and
may not otherwise be assigned.

4.   Binding Effect.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns.  This Agreement is being
entered into for the benefit of the parties hereto (other than
the Salaried/Management Director) and for the Employee Groups
named herein.  The Salaried/Management Director is not a party to
this Agreement in a personal capacity but only in the capacity of
the Salaried/Management Director as the nominal representative of
the SAM Employee Group to acknowledge their acceptance of the
benefits of this Agreement.  Upon the replacement of the
individual named herein as the Salaried/Management Director, each
such successor to the office of Salaried/Management Director,
rather than the individual named herein, shall be authorized to
act hereunder as the Salaried/Management Director.  The parties
hereto, on behalf of themselves and the Employee Groups that they
represent, agree that the Salaried/Management Director, and the
successor Salaried/Management Directors, shall not have any
personal liability under this Agreement.

5.   Governing Law.  This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware
without regard to the conflicts of laws principles thereof.

6.   Counterparts.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same
effect as if the signature thereto and hereto were upon the same
instrument.

7.   Specific Performance.  The parties hereto agree that if any
of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached,
irreparable damage would occur, no adequate remedy of law would
exist and damages would be difficult to determine, and that the
parties shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or equity.

8.   Amendments.  This Agreement may not be amended or modified
unless such amendment or modification is approved in writing by
each of the parties hereto.

9.   Entire Agreement.  This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject
matter hereof and, except as otherwise contemplated hereby,
supersedes all other prior agreements and understandings, both
written and oral, between the parties hereto with respect to the
subject matter hereof.

     IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.


                              UAL CORPORATION
                              
                              
                              By:  /s/ James M. Guyette
                              
                              
                              
                              AIR LINE PILOTS ASSOCIATION,
                              INTERNATIONAL
                              
                              
                              By:  /s/ R. D. Hall
                              
                              
                              
                              INTERNATIONAL ASSOCIATION OF
                              MACHINISTS AND AEROSPACE
                              WORKERS
                              
                              
                              By:  /s/ Ken Thiede
                              
                            
                              
                              /s/ Joseph V. Vittoria
                              Joseph V. Vittoria
                              Salaried/Management Employee
                              Director (not personally but as
                              representative of the
                              Salaried/Management Employees)
                              
                              



                                                    Exhibit 10.13
                                                                 
                                                       As Amended
                                               September 30, 1994


                         UAL CORPORATION

                    1981 INCENTIVE STOCK PLAN


          1.   Purpose.  The purpose of the UAL Corporation 1981
Incentive Stock Plan (the "Plan") is to attract and retain
outstanding individuals as officers and key employees of UAL
Corporation (the "Company") and its subsidiaries, and to furnish
incentives to such persons by providing such persons
opportunities to acquire shares of the Company's Common Stock,
par value $.01 per share ("Common Stock"), or monetary payments
based on the value of such shares or both, on advantageous terms
as herein provided.

          2.   Administration.  The Plan shall be administered by
a stock option committee (the "Committee") of not less than three
Directors of the Company who shall be appointed from time to time
by the Board of Directors of the Company; provided, however, that
no Director, who within one year prior thereto was eligible to
participate in the Plan, shall be appointed as a member of the
Committee.  No member of the Committee shall be eligible, while a
member of the Committee, to receive a Benefit under the Plan.
The Committee is authorized to interpret the provisions of the
Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, to determine
 the terms and conditions of
Benefits to be granted under the Plan and to make all other
determinations necessary or advisable for the administration of
the Plan, but only to the extent not contrary to or inconsistent
with the express provisions of the Plan.

          3.   Participants.  The Plan shall be administered by
the Compensation Administration Committee of the Board of
Directors of the Company for all grants to (I) any "officer" as
such term is defined in Rule 16a-1(f) under the Securities
Exchange Act of 1934, as amended, or (II) any "covered employee"
within the meaning of Section 162(m) of the Internal Revenue Code
of 1986, as amended, and the regulations promulgated thereunder,
and by the Compensation Committee of the Board of Directors of
the Company for all other grants (such committee, as applicable,
herein called the "Committee").  The Committee shall consider
such factors as it deems pertinent in selecting participants and
in determining the type and amount of their respective Benefits,
including without limitation (i) the financial condition of the
Company; (ii) anticipated profits for the current or future
years; (iii) contributions of participants to the profitability
and development of the Company; and (iv) other compensation
provided to participants.

          4.   Types of Benefits.  Benefits under the Plan may be
granted in any one or a combination of (a) Incentive Stock
Options, (b) Non-qualified Stock Options, and (c) Stock
Appreciation Rights, all as described below.

          5.   Shares Reserved under the Plan.  There is hereby
reserved for issuance under the Plan an aggregate of 1,200,000
shares of Common Stock, which may be newly issued or treasury
shares.*  All of such shares may, but need not, be issued
pursuant to the exercise of Incentive Stock Options.  If there is
a lapse, expiration, termination or cancellation of any Benefit
granted hereunder without the issuance of shares or payment of
cash thereunder, or if shares are issued under any Benefit and
thereafter are reacquired by the Company pursuant to rights
reserved upon the issuance thereof, the shares subject to or
reserved for such Benefit may again be used for new options or
rights under this Plan; provided, however, that in no event may
the number of shares issued under this Plan exceed the total
number of shares reserved for issuance hereunder.
Notwithstanding any other provision of the Plan to the contrary,
in no event may the aggregate number of shares of Common Stock
with respect to which options or Stock Appreciation Rights are
granted to any individual exceed 125,000 in any period of two
calendar years, provided, however, that grants made to any new
employee as a condition of employment may not exceed two times
such biennial limit during the first two years of employment.
If, pursuant to Section 1.9 of the Agreement and Plan of
Recapitalization among the Company, Air Line Pilots Association,
International and International Association of Machinists and
Aerospace Workers (the "Agreement"), the Company becomes
obligated to issue the Additional Shares (as defined in the
Agreement), the number of shares reserved for issuance hereunder
as well as the limitations set forth in the preceding sentence
shall be increased by the percentage determined by dividing the
number of Additional Shares the Company is so required to issue
by the number of Fully Diluted Old Shares (as defined in the
Agreement).
        * Represents shares of Common Stock reserved for issuance
          under the Plan in connection with grants made on or after
          July 12, 1994.

          6.   Incentive Stock Options.  Incentive Stock Options
will consist of options to purchase shares of Common Stock at
purchase prices not less than one hundred percent (100%) of the
fair market value of such shares on the date of grant.  Incentive
Stock Options will be exercisable over not more than ten (10)
years after date of grant and shall terminate not later than
three (3) months after termination of employment for any reason
other than death.  If the optionee should die while employed or
within three (3) months after termination of employment, the
right of the optionee or his or her successor in interest to
exercise an option shall terminate not later than twelve (12)
months after the date of death.  The aggregate fair market value
(determined as of the time the option is granted) of the shares
of Common Stock which any participant may exercise pursuant to
Incentive Stock Options for the first time in any calendar year
(under all option plans of the Company and its parent and
subsidiary corporations) shall not exceed $100,000.

          7.   Non-qualified Stock Options.  Non-qualified Stock
Options will consist of options to purchase shares of Common
Stock at purchase prices not less than one hundred percent (100%)
of the fair market value of shares on the date of grant.  Non-
qualified Stock Options will be exercisable over not more than
ten (10) years after date of grant.  Non-qualified Stock Options
will terminate no later than six (6) months after termination of
employment for any reason other than retirement or death, unless
immediately after such termination of employment the optionee
shall be a member of the Board of Directors of the Company, in
which case such options will terminate two (2) years after such
termination of employment.  In the event termination of
employment occurs by reason of the optionee's retirement, the
option shall terminate not later than the fixed expiration date
set forth therein.  In the event termination of employment occurs
by reason of the optionee's death or if the optionee's death
occurs within six months after termination of employment, the
option shall terminate not later than twelve (12) months after
the date of such death.

          8.   Stock Appreciation Rights.  The Committee may, in
its discretion, grant a Stock Appreciation Right to the holder of
any Non-qualified Stock Option granted hereunder.  In addition, a
Stock Appreciation Right may be granted independently of and
without relation to any stock option.  Stock Appreciation Rights
shall be subject to such terms and conditions consistent with the
Plan as the Committee shall impose from time to time, including
the following:

          (a)  A Stock Appreciation Right may be granted with
               respect to a Non-qualified Stock Option at the
               time of its grant or at any time thereafter up to
               six (6) months prior to its expiration.

          (b)  Each Stock Appreciation Right will entitle the
               holder to elect to receive up to 100% of the
               appreciation in fair market value of the shares
               subject thereto up to the date the right is
               exercised.  In the case of a Stock Appreciation
               Right issued in relation to a Non-qualified Stock
               Option, such appreciation shall be measured from
               the option price.  In the case of a Stock
               Appreciation Right issued independently of any
               stock option, the appreciation shall be measured
               from not less than the fair market value of the
               Common Stock on the date the right is granted.

          (c)  The Committee shall have the discretion to satisfy
               a participant's right to receive the amount of
               cash determined under subparagraph (b) hereof, in
               whole or in part, by the delivery of shares of
               Common Stock valued as of the date of the
               participant's election.

          (d)  In the event of the exercise of a Stock
               Appreciation Right, the number of shares reserved
               for issuance hereunder (and the shares subject to
               the related option, if any) shall be reduced by
               the number of shares with respect to which the
               right is exercised.

          9.   Nontransferability.  Each Benefit granted under
this Plan shall not be transferable other than by will or the
laws of descent and distribution, and shall be exercisable,
during the holder's lifetime, only by the holder.

          10.  Other Provisions.  The award of any Benefit under
the Plan may also be subject to other provisions (whether or not
applicable to the Benefit awarded to any other participant) as
the Committee determines appropriate, including, without
limitation, provisions for the purchase of common shares under
stock options in installments, provisions for the payment of the
purchase price of shares under stock options by delivery of other
shares of the Company having a then market value equal to the
purchase price of such shares, restrictions on resale or other
disposition, such provisions as may be appropriate to comply with
federal or state securities laws and stock exchange requirements
and understandings or conditions as to the participant's
employment in addition to those specifically provided for under
the Plan.

          11.  Term of Plan and Amendment, Modification or
Cancellation of Benefits.  No Benefit shall be granted after
December 8, 2001; provided, however, that the terms and
conditions applicable to any Benefits granted prior to such date
may at any time be amended, modified, extended or canceled by
mutual agreement between the Committee and the participant or
such other persons as may then have an interest therein, so long
as any amendment or modification does not increase the number of
shares of Common Stock issuable under this Plan and any extension
does not extend the option term beyond ten (10) years.

          12.  Taxes.  The Company shall be entitled to withhold
the amount of any tax attributable to any amount payable or
shares deliverable under the Plan after giving the person
entitled to receive such amount or shares notice as far in
advance as practicable, and the Company may defer making payment
or delivery if any such tax may be pending unless and until
indemnified to its satisfaction.

          13.  Fair Market Value.  The Fair Market Value of the
Company's shares of Common Stock at any time shall be determined
in such manner as the Committee may deem equitable or required by
applicable laws or regulations.

          14. Adjustment Provisions.

           (a) If the Company shall at any time change the number
               of issued shares of Common Stock without new
               consideration to the Company (such as by stock
               dividend or stock split), the total number of
               shares reserved for issuance under this Plan and
               the number of shares covered by each outstanding
               Benefit shall be adjusted so that the aggregate
               consideration payable to the Company and the value
               of each such Benefit shall not be changed.  The
               Committee shall also have the right to provide for
               the continuation of Benefits or for other
               equitable adjustments after changes in the shares
               of Common Stock resulting from reorganization,
               sale, merger, consolidation or similar occurrence.

           (b) Notwithstanding any other provision of this Plan,
               and without affecting the number of shares
               otherwise reserved or available hereunder, the
               Committee may authorize the issuance or assumption
               of Benefits in connection with any merger,
               consolidation, acquisition of property or stock,
               or reorganization upon such terms and conditions
               as it may deem appropriate.

          15.  Amendment and Termination of Plan.  The Board of
Directors of the Company may amend the Plan from time to time or
terminate the Plan at any time, but no such action shall reduce
the then existing amount of any participant's Benefit or
adversely change the terms and conditions thereof without the
participant's consent.  However, except for adjustments expressly
provided for herein, no amendment may, without stockholder
approval, (i) materially increase the Benefits accruing to
participants, (ii) materially increase the number of shares which
may be issued, or (iii) materially modify the requirements as to
eligibility for participation in the Plan.

          16.  Stockholder Approval.  The Plan was adopted by the
Board of Directors of the Company on December 9, 1981, and was
ratified by the stockholders of the Company on April 29, 1982.

The Board of Directors amended the Plan on October 31, 1985, to
permit the exercise of non-qualified stock options after
termination of employment due to retirement up to their fixed
expiration date, and to increase the shares of old common stock,
par value $5 per share ("Old Common Stock"), of the Company
reserved for issuance under the Plan from 1,300,000 shares to
3,300,000 shares.  The latter amendment was subject to
shareholder approval, which was obtained on April 24, 1986.

The Board of Directors amended the Plan on February 28, 1991, to
extend the duration of the Plan from December 8, 1991 to December
8, 2001, and to increase the shares of Old Common Stock of the
Company reserved for issuance under the Plan from 3,300,000
shares to 4,300,000 shares.  These amendments were approved by
the Company's stockholders on April 25, 1991.

The Board of Directors amended the Plan on July 12, 1994, to
limit the number of shares of Common Stock with respect to which
options may be granted under the Plan to any individual during
any two-year period to 125,000 (250,000 with respect to grants
made to any new employee as a condition of employment), subject
to adjustment if additional shares become issuable to the
employee groups in accordance with the Agreement, and to provide
for 1,200,000 shares of Common Stock of the Company to be
available for issuance under the Plan subsequent to the
Recapitalization of the Company on July 12, 1994.  Additional
shares are reserved for issuance on account of the options
granted prior to the Recapitalization for old Common Stock ("Pre-
Closing Options") that became exercisable for new Common Stock
and cash as a result of the Recapitalization; however, these
shares are not available for future awards in the event any Pre-
Closing Option is forfeited or expires unexercised.  These
amendments were approved by the Company's stockholders on July
12, 1994.




                                                    Exhibit 10.14
                                                                 
                                                       As Amended
                                               September 30, 1994


                         UAL CORPORATION

                   1988 RESTRICTED STOCK PLAN


1.   Purpose.

           The purposes of the Plan are to attract and retain key
 employees of the Company and its Subsidiaries, to compensate
 them for their contributions to the growth and profits of the
 Company and its Subsidiaries and to encourage ownership by them
 of shares of Common Stock of the Company.

2.   Definitions.

          (a)  "Company" shall mean UAL Corporation.
          
          (b)  "Subsidiary" or "Subsidiaries" shall mean a
corporation or corporations of which the Company owns, directly 
or indirectly, shares having a majority of the ordinary voting 
power for the election of directors.
          
          (c)  "Board" shall mean the Board of Directors of the
Company.
          
          (d)  "Committee" shall mean, as applicable, the
Compensation Administration Committee of the Board of Directors
of the Company for all grants to (I) any "officer" as such term
is defined in Rule 16a-1(f) under the Securities Exchange Act of
1934, as amended, or (II) any "covered employee" within the
meaning of Section 162(m) of the Internal Revenue Code of 1986,
as amended, and the regulations promulgated thereunder, and the
Compensation Committee of the Board of Directors of the Company
for all other grants.
          
          (e)  "Plan" shall mean the UAL Corporation
 1988
Restricted Stock Plan.
          
          (f)  "Restricted Share" shall mean a share of Common
Stock of the Company, par value $.01 per share ("Common Stock"),
allocated to a Recipient pursuant to the Plan.
          
          (g)  "Recipient" shall mean an employee of the Company
or a Subsidiary to whom shares are allocated pursuant to the Plan
and shall be deemed to include such Recipient's estate and the
beneficiaries of such estate as the context may require.
          
          (h)  "Change in Control" shall be deemed to have
occurred if (A) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing
25% or more of the combined voting power of the Company's then
outstanding securities (such percentage ownership to be
determined in the manner provided in Rule 13d-3(d)(1)(i) under
the Exchange Act); or (B) during any period of two consecutive
years or portion thereof not including any period prior to July
1, 1993, individuals who at the beginning of such period
constitute the Board and any new director (other than a director
designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (A) or (C) of
this Subsection) whose election by the Board or nomination for
election by the Company's shareholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office
who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof; or (C) the
shareholders of the Company approve a merger or consolidation of
the Company with any other corporation (or similar transaction),
other than a merger or consolidation (or similar transaction)
which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least 80% of the
combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger,
consolidation or similar transaction (either alone or in
combination with new or additional voting securities held by
management of the Company and its subsidiaries) or the
shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets.  For purposes of (I) clause (A) of the
preceding sentence, beneficial ownership of securities of United
Air Lines, Inc. ("United") representing 25% or more of the
combined voting power of United's then outstanding securities
shall be deemed to constitute such beneficial ownership of the
Company and (II) clause (C) of the preceding sentence, the
approval by the shareholders of United of a plan of complete
liquidation of United or an agreement for the sale or disposition
by United of all or substantially all of United's assets shall be
deemed to constitute approval by the shareholders of the Company
of such events in respect of the Company.

3.    Restricted Shares Available Under the Plan.

           (a) An aggregate of five hundred thousand (500,000)
shares of Common Stock, par value $5 per share, will be available
for allocation under the Plan.1  Such shares, which shall be
treasury shares of such Common Stock, shall be credited to a
Restricted Share reserve.2  Upon the allocation of shares
hereunder, said reserve shall be reduced by the number of shares
so allocated.  Upon the failure of a Recipient to complete on a
timely basis all of the requirements of Section 6 in connection
with the allocation of any Restricted Shares or upon the
forfeiture of any Restricted Shares pursuant to Section 7(d) or
Section 9, the Restricted Share reserve shall be increased by
such number of shares, and such Restricted Shares may again be
the subject of allocations hereunder.

           (b) In the event of any stock dividend, stock split,
merger, consolidation, reorganization, recapitalization, or other
change in corporate structure of the Company, appropriate
adjustments shall be made in the aggregate number of shares which
may be allocated under the Plan.  Such adjustments shall be made
by the Committee, whose determination as to what adjustments
shall be made, and the extent thereof, shall be final.  No
fractional shares of stock shall be allocated or authorized by
any such adjustment.


4.   Eligibility and Making of Allocations.

           (a) Any officer or key employee of the Company or any
Subsidiary shall be eligible to receive an allocation of
Restricted Shares pursuant to the Plan.

           (b) The Committee shall from time to time select those
employees who will receive allocations and determine the number
of Restricted Shares subject to each such allocation.
Notwithstanding any other provision of the Plan to the contrary,
in no event may the aggregate number of Restricted Shares
allocated to any individual exceed 30,000 in any period of two
calendar years, provided, however, that allocations made to any
new employee as a condition of employment may not exceed two
times such biennial limit during the first two years of
employment.  If, pursuant to Section 1.9 of the Agreement and
Plan of Recapitalization among the Company, Air Line Pilots
Association, International and International Association of
Machinists and Aerospace Workers (the "Agreement"), the Company
becomes obligated to issue the Additional Shares (as defined in
the Agreement), the limitations set forth in the preceding
sentence shall be increased by the percentage determined by
dividing the number of Additional Shares the Company is so
required to issue by the number of Fully Diluted Old Shares (as
defined in the Agreement).

5.   Form of Allocations.

           (a) Each allocation shall specify the number of
Restricted Shares subject thereto.  At the time of making any
allocation, the Committee or its designee shall advise the
Recipient thereof by delivery of written notice in the form
prescribed by the Committee.

           (b) The Company shall take such action as shall be
necessary to cause any Restricted Shares not previously so listed
to be listed on the New York Stock Exchange and/or such other
exchange or exchanges on which shares of the same class as the
Restricted Shares are then listed.

6.  Actions Required of Recipients.

           (a) Within 30 days of an allocation of Restricted
Shares, the Recipient shall deliver to the Company an agreement
in writing, signed by such Recipient, in form and substance as
prescribed by the Committee, together with a stock power, duly
endorsed in blank, relating to such Restricted Shares.  The
Company may require that the Recipient represent to the Company
in such agreement that such Recipient is acquiring such
Restricted Shares for the purpose of investment and with no
present intention to transfer, sell or otherwise dispose of such
shares, except such distribution by a legal representative as
shall be required by will or the laws of descent and distribution
of any jurisdiction in administering the estate of any Recipient.
In the event the Company requires such a representation in
connection with an acquisition of Restricted Shares hereunder,
such shares shall be transferable only if (i) the proposed
transfer shall be permissible pursuant to the Plan and (ii) the
Company shall determine at the time of the lapse of the
restrictions thereon pursuant to Section 7(c) or at any time
thereafter (based upon an opinion of counsel satisfactory to the
Company, if the Company shall so require) that such a transfer
would comply with applicable securities laws.

           (b) The date on which such agreement and stock power
are received by the Company shall be deemed the "Date of
Transfer" of the Restricted Shares.  The failure of a Recipient
to deliver such agreement and stock power within 30 days from the
date of an allocation of shares shall terminate such allocation
to the Recipient.

 7.  Restrictions.

           (a) On or promptly after the Date of Transfer of
Restricted Shares, a certificate or certificates representing
such shares shall be prepared in the Recipient's name.  The
Recipient shall thereupon be a stockholder with respect to all
the shares represented by such certificate or certificates and
shall have all the rights of a stockholder with respect to all
such shares, including the right to vote such shares and to
receive all dividends and other distributions (subject to the
provisions of Section 7(b)) paid with respect to such shares,
provided, however, that such shares shall be subject to the
restrictions hereinafter described in Section 7(d).  Certificates
of stock representing Restricted Shares shall be imprinted with a
legend to the effect that the shares represented thereby may not
be sold, exchanged, transferred, pledged, hypothecated or
otherwise disposed of except in accordance with the terms of the
Plan, and each transfer agent for the Common Stock shall be
instructed to the same effect in respect of such shares.  In aid
of such restrictions, during the Restricted Period with respect
to the Restricted Shares represented by such a certificate, such
certificate, together with the stock power described in Section
6(a), shall remain in the physical custody of the Company.

           (b) In the event that, as the result of an event
giving rise to an adjustment described in Section 3(b), the
Recipient shall, as the owner of Restricted Shares, receive new
or additional or different shares of stock or securities, the
certificate or certificates for, or other evidences of, such new
or additional or different shares or securities shall also be
imprinted with a legend as provided in Section 7(a) and, together
with a stock power duly endorsed in blank by the Recipient, shall
remain in the physical custody of the Company, and all provisions
of the Plan relating to restrictions and lapse of restrictions
shall thereupon be applicable to such new or additional or
different shares or securities; provided, however, that if the
Recipient shall receive rights, warrants or fractional interests
in respect of any of such Restricted Shares, such rights or
warrants may be held, exercised, sold or otherwise disposed of,
and such fractional interests may be settled, by the Recipient,
without regard to such restrictions.
           
           (c) The term "Restricted Period" with respect to
Restricted Shares shall mean a period commencing on the Date of
Transfer of such shares and ending ten (10) years after such Date
of Transfer or, if sooner, upon the first to occur of any of the
following:
           
               (i)  the dissolution of the Company, or any merger
     or consolidation of the Company where the Company is not the
     surviving corporation and the surviving corporation does not
     agree to exchange the Restricted Shares outstanding
     hereunder for shares of stock or securities of which it is
     the issuer having an aggregate value equal to the aggregate
     value of such Restricted Shares;

               (ii) a Change in Control;

               (iii) a determination by the Committee at any
     time to accelerate or terminate such Restricted Period, but
     only to the extent of such determination.

Notwithstanding the foregoing provision of this Section 7(c), the
Committee may provide with respect to any allocation of
Restricted Shares that the "Restricted Period" with respect to
such Restricted Shares shall lapse based upon the attainment by
the Company of one or more target levels of pre-tax income (as
determined under generally accepted accounting principles but
without regard to any items (whether gains or losses) otherwise
included therein relating to (1) the UAL Corporation Employee
Stock Ownership Plan, the UAL Corporation Supplemental ESOP, or
the trusts relating thereto, (2) any event or occurrence that the
Committee determines to be either not directly related to the
operations of the Company or not within the reasonable control of
the Company's management, (3) the Plan and (4) the Company's
Incentive Compensation Plan).  Such target level(s) shall be
determined by the Committee on or before the allocation of such
Restricted Shares, shall relate to such period or periods of time
as the Committee shall prescribe and may provide that any period
in which such pre-tax income is less than zero may be
disregarded.

          (d)  During the Restricted Period applicable to any
Restricted Shares and except as otherwise specifically provided
in the Plan, none of such Restricted Shares may be sold,
assigned, exchanged, transferred, pledged, hypothecated or
otherwise disposed of or encumbered.  If a Recipient ceases to be
an employee of the Company or any Subsidiary for any reason, all
of such Recipient's Restricted Shares which at such time remain
subject to the restrictions imposed hereunder shall be forfeited
and returned to the Company, unless and to the extent the
Committee determines to end the Restricted Period with respect to
any such Restricted Shares pursuant to Section 7(c)(iii).

          (e)  The restrictions set forth in Section 7(d) shall
lapse with respect to Restricted Shares when the Restricted
Period applicable to such shares expires, as described in Section
7(c).

 8.  Administration.

          The Committee shall administer the Plan and construe
its provisions.  The Committee is authorized, subject to the
provisions of the Plan, to establish such rules and regulations
as it deems necessary for the proper administration of the Plan
and to determine such other terms and conditions of Restricted
Shares and make such other determinations and interpretations and
to take such action in connection with the Plan as it deems
necessary or advisable.  All determinations by the Committee in
carrying out, administering or construing this Plan shall be
final, binding and conclusive for all purposes and upon all
persons interested herein.

9.   Limitations.

          (a)  Except as provided herein, no person shall at any
time have any right to receive an allocation of Restricted Shares
hereunder, and no person shall have authority to enter into an
agreement for the making of an allocation hereunder or to make
any representation or warranty with respect thereto without the
approval of the Committee and the Board.

          (b)  Recipients of allocations shall have no rights in
respect thereof except as set forth in the Plan.  Except as
provided in Section 6(a), in the event that any attempt shall be
made to sell, assign, transfer, pledge, hypothecate or otherwise
dispose of or encumber any Restricted Shares which are then
subject to restrictions hereunder, the shares which are the
subject of such attempted disposition shall be deemed forfeited
and shall be returned to the Company.  No Recipient shall have
any rights as a stockholder with respect to any shares reserved
for allocation hereunder nor shall any such shares be earmarked
for any Recipient prior to the Date of Transfer of such shares.

          (c)  Neither the action of the Company in establishing
the Plan, nor any action taken by it or by the Board or the
Committee under the Plan, nor any provision of the Plan, shall be
construed as giving to any person the right to be retained in
employment with the Company or any Subsidiary.

10.  Amendment, Suspension or Termination of the Plan in Whole or
     in Part.

          The Board may amend, suspend or terminate the Plan in
whole or in part at any time, provided that such amendment,
suspension or termination shall not, without a Recipient's
consent, affect adversely such Recipient's rights with respect to
allocations of Restricted Shares theretofore made; and provided,
further, that no modification of the Plan by the Board without
approval of the stockholders of the Company shall (i) increase
the maximum number of Restricted Shares available for allocation
under the Plan pursuant to Section 3 of the Plan or (ii) render
any member of the Committee eligible to receive an allocation of
Restricted Shares at any time while such member is serving on the
Committee.

11.  Withholding.

         The Company shall be entitled to withhold the amount of
taxes which the Company deems necessary to satisfy any applicable
federal, state and local tax withholding obligations arising from
allocations of or the lapse of restrictions on Restricted Shares
under the Plan, or to make other appropriate arrangements with
Recipients to satisfy such obligations.  At the discretion of the
Committee, the Company may deduct or withhold from any transfer
or payment to a Recipient, or may receive payment from a
Recipient, in the form of cash or other property, including
shares of Common Stock of the Company.

12.   Effective Date and Term of Plan.

          (a)  The Plan was adopted by the Board on March 31,
1988, subject to approval of the Plan by the shareholders of the
Company within twelve (12) months after its adoption by the
Board.  If the Plan is not so approved, the Plan shall be
ineffective.  No Restricted Shares may be allocated to a
Recipient under the Plan unless and until such shareholders have
so approved the Plan.

          (b)  The Plan shall terminate ten (10) years after the
date of its adoption by the Board, unless terminated sooner by
the Board.  No Restricted Shares may be allocated under the Plan
after its termination date, but the Plan shall continue in effect
with respect to all Restricted Shares which, as of such
termination date, have been allocated under the Plan.

1  Pursuant to the recapitalization of the Company on July 12,
1994, each share of old Common Stock, par value $5 per share, was
reclassified and converted into, among other things, 1/2 of a share
of new Common Stock, par value $.01 per share.

2  The Restricted Share reserve of old Common Stock immediately
prior to the Effective Time (as defined in the Agreement and Plan
of Recapitalization of the Company and which occurred on July 12,
1994) shall continue to constitute such Restricted Share reserve
of new Common Stock as of the Effective Time.  Such reserve is
equal to 142,500 shares of new Common Stock as of the Effective
Time.





                                                 Exhibit 10.15
                                                                 
                                                       As Amended
                                               September 30, 1994


                         UAL CORPORATION

                   INCENTIVE COMPENSATION PLAN


I.  PURPOSE

     In an effort to maintain a position of leadership in the
fast-growing and highly competitive business segments in which
UAL Corporation (the "Company") competes, it is necessary to
promote financial interests of the corporation and its corporate
affiliates (the "subsidiaries"), including its growth, by (A)
attracting and retaining highly qualified executives possessing
outstanding ability, (B) motivating executives by means of
performance related incentives, and (C) providing incentive
compensation opportunities which are competitive with those of
major corporations.  The Incentive Compensation Plan (the "Plan")
hereinafter described is designated to assist the Company in
attaining these objectives.

II.  ADMINISTRATION OF THE PLAN

     1.  The Company is responsible for the general
administration of the Plan, except as to matters reserved in this
Plan to the Compensation Administration Committee of the Board of
Directors of the Company for all grants to any "covered employee"
within the meaning of Section 162(m) of the Internal Revenue Code
of 1986, as amended, and the regulations promulgated thereunder,

and by the Compensation Committee of the Board of Directors of
the Company for all other grants (such committee, as applicable,
herein called the "Committee").  Determinations, decisions and
actions of the Company or the Committee in connection with the
construction, interpretation, administration, or application of
the Plan will be final, conclusive, and binding upon any grantee
of awards under the Plan and any person claiming under or through
such grantee.  Neither the Company nor any member of the
Committee will be liable for any determination, decision, or
action made with respect to the Plan or any Incentive Award
granted under the Plan.

     2.  A Participant's rights and interests in any Incentive
Award made under the Plan may not be assigned or transferred and
are not subject to attachment, garnishment, execution, or other
creditor's processes.

     3.  This Plan may at any time be amended, modified, or
terminated as the Board, in its discretion, determines, and such
amendment, modification, or termination will not require the
consent, ratification, or approval of any party, including any
Participant hereunder.

     4.  This Plan and all determinations made and actions taken
pursuant hereto will be governed and construed by the law of the
State of Illinois.

III.  DEFINITIONS

     1.  Award Year--The calendar year for which Incentive
Awards, if any, are calculated under the Plan.

     2.  Financial Objectives--Financial performance goals
established by the Company and approved by the Committee at the
beginning of an Award Year.  Financial Objectives may apply to
overall Company and subsidiaries performance in selected areas
and/or to performance of major business segments of the Company
and subsidiaries.

     3.  Financial Performance Factor--The numerical factor
determined by the Company shortly after the Award Year by
comparing actual performance during such Award Year to the
applicable Financial Performance Objectives previously
established for such Award Year.

     4.  Individual Performance Objectives--Goals and objectives
established by the Company (or by the Committee in the case of
the Company's Chairman and its Chief Executive Officer) for each
Participant under the Plan.

     5.  Individual Performance Factor--The numerical factor
determined with respect to the Plan by the Company (or by the
Committee in the case of the Chairman and the Chief Executive
Officer and officers reporting to either of them) shortly after
the Award Year, based upon an evaluation as to the extent to
which a Participant in the Plan achieved the Individual
Performance Objectives established for him/her.  Such evaluation
will be wholly discretionary and subjective on the part of the
Company or the Committee.

     6.  Incentive Awards--The dollar value of awards made to
Participants under the Plan.  Notwithstanding any other
provisions of the Plan, in no event may a total Incentive Award
for any Participant exceed 100% of his/her base salary for an
Award Year.

     7.  Incentive Opportunity--The amount, determined by the
Company and approved by the Committee at the beginning of an
Award Year, that a Participant may receive as an Incentive Award
under the Plan.  The Incentive Opportunity will be stated as a
percentage of a Participant's annual base salary as of December
31, of an Award Year.  If a Participant held more than one
position in an Award Year, his/her Incentive Opportunity will be
based on the position he/she occupied at the end of the Award
Year.

IV.  PARTICIPATION IN THE PLAN

     1.  Participants will be determined annually by the Company
from among key employees and senior management employees of the
Company and its subsidiaries.  This determination will allow
participation only for the Award Year concerned.

     2.  The Plan does not constitute a contract of employment,
and participation in the  Plan will not give any employee the
right to be retained in the service of the Company or its
subsidiaries.

     3.  If a Participant's employment with the Company or its
subsidiaries is terminated during an Award Year, the appropriate
Incentive Award under the Plan, if any, for such Participant will
be subject to the sole discretion of the Company's Chairman (or
to the sole discretion of the committee in case of the
termination of employment of the Chairman).  A transfer of
employment between the Company and any of its subsidiaries will
not be considered a termination of employment.

V.  COMPUTATION OF INCENTIVE AWARDS

     The Incentive Award for an Award Year for a Participant will
be the product of a Participant's Incentive Opportunity times the
sum of his company's Financial Performance Factor plus his
Individual Performance Factor.  No Incentive Award will be made
to a Participant for an Award Year in which his company's
Financial Performance Factor is below threshold level.  However,
the Chairman, with Committee approval, may waive the Company's
Financial Performance Factor threshold requirement.

     Total payments to all participants of the Incentive
Compensation Plan will be limited to 5% of Pre-Tax Income in any
given year.  Should total calculated incentive awards exceed 5%
of Pre-Tax Income, payments will be made on a prorated basis.

VI.  PAYMENT OF AWARDS

     (A)  Standard Procedures--Payment of Incentive Awards will
be made in cash on or about April 1, of the year following the
Award Year; provided, however, that an Incentive Award may be
deferred at the election of a Participant in the manner described
below.

     (B)  Deferred Awards--Participants may elect, on or before
December 31 of the year preceding an Award Year, to defer receipt
of all or any portion on an Incentive Award to a subsequent
calendar year.  A Participant will receive payment of a deferred
Incentive Award in a lump sum in January of the earliest of: (1)
the deferral calendar year selected by the Participant; (2) the
calendar year immediately after the Participant's retirement
under the United Air Lines, Inc. Non-Union Ground Employees'
Retirement Plan; (3) the calendar year after the Participant's
termination of employment with the Company for other reasons,
provided that a transfer of employment from the Company to any of
the Company's affiliates will not be considered a termination of
employment with the Company; (4) the occurrence of an
"Unforeseeable Emergency", provided that a distribution pursuant
to this clause (4)  shall not exceed the amount reasonably needed
to satisfy the emergency need, or (5) any other time elected by
the Participant, provided that upon making such an election, the
Participant shall be entitled to receive 90% of the amounts then
credited to him or her under the Plan and shall forfeit the
remaining 10% of such amount.  The amounts deferred will be
credited annually with compound interest at the prime rate in
effect during the deferral period at the end of the calendar
quarter, as reported by The Wall Street Journal.  All deferred
Incentive Awards will be reflected in the Company's books as
general unsecured and unfunded obligations of the Company.  No
trust in favor of any Participant will be implied.  Deferral
elections will be irrevocable by a Participant or his or her
beneficiary.  For purposes of this Section, "Unforeseeable
Emergency" shall mean a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or
accident of the Participant or of a dependent (as defined in
Section 152(a) of the Code) of the Participant, loss of the
Participant's property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant.  The
circumstances that will constitute an Unforeseeable Emergency
will depend upon the facts of each case, but, in any case,
payment under clause (4) above may not be made to the extent that
such hardship is or may be relieved (i) through reimbursement or
compensation by insurance or otherwise, (ii) by liquidation of
the Participant's assets, to the extent the liquidation of such
assets would not itself cause severe financial hardship, or (iii)
by cessation of deferrals under the Plan.

VII.  SPECIAL RULES

     Nothwithstanding any other provision of this Plan to the
contrary:  Incentive Awards with respect to an Award Year with
respect to any Participant who is a "covered employee" (as
defined in Section 162(m)(3) of the Code) with respect to such
Award Year (I) may not exceed $900,000 and (ii) shall be
determined by reference to a formula which shall define the
Incentive Award by reference to the attainment by the Company of
one or more target levels of pre-tax income (as determined under
generally accepted accounting principles but without regard to
any items (whether gains or losses) otherwise included therein
relating to (1) the UAL Corporation Employee Stock Ownership
Plan, the UAL Corporation Supplemental ESOP, or the trusts
relating thereto, (2) any event or occurrence that the Committee
determines to be either not directly related to the operations of
the Company or not within the reasonable control of the Company's
management, (3) this Plan and (4) the Company's 1988 Restricted
Stock Plan) for such Award Year.  Such target level(s) and the
formula referred to above shall be determined by the Committee
prior to the commencement of  such Award Year (or at such later
time as may be permissible under Section 162(m) of the Code); the
Committee shall determine and certify whether such target levels
of pre-tax income have been met.  Notwithstanding the foregoing,
the Committee may reduce the Incentive Award otherwise determined
pursuant to such formula in its sole discretion.




                                                 Exhibit 10.18
                                                                 
                                                       As Amended
                                                December 15, 1994
                                
                                
                         UAL CORPORATION
                         1992 STOCK PLAN
                      FOR OUTSIDE DIRECTORS


1.   Purpose.

     The purposes of the Plan are to attract and retain
outstanding individuals as outside directors of the Company, to
compensate them for their contributions to the growth and profits
of the Company and its subsidiaries and to encourage ownership by
them of shares of Common Stock of the Company.

2.  Definitions.

     (a)  "Board" shall mean the Board of Directors of the
Company.

     (b)  "Committee" shall mean the Compensation Committee of
the Board, selected by and serving at the pleasure of the Board.

     (c)  "Shares" shall mean shares of the common stock of the
Company, par value $0.01 per share.

     (d)  "Company" shall mean UAL Corporation.

     (e)  "Outside Director" shall mean a director of the Company
who, on the applicable Date of Award, is not an employee of the
Company or a subsidiary of the Company.

     (f)  "Date of Award" shall mean the date on which Shares are
granted to Outside Directors pursuant to Section 3(a) hereof.

     (g)  "Plan" shall mean the UAL Corporation 1992 Stock Plan
for Outside Directors.

     (h)  "Recipient" shall mean an Outside Director of the
Company to whom Shares are granted pursuant to the Plan.

3.   Shares Available Under the Plan.

     (a)  Each Outside Director
 shall be granted 100 Shares on
July 1, 1992 and shall be granted 100 Shares on the first
business day of January in each subsequent year commencing with
the year 1993; provided, however, that with respect to the year
1995 only, such grant of 100 Shares shall occur on the first
business day of the month of February.

     (b)  An aggregate of 20,000 Shares will be available for
grant under the Plan.  Such Shares, which shall be treasury
shares, shall be credited to a Share reserve.  Upon the grant of
Shares hereunder, said reserve shall be reduced by the number of
Shares so granted.

     (c)  In the event of any stock dividend, stock split,
recapitalization, or merger, consolidation, or reorganization in
which the Company is the survivor, appropriate adjustments shall
be made in the aggregate number and kind of Shares which may be
granted under the Plan.  Such adjustments shall be made by the
Committee.  In determining what adjustment, if any, is
appropriate, the Committee may rely on the advice of independent
counsel and the accountants of the Company, and the determination
of the Committee shall be final.  No fractional Shares of stock
shall be granted or authorized by any such adjustment.

4.   Administration.

     To the extent necessary, the Committee shall administer the
Plan and it shall have the power to (1) construe and interpret
the provisions of the Plan, (2) to prescribe, amend and rescind
such rules and regulations as it deems necessary for the proper
administration of the Plan, and (3) to take such action in
connection with administering the Plan as it deems necessary or
advisable.  All determinations by the Committee in carrying out,
administering or construing this Plan shall be final, binding and
conclusive for all purposes and upon all persons interested
herein.

5.   Limitations.

     (a)  Except as provided herein, no person shall at any time
have any right to receive a grant of Shares hereunder.

     (b)  Neither the action of the Company in establishing the
Plan, nor any action taken by it or by the Board or the Committee
under the Plan, nor any provision of the Plan, shall be construed
as giving to any person the right to be retained as a member of
the Board.

     (c)  Except for Shares actually delivered under the Plan,
the Plan constitutes only an unfunded, unsecured promise of the
Company to make payments or awards to Outside Directors (or other
persons) or deliver Shares in the future in accordance with the
terms of the Plan.

6.   Deferral of Share Awards.

     Subject to the terms and conditions of the Plan, each
Outside Director, by filing a written "Share Deferral Election"
with the Committee in accordance with  uniform and
nondiscriminatory rules adopted by the Committee, may elect to
defer the receipt of all or any portion of the Shares which are
otherwise to be granted to him or her pursuant to Section 3(a)
until the Distribution Date.  The "Distribution Date" shall be
the date specified by the Outside Director in his or her Share
Deferral Election or, if no such date is specified, the first
business day in January of the year following the date on which
the Outside Director ceases to be a director of the Company for
any reason.  An Outside Director's Share Deferral Election shall
be effective with respect to grants otherwise to be made to him
or her pursuant to Section 3(a) after the last day of the
calendar year in which such election is filed with the Committee
(or for grants to be made in calendar year 1995, after the date
the election is filed with the Committee if it is filed with the
Committee no later than January 5, 1995); provided, however, that
by notice filed with the Committee in accordance with uniform and
nondiscriminatory rules established by it, an Outside Director
may terminate or modify any Share Deferral Election as to grants
to be made after the last day of the calendar year in which such
notice is filed with the Committee.  An Outside Director may
modify the Distribution Date only by filing notice with the
Committee at least one year prior thereto; provided, however,
that the Committee may, in its sole discretion, after considering
all pertinent facts and circumstances, approve a change to the
Distribution Date which is requested by an Outside Director less
than one year prior thereto.

7.   Crediting and Adjustment of Share Deferrals.

     The amount of any Shares deferred by an Outside Director
pursuant to a Share Deferral Election ("Share Deferral") shall be
credited to a bookkeeping account maintained by the Company in
the name of the Outside Director (the "Share Unit Account").  An
Outside Director's Share Unit Account shall be adjusted as
follows:

     (a)  As of the date on which Shares would be granted to the
Outside Director pursuant to Section 3(a) but for his or her
Share Deferral Election, the Share Unit Account shall be credited
with a number of share units ("Share Units") equal to the number
of Shares that would have been granted to the Outside Director as
of such date but for his or her Share Deferral Election.

     (b)  As of the date on which Shares are distributed to the
Outside Director in accordance with Section 8 below, the Share
Unit Account shall be charged with an equal number of Share
Units.

     (c)  As of the record date for any dividend paid on Shares,
the Share Unit Account shall be credited with that number of
additional Share Units or fractions thereof which is equal to the
number obtained by multiplying the number of Share Units then
credited to the Share Unit Account by the amount of the cash
dividend or the fair market value (as determined by the Board) of
any dividend in kind payable on a Share, and dividing that
product by the then Fair Market Value (as defined below) of a
Share.

     In the event of any merger, consolidation, reorganization,
recapitalization, spinoff, rights offering, stock split, reverse
stock split, exchange or other exchange or other change in the
corporate structure or capitalization of the Company affecting
the Shares, each Outside Director's Share Unit Account shall be
equitably adjusted in such manner as the Committee shall
determine in its sole judgment.

     The "Fair Market Value" of a Share on any date shall be
equal to the average of the high and low prices of a Share
reported for New York Stock Exchange Composite Transactions for
the applicable date or, if there are no such reported trades for
such date, for the last previous date for which trades were
reported.

8.   Payment of Share Deferrals.

     Except as otherwise provided in this Section 8 or Section 9,
the balance credited to the Share Unit Account of an Outside
Director shall be payable to the Outside Director in 10 annual
installments commencing as of the Distribution Date and
continuing on each annual anniversary thereof.  Notwithstanding
the foregoing, an Outside Director may elect, by filing a notice
with the Committee at least one year prior to the Distribution
Date, to change the number of payments to a single payment or to
any number of annual payments not in excess of ten.  Each such
payment shall be made in whole Shares, the number of which shall
be determined by rounding to the next lower integer the product
obtained by multiplying the number of Share Units then credited
to the Outside Director's Share Unit Account by a fraction, the
numerator of which is one and the denominator of which is the
number of remaining payments to be made, including such payment.
The Fair Market Value of any fractional Share remaining after all
distributions have been made to the Outside Director pursuant to
this Section 8 shall be paid to the Outside Director in cash.

     Notwithstanding the foregoing, the Committee, in its sole
discretion, may distribute all of an Outside Director's Share
Unit Account to such Outside Director (or former Outside
Director) in a lump sum as of any date or, if requested by an
Outside Director who has elected to receive a lump sum, the
Committee in its sole discretion, may distribute all of an
Outside Director's Share Unit Account to such Outside Director
(or former Outside Director) in installments satisfying the
preceding paragraph as requested by the Outside Director (or
former Outside Director).

9.   Payment of Share Deferrals in the Event of Death.

     If an Outside Director dies before payment of his or her
Share Unit Account commences, all amounts then credited to his or
her Share Unit Account shall be distributed to his or her
Beneficiary (as described below), as soon as practicable after
his or her death in a lump sum.  If an Outside Director dies
after payment of his or her Share Unit Account has commenced but
before the entire balance of such account has been distributed,
the remaining balance thereof shall be distributed to his or her
Beneficiary, as soon as practicable after  his or her death, in a
lump sum.  Any such amounts shall be distributed in whole Shares
determined in accordance with Section 8, and the Fair Market
Value of any fractional Share shall be distributed in cash.  For
purposes of the Plan, the Outside Director's "Beneficiary" is the
person or persons the Outside Director designates, which
designation shall be in writing, signed by the Outside Director
and filed with the Committee prior to the Outside Director's
death.  A Beneficiary designation shall be effective when filed
with the Committee in accordance with the preceding sentence.  If
more than one Beneficiary has been designated, the balance in the
Outside Director's Share Unit Account shall be distributed to
each such Beneficiary per capita (with cash distributed in lieu
of any fractional Share).  In the absence of a Beneficiary
designation or if no Beneficiary survives the Outside Director,
the Beneficiary shall be the Outside Director's estate.

10.  Amendment, Suspension or Termination of the Plan in Whole or
     in Part.

     (a)  Except as provided in subsections (b) - (c) of this
Section 10, the Compensation Committee of the Board may amend,
suspend or terminate the Plan in whole or in part at any time.

     (b)  No amendment, suspension or termination shall, without
a Recipient's consent, affect adversely such Recipient's rights
with respect to Shares which have been granted to him.

     (c)  The provisions in the Plan shall not be amended more
than once every six months, except as permitted by Rule 16b-3 (c)
(2) (ii) (B) promulgated under the Securities Exchange Act of
1934, as amended, or any successor thereto.

11.  Continuation of Benefits.

     Absent express provision to the contrary, upon the
dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one
or more corporations as a result of which the Company is not the
surviving corporation, the Plan shall terminate.

12.  Governing Law.

     This Plan, shall be governed by, and construed in accordance
with, the laws of the State of Illinois.  If any provision shall
be held by a court of competent jurisdiction to be invalid and
unenforceable, the remaining provisions of this Plan shall
continue to be fully effective.



                                                 Exhibit 10.19




              UAL CORPORATION 1995 DIRECTORS PLAN




                       TABLE OF CONTENTS

                                                         Page No.

1.   General                                                  1

     1.1  Purpose, History and Effective Date                 1
     1.2  Participation                                       1
     1.3  Administration                                      1
     1.4  Shares Subject to the Plan                          2
     1.5  Compliance with Applicable Laws                     3
     1.6  Director and Shareholder Status                     3
     1.7  Definition of Fair Market Value                     3
     1.8  Source of Payments                                  3
     1.9  Nonassignment                                       3
     1.10 Elections                                           4

2.   Formula Stock Awards                                     4

3.   Elections to Receive Stock in Lieu of
        Eligible Cash Fees                                    4

     3.1  Election to Receive Stock                           4
     3.2  Revocation of Election to Receive Stock             4
     3.3  Equivalent Amount of Stock                          5

4.   Deferral Elections                                       5

     4.1  Deferrals of Fees                                   5
     4.2  Deferral of Stock Awards                            6
     4.3  Crediting and Adjustment of Deferred Amounts        7
     4.4  Payment of Deferred Compensation Account            9
     4.5  Payments in the Event of Death                     10

5.   Amendment and Termination                               11

                        UAL CORPORATION
                      1995 DIRECTORS PLAN


                            SECTION 1

                            General

     1.1. Purpose, History and Effective Date.  UAL Corporation
(the "Company") maintains the UAL Corporation 1992 Stock Plan for
Outside Directors (the "Prior Plan") which provides certain
benefits to non-employee directors of the Company.  In order to
(i) encourage stock ownership by directors to further align their
interests with those of the stockholders of the Company,
 while at the same
time providing flexibility for directors who, due to their individual
circumstances, may be unable to take stock in lieu of cash compensation, 
and (ii) add certain deferral features for fees and stock awards,
the Company has authorized a variety of compensation
alternatives, including those set forth in the Prior Plan, that
will be available to Outside Directors under a new plan to be
known as the UAL Corporation 1995 Directors Plan (the "Plan").
The Plan shall be effective immediately upon approval by the
Board of Directors, except that subsections 1.4, 1.5, 1.7, 1.8
and 4.2 and Sections 2 and 3 and all references to Stock Awards,
Stock Deferrals and the Company Stock Subaccount shall be
effective on July 3, 1995, but only if the Plan is approved by
shareholders of the Company (the "Effective Date") prior thereto.
Upon the Effective Date the Prior Plan shall be terminated (with
prior stock deferrals thereunder being treated as deferrals under
subsection 4.2 of the Plan); provided, however, that if
shareholder approval is not obtained at the next annual meeting
of shareholders of the Company, subsections 1.4, 1.5, 1.7, 1.8
and 4.2 and Sections 2 and 3 and all references to Stock Awards,
Stock Deferrals and the Company Stock Subaccount shall be deleted
and the Plan shall be restated accordingly, and the Prior Plan
will continue in effect in accordance with its terms.

     1.2. Participation.  Only Outside Directors shall be
eligible to participate in the Plan.  As of any applicable date,
an "Outside Director" is a person who is serving as a director of
the Company who is not an employee of the Company or any
subsidiary of the Company as of that date.

     1.3. Administration.  The authority to manage and control
the operation and administration of the Plan shall be vested in
the Executive Committee of the Board (the "Committee").  Subject
to the limitations of the Plan, the Committee shall have the sole
and complete authority to:

     (a)  interpret the Plan and to adopt, amend and rescind
          administrative guidelines and other rules and
          regulations relating to the Plan;

     (b)  correct any defect or omission and to reconcile any
          inconsistency in the Plan or in any payment made
          hereunder; and

     (c)  to make all other determinations and to take all other
          actions necessary or advisable for the implementation
          and administration of the Plan.

The Committee's determinations on matters within its control
shall be conclusive and binding on the Company and all other
persons.  Notwithstanding the foregoing, no member of the
Committee shall act with respect to the administration of the
Plan except to the extent consistent with the exempt status of
the Plan under Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended ("Rule 16b-3").

     1.4. Shares Subject to the Plan.  Shares of stock which may
be distributed under the plan are shares of common stock of the
Company, par value $.01 per share ("Stock").  The shares of Stock
which shall be available for distribution pursuant to the Plan
shall be treasury shares (including, in the discretion of the
Company, shares purchased in the open market).  The number of
shares of Stock to be distributed pursuant to Outside Directors'
elections to receive shares of Stock in lieu of Eligible Cash
Fees (as described in subsection 3.1) shall be determined in
accordance with Section 3.  The number of shares of Stock to be
distributed pursuant to Outside Directors' Deferral Elections (as
described in Section 4) shall be determined in accordance with
Section 4.  The number of shares of Stock which are available for
awards under Section 2 shall be 20,000; provided, however, that:

     (a)  in the event of any merger, consolidation,
          reorganization, recapitalization, spinoff, stock split,
          reverse stock split, rights offering, exchange or other
          change in the corporate structure or capitalization of
          the Company affecting the Stock, the number and kind of
          shares of Stock available for awards under Section 2
          and the annual awards provided thereunder shall be
          equitably adjusted in such manner as the Committee
          shall determine in its sole judgment;

     (b)  in determining what adjustment, if any, is appropriate
          pursuant to paragraph (a), the Committee may rely on
          the advice of such experts as they deem appropriate,
          including counsel, investment bankers and the
          accountants of the Company; and

     (c)  no fractional shares shall be granted or authorized
          pursuant to any adjustment pursuant to paragraph (a),
          although cash payments may be authorized in lieu of
          fractional shares that may otherwise result from such
          an equitable adjustment.

     1.5. Compliance with Applicable Laws.  Notwithstanding any
other provision of the Plan, the Company shall have no obligation
to deliver any shares of Stock under the Plan unless such
delivery would comply with all applicable laws and the applicable
requirements of any securities exchange or similar entity.  Prior
to the delivery of any shares of Stock under the Plan, the
Company may require a written statement that the recipient is
acquiring the shares for investment and not for the purpose or
with the intention of distributing the shares.  If the
redistribution of shares is restricted pursuant to this
subsection 1.5, the certificates representing such shares may
bear a legend referring to such restrictions.

     1.6. Director and Shareholder Status.  The Plan will not
give any person the right to continue as a director of the
Company, or any right or claim to any benefits under the Plan
unless such right or claim has specifically accrued under the
terms of the Plan.  Participation in the Plan shall not create
any rights in a director (or any other person) as a shareholder
of the Company until shares of Stock are registered in the name
of the director (or such other person).

     1.7. Definition of Fair Market Value.   The "Fair Market
Value" of a share of Stock on any date shall be equal to the
average of the high and low prices of a share of Stock reported
for New York Stock Exchange Composite Transactions for the
applicable date or, if there are no such reported trades for such
date, for the last previous date for which trades were reported.

     1.8. Source of Payments.  Except for Stock actually
delivered pursuant to the Plan, the Plan constitutes only an
unfunded, unsecured promise of the Company to make payments or
awards to directors (or other persons) or deliver Stock in the
future in accordance with the terms of the Plan.

     1.9. Nonassignment.  Neither a director's nor any other
person's rights to payments or awards under the Plan are subject
in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by
creditors of the director.

     1.10. Elections.  Any notice or document required to be filed
with the Committee under the Plan will be properly filed if
delivered or mailed by registered mail, postage prepaid, to the
Committee, in care of the Company, at the Company's principal
executive offices.  The Committee may, by advance written notice
to affected persons, revise such notice procedure from time to
time.  Any notice required under the Plan may be waived by the
person entitled thereto.

                           SECTION 2

                      Formula Stock Awards

     As of the first business day of January each year after the
Effective Date, each Outside Director shall be awarded 100 shares
of Stock (the "Stock Award").


                           SECTION 3

                 Elections to Receive Stock in
                   Lieu of Eligible Cash Fees

     3.1. Election to Receive Stock.  Subject to the terms and
conditions of the Plan, each Outside Director may elect to forego
receipt of all or any portion of the Eligible Cash Fees (as
defined below) payable to him or her during 1995 following the
Effective Date (or payable during 1995 prior to the Effective
Date and subject to a Deferral Election made in accordance with
Section 4) and during any calendar year thereafter and instead to
receive whole shares of Stock of equivalent value to the Eligible
Cash Fees so foregone (determined in accordance with subsection
3.3).  An election under this subsection 3.1 to have Eligible
Cash Fees paid in shares of Stock shall be valid only if it is in
writing, signed by the Outside Director, and filed with the
Committee in accordance with uniform and nondiscriminatory rules
adopted by the Committee but, in any event:
     
          (a) at least six months prior to any date in 1995
          following the Effective Date or subsequent years on
          which such Eligible Cash Fees would otherwise be
          payable; and
     
          (b) prior to January 1, 1995 with respect to any amounts
          payable during 1995 prior to the Effective Date and
          deferred pursuant to a Deferral Election made in
          accordance with Section  4.

For purposes of the Plan, the term "Eligible Cash Fees" means the
retainer fees, meeting fees, committee fees and committee chair
fees that would otherwise be payable to the Outside Director by
the Company in cash as established, from time to time, by the
Board or any committee thereof.
     
     3.2. Revocation of Election to Receive Stock.  Once
effective, an election pursuant to subsection 3.1 to receive
Stock shall remain in effect for successive calendar years until
it is revised or revoked.  Any such revision or revocation shall
be in writing, signed by the Outside Director and filed with the
Committee and shall be effective for the calendar year next
following the date on which it is received by the Committee, or
such later date specified in such notice; provided, however, that
no revision or revocation shall be effective prior to six months
from the date it is made.

     3.3. Equivalent Amount of Stock.  The number of whole shares
of Stock to be distributed to any Outside Director, or credited
to his or her Deferred Compensation Account (as defined in
subsection 4.3) pursuant to a Deferral Election made in
accordance with Section 4, by reason of his or her election
pursuant to subsection 3.1 to receive Stock in lieu of Eligible
Cash Fees shall be equal to:

     (a)  the amount of the Eligible Cash Fees which the Outside
          Director has elected to have paid to him or her in
          shares of Stock or credited to his or her Company Stock
          Subaccount (as defined in subsection 4.3);

          DIVIDED BY

     (b)  the Fair Market Value of a share of Stock as of the
          date on which such Eligible Cash Fees would otherwise
          have been payable to the Outside Director.


The Fair Market Value of any fractional share shall be paid to
the Outside Director in cash; provided, however, that fractional
shares subject to a Deferral Election filed in accordance with
subsection 4.1 shall be deferred and credited to the Company
Stock Subaccount.


                           SECTION 4

                       Deferral Elections

     4.1. Deferrals of Fees.  Subject to the terms and conditions
of the Plan, each Outside Director, by filing a written "Deferral
Election" with the Committee in accordance with uniform and
nondiscriminatory rules adopted by the Committee, may elect to
defer the receipt of all or any portion of the Eligible Cash Fees
otherwise payable to him or her for a calendar year commencing on
or after January 1, 1995 (including any Eligible Cash Fees that
he or she has elected to receive in Stock pursuant to Section 3)
until a future date (the "Distribution Date") specified by the
Outside Director in his or her Deferral Election as of which
payment of his or her Deferred Compensation Account attributable
to amounts deferred pursuant to his or her Deferral Election
shall commence in accordance with subsection 4.4; provided,
however, that in no event shall the Distribution Date elected
pursuant to this subsection 4.1 be different from the
Distribution Date, if any, elected by the Outside Director
pursuant to subsection 4.2.  If no Distribution Date is specified
in an Outside Director's Deferral Election or has otherwise been
elected by the Outside Director pursuant to subsection 4.2, the
Distribution Date shall be deemed to be the first business day in
January of the year following the date on which the Outside
Director ceases to be a director of the Company for any reason.
An Outside Director's Deferral Election shall be effective with
respect to Eligible Cash Fees (including any Eligible Cash Fees
that he or she has elected to receive in Stock pursuant to
Section 3) otherwise payable to him or her for services rendered
after the last day of the calendar year in which such election is
filed with the Committee; provided, however, that:

     (a)  a Deferral Election which is filed within 30 days of
          the date on which a director first becomes an Outside
          Director shall be effective with respect to all
          Eligible Cash Fees (including any Eligible Cash Fees
          that he or she has elected to receive in Stock pursuant
          to Section 3) otherwise payable to him or her after the
          date of the Deferral Election; and

     (b)  by notice filed with the Committee in accordance with
          uniform and nondiscriminatory rules established by it,
          a director may terminate or modify any Deferral
          Election as to Eligible Cash Fees payable for services
          rendered after the last day of the calendar year in
          which such notice is filed with the Committee;
          provided, however, that no modification may be made to
          the Distribution Date unless the Outside Director shall
          file such notice with the Committee at least one year
          prior thereto.

Notwithstanding the provisions of paragraph (b) next above, the
Committee may, in its sole discretion, after considering all of
the pertinent facts and circumstances, approve a change to the
Distribution Date which is requested by an Outside Director less
than one year prior thereto.


     4.2. Deferral of Stock Awards.  Subject to the terms and
conditions of the Plan, each Outside Director, by filing a
written "Stock Deferral Election" with the Committee in
accordance with uniform and nondiscriminatory rules adopted by
the Committee, may elect to defer the receipt of all or any
portion of the Stock Award which is otherwise to be made to him
or her for 1996 and subsequent years until the Distribution Date;
provided, however, that if no Distribution Date has been elected
(or is deemed to have been elected) pursuant to subsection 4.1,
the "Distribution Date" shall be the date specified by the
Outside Director in his or her Stock Deferral Election or, if no
such date is specified, the first business day in January of the
year following the date on which the Outside Director ceases to
be a director of the Company for any reason.  An Outside
Director's Stock Deferral Election shall be effective with
respect to Stock Awards otherwise to be made to him or her
pursuant to Section 2 after the last day of the calendar year in
which such election is filed with the Committee; provided,
however, that by notice filed with the Committee in accordance
with uniform and nondiscriminatory rules established by it, an
Outside Director may terminate or modify any Stock Deferral
Election as to Stock Awards to be made after the last day of the
calendar year in which such notice is filed with the Committee;
further provided that no modification may be made to the Stock
Distribution Date unless the Outside Director shall file such
notice with the Committee at least one year prior thereto.

     4.3. Crediting and Adjustment of Deferred Amounts.  The
amount of any Eligible Cash Fees (including any Eligible Cash
Fees that he or she has elected to receive in Stock pursuant to
Section 3) deferred pursuant to subsection 4.1 ("Deferred
Compensation") and the amount of any Stock Award deferred by an
Outside Director pursuant to a Stock Deferral Election ("Stock
Deferral") shall be credited to a bookkeeping account maintained
by the Company in the name of the Outside Director (the "Deferred
Compensation Account"), which account shall consist of two
subaccounts, one known as the "Cash Subaccount" and the other as
the "Company Stock Subaccount."  Any Stock Deferrals and Eligible
Cash Fees that the Outside Director has elected to receive in
Stock pursuant to Section 3 and which he or she has also elected
to defer pursuant to subsection 4.1 shall be credited to his or
her Company Stock Subaccount.  Any other Deferred Compensation
shall be credited to his or her Cash Subaccount.  An Outside
Director's Deferred Compensation Account shall be adjusted as
follows:

     (a)  As of the first day of February, May, August and
          November, and as of July 3, 1995 (which dates are
          referred to herein as "Accounting Dates"), the Outside
          Director's Cash Subaccount shall be adjusted as
          follows:

          (i)   first, the amount of any distributions made since
                the last preceding Accounting Date and
                attributable to the Cash Subaccount shall be
                charged to the Cash Subaccount;

          (ii)  next, the balance of the Cash Subaccount after
                adjustment in accordance with subparagraph (i)
                above shall be credited with interest for the
                period since the last preceding Accounting Date
                computed at the prime rate as reported by The
                Wall Street Journal for the current Accounting
                Date, or if such date is not a business day, for
                the next preceding business day;

          (iii) next, on the Accounting Date occurring on July 3,
                1995, the balance in the cash Subaccount shall be
                charged with a distribution equal to that portion
                of the balance in the Cash Subaccount which is
                attributable to Eligible Cash Fees payable prior
                to the Effective Date which the Outside Director
                has elected to receive in Stock pursuant to
                Section 3 and which were credited to the Cash
                Subaccount pursuant to the Outside Director's
                Deferral Election (as adjusted in accordance with
                the terms of the Plan through July 3, 1995); and
          
          (iv)  finally, after adjustment in accordance with the
                foregoing provisions of this paragraph (a), the
                Cash Subaccount shall be credited with the
                portion of the Deferred Compensation otherwise
                payable to the Outside Director since the last
                preceding Accounting Date or, in the case of the
                Accounting Date occurring on February 1, 1995,
                subsequent to January 1, 1995, which is to be
                credited to the Cash Subaccount.

     (b)  The Outside Director's Company Stock Subaccount shall
          be adjusted as follows:

          (i)   as of the Effective Date, the Company Stock
                Subaccount shall be credited with that number of
                stock units ("Stock Units") which is equal to the
                amount charged to the Cash Subaccount as of that
                date pursuant to subparagraph (a) (iii) next
                above, divided by the Fair Market Value of a
                share of Stock as of the Effective Date;
          
          (ii)  as of any date on or after the Effective Date on
                which Eligible Cash Fees would have been payable
                to the Outside Director in Stock but for his or
                her Deferral Election, the Company Stock
                Subaccount shall be credited with a number of
                Stock Units equal to the number of shares of
                Stock (including any fractional shares) to which
                he or she would have been entitled pursuant to
                Section 3;

          (iii) as of the date on which a Stock Award would be
                made to the Outside Director pursuant to Section
                2 but for his or her Stock Deferral Election, the
                Company Stock Subaccount shall be credited with a
                number of Stock Units equal to the number of
                shares of Stock that would have been awarded to
                the Outside Director as of such date but for his
                or her Stock Deferral Election;

          (iv)  as of the date on which shares of Stock are
                distributed to the Outside Director in accordance
                with subsection 4.4 below, the Company Stock
                Subaccount shall be charged with an equal number
                of Stock Units; and

          (v)   as of the record date for any dividend paid on
                Stock, the Company Stock Subaccount shall be
                credited with that number of additional Stock
                Units which is equal to the number obtained by
                multiplying the number of Stock Units then
                credited to the Company Stock Subaccount by the
                amount of the cash dividend or the fair market
                value (as determined by the Board of Directors)
                of any dividend in kind payable on a share of
                Stock, and dividing that product by the then Fair
                Market Value of a share of Stock.

In the event of any merger, consolidation, reorganization, reca
pitalization, spinoff, stock split, reverse stock split, rights
offering, exchange or other change in the corporate structure or
capitalization of the Company affecting the Stock, each Outside
Director's Company Stock Subaccount shall be equitably adjusted
in such manner as the Committee shall determine in its sole
judgment.

     4.4. Payment of Deferred Compensation Account.  Except as
otherwise provided in this subsection 4.4 or subsection 4.5, the
balances credited to the Cash Subaccount and Company Stock
Subaccount of an Outside Director's Deferred Compensation Account
shall each be payable to the Outside Director in 10 annual
installments commencing as of the Distribution Date and
continuing on each annual anniversary thereof.  Notwithstanding
the foregoing, an Outside Director may elect, by filing a notice
with the Committee at least one year prior to the Distribution
Date, to change the number of payments to a single payment or to
any number of annual payments not in excess of ten.  Each such
payment shall include a cash portion, if applicable, and a Stock
portion, if applicable, as follows:

     (a)  The cash portion to be paid as of the Distribution Date
          or any anniversary thereof and charged to the Cash
          Subaccount shall be equal to the balance of the Cash
          Subaccount multiplied by a fraction, the numerator of
          which is one and the denominator of which is the number
          of remaining payments to be made, including such
          payment.

     (b)  The Stock portion to be paid as of the Distribution
          Date or any anniversary thereof and charged to the
          Company Stock Subaccount shall be distributed in whole
          shares of Stock, the number of shares of which shall be
          determined by rounding to the next lower integer the
          product obtained by multiplying the number of Stock
          Units then credited to the Outside Director's Company
          Stock Subaccount by a fraction, the numerator of which
          is one and the denominator of which is the number of
          remaining payments to be made, including such payment.
          The Fair Market Value of any fractional share of Stock
          remaining after all Stock distributions have been made
          to the Outside Director pursuant to this paragraph (b)
          shall be paid to the Outside Director in cash.

Notwithstanding the foregoing, the Committee, in its sole
discretion, may distribute all balances in any Deferred
Compensation Account to an Outside Director (or former Outside
Director) in a lump sum as of any date.  Notwithstanding the
foregoing, the Committee, in its sole discretion, may distribute
all of an Outside Director's Share Unit Account to such Outside
Director (or former Outside Director) in a lump sum as of any
date or, if requested by an Outside Director who has elected to
receive a lump sum, the Committee, in its sole discretion, may
distribute all balances in any Deferred Compensation Account to
an Outside Director (or former Outside Director) in installments
satisfying this Section 4.4 as requested by the Outside Director
(or former Outside Director).

     4.5. Payments in the Event of Death.  If an Outside Director
dies before payment of his or her Deferred Compensation Account
commences, all amounts then credited to his or her Deferred
Compensation Account shall be distributed to his or her
Beneficiary (as described below), as soon as practicable after
his or her death, in a lump sum.  If an Outside Director dies
after payment of his or her Deferred Compensation Account has
commenced but before the entire balance of such account has been
distributed, the remaining balance thereof shall be distributed
to his or her Beneficiary, as soon as practicable after his or
her death, in a lump sum.  Any amounts in the Cash Subaccount
shall be distributed in cash and any amounts in the Stock
Subaccount shall be distributed in whole shares of Stock
determined in accordance with paragraph 4.4(b), and the Fair
Market Value of any fractional share of Stock shall be
distributed in cash.  For purposes of the Plan, the Outside
Director's "Beneficiary" is the person or persons the Outside
Director designates, which designation shall be in writing,
signed by the Outside Director and filed with the Committee prior
to the Outside Director's death.  A Beneficiary designation shall
be effective when filed with the Committee in accordance with the
preceding sentence.  If more than one Beneficiary has been
designated, the balance in the Outside Director's Deferred
Compensation Account shall be distributed to each such
Beneficiary per capita (with cash distributed in lieu of any
fractional share of Stock).  In the absence of a Beneficiary
designation or if no Beneficiary survives the Outside Director,
the Beneficiary shall be the Outside Director's estate.

                           SECTION 5

                   Amendment and Termination

     While the Company expects and intends to continue the Plan,
the Board of Directors of the Company reserves the right to, at
any time and in any way, amend, suspend or terminate the Plan;
provided, however, that no amendment, suspension or termination
shall:

     (a)  be made without shareholder approval to the extent such
          approval is required by law, agreement or the rules of
          any exchange or automated quotation system upon which
          the Stock is listed or quoted;

     (b)  except as provided in subsection 4.4 (relating to lump
          sum payments of amounts held in an Outside Director's
          Deferred Compensation Account) or this Section 5,
          materially alter or impair the rights of an Outside
          Director under the Plan without the consent of the
          Outside Director with respect to rights already accrued
          hereunder;

     (c)  amend the provisions of Section  2 or 3 more frequently
          than once in any six-month period except to comport
          with changes in the Internal Revenue Code of 1986, as
          amended, the Employee Retirement Income Security Act of
          1974, as amended, or the rules thereunder; or

     (d)  make any change that would disqualify the Plan or any
          other plan of the Company intended to be so qualified
          from the exemption provided by Rule 16b-3 under the
          Securities Exchange Act of 1934, as amended.



                                               
                                               EXHIBIT 10.27
     6-1162-JCM-500
     
     United Air Lines, Inc.
     Executive Offices
     P. 0. Box 66100
     Chicago, IL 60666-0100
     
     
     Subject:  Letter Agreement No. 6-1162-JCM-500 to
     Purchase Agreement No. 1663 -
     * CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
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     Gentlemen:
     
     Reference is made to Purchase Agreement No. 1663 dated
     as of December 18, 1990 (the Purchase Agreement)
     between The Boeing Company (Boeing) and United Air
     Lines, Inc. (Buyer) relating to the sale by Boeing and
     the purchase by Buyer of thirty-four (34) Model 777-222
     aircraft (hereinafter referred to generally as the
     Aircraft).
     
     Reference is also made to Letter Agreement 6-1162-DLJ-
     935 to Purchase Agreement No. 1663 (entitled "Early
     Approval of One Hundred Eighty (180) Minutes Extended
     Range Operations with Two-Engine Aircraft").
     
     This Letter Agreement will become part of the Purchase
     Agreement and will evidence our further agreement with
     respect to the matters set forth below.
     
     All terms used herein and in the Purchase Agreement,
     and not defined herein, shall have the same meanings as
     in the Purchase Agreement.
     
     
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       WITH THE SECURITIES AND EXCHANGE COMMISSION
       PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
     
     
     United Air Lines, Inc.
     6-1162-JCM-500
     Page 20
     
     
     
     
     
     
     * CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
       WITH THE SECURITIES AND EXCHANGE COMMISSION
       PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
     
     
     United Air Lines, Inc.
     6-1162-JCM-500
     Page 21
     
     
     
     
     
     
     * CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
       WITH THE SECURITIES AND EXCHANGE COMMISSION
       PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     8.   Confidentiality
     
     8.1  In accordance with Letter Agreement No. 6-1162-DLJ-
     832, the terms and conditions of this Letter Agreement
     are and will remain strictly confidential between
     Boeing and Buyer and will not under any circumstances
     be disclosed by either party to any third party
     (except, as reasonably necessary, to its respective
     employees and professional advisers, and to Boeing's
     insurers in connection with the insurance described in
     paragraph 7.3 above and to the Federal Aviation
     Administration) without the prior written
     
     United Air Lines, Inc.
     6-1162-JCM-500
     Page 22
     
     
     consent of the other party, such consent not to be
     unreasonably withheld.
     
     
     
     * CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
       WITH THE SECURITIES AND EXCHANGE COMMISSION
       PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
     
     
     United Air Lines, Inc.
     6-1162-JCM-500
     Page 23
     
     
     
     * CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
       WITH THE SECURITIES AND EXCHANGE COMMISSION
       PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
     
     
     
     
     
     
     
     
     If the foregoing correctly sets forth your
     understanding of our agreement with respect to the
     matters treated above, please indicate your acceptance
     and approval below.
     
     Very truly yours,
     
     THE BOEING COMPANY
     
     
     
     By /s/ Joseph Mc Aleer
     
     Its Attorney-in-Fact
     
     
     ACCEPTED AND AGREED TO as of

     the 9th day of December, 1994.

     UNITED AIR LINES, INC.

     

     By /s/ D. Hacker

     Its Senior Vice President-Finance

     


                                               
                                               EXHIBIT 10.28

                              Boeing Commercial Airplane Group
                              P.O. Box 3707
                              Seattle, WA  98124-2207


               February 22, 1995
               6-1171-FT-831


               United Air Lines, Inc.
               Flight Center
               32nd & Quebec Street
               Denver, Colorado  80207

               Facsimile:    415-634-7388

               Attention:    Captain Stephen Forte
                             Flight Manager
                             B757/B767/B777
               
               Facsimile:    708-952-4683

               cc:           Mr. Chick McErlean
                             Senior Attorney
               
               Facsimile:    415-634-7388
               
               cc:           Mr. W. C. Ceresa
                             Manager
                             Maintenance, Warranty and Contracts San
                             Francisco International Airport

               
                Subject: *     CONFIDENTIAL MATERIAL OMITTED AND
                FILED SEPARATELY WITH THE SECURITIES
                AND EXCHANGE COMMISSION PURSUANT TO A
                REQUEST FOR CONFIDENTIAL TREATMENT
     
               Dear Captain Forte:

               In response to your request, The Boeing Company
               (Boeing) is pleased to offer to provide to United Air
               Lines, Inc. (Buyer) the following flight training
               services:

               
               * CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
                 WITH THE SECURITIES AND EXCHANGE COMMISSION
                 PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
     United Air Lines, Inc.
     6-1171-FT-831
     Page 2
     
     
     
     
     * CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
       WITH THE SECURITIES AND EXCHANGE COMMISSION
       PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
     
     United Air Lines, Inc.
     6-1171-FT-831
     Page 3
     
     
     
     
     * CONFIDENTIAL MATERIAL OMITTED AND FILED
 SEPARATELY
       WITH THE SECURITIES AND EXCHANGE COMMISSION
       PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
     
     United Air Lines, Inc.
     6-1171-FT-831
     Page 4
     
     
     
     
     * CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
       WITH THE SECURITIES AND EXCHANGE COMMISSION
       PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
     
     United Air Lines, Inc.
     6-1171-FT-831
     Page 5

     
     
     
     * CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
       WITH THE SECURITIES AND EXCHANGE COMMISSION
       PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
     
     
     
     
          
          
          Article 7.     Right to Stop Work.
          
                     Boeing will not be required to begin or continue
          providing services if:
          
              7.1    there is a labor dispute or work stoppage in
          progress, or
          
              7.2    there exist conditions that are dangerous
          to the safety or health of the Boeing employees.
          
          Article 8.     Excusable Delays.
          
              Boeing will not be liable for any delay resulting from any
          cause beyond Boeing's control.
          
          Article 9.     Assignment.
          
              Boeing may assign all or any part of its rights and
          obligations under this Agreement to any wholly owned
          subsidiary of Booing.
          
          Article 10.    Order of Precedence.
          
              The provisions of this Agreement will not be revised in
          any manner by any provision of any purchase order which Buyer
          may choose to issue in connection with this Agreement
          
          ARTICLE 11.    GOVERNING LAW.
          
              THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE
          OF WASHINGTON, U.S.A. EXCLUSIVE OF WASHINGTON'S CONFLICT OF
          LAWS RULES.
          
          United Air Lines, Inc.
          6-1171-FT-831
          Page 6
          
          Article 12.    Negotiated Agreement.
          
          This Agreement, including the Indemnification and the
          Exclusion of Liabilities has been the subject of
          discussion, and negotiation and is fully understood by the
          parties, and the price of the Services and the other mutual
          agreements of the parties set forth in this Agreement were
          arrived at in consideration of such provisions.
          
          Please accept this offer by signing one (1) copy and
          returning same to the undersigned at facsimile No.
          206-237-1706 on or before February 22, 1995, the date on
          which this offer will otherwise expire.
          
          Very truly yours,
          
          THE BOEING COMPANY
          
          BY /s/W.R. Lyle
          W. R. Lyle
          Contracts Manager
          Aircraft Support
          Mail Stop 76-66
          ACCEPTED AND AGREED TO this

          date:  February 23, 1995.

          

          UNITED AIR LINES, INC.

          
          
          BY /s/Stuart Oran
          
          ITS Executive Vice President-Corporate 
              Affairs & General Counsel






                                               EXHIBIT 10.29
                         UNITED AIRLINES

                                        January 31, 1995

Via facsimile:  206-237-1706

Mr. R. C. Nelson
Regional Director, Aircraft Contracts
Boeing Commercial Airplane Group P.O. Box 3707
Seattle, WA 98124-2207

Re:  (1)  Letter Agreement 6-1162-TML-1205 to Purchase Agreement
          1670 dated December 18, 1990 as amended and supplemented 
          among The Boeing Company and United Air Lines, Inc. 
          and United Worldwide Corporation

     (2)  Boeing Proposal Letters 6-1162-MMF-045 & 6-1162-RCN-
          839 dated January 23, 1995

Gentlemen:

Reference is made to Letter Agreement No. 6-1162-TML-1205 (the
"Letter Agreement") to Purchase Agreement No. 1670 dated December
18, 1990 (as previously amended and supplemented, including all
previously executed letter agreements, the "Purchase Agreement")
among The Boeing Company ("Boeing"), United Air Lines, Inc.
("United") and United Worldwide Corporation ("Worldwide")
relating to the sale by Boeing and the purchase by United and
Worldwide (collectively the "Buyer") of Model 747-400 aircraft;
and reference is made to Boeing Proposal Letters 6-1162-MMF-045
and 6-1162-RCN-839 both dated January 23, 1995 (the "Proposal
Letters").

This letter amendment (this "Letter Amendment"), when accepted by
Buyer, will become part of the Letter Agreement and part of the

Purchase Agreement, and will evidence our further agreement with
respect to the matters set forth below. All terms used herein and
in the Letter Agreement, and not defined herein, shall have the
same meaning as in the Letter Agreement.  If there is any
inconsistency between the terms of this Letter Amendment and the
Letter Agreement or the Purchase Agreement, the terms of this
Letter Amendment will govern.


          *  CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
            WITH THE SECURITIES AND EXCHANGE COMMISSION
            PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT


If the foregoing correctly sets forth your understanding of our
agreement with respect to the matters addressed above, please
indicate your acceptance and approval below.



                                        UNITED AIR LINES, INC.


                                        /s/ Douglas A. Hacker
                                        Douglas A. Hacker
                                        Senior Vice President -
                                        Finance


                     
ACCEPTED AND AGREED TO
AS OF THE DATE SHOWN ABOVE:

THE BOEING COMPANY



By: /s/R.C. Nelson
Its: Attorney-in-Fact

                         UNITED AIRLINES

                                        January 31, 1995

Via facsimile:  206-237-1706

Mr. R. C. Nelson
Regional Director, Aircraft Contracts
Boeing Commercial Airplane Group P.O. Box 3707
Seattle, WA 98124-2207

Re: (1)  Letter Agreement 6-1162-DLJ-89lRl to Purchase Agreement
         No. 1670 dated December 18, 1990 as amended and supplemented 
         among The Boeing Company and United Air Lines, Inc. and 
         United Worldwide Corporation

    (2)  Boeing Letter Fix/Pollock dated September 23, 1994

    (3)  Boeing Proposal Letters 6-1162-MMF-045 & 6-1162-RCN-
         839 dated January 23, 1995

Gentlemen:

Reference is made to Letter Agreement No. 6-1162-DLJ-89lRl (the
"Letter Agreement") to Purchase Agreement No. 1670 dated December
18, 1990(as previously amended and supplemented, including all
previously executed letter agreements, the "Purchase Agreement")
among The Boeing Company ("Boeing"), United Air Lines, Inc.
("United") and United Worldwide Corporation ("Worldwide")
relating to the sale by Boeing and the purchase by United and
Worldwide (collectively the "Buyer") of Model 747-400 aircraft;
and reference is made to Boeing Letter Fix/Pollock dated
September 23, 1994 and to Boeing Proposal Letters 6-1162-MMF-045
and 6-1162-RCN-839 both dated January 23, 1995 (the "Proposal
Letters").

This letter amendment (this "Letter Amendment"), when accepted by
Buyer, will become part of the Letter Agreement and part of the
Purchase Agreement, and will evidence our further agreement with
respect to the matters set forth below. All terms used herein and
in the Letter Agreement, and not defined herein, shall have the
same meaning as in the Letter Agreement.  If there is any
inconsistency between the terms of this Letter Amendment and the
Letter Agreement or the Purchase Agreement, the terms of this
Letter Amendment will govern.


       *  CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
            WITH THE SECURITIES AND EXCHANGE COMMISSION
            PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT


If the foregoing correctly sets forth your understanding of our
agreement with respect to the matters addressed above, please
indicate your acceptance and approval below.



                                        UNITED AIR LINES, INC.


                                        /s/ Douglas A. Hacker
                                        Douglas A. Hacker
                                        Senior Vice President -
                                        Finance


                     
ACCEPTED AND AGREED TO
AS OF THE DATE SHOWN ABOVE:

THE BOEING COMPANY



By: /s/R.C. Nelson
Its: Attorney-in-Fact






                                               EXHIBIT 10.30
                         UNITED AIRLINES

                                        February 28, 1995

Via facsimile:  206-237-1706

Mr. R. C. Nelson
Regional Director, Aircraft Contracts
Boeing Commercial Airplane Group P.O. Box 3707
Seattle, WA 98124-2207

Re: (1)  Letter Agreement 6-1162-DLJ-89lRl to Purchase Agreement
          No. 1670 dated December 18, 1990 as amended and supplemented 
          among The Boeing Company and United Air Lines, Inc. and 
          United Worldwide Corporation

    (2)   Boeing Proposal Letters 6-1162-MMF-045 & 6-1162-
          RCN-839 dated January 23, 1995

Gentlemen:

Reference is made to Letter Agreement No. 6-1162-DLJ-89lRl (the
"Letter Agreement") to Purchase Agreement No. 1670 dated December
18, 1990(as previously amended and supplemented, including all
previously executed letter agreements, the "Purchase Agreement")
among The Boeing Company ("Boeing") and United Air Lines, Inc.
("United") relating to the sale by Boeing and the purchase by
United (the "Buyer") of Model 747-400 aircraft; and reference is
made to Boeing Proposal Letters 6-1162-MMF-045 and 6-1162-RCN-839
both dated January 23, 1995 (the "Proposal Letters").

This letter amendment (this "Letter Amendment"), when accepted by
Buyer, will become part of the Letter Agreement and part of the
Purchase Agreement, and will evidence our further agreement with

respect to the matters set forth below. All terms used herein and
in the Letter Agreement, and not defined herein, shall have the
same meaning as in the Letter Agreement.  If there is any
inconsistency between the terms of this Letter Amendment and the
Letter Agreement or the Purchase Agreement, the terms of this
Letter Amendment will govern.


     *     CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
            WITH THE SECURITIES AND EXCHANGE COMMISSION
            PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT


If the foregoing correctly sets forth your understanding of our
agreement with respect to the matters addressed above, please
indicate your acceptance and approval below.



                                        UNITED AIR LINES, INC.


                                        /s/ Douglas A. Hacker
                                        Douglas A. Hacker
                                        Senior Vice President -
                                        Finance


                     
ACCEPTED AND AGREED TO
AS OF THE DATE SHOWN ABOVE:

THE BOEING COMPANY



By: /s/R.C. Nelson
Its: Attorney-in-Fact




                                               
                                               EXHIBIT 10.31
                                        2 ROND POINT MAURICE
                                        BELLONTE
                                        31700 BLAGNAC FRANCE
                                        TELEPHONE 33 + 61 30 40 12
                                        TELECOPY: 33 + 61 30 40 11
                                        TELEX: AVSA 5211 55 F


                                   UNITED AIR LINES
                                   San Francisco

Fax 19.1.415.634.7117             Attention:     Jerry Pollock

Fax 61.93.43.41                    cc:       Tom Ellis
Fax 19.1.708.952-5104                        Yesso Tekerian
                                             Dick Coykendall


O/REF. AVSA/CA-SL-0182/95         Blagnac, February 10, 1995


SUBJECT:      * CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
     WITH THE SECURITIES AND EXCHANGE COMMISSION
      PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT




Dear Mr Pollock,

     Further to our discussions with You and Dick Coykendall, please
find hereafter the terms of our offer with respect to the



              *  CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
     WITH THE SECURITIES AND EXCHANGE COMMISSION
      PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT














   S.A.R.L. AU CAPITAL DE 235 000 000 F - R.C.S. TOULOUSE B 330
                      926 672 - CODE APE 514S


              *  CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
     WITH THE SECURITIES AND EXCHANGE COMMISSION
      PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT











If  you agree with the preceding, please sign below and return  to
AVSA by February 11, 1995.



Yours Sincerely,                        Agreed and accepted
                                        United Air Lines



/s/Sylyain Lebeuf                       /s/J.L. Pollock                         
Sylyain Lebeuf                          Senior Staff Specialist

Director of Contracts Administration    Aircraft Purchasing

Attachment 1



             *  CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
     WITH THE SECURITIES AND EXCHANGE COMMISSION
      PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
Attachment 2


             *  CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
     WITH THE SECURITIES AND EXCHANGE COMMISSION
      PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT



                                               EXHIBIT 10.35





                                   [PHOTOCOPIES/SIGNATURES)


      



                          IMC 757/767 PROJECT
                               AGREEMENT



                       Dated as of December 1, 1994

                            IMC 757-767 PROJECT
                                 AGREEMENT

                             Table of Contents



ARTICLE I      LOCATION AND DESCRIPTION OF THE 757/767
               PROJECT..........................................  8

     101       Location.........................................  8
     102       Description......................................  8


ARTICLE II     CONSTRUCTION OF THE 757/767 PROJECT..............  9

     201       Construction of the 757/767 Project..............  9


ARTICLE III    FINANCING........................................ 10

     301       Financing........................................ 10
     302       Repayment........................................ 10
     303       Costs of the Project; Indiana Project
                    Costs....................................... 10


ARTICLE IV     FINANCIAL INCENTIVES............................. 11

     401       Account.......................................... 11
     402       State Incentives and State Bonds................. 12


ARTICLE V      ADDITIONAL COVENANTS............................. 14

     501       Necessary Actions................................ 14
     502       Taxes............................................ 14
     503       Supplemental Disclosure.......................... 15
     504       Governmental Assistance.......................... 15
     505       Airport Rates and Charges........................ 16


ARTICLE VI     COVENANTS OF UNITED.............................. 17

     601       Construction and Operation of the 757/767
                    Project as a Part of the IMC
                    Facility.................................... 17
     602       Reimbursement.................................... 18
     603       Minority Business Enterprise and Women
                    Business Enterprise Goals................... 24


ARTICLE VII    LEASE ARRANGEMENTS............................... 25

     701       Master Lease Agreement........................... 25
     702       Lease Terms...................................... 25


ARTICLE VIII   REPRESENTATIONS AND WARRANTIES OF THE
                    STATE....................................... 26

     801       Power and Authority.............................. 26
     802       Due Authorization................................ 26
     803       Due Execution.................................... 26
     804       Consents and Approvals; NO Violation:............ 26
     805       Operation of the 757/767 Project and

                    the IMC Facility:........................... 27
     806       No Injunctions, Suits or Proceedings............. 27


ARTICLE IX     REPRESENTATIONS AND WARRANTIES OF UNITED......... 29

     901       organization and Existence....................... 29
     902       Power and Authority.............................. 29
     903       Due Authorization................................ 29
     904       Due Execution.................................... 29
     905       Consents and Approvals; No Violation............. 29


ARTICLE X      INDEMNIFICATIONS; SURVIVAL OF REPRESENTATIONS
                    AND WARRANTIES.............................. 31
     1001      Indemnification by the State..................... 31
     1002      Indemnification by United........................ 32
     1003      Survival of Representations, Etc................. 32


ARTICLE XI     TERMINATION...................................... 33

     1101      Termination...................................... 33
     1102      Procedure upon Termination....................... 33
     1103      Effect of Termination............................ 34
     1104      Breach........................................... 34
     1105      Other Rights and Remedies........................ 34


ARTICLE XII    MISCELLANEOUS.................................... 35

     1201      Expenses......................................... 35
     1202      Further Assurances............................... 35
     1203      Alternative Dispute Resolution;
                    Arbitration................................  35
     1204      Parties in Interest.............................  37



     1205      Amendments and Waiver............................ 37
     1206      Entire Agreement; Non-Merger....................  37
     1207      Headings......................................... 38
     1208      Notices.......................................... 38
     1209      Third Parties.................................... 39
     1210      Independent Parties.............................. 39
     1211      Appropriations................................... 39
     1212      Non-Discrimination............................... 40
     1213      Drug-Free Workplace.............................. 40
     1214      Counterparts..................................... 40
     1215      Governing Law.................................... 41
     1216      Severability..................................... 41

EXHIBITS

                        IMC 757/767 PROJECT
                             AGREEMENT



    AGREEMENT,  dated as of December 1, 1994 (the "Agreement"),  by

and  between  the  State  of Indiana, acting  by  and  through  its

Department  of Commerce (the "State"), and United Air  Lines,  Inc.

("United").



                            RECITALS

    A.      In   November   1991,   United  selected   Indianapolis

International Airport (the "Airport") as the site of its new, state-

of-the-art,   major   aircraft  maintenance  facility   (originally

referred  to as "MOC-II and currently redesignated and referred  to

as the "Indianapolis Maintenance Center" or the "IMC Facility").

    B.     United  has previously entered into the MOC-II Agreement

dated  as  of  November 21, 1991 (together with  subsequent  letter

agreement  amendments dated June 15, 1992, and December  23,  1993,

the  "Original Agreement") , by and among the State,  the  City  of

Indianapolis,  Indiana  (the  "City"),  the  Indianapolis   Airport

Authority (the "Authority") (the State, the City and the Authority,

collectively,  the  "Governments") and United,  pursuant  to  which

United  has  agreed to locate the IMC Facility on a specified  site

(the "Site") at the Airport, subject to the terms and conditions of

the Original Agreement.

      C.    Subsequent to the date of and pursuant to the  original

Agreement,  United  and the Authority have entered  into  a  Master

Lease   Agreement   (together  with  subsequent  letter   agreement

amendments  dated  June 15, 1992, and December  23,  1993,  and  an

Amendment to Lease Agreements dated May 11, 1993, the "Master Lease

Agreement"), with respect to the construction, lease and  operation

of  the IMC Facility and a Construction Management Agreement  dated

as   of  March  1,  1992  (the  "Original  Construction  Management

Agreement"),  as  amended  by  an  Amendment  to  the  Construction

management Agreement, dated as of August 1, 1993 (the "Construction

Management  Agreement Amendment" and, together  with  the  Original

Construction  Management  Agreement, the  "Construction  Management

Agreement"), under which, to expedite the construction process  and

to  assure that the IMC Facility conforms to and complies with  the

needs  of  United,  the  Authority has  designated  United  as  its

construction manager for the purpose of granting to United, to  the

extent permitted by law, the responsibility and authority to act as

the   agent  for  and  on  behalf  of  the  authority  with   total

responsibility and authority to manage the design, construction and

equipping  of the IMC Facility, including the delegation to  United

of  any and all approval authority with respect to the IMC Facility

to the extent allowed by Indiana law.



     D.   Construction of the IMC Facility began in August 1992 and

has  been  expeditiously pursued to the satisfaction of United  and

the  State.  The IMC Facility was dedicated nearly a year ahead  of

schedule and under budget, on March 2, 1994, with the first  Boeing

737   arriving  for  maintenance  on  March  28,   1994.    It   is

anticipated by United that Phase I (as defined in the Master Lease

Agreement) of the IMC Facility will be completed in accordance with

the Original Agreement.



     E.   Each of United and the State has substantially complied

with all of its respective commitments under the Original

Agreement.

    

     F.   As originally contemplated by United and the Governments,

the   IMC  Facility  would  be  dedicated  to  meeting  the   heavy

maintenance  requirements of United's growing fleet of  Boeing  737

aircraft.



      G.    Because of its strong partnership with the  State,  the

City  and the Authority and the advantages and attractions  of  the

IMC  Facility  to and for United, United has already  expanded  the

types of maintenance operations to be conducted at the IMC Facility

to   include  certain  types  of  lighter  maintenance,   and   has

consequently commenced certain maintenance operations  at  the  IMC

Facility  approximately one year earlier than contemplated  by  the

Original Agreement.

      H.    Because of its strong partnership with the  State,  the

City  and the Authority and the advantages and attractions  of  the

IMC  Facility  to and for United, United also has now  proposed  to

expand the number and nature of the aircraft types to be maintained

at the IMC Facility to include United's entire and growing fleet of

Boeing 757 and Boeing 767 aircraft as well as its growing fleet  of

Boeing 737 aircraft.

      I.    United  currently operates and maintains 88 Boeing  757

aircraft and 42 Boeing 767 aircraft, representing approximately 25%-

of   United's  fleet.   The  Boeing  757  aircraft,  carrying   185

passengers,  is  one of the most efficient aircraft  in  commercial

aviation  on  a  cost-per-passenger-mile  basis.   The  Boeing  767

aircraft,  carrying  210  passengers, represents  one  of  Boeing's

newest  generation of aircraft.  Heavy maintenance visits for  each

of  the  Boeing  757  and  Boeing 767  fleets  would  be  currently

scheduled  to  occur in the second quarter of 1996 in Indianapolis.

Since many components of the Boeing 757 and Boeing 767 aircraft are

interchangeable, an interlinking of the maintenance of  the  Boeing

757 and Boeing 767 aircraft fleets makes sound business sense.

      J.    Airframe maintenance of the Boeing 737, Boeing 757  and

Boeing  767  aircraft at the IMC Facility will bring  approximately

65% of United's current total aircraft fleet to Indiana for regular

airframe maintenance operations.

      K.   The IMC Facility has been contemplated by the parties to

the Original Agreement and designed and constructed by United to be

flexible  and  expandable with respect to the nature and  types  of

operations and functions that can be performed.  Accordingly, while

the  hangars  for  maintenance of the Boeing  757  and  Boeing  767

aircraft are substantially larger than hangars required for  Boeing

737  aircraft maintenance and will each be required to be specially

designed,  constructed  and integrated into  the  IMC  Facility  as

contemplated    in   the   Original   Agreement,   the    resulting

reconfiguration of the IMC Facility is both feasible and consistent

with the nature, substance, function and intent of the IMC Facility

as contemplated by the Original Agreement.

    L.    Construction of the Boeing 757 and Boeing 767 maintenance

hangars  will  require hundreds of additional Hoosier  construction

workers  and  tens  of  millions of  dollars  of  expenditures  for

additional  materials  and services to be  purchased  and  procured

within Indiana.

    M.     The Boeing 757 and Boeing 767 maintenance hangars,  when

complete, are expected and anticipated by United to result in

(i)  capital additions to the IMC Project with an anticipated  cost

of  up  to  $117 million and (ii) at least 1200 new and  additional

employees  in good paying jobs at the IMC Facility by December  31,

1996.

     N.   The State believes that the expansion of the IMC Facility

through the construction and operation of the Boeing 757 and Boeing

767  maintenance  hangars will allow the IMC  Facility  to  make  a

further  and  faster  contribution to the  diversification  of  the

Indiana  economy; will provide an enhanced and earlier  opportunity

for  the  State,  Central Indiana and the  City  to  attract  other

aerospace  and aerospace-related business to Indiana; will  provide

more  Hoosier workers with an earlier and unprecedented opportunity

to  improve the quality of their skills and work; and will  provide

(through the need for additional numbers of better educated, better

skilled Hoosier workers at the IMC Facility and related businesses)

the  State's higher education institutions -- especially  Vincennes

University, Purdue University, Indiana University-Purdue University

at Indianapolis and Indiana Vocational Technical College -- with an

even  greater and earlier opportunity to help prepare these workers

for their new jobs.


      0.    United  has already established itself as  a  committed

corporate citizen of Indianapolis and Indiana.

      P.   The State is entering into this Agreement with United in

reliance  upon United's representations, warranties, covenants  and

agreements,  especially those with respect to the construction  and

equipping  of two additional hangars for Boeing 757 and Boeing  767

aircraft  maintenance at and as a part of the IMC Facility  at  the

Airport  and  the  employment of at least 1,200  additional  highly

skilled  workers  in good paying jobs relating to  such  additional

hangars.

      Q.   United is entering into this Agreement with the State in

continuing reliance upon the respective representations,

warranties, covenants and agreements of the State under the

Original Agreement, and in further reliance upon the State's

additional representations, warranties, covenants and obligations

hereunder,  especially those obligations to provide to United the

financial incentives provided for herein and an environment

conducive to efficiency of operation in accordance with the

Original Agreement and this Agreement.

    

    NOW,   THEREFORE,  in  consideration  of  the  representations,

warranties, covenants and agreements contained herein, and  subject

to  the  terms  and conditions described below, the parties  hereto

agree as follows.  Capitalized terms used in this Agreement and not

otherwise defined have the meanings set forth in Appendix I to  the

Original Agreement.





                             ARTICLE I

          LOCATION AND DESCRIPTION OF THE 757/767 PROJECT

     101.  Location.   United  agrees to construct  and  equip  two

additional   hangars  for  Boeing  757  and  Boeing  767   aircraft

maintenance (the "757/767 Project") at and as an integral part  of

the  IMC  Facility  on  the  Site at the  Airport  as  defined  and

described  in the Original Agreement.  As an integral part  of  the

IMC  Facility, the 757/767 Project will be subject to the terms and

conditions of the Master Lease Agreement.

     
      102. Description.  The 757/767 Project is generally described

on  Exhibit  A  hereto.   The parties acknowledge  and  agree  that

nothing  contained  herein or in Exhibit  A  hereto  shall  prevent

United  from  making  changes  to the 757/767  Project  description

provided  that  such  description changes do  not  change  United's

commitments as expressed in this Agreement.





                            ARTICLE II

                CONSTRUCTION OF THE 757/767 PROJECT

     201.  Construction of the 757/767 Project.

      (a)  The State acknowledges and agrees generally that Article

II   of  the  Original  Agreement  shall  control,  to  the  extent

applicable, the construction and equipping of the 757/767  Project,

and  acknowledges and agrees specifically, but without  limitation,

that  (i)  the Authority has committed under the Original Agreement

to  confer  upon  United complete discretion with  respect  to  the

selection of, and contracting for, professional services, including

program management, architectural design, engineering services and,

to  the  extent  permitted  by law, all additional  non-contractual

issues  and  matters  and (ii) United will, at  United's  election,

construct  and  equip  the  757/767  Project  pursuant  to  and  in

accordance  with United's rights, responsibilities and  obligations

under  the  terms  and  conditions of the  Construction  Management

Agreement.

     (b)   In addition to this Section 201, the State shall, to the

extent  permitted  by  law,  continue  to  support  and  reasonably

cooperate  with  United  in seeking administrative  or  legislative

relief  or advantage with respect to the expedited construction  of

the 757/767 Project and continued operation of the IMC Facility.



                            ARTICLE III
                             FINANCING

      301.  Financing.  United hereby represents and warrants  that

it  is proceeding to finance a portion of the Costs of the Project,

as  hereinafter defined, including Costs of the Project relating to

the  757/767 Project, through the issuance and sale by  or  through

the  Authority  of one or more series of bonds payable  from  lease

rentals  under the Master Lease Agreement and constituting  Special

Facility Bonds, as defined and described in and subject to  Section

3.01(a) of the Original Agreement.

    302.   Repayment.  United shall be responsible for  paying  all

debt  service  on  the Special Facility Bonds by making  the  lease

rental  payments  specified  in  the  Master  Lease  Agreement,  as

supplemented  in  connection with the issuance of Special  Facility

Bonds.  United acknowledges and agrees that the State shall have no

liability  with respect to the payment of principal of and  premium

(if  any)  and interest on the Special Facility Bonds  or  United's

obligations  to  make rental payments as described  in  the  Master

Lease Agreement, as so supplemented.

    303.   Costs  of  the  Project;  Indiana  Project  Costs.   For

purposes of this Agreement:

     a)   "Costs of the Project" shall have the meaning set forth

in Section 3.03(a) of the Original Agreement.

     b )  "Indiana Project Costs" shall have the meaning set

forth in Section 3.03(b) of the Original Agreement.



                            ARTICLE IV

                       FINANCIAL INCENTIVES

      401. Account.

       (a)   In  accordance  with  Section  4.01  of  the  original

Agreement, the proceeds of bonds as described in Sections  301  and

402  of this Agreement shall be or continue to be deposited in  one

or  more  trust accounts with a trustee bank or banks permitted  to

serve as a trustee for the particular bond issue under Indiana law,

acceptable to United, pursuant to a trust indenture, resolution  or

ordinance  for  such bonds (all such trust accounts,  collectively,

the  "Account").   All deposits in the Account and  any  investment

income  thereon  (subject to any required  rebate  to  the  federal

government) shall be available at the direction of United solely to

fund the Costs of the Project as provided in Section 303 hereof and

the  provisions  set forth in the Master Lease  Agreement  and  the

Construction Management Agreement.  The funds in the Account  shall

be  invested by or on behalf of the State or another entity issuing

on behalf of the State (the "Issuer") at the direction of United in

obligations  in  which the Issuer is legally authorized  to  invest

such  funds.   For  the purposes, among others, of  complying  with

State law and maintaining the tax-exemption of the Special Facility

Bonds and the State Bonds (as defined herein), funds deposited into

the  Account  may be segregated; set aside in separate accounts  as

may  be required under any trust indenture, resolution or ordinance

providing  for the issuance of the Special Facility  Bonds  or  the

State Bonds; or accounted for otherwise.

     (b)   On  or  before the 15th day of each month following  the

initial  deposit into the Account pursuant to this Article  IV  and

until  all  funds in the Account have been expended,  United  shall

cause to be provided to the Issuer, on behalf of the State, records

of  all  deposits to and payments from the Account,  together  with

appropriate  documentation therefor.  United shall also  provide  a

designee  of  the  State,  reasonably acceptable  to  United,  with

reasonable  access during normal business hours to  United's  books

and records relating to all payments made from the Account.

      (c)  United acknowledges and agrees that, with respect to the

issuance and sale of the State Bonds, (i) certain actions  will  be

required  to  be  taken by various State governmental  entities  to

effect  the  issuance  and  sale of  such  State  Bonds;  (ii)  the

conditions  customarily included in bond purchase  agreements  with

respect  to such State Bonds will be required to be satisfied;  and

(iii)  United  will  cooperate fully with, and  provide  sufficient

information  to, the Issuer to effectuate the Issuer's  ability  to

issue  and sell the State Bonds on a tax-exempt basis.  United  and

the  State acknowledge and agree to cooperate and consult with each

other regarding all such activities.

     
     402.  State Incentives and State Bonds.
      (a)   Subject  to the actions and conditions referred  to  in

Section 401 (c) having been taken or satisfied, as the case may be,



the  Issuer  shall  issue and sell a special series  of  tax-exempt

revenue bonds (the "State Bonds"), the principal of and premium (if

any)  and  interest  on  which, and all other  costs  and  expenses

relating thereto (except as provided in Section 1201 hereof), shall

be  payable  solely  from available funds of the Issuer,  including

lease  rentals payable from any State appropriations which  may  be

made by the Indiana General Assembly.  As soon as practicable,  but

in  any event not later than April 15, 1995, unless a longer period

of time is agreed to by United, the State shall cause the Issuer to

deposit $26 million, in cash, from the proceeds of the issuance  of

the  State Bonds into the Account.  United acknowledges and  agrees

that  the  State Bonds will be issued by the Indiana Transportation

Finance Authority or such other Issuer as the State shall cause  to

issue such bonds.

     (b)  The State covenants and agrees that United shall have  no

liability  with respect to the issuance, sale or repayment  of  the

State Bonds, or any other obligations with respect thereto, and  no

portion  of the IMC Facility, including the 757/767 Project,  shall

be  pledged,  directly  or indirectly, to  secure  any  obligations

relating to the State Bonds.



                             ARTICLE V
                       ADDITIONAL COVENANTS

      501.   Necessary  Actions.  The State  hereby  covenants  and

agrees  to  use its best efforts to cause each of its affected  and

applicable agencies, authorities, boards and commissions and  other

entities to take all actions necessary or appropriate to effect  to

the  fullest  extent  possible all of the covenants  of  the  State

contained  in this Agreement as soon as practicable after-the  date

hereof.

     
     502. Taxes.
     
      a)   The State affirms its acknowledgment and agreement under

Section  5.04 of the Original Agreement to the effect  that  United

(i)  has  initially selected the Airport as the  site  of  the  IMC

Facility,  and  has now selected the Airport as the  site  for  the

inclusion  within  the  IMC Facility of  the  757/767  Project,  in

reliance  upon  the  current  State  and  local  governmental   tax

structures  and with the expectation that the fundamental  policies

underlying  such  tax structures would not change significantly  in

the  future; and (ii) has entered into this Agreement in continuing

reliance upon the representations and warranties made by the  State

under  Section 5.04 of the Original Agreement concerning State  and

local property, sales and use and corporate income taxes.

      b)   The State affirms its acknowledgment and agreement under

Section  5.04  of  the Original Agreement that changes  in  current

State  and local taxes may result in the creation of fees and taxes

that  could  produce  results that are, in  effect,  discriminatory

against  United  in  contravention of  the  understandings  of  the

parties  hereto  and  the  parties to the Original  Agreement.   In

furtherance thereof, the State covenants and agrees to  the  extent

permitted  by law that it will not seek or support any  changes  in

such taxes that are, in effect, limited to the airlines or to their

suppliers.

     (c)   United  acknowledges that the State  has  supported  and

cooperated,  in  accordance with Section 5.04(c)  of  the  Original

Agreement,  with United in obtaining legislative relief from  those

provisions of Indiana's corporate tax law that could have  resulted

in additional corporate tax liability for United.

      503.  Supplemental Disclosure.  The State  and  United  shall

have,   and  in  accordance  with  Section  5.06  of  the  Original

Agreement,  shall  continue to have, the continuing  obligation  to

notify  the other promptly of any event, circumstance or  discovery

leading   to  a  reasonable  conclusion  that  any  representation,

warranty,  covenant  or agreement contained in  this  Agreement  is

incomplete,  inaccurate  or  not  complied  with  in  any  material

respect.

     
     504.  Governmental Assistance.

      (a)  In addition to the obligations contained in Section 2.01

of  the Original Agreement and as an affirmation of Section 5.07 of

the  Original  Agreement, the State shall continue to cooperate  in

good  faith  with United and with the City, the Authority  and  any

other  affected governmental entity or agency to assist  United  in

obtaining  or  maintaining in effect all federal, State  and  local

licenses, permits, approvals and authorizations under any  and  all

applicable laws, ordinances, regulations, rules, orders or  decrees

that  are  necessary,  in  the reasonable judgment  of  United,  to

construct,  equip, utilize and operate the IMC Facility,  including

the 757/767 Project, as expeditiously as possible.

     (b)   To continue to facilitate the foregoing commitment,  the

State  shall  continue to employ an expedited review  process  with

respect  to all aspects of the IMC Facility, including the  757/767

Project, through which process United will submit all documentation

required   for  any  license,  permit,  approval  or  authorization

necessary or appropriate to be obtained from or maintained with the

State or any agency or instrumentality thereof.

     505.  Airport  Rates  and  Charges.   The  State  affirms  its

agreement  and  understanding under Section 5.08  of  the  original

Agreement that none of the costs and expenses to or for the account

of  the  State or any other governmental entity in connection  with

the  provision  of  the incentives pursuant to Article  IV  of  the

Original  Agreement or Article IV hereof shall  or  should  in  any

manner be paid, directly or indirectly, from airport rates, charges

or  landing  fees  paid by United or any other  airline  under  its

respective Agreement and Lease of Premises with the Authority.


     


                            ARTICLE VI
                        COVENANTS OF UNITED

     601.  Construction and Operation of the 757/767 Project  as  a

Part of the IMC Facility.

     (a)  United agrees to locate, construct and equip (or cause to

construct and equip) the 757/767 Project as an integral part of the

IMC Facility at the Airport.

     (b)   During  the  term of the Master Lease Agreement,  United

will utilize the IMC Facility, including the 757/767 Project, as  a

major aircraft maintenance facility.

     (c)   United  agrees that an aggregate of at least 1,200  full

time  employees (the "757/767 Employees") will be employed by United

at  the  757/767  Project  within the IMC  Facility  on  or  before

December 31, 1998.

     (d)   Subject  to  the  provisions. of  Section  602  of  this

Agreement,  the  agreements by United set forth  in  the  foregoing

paragraph (c) of this Section 601 are separate from and in addition

to  the  covenants of United set forth in Section  6.01(c)  of  the

Original Agreement.

     (e)   The estimated annual payroll and benefits for the United

employees allocable to the 757/767 Project within the IMC  Facility

are  expected  to aggregate more than $54 million by  December  31,

1997.

      (f)  Subject to the compliance by the State, the City and the

Authority  with  Section  2.01 and Section  5.07  of  the  Original

Agreement,  United agrees to construct the 757/767  Project  as  an

integral part of the IMC Facility.

     (g)   United continues to be committed to assisting the  State

in  its  economic  development efforts and, in  this  regard,  will

continue to use its best efforts to cooperate with the State in  an

effort  to induce other private entities to locate significant  new

economic  development  projects related  to  the  IMC  Facility  in

Indiana.

     
     602.  Reimbursement.

     (a)   United acknowledges and agrees that the State has entered
           
into  this  Agreement and has agreed to provide the incentives  set

forth herein, in part, in reliance upon the covenants of United set

forth  in Section 601 hereof.  In furtherance thereof, the  parties

hereto  agree that if any of such covenants are not fulfilled,  the

following  provisions shall serve as the sole and exclusive  remedy

of the State, subject to Article XI of this Agreement:

          
          (i)   In  the  event that on or before December  31,
     2001, the aggregate Indiana Project Costs, including  the
     Indiana  Project  Costs expended  or  allocated  for  the
     construction and equipping of the 757/767 Project, do not
     equal   or   exceed  $800  million  (in  actual   dollars
     expended),  United  (A)  affirms  its  obligations  under
     Section 6.02 (a) (i) of the Original Agreement to pay  to
     the  State and the other Governments, as defined  in  the
     Original  Agreement, the amount determined in the  manner
     and  paid in accordance with Section 6.02 (a) (i) of  the
     Original  Agreement;  and (B) shall  make  an  additional
     payment to the State of an aggregate amount equal to  the
     product  of (1) a fraction, the numerator of which  shall
     be  $800  million minus the actual Indiana Project  Costs
     accrued  or expended through December 31, 2001,  and  the
     denominator of which shall be $800 million; times  (2)  a
     fraction, the numerator of which shall be $26 million and
     the denominator of which shall be three.


          (ii)  In  the  event that during the  calendar  year
     ending  December 31, 2004 (or any earlier  calendar  year
     selected by United in its sole discretion), there are not
     at  least 7,500 Facility Employees, including the 757/767
     Employees,  United  shall pay to the State  an  aggregate
     amount  equal  to  the  product of (X)  a  fraction,  the
     numerator of which shall be 7,500 minus the actual number
     of  Facility  Employees for the year ending December  31,
     2004  (or such earlier year selected by United), and  the
     denominator  of  which  shall be 1,200;   times  (Y)  $26
     million;  times  (Z) a fraction, the numerator  of  which
     shall be two and the denominator of which shall be three.
     In  the  event that a calculation is required to be  made
     under  this clause (ii) and the actual number of Facility
     Employees for the year ending December 31, 2004 (or  such
     earlier year selected by United) is less than 6,300, then
     the  first  sentence of this clause (ii) shall not  apply
     and   United   shall  pay  to  the  State  the   sum   of
     $17,333,333.33. United further acknowledges that  it  may
     also  be  liable to make payments to the  State  and  the
     other Governments as set forth in Section 6.02(a) (ii) of
     the Original Agreement.

          (iii)     Notwithstanding clause (ii) above, in  the
     event  that for the calendar year referred to  in  clause
     (ii) above, the number of Facility Employees is less than
     7,500,  for purposes of determining whether United  shall
     be  required to make any payment to the State pursuant to
     such  clause (ii), the number of Facility Employees shall
     be recalculated so that such number will equal the sum of
     (A)  the  number of Facility Employees (including 757/767
     Employees) for such calendar year, plus (B) the number of
     Net New United Employees for such calendar year, plus (C)
     the number of Ancillary Employees for such calendar year.

               (iv) For  purposes of this Section 602:

                     (W)  "Facility Employees" means  the
          average   number   of  all   Full-Time   United
          Employees and Full-Time Equivalents employed at
          the Facility during any year.

                     (X)  "Full-Time United Employees and
          FullTime  Equivalents" shall mean all Full-Time
          United    Employees   and   Full-Time    United
          Equivalents;   "Full  Time  United   Employees"
          means  any United employee who works (including
          all  vacation  time, sick time and compensatory
          time)  an average of 35 hours or more per  week
          of  employment;  provided,  however,  that  any
          employees  covered  by a collective  bargaining
          agreement  shall  be  deemed  to  satisfy  this
          requirement   if   they  work  (including   all
          vacation  time,   sick  time  and  compensatory
          time)  at  least  the minimum number  of  hours
          required  of  full-time  employees  under   the
          applicable    terms   of    their    respective
          collective bargaining agreements; and "FullTime
          United Equivalents" means  (i) with respect  to
          United   employees  covered  by  a   collective
          bargaining  agreement who  are  not  Full  Time
          United Employees, the aggregate number of hours
          per  week  during  any relevant  period  worked
          (including  all vacation time,  sick  time  and
          compensatory   time)  by  all  such   employees
          divided  by  the number obtained by multiplying
          the  minimum number of hours per week  required
          of  full-time  employees under  the  applicable
          collective bargaining agreement by the   number
          of   weeks  in  such   period;   or  (ii)  with
          respect  to  all other employees that  are  not
          Full-Time   United  Employees,  the   aggregate
          number of hours worked per week (including  all
          vacation time, sick time and compensatory time)
          during   any  relevant  period  by   all   such
          employees,  divided by the number  obtained  by
          multiplying  35 times the number  of  weeks  in
          such period.

               (Y)  "Net New United Employees" shall mean
          the  average  number  of all  Full-Time  United
          Employees   and  Full-Time  Equivalents  (other
          than   Facility   Employees)  employed  in  the
          State  in  any  year in excess of  the  average
          number  of Full-Time United Employees and  Full
          Time  Equivalents employed in the State  during
          the  year  ending December 31, 1991;  provided,
          however,  that  Net New United Employees  shall
          not    include  any  employee  of  a   business
          acquired  by  United (by merger or  otherwise),
          after  the  date  hereof  who  prior  to   such
          acquisition  worked in the  State  .  for  such
          business.

                (Z)  "Ancillary Employees" shall mean the
          average  number of full-time employees employed
          in   the   State  during  any   year   of   all
          corporations  or other entities  which  conduct
          
          business   falling  within  Standard   Industry
          Group  No. 372 and all corporations engaged  in
          the  aircraft or aeronautical industries  which
          conduct   businesses  falling  within  Standard
          Industry Classification Nos. 3592, 3694,  3714,
          3812,  4581,  or  8731 and such other  Standard
          Industry  Classification Numbers as  the  State
          and  United agree to, and which directly  serve
          the  IMC Facility, but only to the extent  that
          such  employee's job has been created  by  such
          business  since  November  15,  1991.   Without
          limiting  the foregoing, United and  the  State
          agree   that  the  term  "Ancillary  Employees"
          hereunder shall include employees of non United
          owned or controlled entities working on a full-
          time  basis  at the IMC Facility and performing
          functions  or  services  which  were  or  would
          reasonably   have  been  contemplated   to   be
          performed  or carried out by United   employees
          as  of  the  time of execution of the  Original
          Agreement.

     (b)  For purposes of Paragraph (a) of this Section 602, (i) no

later  than  March 31, 2002, United shall deliver to  the  State  a

certificate  (a  "Determination  Certificate")  of  an  appropriate

officer  of United, certifying as to the aggregate Indiana  Project

Costs  on December 31, 2001 or such earlier time selected by United

(in  actual  dollars expended) ; and (ii) no later than  March  31,

2005, United shall deliver to the State a Determination Certificate

of  an  appropriate officer of United, certifying as to the  actual

number  of  Facility Employees during the year ending December  31,

2004,  or  such earlier year selected by United.  All amounts  used

for  such  computation  shall be determined according  to  United's

internal  books  and records, except that the number  of  Ancillary

Employees  shall be determined pursuant to good faith  negotiations

between United and  the State consistent  with Section 6.02 of  the

 Original Agreement or certificates of United and employers of such

 Ancillary  Employees.  For purposes of reviewing any Determination

 Certificate,  a  designee of the State acceptable to  United  will

 have  the right, during normal business hours, to review the books

 and  records  of  United related solely to the matters  set  forth

 therein.  Any Determination Certificate shall be deemed conclusive

 of  the facts set forth therein and shall be final and binding  on

 the  parties hereto, unless challenged by the State within 45 days

 following delivery.

      (c)    In the event that United is required to reimburse  the

 State  pursuant to Paragraph (a) of this Section 602, United shall

 make  such  payment  within 45 days following the  date  that  the

 applicable   Determination  Certificate   provided   pursuant   to

 Paragraph (b) of this Section 602 becomes final and binding on the

 State, in cash, by wire transfer to a trust account designated  by

 the  State  in writing at least three business days prior  to  any

 required payment date. Any such payment shall be separate from and

 in  addition  to any payment that may be required to  be  made  by

 United  to  the  State  and  the  other Governments   pursuant  to

 Section 6.02 of the Original Agreement.  Any such payment made  to

 the  State  pursuant  to  the Determination Certificate  described

 under Section 602(b)(i) shall be held by the State in escrow under

 mutually  agreeable terms until December 31, 2004,  and  shall  be

 paid to the State at such time only in the event that Section  602

 (e) does not apply.



     (d)   The parties hereto acknowledge and agree that any amount

required  to   be  paid  by United to the State  pursuant  to  this

Section  602  represents a good faith estimate of  damages  to  the

State  as  a  result of United's failure to fulfill  the  covenants

contained herein, and is not intended to be a penalty imposed  upon

United.

     (e)   Notwithstanding any other provision of this Section 602,

in  the  event  that  for any calendar year  ending  on  or  before

December 31, 2004, the number of Facility Employees, including  the

757/767  Employees, equals or exceeds 7900, the provisions of  this

Section  602  shall  terminate and United shall have  no  liability

hereunder or under Section 6.02 of the Original Agreement  pursuant

to Section 6.02(e) thereof.  Any amounts which have previously been

paid  to  the  State  by United  and held in   escrow  pursuant  to

Section 602(c) shall be thereupon returned to United, together with

any  interest  earned on such amounts during the period  of  escrow

investment.

      (f)  Nothing  in this  Agreement generally, or in Section 601

or  this  Section  602  of this Agreement in particular,  shall  be

deemed in any way to modify, amend, alter or affect any obligation,

liability or covenant of United set forth in the Original Agreement

with  respect  to  the City or the Authority,  or  any  obligation,

liability or covenant of the City or the Authority set forth in the

Original Agreement with respect to United. Neither the City nor the

Authority shall be, or deemed to be, a third-party beneficiary for

any purposes under this Agreement.

       603.   Minority  Business  Enterprise  and  Women   Business

Enterprise  Goals.   United  and  the  State  affirm  the  Minority

Business  Enterprise  and  Women  Business  Enterprise  goals   and

provisions of Section 6.03 of the Original Agreement.





                            ARTICLE VII

                        LEASE ARRANGEMENTS

    701.   Master Lease Agreement.  The 757/767  Project  shall  be

an integral part of and shall be included for all purposes with the

IMC  Facility  leased  to  United  pursuant  to  the  Master  Lease

Agreement.

    702.   Lease  Terms.  Interests in the IMC Facility,  including

the  757/767 Project, financed with the proceeds of the State Bonds

shall  be  leased  or subleased by the Authority to United pursuant

to  the Master Lease Agreement.  United shall have no liability for

any  additional amounts required with respect to the lease  of  the

portions  of  the  IMC  Facility, including  the  757/767  Project,

financed  with  the  State  Bonds except  for  its  obligations  to

maintain and operate the IMC Facility.





                           ARTICLE VIII

            REPRESENTATIONS AND WARRANTIES OF THE STATE

     The State represents and warrants to United as follows:

      801.  Power and Authority.  The State has all requisite power

and  authority  to  enter into this Agreement and  to  perform  its

obligations under this Agreement.

     
      802.  Due  Authorization.  Except   as  otherwise  set  forth

herein,  all acts and  other proceedings  required to be  taken  by

the  State to authorize the execution, delivery and performance  of

this Agreement have been duly and properly taken.

     803.  Due  Execution.  This Agreement has  been duly  executed

and  properly delivered by the State and constitutes  a  valid  and

binding  obligation of the State, enforceable against the State  in

accordance  with this Agreement's terms, subject to (i) bankruptcy,

insolvency,  reorganization, moratorium and similar laws  affecting

creditors,  rights generally heretofore or hereafter  enacted;  and

(ii)  the  exercise of judicial discretion in accordance  with  the

general principles of equity; and (iii) the valid exercise  of  the

constitutional  powers  of  the State  and  the  United  States  of

America.

     804. Consents and Approvals; No Violation.  The execution  and

delivery  of  this  Agreement  by  the  State  does  not,  and  the

consummation  by the State of the transactions contemplated  hereby

and compliance by the State with the terms hereof will not:





     (a)   conflict  with  or  result in a  violation  of  (i)  any

provision of any instrument governing the State (including, without

limitation,   the  State  Constitution  and  any   State   enabling

legislation) or (ii) any judgment, order, writ, injunction, decree,

statute,  law,  ordinance,  rule or regulation  applicable  to  the

State; or

     (b)   conflict with or result in or cause any material breach,

violation  of  or  default under any material contract,  agreement,

other  instrument,  commitment, arrangement,  or  understanding  or

grant  to  which  the  State  is  a party  or  which  is  otherwise

applicable to the State.

     805.  Operation of the 757/767 Project and the  IMC  Facility.

There is no law, ordinance, regulation or rule of the State enacted

or,  to  the  best knowledge  of the State,  proposed  that  would

prohibit  United  from fully utilizing the IMC Facility,  including

the 757/767 Project, on a 24-hour-a-day, seven-day-a-week basis  in

the manner currently contemplated.

     
     806.  No Injunctions, Suits or Proceedinqs.

     (a)   None of the commitments of the State to provide benefits

to  United  hereunder  is  the subject  of  any  injunction,  suit,

proceeding or other challenge.

      (b)  Except as disclosed to United as of the date hereof, the

State  has not received any communication, whether from any  member

of  the  Indiana General Assembly, a citizens' group,  taxpayer  or

otherwise,   with  respect  to  any  proposed  or   current   suit,

proceeding,  legislation  with respect  to  or  challenge  to  this

Agreement or any of the transactions contemplated hereby. The State

agrees to inform United of any such communications and, subject  to

the attorney-client privilege, to provide United with copies of all

such communications whenever received.







                            ARTICLE IX
             REPRESENTATIONS AND WARRANTIES OF UNITED

     United hereby represents and warrants to the State as follows:

      901.  Organization and Existence.  United  is  a  corporation

duly  organized,  validly existing and in good standing  under  the

laws  of the State of Delaware.  United has all requisite corporate

power  and authority to own, lease and  operate its properties  and

to carry on its business as now being conducted.

     902.  Power and Authority.  United has all requisite corporate

power and authority to enter into this Agreement and to perform its

obligations under this Agreement.

     903.   Due  Authorization.   All  corporate  acts  and   other

proceedings  required  to  be  taken by  United  to  authorize  the

execution,  delivery  and performance of this Agreement  have  been

duly and properly taken.

     904.  Due  Execution.  This Agreement  has been duly  executed

and  properly  delivered by United and constitutes  the  valid  and

binding  obligation  of  United,  enforceable  against  United   in

accordance  with its terms, subject to (i) bankruptcy,  insolvency,

reorganization,  moratorium and similar laws affecting  creditors',

rights  generally  heretofore or hereafter  enacted  and  (ii)  the

exercise  of  judicial discretion in accordance  with  the  general

principles of equity.

      905. Consents and Approvals; No Violation.  The execution and

delivery of this Agreement by United does not, and the consummation

of  the  transactions contemplated hereby and compliance  with  the

terms  hereof will not, (a) conflict with or result in a  violation

of  (i)  its Certificate of Incorporation or By-laws; or  (ii)  any

judgment, order, writ, injunction, decree, statute, law, ordinance,

rule  or regulation applicable to United; or (b) conflict with,  or

result  in  or cause any material breach, violation of  or  default

under,   any   material  contract,  agreement,  other   instrument,

commitment, arrangement or understanding to which United is a party

or which otherwise applies to United.





                             ARTICLE X

                   INDEMNIFICATIONS; SURVIVAL OF
                  REPRESENTATIONS AND WARRANTIES

1001.      Indemnification  by the State.  To  the  fullest  extent

permitted  by  law  and subject to Section 1211 hereof,  the  State

agrees  to  indemnify, defend and hold harmless the United  Parties

from   and  against  any  and  all  losses,  liabilities,  expenses

(including  attorneys and other professionals' fees and  expenses),

claims and damages asserted against, resulting to, imposed upon  or

suffered by the United Parties or any of them to the extent arising

from  or  attributable to (i) any breach of any  representation  or

warranty by the State contained in this Agreement, (ii) any  breach

or  nonperformance  of  any  covenant or  agreement  of  the  State

contained  in this Agreement, (iii) any action, suit or  proceeding

relating to or challenging any of the obligations of the State  set

forth  in  this Agreement, or (iv) the issuance, sale or  repayment

of  the  State Bonds.  Although the State's obligations under  this

Section  1001  are  subject  to  Section  1211  hereof,  the  State

covenants that it will do all things lawfully within its  power  to

obtain and maintain funds from which to meet its obligations  under

this  Section 1001, including, without limitation, making  separate

provision for any such obligations under this Section 1001 in  each

budget,  or adjustments thereto, submitted to the General  Assembly

of  the  State for the purpose of obtaining appropriations;   using

its  bona  fide  best efforts to have such portion of  the  State's

budget  approved; and exhausting all available reviews and  appeals

in the event such portion of the State's budget is not approved.

      1002.      Indemnification by United.  To the fullest  extent

permitted  by  law,  United agrees to indemnify,  defend  and  hold

harmless   the  State  from  and  against  any  and   all   losses,

liabilities,    expenses   (including    attorneys'    and    other

professionals'  fees  and expenses), claims  and  damages  asserted

against, resulting to, imposed upon or suffered by the State to the

extent  arising  from  or attributable to (i)  any  breach  of  any

representation  or warranty of United contained in this  Agreement,

(ii)  any breach or nonperformance of any covenant or agreement  of

United  contained in this Agreement, or (iii) any action,  suit  or

proceeding  relating to or challenging any of  the  obligations  of

United set forth in this Agreement.

     1003.     Survival of Representations, Etc.  The parties agree

that  each  of  the  representations,  warranties,  covenants   and

agreements contained herein shall survive the consummation  of  the

transactions contemplated hereby.




                            ARTICLE XI
                            TERMINATION

     1101.      Termination.  Notwithstanding  any other  provision

of  this  Agreement,  this  Agreement may  be  terminated  and  the

transactions contemplated hereby may be abandoned:

      
      (a)  by mutual written agreement of the parties hereto;

      (b)  by the State, in the event of a material breach by United
           
of  its obligations set forth in Section 601 (a), (b), (c), (f)  or

(g)  hereof  which  is  not cured within forty-five  (45)  days  of

written notice thereof;

     (c)   by United, in the event of (i) a material breach by  the

State  of its obligations set forth in Sections 501 or 1211 hereof,

which  is  not cured within forty-five (45) days of written  notice

thereof  or  (ii)  in the event that the financial  incentives  set

forth  in  Section  402  hereof of this  Agreement  have  not  been

provided  within the time period set forth in Section  402  hereof;

and

     (d)    unless   earlier  terminated,  this   Agreement   shall

automatically  terminate and be of no further force  or  effect  on

November 22, 2050.

      1102.      Procedure upon Termination.  In the event  of  the

termination   of  this  Agreement  and  the  abandonment   of   the

transactions  contemplated hereby pursuant to Section 1101  hereof,

written  notice thereof shall forthwith be given by  the  party  so

terminating to the other party, and this Agreement shall terminate,

and  the  transactions  contemplated  hereby  shall  be  abandoned,

without further action by the State or United hereunder.

     1103.       Effect  of  Termination.  If  this  Agreement   is

terminated pursuant to Section 1101 hereof:

     (a)   Except  as provided in Section 1104 hereof, neither  the

State  nor  United shall have any liability hereunder to the  other

party hereto;

     (b)   United shall have no obligation to reimburse  the  State

for  amounts expended from the Account pursuant to Section  401  of

this Agreement; and

     (c)   The  provisions of Sections 1001, 1002, 1003,  1104  and

1201 hereof and this Section 1103 shall survive any termination  of

this Agreement.

     1104.      Breach.   In  no  event shall termination  of  this

Agreement limit or restrict the rights and remedies of either party

hereto against the other party to the extent that such other  party

has  willfully  breached  the  terms of  this  Agreement  prior  to

termination hereof.

                                 
      1105.     Other Rights and Remedies.  The right of any party

 hereto to terminate this Agreement shall not in any manner affect

 or limit such party's right to exercise any other right or remedy

 it may have in addition to its right of termination hereunder, or

   any right or remedy it may have under the Original Agreement.

                            ARTICLE XII


                           MISCELLANEOUS

     1201.     Expenses.  Except as otherwise provided herein, each

party  shall pay all fees and expenses incurred by it in connection

with  the  transactions  contemplated by  this  Agreement.   United

acknowledges  that  the  costs  incurred  in  connection  with  the

issuance  of  the  State Bonds may be disbursed from  the  proceeds

thereof,  so long as the amount required to be deposited  into  the

Account pursuant to Section 402 of this Agreement is so deposited.

     1202.     Further Assurances.  From time to time, either party

may  request  the  other  party  to  execute  and  deliver  to  the

requesting  party such documents and to take such other  action  as

the  party  may  reasonably  request in order  to  consummate  more

effectively the transactions contemplated herein.

     
     1203.     Alternative Dispute Resolution; Arbitration.
     
     (a)   If a dispute arises between the parties relating to this

Agreement,  the parties agree, to the fullest extent  permitted  by

law, to use the following procedure to resolve the dispute:


           (i)   A meeting shall be held promptly between  the
     parties,  attended  by  individuals with  decision-making
     authority regarding the dispute, to attempt in good faith
     to negotiate a resolution of the dispute;

          (ii)  If,  within  15 days after that  meeting,  the
     parties  have not succeeded  in negotiating a  resolution
     of the  dispute, they hereby agree to submit the dispute
     to mediation in accordance with the Commercial Mediation
     Rules of the American Arbitration Association and to bear
     equally the costs of the mediation;

           (iii)   The parties will jointly appoint a mutually
     acceptable  mediator, seeking assistance in  this  regard
     
     from  the  American Arbitration Association if  they  are
     unable to agree upon this appointment within 15 days from
     the conclusion of the negotiation period; and
     
          (iv)  The parties agree to participate in good faith
     in  the mediation and negotiations related thereto for  a
     period of 30 days.  If the parties are not successful  in
     resolving  the  dispute through the mediation,  then  the
     parties  agree that, to the fullest extent  permitted  by
     law,  the dispute shall be settled by binding arbitration
     in accordance with the procedures set forth below.
     (b)   If any dispute cannot be settled in accordance with  the

procedures set forth above, to the fullest extent permitted by law,

then:

          (i)    Either  the  State  or  United  may   request
     arbitration  of  the dispute by giving  the  other  party
     written  notice that specifies the matter  sought  to  be
     arbitrated and designates a person to act as arbitrator;

          (ii)  within 10 business days after receipt of  that
     notice,  the State or United, as the case may  be,  shall
     send  written notice to the party requesting  arbitration
     and designating a second person to act as arbitrator;
     
          (iii)  Within 10 business days after receipt of  the
     written   notice  of  the  second  arbitrator,  the   two
     arbitrators, by mutual agreement, shall designate a third
     arbitrator.   If  the time provided in subparagraph  (ii)
     above  expires  before the written notice of  the  second
     arbitrator  is sent to the party requesting  arbitration,
     the  first  arbitrator shall designate the two additional
     arbitrators.
     
          (iv)   Promptly   after   the   third   arbitrator's
     designation,  but  in  no  event  later  than   30   days
     thereafter,  at  a date to be set by the arbitrators,  an
     arbitration   hearing  shall  be  held  in  Indianapolis,
     Indiana.   The  Commercial  Arbitration  Rules   of   the
     American  Arbitration  Association  shall  apply  at  the
     arbitration  hearing,  and the  three  arbitrators  shall
     allow  the  State  and  United to each  present,  in  the
     presence of the other party, its case, including  opening
     statement,  evidence, witnesses, if any,  and  summation.
     The  arbitrators  shall render their decision  within  30
     days of the hearing; and


          (v)  The decision and award, if any, of the majority
     of   the   arbitrators  shall  be  final,   binding   and
     nonappealable as to the parties hereto.  Any award  shall
     provide  for  the  entire  costs  and  expenses  of   the
     arbitration, including reasonable attorney's fees, by the
     losing  party where it is determined that the arbitration
     has been made necessary by the refusal or failure of that
     party  to negotiate in good faith the matter that is  the
     subject   matter  of  the  arbitration.    If   no   such
     determination  is  made, each party shall  bear  its  own
     costs and expenses.  Judgment may be entered on any award
     so rendered in any court of competent jurisdiction.

     1204.   Parties in Interest.  This Agreement shall be  binding

upon,  inure to the benefit of and be enforceable by the respective

successors and permitted assigns of the parties hereto.  The rights

and  obligations  of  the State and United  hereunder  may  not  be

assigned without the consent of the other party.

     1205.   Amendments and Waiver.  This Agreement may be  amended

only by a written instrument executed by both of the parties.   Any

condition  precedent  to  a party's obligations  hereunder  may  be

waived in writing by that party to the extent permitted by law.

      1206.  Entire Agreement; Non-Merger.  This Agreement and  the

schedules  and exhibits hereto, together with the other  agreements

referred to herein, contain the entire understanding of the parties

hereto  with  respect  to  their subject  matter.   This  Agreement

supersedes  all  prior  agreements  and  understandings,  oral  and

written,  with  respect  to the subject matter  set  forth  herein,

provided that (a) the Original Agreement shall not be deemed to  be

merged into or modified or amended or superseded by this Agreement,

and  (b)  this  Agreement is and shall be deemed to be supplemental

only  to  the  Original Agreement with respect  to  the  additional

rights  and  obligations of United and the State set forth  herein.

Except  as so supplemented by the provisions set forth herein,  the

Original  Agreement shall continue in full force  and  effect  with

respect  to  the  rights, title, interests and obligations  of  the

State and United.

    1207.   Headings.  The article  and section headings  contained

in  this  Agreement are for reference purposes only and  shall  not

affect  in any way the meaning or interpretation of this Agreement.

1208.   Notices.   All  notices,  claims,  certificates,  requests,

demands and other communications hereunder shall be in writing  and

shall be deemed to have been duly given if delivered personally  or

mailed  (registered  or  certified mail,  postage  prepaid,  return

receipt requested) as follows:

     If to the State:

          
          Indiana Department of Commerce
          Office of the Lieutenant Governor
          Indianapolis, Indiana 46204
          Attention: Frank O'Bannon, Director
         
    If to United:
          
          United Air Lines, Inc.
          1200 Algonquin Road
          Elk Grove Township, Illinois 60007
          Attention: Stuart Oran, Esq.
                     Executive Vice President 
                     and General Counsel

     With a copy to:

                                 
             Larry Clark, Vice President - Properties
                                           and Facilities

or  to  such other address as the person to whom notice  is  to  be

given  may have previously furnished to the other party in  writing

in  the  manner set forth above;  provided, that notice of a change

of address shall be deemed given only upon receipt.

      1209.  Third Parties.  Nothing herein expressed or implied is

intended or shall be construed to confer upon or give to any entity

or  person  other than the parties hereto and their  successors  or

permitted assigns any rights or remedies under or by reason of this

Agreement.


      210.  Independent Parties.  With respect  to  the  State  and

United, each   party, in the performance of this Agreement, will be

acting  in  an   individual capacity and not as an agent, employee,

partner, joint venturer or associate of one another.  The employees

or  agents of the State shall not be deemed or construed to be  the

employees  or  agents  of United, and the employees  or  agents  of

United  shall  not  be deemed or construed to be the  employees  or

agents  of  the State for any purposes whatsoever.  Neither  United

nor  the  State will assume any liability for any injury (including

death)  to any persons, or any damage to any property, arising  out

of the acts or omissions of the agents, employees or subcontractors

of the other party.

       1211.    Appropriations.    The  payment   and   performance

obligations of the State under  Section 1001  of this Agreement are

subject to the appropriation and the availability of funds and,  in

this  regard, this Agreement may be terminated by United, in  whole

or  in part, if the State Budget Director makes an official written

determination  that  funds  are  not  appropriated   or   otherwise

available to support continuation of performance of the State under

this  Agreement.   An official determination by  the  State  Budget

Director that funds are not appropriated or otherwise available  to

support continuation of performance shall be final and conclusive.

     1212.  Non-Discrimination.  United and its subcontractors,  if

any,  shall not discriminate against any employee or applicant  for

employment  in the performance of this Agreement, with  respect  to

the hire, tenure, terms, conditions or privileges of employment  or

any matter directly or indirectly related to employment because  of

such person's race, color, religion, sex, handicap, national origin

or ancestry.

     1213.   Drug-Free  Workplace.   United  hereby  covenants  and

agrees  (a) to continue to make a good faith effort to provide  and

maintain  during the term of this  Agreement a drug-free  workplace

at  the  IMC Facility; and (b) that it will give written notice  to

the  State  within 10 days after receiving actual notice  that  any

Facility  Employee has been convicted of a criminal drug  violation

occurring at the Site. In addition, United hereby acknowledges that

the entry of the State into this Agreement is expressly subject  to

the  Drug-Free Workplace Certificate, attached as Exhibit B hereto.

United covenants to undertake its best efforts to comply with  this

Section  1213  and the representations of United set forth  in  the

Drug-Free Workplace Certificate.

       1214.   Counterparts.   This  Agreement  may   be   executed

simultaneously  in  several counterparts, each of  which  shall  be

deemed an original, but all of which together shall constitute  one

and the same instrument.

    1215.   Governing Law.  This Agreement  shall be  governed  by,

and  construed  and enforced in accordance with, the  laws  of  the

State of Indiana, without regard to the conflicts of law principles

thereof.

     1216.   Severability.  In the event  that any clause,  portion

or  section of this Agreement is unenforceable or invalid  for  any

reason, as long as the economic benefits expected to be derived  by

each   of   the   parties   are  not  materially   affected,   such

unenforceability or invalidity shall not affect the  enforceability

or validity of the remainder of this Agreement.







     IN WITNESS WHEREOF, the parties hereto have executed this

Agreement as of the day and year first above written.

                             
                              STATE OF INDIANA, ACTING BY AND
                              THROUGH ITS DEPARTMENT OF
                              COMMERCE

                              By: /s/ Frank O'Bannon
                                  Frank O'Bannon, Director

APPROVED:

DEPARTMENT OF ADMINISTRATION:

By:  /s/ William Shenberg
Date:  28 December 1994


STATE BUDGET AGENCY:

By:  /s/ Jean S. Blackwell
     Jean S. Blackwell,
     State Budget Director

Date:  28 December 1994


APPROVED ONLY AS TO FORM AND
LEGALITY WITH RESPECT TO THE STATE:

By:  /s/ Pamela Carter
     Pamela Carter,
     Attorney General

Date:  28 December 1994


APPROVED AND RATIFIED

By:  /s/ Evan Bayh
     Evan Bayh, Governor

Date:  4 January 1995






                              ****

                              UNITED AIR LINES, INC.

                              By:  /s/ Stuart I. Oran
                              Name:  Stuart I. Oran
                               
                              Title:  Executive Vice President
                                      Corporate Affairs and
                                      General Counsel


ATTEST:

                             BY:  /s/ Mary Jo Georgen
                             Name:  Mary  Jo C. Georgen
                              
                              
                              Title:  Assistant Secretary
                              
                              
                              
                              
                              
                              






                           EXHIBIT LIST

A.         Description of the 757/767 Project (Section 101)

B.        Drug-Free Workforce Certificate (Section 1213)













                             EXHIBIT A

                Description of the 757/767 Project



                         [To be supplied]






                             EXHIBIT B

                         STATE OF INDIANA
                 DRUG-FREE WORKPLACE CERTIFICATION


     Pursuant  to Executive Order No. 95-0, April 12, 1990,  Issued
by  Governor  Evan  Bayh, the Indiana Department of  Administration
requires the Inclusion of this certification In all contracts  with
and  grants  from the State of Indiana in excess  of  $25,000.   No
award  of  a  contract  or grant shall be made,  and  no  contract,
purchase  order  or agreement, the total amount  of  which  exceeds
$25,000,  shall  be  valid unless and until this certification  has
been  fully  executed by the Contractor or Grantee and attached  to
the contract or agreement as part of the contract documents.  False
certification  or  violation  of the certification  may  result  in
sanctions  including,  but not limited to, suspension  of  contract
payments, termination of the contract or agreement and/or debarment
of  contracting opportunities with the State for up  to  three  (3)
years.
     
     The  Contractor/Grantee  certifies and  agrees  that  it  will
        provide a drug-free workplace by:

      (a)   Publishing  and providing to all  of  its  employees  a
statement   notifying  employees  that  the  unlawful  manufacture,
distribution,  dispensing,  possession  or  use  of  a   controlled
substance   is   prohibited  in  the  Contractor's  workplace   and
specifying  the  actions that will be taken against  employees  for
violations of such prohibition; and

     (b)  Establishing  a  drug-free awareness  program  to  Inform
employees about (1) the dangers of drug abuse in the workplace; (2)
the  Contractor's policy of maintaining a drug-free workplace;  (3)
any   available  drug  counseling,  rehabilitation,  and   employee
assistance programs; (4) the penalties that may be imposed upon  an
employee for drug abuse violations occurring in the workplace;

     (c)   Notifying  all  employees in the statement  required  by
subparagraph (a) above that as a condition of continued  employment
the  employee will (1) abide by the terms of the statement; and (2)
notify the employer of nay criminal drug statute conviction  for  a
violation  occurring In the workplace no later than five  (5)  days
after such conviction;

     (d)  Notifying in writing the contracting State Agency and the
Indiana  Department of Administration within ten  (10)  days  after
receiving  notice from an employee under subdivision (c)(2)  above,
or otherwise receiving actual notice of such conviction;

      (e)   Within  thirty (30) days after receiving  notice  under
subdivision  (c)(2) above of a conviction, Imposing  the  following
sanctions or remedial measures on any employee who is convicted  of
drug   abuse  violations  occurring  in  the  workplace:  (1)  take
appropriate  personnel  action against  the  employee,  up  to  and
Including   termination;   or  (2)   require   such   employee   to
satisfactorily   participate  in  a  drug   abuse   assistance   or
rehabilitation  program approved for such purposes  by  a  Federal,
State  or  local  health,  law enforcement,  or  other  appropriate
agency; and

     (f)   Making  a  good  faith effort  to  maintain  a  drugfree
workplace  through the implementation of subparagraphs (2)  through
(3) above.

    THE UNDERSIGNED AFFIRMS, UNDER PENALTIES OF PERJURY, THAT HE OR
SHE  IS  AUTHORIZED TO EXECUTE THIS CERTIFICATION ON BEHALF OF  THE
DESIGNATED ORGANIZATION.



                                       
Printed  Name of Organization                      Contract/Grantee
ID Number

                                       
Signature of Authorized Representative            Date

                                       
Printed Name and Title


State Form                                        DAPW 150
44260                                             Rev. 8/90





                                                 Exhibit 10.37
                                
                                
                        OFFICER BENEFITS
           UAL CORPORATION AND UNITED AIR LINES, INC.


Welfare Benefits

Each officer of United and UAL is eligible to receive "split-
dollar" life insurance and 24-hour all-risk accidental death and
dismemberment ("AD&D") insurance.  Under the split-dollar
program, officers receive whole life coverage equal to
approximately three times base salary less $50,000.  UAL and
United pay the entire premium for the first seven years, partly
with cash and partly with loans against the policy's cash value.
UAL and United recover their payments from the cash value of the
policy in the eighth policy year, or when the policy is paid up.
The AD&D insurance pays a $250,000 benefit upon the accidental
death or dismemberment of the insured.

Officers are covered by a self-insured supplemental long term
disability plan which provides a supplement to the Company's
disability benefit for certain management employees equal to 50%
of monthly pay in excess of $20,000.

Company Cars

Designated senior officers are entitled to the personal use of
cars owned or leased by United.

Club Memberships

United pays the cost of social club memberships of designated
senior officers only upon approval by the Chairman and Chief
Executive Officer.

Travel Benefits
     
Free travel is provided on United for active and retired officers
of UAL and United and their spouses and dependent children, and
payments are made to federal and state tax authorities with
respect to the imputed tax liability on up to $12,000 in value of
travel benefits for active officers, and up to $6,000 for retired
officers.  This benefit also includes admission to United's Red
Carpet Club.  Active officers who are also directors of UAL
received the benefits provided to active directors.

Financial Advisory Services

Each officer of UAL and United at the Senior Vice President level
and above are entitled to receive reimbursement for costs
incurred for professional financial counseling in the areas of
cash management, taxes, investments,, insurance and estate
planning.  Reimbursement is limited to $7,000 in the first year
the officer is admitted to the program, and to $4,000 per year
thereafter.  Unused reimbursements may be carried over and used
in succeeding years.








<TABLE>
<CAPTION>
                                                                      Exhibit 11
                      UAL Corporation and Subsidiary Companies

                Calculation of Fully Diluted Net Earnings Per Share
                          (In Millions, Except Per Share)


                                                     Year Ended December 31    
                                                 1994(1)    1993(1)    1992(1)
<S>                                              <C>        <C>        <C>
Earnings or loss:
  Earnings (loss) before extraordinary item and
    cumulative effect of accounting changes      $   14     $  (31)    $  (417)
  Interest on Air Wis convertible debentures,
    net of income tax                                -           2           2 
  Earnings (loss) before cumulative effect of
    accounting changes for fully diluted
    calculation                                      14        (29)       (415)
  Extraordinary loss on early
    extinguishment of debt                           -         (19)         - 
  Cumulative effect of accounting changes           (25)        -         (540)
  Net loss for fully diluted calculation         $  (11)    $  (48)    $  (955)

Shares:
  Average number of shares of common
    stock outstanding during the year              18.8       24.3        24.1
  Average number of shares of ESOP preferred 
    stock outstanding during the year               0.3         -           - 
  Additional shares assumed issued at the date
    of issuance for conversion of convertible
    preferred stock                                  -         3.4          - 
  Additional shares assumed issued at the
    beginning of the year (or at the date of
    merger) for conversion of Air Wis
    convertible debentures                           -         0.1         0.1
  Additional shares assumed issued at the
    beginning of the year (or at the date of
    issuance) for exercises of dilutive stock
    options and stock award plans (after
    deducting
 shares assumed purchased 
    under the treasury stock method)                0.3        0.6         0.3
  Average number of shares for fully 
    diluted calculation                            19.4       28.4        24.5

Fully diluted per share amounts:
  Earnings (loss) before extraordinary item and
    cumulative effect of accounting changes      $ 0.74     $(1.02)    $(16.96)
  Extraordinary loss on early
    extinguishment of debt                           -       (0.66)         - 
  Cumulative effect of accounting changes         (1.33)        -       (22.00)
  Net loss                                       $(0.59)    $(1.68)    $(38.96)

               
(1)   This calculation is submitted in accordance with Regulation S-K item 
      601(b)(11), although it is contrary to paragraph 40 of APB Opinion No. 15 
      because it produces an antidilutive result.
</TABLE>





<TABLE>
<CAPTION>

                                                               Exhibit 12.1

                 UAL Corporation and Subsidiary Companies

             Computation of Ratio of Earnings to Fixed Charges

                                         Year Ended December 31         
                               1994      1993     1992     1991    1990 
                                             (In Millions)
<S>                           <C>       <C>      <C>      <C>     <C>
Earnings:

  Earnings (loss) before
    income taxes and
    extraordinary items       $  170    $  (47)  $ (656)  $(508)  $164
  Fixed charges,
    from below                 1,052     1,104    1,001     749    592 
  Interest capitalized           (41)      (51)     (92)    (91)   (71)

    Earnings                  $1,181    $1,006   $  253   $ 150   $685


Fixed charges:

  Interest expense            $  372    $  358   $  329   $ 211   $193

  Portion of rental expense
    representative of the
    interest factor              680       746      672     538    399

      Fixed charges           $1,052    $1,104   $1,001   $ 749   $592


Ratio of earnings to
  fixed charges                 1.12       (a)      (a)     (a)   1.16


             
(a)   Earnings were inadequate to cover fixed charges by $98 million in 1993, 
      $748 million in 1992 and $599 million in 1991.
</TABLE>







<TABLE>
<CAPTION>
                                                               Exhibit 12.2

                 UAL Corporation and Subsidiary Companies

             Computation of Ratio of Earnings to Fixed Charges

                 and Preferred Stock Dividend Requirements

                                         Year Ended December 31         
                               1994      1993     1992     1991    1990 
                                             (In Millions)
<S>                           <C>       <C>      <C>      <C>     <C>
Earnings:

  Earnings (loss) before
    income taxes and
    extraordinary items       $  170    $  (47)  $ (656)  $(508)  $164
  Fixed charges and
    preferred stock
    dividend requirements,
    from below                 1,184     1,154    1,001     749    592 
  Interest capitalized           (41)      (51)     (92)    (91)   (71)

    Earnings                  $1,313    $1,056   $  253   $ 150   $685


Fixed charges:

  Interest expense            $  372    $  358   $  329   $ 211   $193

  Preferred stock dividend
    requirements                 132       50       -        -      -

  Portion of rental expense
    representative of the
    interest factor              680       746      672     538    399

  Fixed charges and
    preferred stock
    dividend requirements     $1,184    $1,154   $1,001   $ 749   $592

Ratio of earnings to
  fixed charges and
  preferred stock
  dividend requirements         1.11       (a)     (a)      (a)   1.16


             
(a)   Earnings were inadequate to cover fixed charges and preferred stock 
      dividend requirements by $98 million in 1993, $748 million in 1992 and 
      $599 million in 1991.
</TABLE>






                                                  Exhibit 21
                                
                                
                                
                                
                  UAL CORPORATION SUBSIDIARIES
                                

Subsidiary               Place of Incorporation    Business Name   

Air Wis Services, Inc.         Wisconsin           Air Wis Services, Inc. 
Four Star Insurance            Bermuda             Four Star Insurance
Company, Ltd.                                      Company, Ltd.        

Mileage Plus, Inc.             Delaware            Mileage Plus, Inc. 

UAL Leasing Corporation        Delaware            UAL Leasing Corporation 
U-C Corp.                      Delaware            U-C Corp.     

United Air Lines, Inc.         Delaware            United Air Lines, Inc. 







                                                Exhibit 23.1





          Consent of Independent Public Accountants
                              
                              
As independent public accountants, we hereby consent to the
incorporation of our report included in the UAL Corporation
Form 10-K for the year ended December 31, 1994, into the
Company's previously filed Post-Effective Amendment No. 1 to
Form S-8 Registration Statement (File No.  2-67368) and Post-
Effective Amendment No. 2 to Form S-8 Registration Statement
(File No. 33-37613) for the Employees' Stock Purchase Plan
of UAL Corporation; Post-Effective Amendment No. 1 to Form S-
8 Registration Statement (File No. 33-38613) for the United
Air Lines, Inc. Management and Salaried Employees' 401(k)
Retirement Savings Plan; Form S-8 Registration Statement
(File No. 33-57331) and Post-Effective Amendment No. 1 to
Form S-8 Registration Statement (File No. 33-44552) for the
United Air Lines, Inc. Ground Employees' 401(k) Retirement
Savings Plan; Post-Effective Amendment No. 1 to Form S-8
Registration Statement (File No. 33-44553) for the United
Air Lines, Inc. Flight Attendant Employees' 401(k)
Retirement Savings Plan; Post-Effective Amendment No. 2 to
Form S-8 Registration Statement (File No. 33-41968) and Form
S-8 Registration Statement (File No. 33-10206) for the UAL
Corporation 1981 Incentive Stock
 Plan; Form S-3 Registration
Statement (File No. 33-57192), as amended; Post-Effective
Amendment No. 1 to Form S-8 Registration Statement (File No.
33-59950) for the United Air Lines, Inc. Pilots' Directed
Account Retirement Income Plan; and Form S-4 Registration
Statement (File No. 33-57579), as amended.

                                   /s/ Arthur Andersen LLP

                                   Arthur Andersen LLP


Chicago, Illinois
March 8, 1995




<TABLE> <S> <C>

<ARTICLE>  5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UAL 
CORPORATION'S STATEMENT OF CONSOLIDATED OPERATIONS FOR THE YEAR ENDED 
DECEMBER 31, 1994 AND STATEMENT OF CONSOLIDATED FINANCIAL POSITION AS OF 
DECEMBER 31, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 
FINANCIAL STATEMENTS.
<MULTIPLIER>  1,000,000
       
<S>                               <C>
<FISCAL-YEAR-END>             DEC-31-1994
<PERIOD-START>                JAN-01-1994
<PERIOD-END>                  DEC-31-1994
<PERIOD-TYPE>                      12-MOS
<CASH>                                500
<SECURITIES>                        1,032
<RECEIVABLES>                         911
<ALLOWANCES>                           22
<INVENTORY>                           285
<CURRENT-ASSETS>                    3,192
<PP&E>                             11,956
<DEPRECIATION>                      5,233
<TOTAL-ASSETS>                     11,764
<CURRENT-LIABILITIES>               4,906
<BONDS>                             3,617
<PREFERRED-MANDATORY>                   0
<PREFERRED>                             0
<COMMON>                                0
<OTHER-SE>                           (316)
<TOTAL-LIABILITY-AND-EQUITY>       11,764
<SALES>                                 0
<TOTAL-REVENUES>                   13,950
<CGS>                                   0
<TOTAL-COSTS>                      13,429
<OTHER-EXPENSES>                        0
<LOSS-PROVISION>                        0
<INTEREST-EXPENSE>                    372
<INCOME-PRETAX>                       171
<INCOME-TAX>                           94
<INCOME-CONTINUING>                    77
<DISCONTINUED>                          0
<EXTRAORDINARY>                         0
<CHANGES>                             (26)
<NET-INCOME>                           51
<EPS-PRIMARY>                       (0.61)
<EPS-DILUTED>                           0 
        

</TABLE>






                                                      EXHIBIT 99.1






                  SECURITIES AND EXCHANGE COMMISSION

                           Washington, D.C.





                               FORM 11-K

                             ANNUAL REPORT

                   Pursuant to Section 15(d) of the

                    Securities Exchange Act of 1934

              For the Fiscal Year Ended December 31, 1994





           Employees' Stock Purchase Plan of UAL Corporation
                       (Full title of the Plan)


                            UAL Corporation
             (Employer sponsoring the Plan, issuer of the
               participations in the Plan and issuer of
                 the shares held pursuant to the Plan)


           1200 Algonquin Road, Elk Grove Township, Illinois
                           Mailing Address:
       UAL Corporation, P.O. Box 66919, Chicago, Illinois  60666
               (Address of principal executive offices)



                  REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To UAL Corporation:

          We have audited the accompanying statement of financial position 
of the Employees' Stock Purchase Plan of UAL Corporation (the "Plan") as of 
December 31, 1994 and 1993 and the related statement of changes in 
participants' equity for each of the three years in the period ended 
December 31, 1994.  These financial statements are the responsibility of the 
Plan's administrator.  Our responsibility is to express an opinion on these 
financial statements based on our audits.

          We conducted our audits in accordance with generally accepted 
auditing standards.  Those standards require that we plan
 and perform the 
audit to obtain reasonable assurance about whether the financial statements 
are free of material misstatement.  An audit includes examining, on a test 
basis, evidence supporting the amounts and disclosures in the financial 
statements.  An audit also includes assessing the accounting principles used 
and significant estimates made by the Plan's administrator, as well as 
evaluating the overall financial statement presentation.  We believe that 
our audits provide a reasonable basis for our opinion.

          In our opinion, the financial statements referred to above present 
fairly, in all material respects, the financial position of the Plan as of 
December 31, 1994 and 1993 and the changes in its participants' equity for 
each of the three years in the period ended December 31, 1994, in conformity 
with generally accepted accounting principles.



                                           /s/ ARTHUR ANDERSEN LLP

                                           ARTHUR ANDERSEN LLP


Chicago, Illinois
February 23, 1995




Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, 

the sponsor and issuer of the participants of the Plan, UAL 

Corporation, has duly caused this Annual Report to be signed on its 

behalf by the undersigned thereunto duly authorized.







                                            UAL Corporation          
                                             Administrator




Dated February 23, 1995          By /s/ Douglas A. Hacker       
                                    Douglas A. Hacker
                                    Senior Vice President - Finance





                    EMPLOYEES' STOCK PURCHASE PLAN
                          OF UAL CORPORATION

                    STATEMENT OF FINANCIAL POSITION
                (In Thousands, Except Number of Shares)


<TABLE>
<CAPTION>

                                                 December 31    
                                               1994        1993 

<S>                                          <C>         <C>
ASSETS

Cash                                         $   250     $  -   

Participants' payroll deductions
  receivable from UAL Corporation                 71          34

Investment in common stock of
  UAL Corporation, at quoted market
  value (1994 - 124,429 shares, cost
  $11,263; 1993 - 262,369 shares, cost 
  $29,402).                                   10,880      38,109

                                             $11,201     $38,143


LIABILITIES AND PARTICIPANTS' EQUITY


Payable to terminating and partially
  withdrawing participants, at
  quoted market value (1994 - 1,271
  shares, cost $116; 1993 - 9,462
  shares, cost $1,142).                      $   112     $ 1,375

Participants' equity                          11,089      36,768

                                             $11,201     $38,143


The accompanying notes to financial statements are an integral part of 
these statements.

</TABLE>


                    EMPLOYEES' STOCK PURCHASE PLAN
                          OF UAL CORPORATION

             STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY
                            (In Thousands)


<TABLE>
<CAPTION>

                                            Year Ended December 31    
                                           1994       1993       1992 

<S>                                      <C>        <C>        <C>
Balance at beginning of year             $36,768    $43,505    $31,574

Increase (decrease) during year:

  Participants' payroll deductions         4,601      8,600     16,644

  Company contribution                      -           227      2,943

  Realized gain on stock distributed
    to participants                        4,925      1,416        510

  Unrealized appreciation (depreciation)
    in value of investment                (9,090)     3,761     (3,927)

  Stock and cash for fractional
    shares distributed or amounts
    payable to participants, at
    market value                          (6,489)   (20,741)    (4,239)

  Cash distributed in connection
    with recapitalization                (19,626)      -          -   


                                         (25,679)    (6,737)    11,931

Balance at end of year                   $11,089    $36,768    $43,505




The accompanying notes to financial statements are an integral part of 
these statements.

</TABLE>


                      EMPLOYEES' STOCK PURCHASE PLAN
                            OF UAL CORPORATION



                      NOTES TO FINANCIAL STATEMENTS


(1)  The Plan

The Employees' Stock Purchase Plan of UAL Corporation (the "Plan") is 
sponsored by UAL Corporation ("UAL").  UAL offers participation in the 
Plan to eligible employees of UAL and its subsidiaries.

(2)  Purchase and Distribution of Stock

The Plan invests only in the common stock of UAL.  From January 1, 1991 
through January 31, 1993, participants purchased stock at a 15% discount 
from current market prices.  The difference between the market price and 
the participant's cost was contributed by United Airlines, Inc., a UAL 
subsidiary.  Effective February 1, 1993, the 15% discount was discontinued.

Purchases are made by the Plan monthly, and the shares purchased are 
credited to the accounts of each participant on the basis of the ratio of 
the participant's contribution to total participants' contributions for 
the month.  The cost of common stock purchased for the Plan includes all 
brokerage charges involved in the purchase.

When shares of stock are distributed to the individual participants 
pursuant to the terms of the Plan, the market value of such shares is 
removed from the investment account of the Plan.

Terminating participants receive a certificate for the full number of 
shares, plus cash for the fractional shares, held for their accounts.  
Partially withdrawing participants receive certificates for the full 
number of shares withdrawn.  There are no forfeiture provisions under the 
Plan with respect to participants' contributions.

(3)  Investment in Common Stock of UAL

The investment in common stock of UAL is valued at the year-end published 
market prices as reported by the New York Stock Exchange.

(4)  Realized Gain on Stock Distributed to Participants

Gains on stock distributed to participants are realized to the extent of 
the difference between cost at acquisition and market value at the date of 
distribution.

(5)  Unrealized Appreciation (Depreciation) in Value of Investment

The unrealized appreciation (depreciation) in the value of investment is 
the change from the prior year-end to the current year-end in the 
difference between the market value and the cost of the investment.


<TABLE>
<CAPTION>

The following is a summary of unrealized appreciation (depreciation):

                                           1994      1993       1992 
                                               (In Thousands)
<S>                                      <C>       <C>         <C>
Balance at beginning of year             $ 8,707   $ 4,946     $ 8,873

Increase (decrease) during year           (9,090)    3,761      (3,927)

Balance at end of year                   $  (383)  $ 8,707     $ 4,946
</TABLE>



(6)  Administrative Expenses of the Plan

All administrative expenses of the Plan are paid by UAL.

(7)  Federal Income Tax

Under existing federal income tax laws, the Plan is not subject to federal 
income tax.  Any dividend income is taxable to the participants upon 
distribution and receipt.  When any shares of stock or rights acquired 
under the Plan are sold by or for a participant, any gain or loss must be 
recognized by that participant.

The 15% discount which was offered to participants was also considered 
taxable income to the participant.

(8)  Employee Investment Transaction and Recapitalization

On July 12, 1994, the shareholders of UAL approved a plan of 
recapitalization to provide an approximately 55% equity interest in UAL to 
certain employees of United in exchange for wage concessions and work-rule 
changes.  The employees' equity interest will be allocated to individual 
employees through the year 2000 under Employee Stock Ownership Plans 
("ESOPs") which were created as a part of the recapitalization.  The 
employee interest may increase to 63%, depending on the average market 
value of UAL common stock in the year after the transaction closed.  Based 
on the average market value of UAL common stock through February 23, 1995, 
the market value of UAL common stock for the remainder of the measuring 
period would have to average at least $204 for any adjustment to be made 
in the ESOP percentage interest.  Pursuant to the terms of the plan of 
recapitalization, holders of old UAL common stock received approximately 
$2.1 billion in cash and the remaining 45% (subject to a decrease down to 
37%) of the equity in the form of new common stock, which was issued at 
the rate of one half share of new common stock for each share of old 
common stock.

The cash consideration received by the Plan was distributed to Plan 
participants at a rate of $84.81 per old common share held in the Plan as 
of July 12, 1994.  Additionally, each old common share held by 
participants as of this date was exchanged for one half new common share, 
thereby reducing the Plan participants' balances proportionately.

 
                                                  Exhibit 23.1


                 Consent of Independent Public Accountants

As independent public accountants, we hereby consent to the incorporation
of our report included in this Form 11-K, into the Company's previously 
filed Post-Effective Amendment No. 1 to Form S-8 Registration Statement
(File No. 2-67368) and the Post-Effective Amendment No. 2 to Form S-8 
Registration Statement (File No. 33-37613) for the Employees' Stock
Purchase Plan of UAL Corporation.

                                        /s/ Arthur Andersen LLP

                                        Arthur Andersen LLP

Chicago, Illinois
March 8, 1995