<PAGE>
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
 
                               ----------------
 
                                 SCHEDULE 13E-3
                        RULE 13E-3 TRANSACTION STATEMENT
           (PURSUANT TO SECTION 13(E) OF THE SECURITIES EXCHANGE ACT
                       OF 1934 AND RULE 13E-3 THEREUNDER)
 
                                UAL CORPORATION
                                (Name of Issuer)
                   UAL CORPORATION AND UNITED AIR LINES, INC.
                       (Name of Persons Filing Statement)
 
                  COMMON STOCK, PAR VALUE $5 PER SHARE, OF UAL
                         (Title of Class of Securities)
 
                                 902549 5 10 4
                    (CUSIP Numbers of Classes of Securities)
 
                            LAWRENCE M. NAGIN, ESQ.
                                UAL CORPORATION
                                 P.O. BOX 66100
                            CHICAGO, ILLINOIS 60666
                                 (708) 952-4000
 
          (Name, Address and Telephone Number of Person Authorized to
   Receive Notices and Communications on Behalf of Persons Filing Statement)
 
                                   Copies to:
                            PETER ALLAN ATKINS, ESQ.
                            THOMAS H. KENNEDY, ESQ.
                             ERIC L. COCHRAN, ESQ.
                      SKADDEN, ARPS, SLATE, MEAGHER & FLOM
                                919 THIRD AVENUE
                            NEW YORK, NEW YORK 10022
 
This statement is filed in connection with (check the appropriate box):
a.  x  The filing of solicitation materials or an information statement subject
   --- to Regulation 14A, Regulation 14C, or Rule 13e-3(c) under the Securities
       Exchange Act of 1934.
b.  x  The filing of a registration statement under the Securities Act of 1933.
   ---
c.     A tender offer.
   ---
d.     None of the above.
   ---
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies.  x
                                                        ---
 
                           CALCULATION OF FILING FEE
- --------------------------------------------------------------------------------
 
Transaction Valuation: $3,677,241,268*       Amount of Filing Fee: $735,448.25
 
- --------------------------------------------------------------------------------
*    For purposes of calculating fee only. This amount assumes that the number
     of shares of Common Stock, par value $5 per share, of UAL (the "Old
     Shares") to be reclassified pursuant to the Plan of Recapitalization (as
     defined herein) is 28,926,185. The filing fee is based on the average of
     the high and low prices for Old Shares on April 16, 1994 ($127.125).
  x  Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
 --- and identify the filing with which the offsetting fee was previously
     paid. Identify the previous filing by registration statement number, or
     the form or schedule and the date of its filing.
                                                                              
                                                     UAL Corporation and United 
Amount previously paid: $700,462.52  Filing parties: Airlines, Inc.             
                        -----------                  --------------------------
                                                                               
                                                     
Form or registration no.: Pending    Date filed: April 12, 1994
                          ---------              ------------------------------

 
Amount previously paid: $310,208.41  Filing party: United Airlines, Inc.
                        -----------                ----------------------------

                                                       
Form or registration no.: 33-57192   Date filed: January 21, 1993
                          --------               ------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<PAGE>
 
                                  INTRODUCTION
 
  This Schedule 13E-3 relates to a recapitalization (the "Recapitalization") of
UAL Corporation, a Delaware corporation (the "Company" or "UAL") pursuant to
the Agreement and Plan of Recapitalization dated as of March 25, 1994 (the
"Plan of Recapitalization") among UAL, the Air Line Pilots Association,
International ("ALPA") and the International Association of Machinists and
Aerospace Workers (the "IAM"). Under the Plan of Recapitalization, each share
of Common Stock, par value $5 per share, of the Company (the "Old Shares") that
is outstanding at the Effective Time (as defined in the Plan of
Recapitalization) will be converted into, and become a right to receive (a)
$25.80 in cash, (b) $15.55 principal amount of Series A Debentures due 2004 of
United Air Lines, Inc., a Delaware corporation and a wholly-owned subsidiary of
UAL ("United") (the "Series A Debentures"), (c) $15.55 principal amount of
Series B Debentures due 2014 of United (the "Series B Debentures" and, together
with the Series A Debentures, the "Debentures"), (d) $31.10 liquidation value
of Series B Preferred Stock, without par value, of the Company (the "Public
Preferred Stock") and (e) one half (0.5) of a share of new Common Stock, par
value $0.01 per share, of the Company (the "New Shares") (collectively, the
"Recapitalization Consideration"). In addition, the Plan of Recapitalization
provides for (1) certain amendments to the Company's Certificate of
Incorporation and Bylaws that will, among other things, effectuate the
Recapitalization and put into place the revised corporate governance structure
contemplated by the Plan of Recapitalization and (2) the issuance of new
classes of preferred stock that will (a) transfer approximately 53% (which,
under certain circumstances may be increased, up to a maximum of approximately
63%) of the common equity and voting power of the Company to employee stock
ownership plans to be established for the benefit of certain groups of
employees and (b) effectuate the corporate governance structure referred to
above by permitting different constituent groups to elect members of the
Company's Board of Directors.
 
  The Plan of Recapitalization further provides for certain amendments to the
existing ALPA collective bargaining agreement and IAM collective bargaining
agreements and the creation of a salaried and management employees cost
reduction program, all of which will become effective at the Effective Time and
are estimated to provide United with $8.2 billion in improved operating
earnings over a twelve year period with a net present value of approximately
$4.9 billion. Furthermore, certain employee benefit plans maintained by the
Company and United will be amended to permit employees to acquire substantial
amounts of the New Shares, Public Preferred Stock and the Debentures.
 
  The Plan of Recapitalization is incorporated by reference as Exhibit 2.1 to
the Registration Statement on Form S-4 filed by UAL and United with the
Securities and Exchange Commission (the "Commission") on the date hereof from
Exhibit 10.1 to UAL's Form 8-K dated March 28, 1994.
 
  This Schedule 13E-3 is being filed jointly by UAL and United. By filing this
Schedule 13E-3, neither UAL nor United concedes that Rule 13e-3 under the
Securities Exchange Act of 1934 (the "Act of 1934") is applicable to the
Recapitalization or any other transactions contemplated by the Plan of
Recapitalization.
 
  The information set forth in the Registration Statement, including the Plan
of Recapitalization and other exhibits, is incorporated in its entirety herein
by reference. The following is a summary cross-reference sheet pursuant to
General Instruction F of Schedule 13E-3, showing the location in the Proxy
Statement/Joint Prospectus that is a part of the Registration Statement and the
Plan of Recapitalization of information required by Schedule 13E-3. To the
extent the requirements of Schedule 13E-3 are met by the Plan of
Recapitalization, no attempt is made in the following cross-reference sheet to
distinguish more limited requirements of the corresponding Form S-4 items which
are also referenced.
 
                                       1

<PAGE>
 

<TABLE>
<CAPTION>
  SCHEDULE                              CAPTION OR LOCATION IN THE PROXY
 13E-3 ITEM                                STATEMENT/JOINT PROSPECTUS
 ----------                             --------------------------------
 <C>        <C>                      <S>                                     <C>
 Item 1:    Issuer and Class of Security Subject to the Transaction.
            (a)                      Cover Page; SUMMARY OF PROXY
                                      STATEMENT/JOINT PROSPECTUS--The
                                      Company and United
            (b)                      Cover Page; SUMMARY OF PROXY
                                      STATEMENT/JOINT PROSPECTUS--Purpose
                                      of the Meeting; INTRODUCTION--Voting
                                      Rights and Proxy Information
            (c)                      SUMMARY OF PROXY STATEMENT/JOINT
                                      PROSPECTUS--Market Prices of the Old
                                      Shares; Dividends; MARKET PRICES OF
                                      THE SHARES; DIVIDENDS
            (d)                      SUMMARY OF PROXY STATEMENT/JOINT
                                      PROSPECTUS--Market Prices of the Old
                                      Shares; Dividends; MARKET PRICES OF
                                      THE SHARES; DIVIDENDS
            (e)                      Not applicable.
            (f)                      Not applicable.
 Item 2:    Identity and Background. SUMMARY OF PROXY STATEMENT/JOINT
                                      PROSPECTUS--The Company and United
                                      The persons filing this schedule are
                                      the issuer (UAL) and its wholly-
                                      owned subsidiary (United).
            (a)-(d)                  Not applicable.
            (e)-(f)                  None.
            (g)                      Not applicable.
 Item 3:    Past Contacts, Transactions or Negotiations.
            (a)                      Not applicable.
            (b)                      Not applicable.
 Item 4:    Terms of the
            Transaction.
            (a)                      SUMMARY OF PROXY STATEMENT/JOINT
                                      PROSPECTUS--The Plan of
                                      Recapitalization; THE PLAN OF
                                      RECAPITALIZATION; ELECTION OF
                                      DIRECTORS; DESCRIPTION OF SECURITIES
            (b)                      Not applicable.
</TABLE>

 
 
                                       2

<PAGE>
 

<TABLE>
<CAPTION>
  SCHEDULE                                  CAPTION OR LOCATION IN THE PROXY
 13E-3 ITEM                                    STATEMENT/JOINT PROSPECTUS
 ----------                                 --------------------------------
 <C>        <C>                      <S>
 Item 5:    Plans or Proposals of the Issuer or Affiliate
            (a)                      Not applicable.
            (b)                      Not applicable.
            (c)                      SUMMARY OF PROXY STATEMENT/JOINT PROSPECTUS--
                                      The Plan of Recapitalization; SPECIAL
                                      FACTORS--Management Arrangements; THE PLAN
                                      OF RECAPITALIZATION--Revised Governance
                                      Structure; --Terms and Conditions
            (d)                      SUMMARY OF PROXY STATEMENT/JOINT PROSPECTUS--
                                      The Plan of Recapitalization; THE PLAN OF
                                      RECAPITALIZATION--Terms and Conditions;
                                      UNAUDITED PRO FORMA FINANCIAL INFORMATION;
                                      CAPITALIZATION
            (e)                      SUMMARY OF PROXY STATEMENT/JOINT PROSPECTUS--
                                      The Plan of Recapitalization; SPECIAL
                                      FACTORS--Implementation of the "Airline-
                                      Within-an-Airline" (U2)
            (f)                      Not applicable.
            (g)                      Not applicable.
 Item 6:    Source and Amounts of Funds or Other Consideration.
            (a)                      SUMMARY OF PROXY STATEMENT/JOINT PROSPECTUS--
                                      The Plan of Recapitalization; THE PLAN OF
                                      RECAPITALIZATION--Terms and Conditions
            (b)                      FEES AND EXPENSES
            (c)                      SUMMARY OF PROXY STATEMENT/JOINT PROSPECTUS--
                                      The Plan of Recapitalization; DESCRIPTION OF
                                      THE SECURITIES--The Debentures;--The ESOP
                                      Preferred Stock
            (d)                      Not applicable.
 Item 7:    Purpose(s), Alternatives, Reasons and Effects.
            (a)                      SUMMARY OF PROXY STATEMENT/JOINT PROSPECTUS--
                                      Background of the Recapitalization;
                                      BACKGROUND OF THE PLAN OF RECAPITALIZATION;
                                      SPECIAL FACTORS--Purpose and Structure of
                                      the Recapitalization
            (b)                      BACKGROUND OF THE PLAN OF RECAPITALIZATION
            (c)                      SPECIAL FACTORS--Purpose and Structure of the
                                      Recapitalization
</TABLE>

 
 
                                       3

<PAGE>
 

<TABLE>
<CAPTION>
  SCHEDULE                                  CAPTION OR LOCATION IN THE PROXY
 13E-3 ITEM                                    STATEMENT/JOINT PROSPECTUS
 ----------                                 --------------------------------
 <C>        <C>                      <S>
            (d)                      SUMMARY OF PROXY STATEMENT/JOINT PROSPECTUS--
                                      The Plan of Recapitalization; BACKGROUND OF
                                      THE PLAN OF RECAPITALIZATION; SPECIAL
                                      FACTORS--Certain Company Analyses; --Certain
                                      Revenue and Earnings Scenarios; --Effect of
                                      the Recapitalization on Income Statement,
                                      Book Equity and Cash Flow;--Implementation of
                                      the "Airline-Within-an-Airline" (U2); --Unit
                                      Costs; CERTAIN FEDERAL INCOME TAX
                                      CONSEQUENCES
 Item 8:    Fairness of the Transaction.
            (a)                      SUMMARY OF PROXY STATEMENT/JOINT PROSPECTUS--
                                      The Plan of Recapitalization--Recommendation
                                      of the Board; BACKGROUND OF THE PLAN OF
                                      RECAPITALIZATION; SPECIAL FACTORS--
                                      Recommendation of the Board
            (b)                      SUMMARY OF PROXY STATEMENT/JOINT PROSPECTUS--
                                      The Plan of Recapitalization--Recommendation
                                      of the Board; SPECIAL FACTORS--Recommendation
                                      of the Board
            (c)                      SUMMARY OF PROXY STATEMENT/JOINT PROSPECTUS--
                                      Vote Required; INTRODUCTION--Voting Rights
                                      and Proxy Information
            (d)                      SUMMARY OF PROXY STATEMENT/JOINT PROSPECTUS--
                                      The Plan of Recapitalization--Opinions of
                                      Financial Advisors to the Board; SPECIAL
                                      FACTORS--Opinions of the Financial Advisors
                                      to the Board
            (e)                      SUMMARY OF PROXY STATEMENT/JOINT PROSPECTUS--
                                      The Plan of Recapitalization--Recommendation
                                      of the Board; SPECIAL FACTORS--Recommendation
                                      of the Board
            (f)                      Not applicable
 Item 9:    Reports, Opinions, Appraisals and Certain Negotiations.
            (a)                      SUMMARY OF PROXY STATEMENT/JOINT PROSPECTUS--
                                      The Plan of Recapitalization--Opinions of the
                                      Financial Advisors to the Board; BACKGROUND
                                      OF THE PLAN OF RECAPITALIZATION; SPECIAL
                                      FACTORS--Opinions of the Financial Advisors
                                      to the Board; EXPERTS
            (b)                      SUMMARY OF PROXY STATEMENT/JOINT PROSPECTUS--
                                      The Plan of Recapitalization--Opinions of the
                                      Financial Advisors to the Board; BACKGROUND
                                      OF THE PLAN OF RECAPITALIZATION; SPECIAL
                                      FACTORS--Opinions of the Financial Advisors
                                      to the Board; EXPERTS
            (c)                      INCORPORATION OF CERTAIN DOCUMENTS BY
                                      REFERENCE; Opinions of CS First Boston
                                      Corporation and Lazard Freres & Co. are
                                      attached to the Proxy Statement/Joint
                                      Prospectus as Annexes I and II, respectively
</TABLE>

 
                                       4

<PAGE>
 

<TABLE>
<CAPTION>
  SCHEDULE                            CAPTION OR LOCATION IN THE PROXY
 13E-3 ITEM                              STATEMENT/JOINT PROSPECTUS
 ----------                           --------------------------------
 <C>        <C>                      <S>                                  
 Item 10:   Interest in Securities of the Issuer.
            (a)                      SUMMARY OF PROXY STATEMENT/JOINT
                                      PROSPECTUS--Vote Required
            (b)                      Not applicable.
 Item 11:   Contracts, Arrangements or Understandings with Respect to
            the Issuer's Securities.
                                     SUMMARY OF PROXY STATEMENT/JOINT
                                      PROSPECTUS--The Plan of
                                      Recapitalization; THE PLAN OF
                                      RECAPITALIZATION--Terms and
                                      Conditions;--Establishment of
                                      ESOPs;--Revised Governance
                                      Structure; DESCRIPTION OF
                                      SECURITIES
 Item 12:   Present Intention and Recommendation of Certain Persons with
            Regard to the Transaction.
            (a)                      None.
            (b)                      Not applicable.
 Item 13:   Other Provisions of the Transaction.
            (a)                      SUMMARY OF PROXY STATEMENT/JOINT
                                      PROSPECTUS--The Plan of
                                      Recapitalization--No Appraisal
                                      Rights; INTRODUCTION
            (b)                      Not applicable.
            (c)                      SUMMARY OF PROXY STATEMENT/JOINT
                                      PROSPECTUS--The Plan of
                                      Recapitalization--Conditions to
                                      the Recapitalization; THE PLAN OF
                                      RECAPITALIZATION--Terms and
                                      Conditions--Conditions
 Item 14:   Financial Information.
            (a)                      INCORPORATION OF CERTAIN DOCUMENTS
                                      BY REFERENCE; SUMMARY OF PROXY
                                      STATEMENT/JOINT PROSPECTUS--
                                      Selected Consolidated Historical
                                      and Pro Forma Operating
                                      Information; SELECTED
                                      CONSOLIDATED FINANCIAL AND
                                      OPERATING INFORMATION
            (b)                      SUMMARY OF PROXY STATEMENT/JOINT
                                      PROSPECTUS--Selected Consolidated
                                      Historical and Pro Forma
                                      Operating Information; UNAUDITED
                                      PRO FORMA FINANCIAL INFORMATION
 Item 15:   Persons or Assets Employed, Retained or Utilized.
            (a)                      COVER PAGE; SUMMARY OF PROXY
                                      STATEMENT/JOINT PROSPECTUS--The
                                      Plan of Recapitalization--
                                      Opinions of the Financial
                                      Advisors to the Board; SPECIAL
                                      FACTORS--Opinions of the
                                      Financial Advisors to the Board;
                                      THE PLAN OF RECAPITALIZATION--
                                      Terms and Conditions; FEE AND
                                      EXPENSES
</TABLE>

 
                                       5

<PAGE>
 

<TABLE>
<CAPTION>
  SCHEDULE                              CAPTION OR LOCATION IN THE PROXY
 13E-3 ITEM                                STATEMENT/JOINT PROSPECTUS
 ----------                             --------------------------------
 <C>        <C>                      <S>                                      
            (b)                      SUMMARY OF PROXY STATEMENT/JOINT
                                      PROSPECTUS--The Plan of
                                      Recapitalization; SPECIAL FACTORS--
                                      Opinions of the Financial Advisors to
                                      the Board; --Opinion of Valuation
                                      Firm; INDEPENDENT PUBLIC ACCOUNTANTS;
                                      EXPERTS; LEGAL OPINION; PROXY
                                      SOLICITATION
  Item 16:  Additional Information   None.
  Item 17:  Material to be Filed as Exhibits
 
 
            (a)(1)                   Indenture dated as of July 1, 1991
                                      between United and The Bank of New
                                      York providing for the issuance of
                                      Senior Debt Securities in series
                                      (filed as Exhibit 4(a) of United's
                                      Registration Statement on Form S-3
                                      (No. 33-57192) and incorporated
                                      herein by reference).
            (a)(2)                   Form of Officer's Certificate relating
                                      to United's Series A Debentures due
                                      2004 and United's Series B Debentures
                                      due 2014 (filed as Schedule 1.3 to
                                      Exhibit 10.1 of UAL's Form
                                      8-K dated March 28, 1994 and
                                      incorporated herein by reference).
            (b)(1)                   Presentation to the UAL Corporation
                                      Board of Directors by CS First Boston
                                      Corporation and Lazard Freres & Co.
                                      dated December 16, 1993.
            (b)(2)                   Presentation to the UAL Corporation
                                      Board of Directors by CS First Boston
                                      Corporation and Lazard Freres & Co.
                                      dated December 22, 1993.
            (b)(3)                   Presentation to the UAL Corporation
                                      Board of Directors by CS First Boston
                                      Corporation and Lazard Freres & Co.
                                      dated March 14, 1994.
            (c)(1)                   Same as item filed as Exhibit (a)(1).
            (c)(2)                   Same as Item filed as Exhibit (a)(2).
            (c)(3)                   Proposed Restated Certificate of
                                      Incorporation of UAL Corporation
                                      (filed as Schedule 1.1 to Exhibit
                                      10.1 of UAL's Form 8-K dated March
                                      28, 1994 and incorporated herein by
                                      reference).
            (d)(1)                   Chairman's Letter to Stockholders,
                                      Notice of Meeting of Stockholders and
                                      the Proxy Statement/Joint Prospectus
                                      filed as a part of UAL's and United's
                                      Registration Statement on Form S-4 on
                                      the date hereof and incorporated
                                      herein by reference.
            (e)                      Not applicable.
            (f)                      Not applicable.
</TABLE>

 
                                       6

<PAGE>
 

                                   SIGNATURE
 
  After due inquiry, and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
 
                                          UAL Corporation
 
                                                     /s/ John C. Pope
                                          By: _________________________________
                                                       John C. Pope
                                                  Director, President and 
                                                  Chief Operating Officer
 
Date: April 12, 1994
 
                                       7

<PAGE>
 
                                   SIGNATURE
 
  After due inquiry, and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
 
                                          United Air Lines, Inc.
 
                                                     /s/ John C. Pope
                                          By: _________________________________
                                                        John C. Pope 
                                                   Director, Chairman and 
                                                   Chief Executive Officer
 
Date: April 12, 1994
 
                                       8

<PAGE>
 

                                 EXHIBIT INDEX
 

<TABLE>
<CAPTION>
  EXHIBIT
  NUMBER
  -------
 <C>       <S>                                                              <C>
 99.(a)(1) Indenture dated as of July 1, 1991 between United and The Bank
           of New York providing for the issuance of Senior Debt
           Securities in series (filed as Exhibit 4(a) of United's
           Registration Statement on Form S-3 (No. 33-57192) and
           incorporated herein by reference).............................
 99.(a)(2) Form of Officer's Certificate relating to United's Series A
           Debentures due 2004 and United Series B Debentures due 2014
           (filed as Schedule 1.3 to Exhibit 10.1 of UAL's Form 8-K dated
           March 28, 1994 and incorporated herein by reference)..........
 99.(b)(1) Presentation to the UAL Corporation Board of Directors by CS
           First Boston Corporation and Lazard Freres & Co. dated
           December 16, 1993.............................................
 99.(b)(2) Presentation to the UAL Corporation Board of Directors by CS
           First Boston Corporation and Lazard Freres & Co. dated
           December 22, 1993.............................................
 99.(b)(3) Presentation to the UAL Corporation Board of Directors by CS
           First Boston Corporation and Lazard Freres & Co. dated March
           14, 1994......................................................
 99.(c)(1) Same as Item filed as Exhibit (a)(1)..........................
 99.(c)(2) Same as Item filed as Exhibit (a)(2)..........................
 99.(c)(3) Proposed Restated Certificate of Incorporation of UAL
           Corporation (filed as Schedule 1.1 to Exhibit 10.1 of UAL's
           Form 8-K dated March 28, 1994 and incorporated herein by
           reference)....................................................
 99.(d)(1) Chairman's Letter to Stockholders, Notice of Meeting of
           Stockholders and the Proxy Statement/Joint Prospectus filed as
           a part of UAL's and United's Registration Statement on Form S-
           4 on the date hereof and incorporated herein by reference.....
 99.(e)    Not applicable................................................
 99.(f)    Not applicable................................................
</TABLE>






<PAGE>
 
                               UAL CORPORATION

                   PRESENTATION TO THE BOARD OF DIRECTORS

                              December 16, 1993


               CS First Boston           Lazard Freres & Co.

<PAGE>
 
     AGENDA
     -----------------------------------



     [ ]  Overview

     [ ]  Structure and Valuation Issues

     [ ]  Timetable

<PAGE>
 
     TRANSACTION OVERVIEW
     ---------------------------------------------------


     [ ]  Union Coalition ("Coalition") acquires a minimum of a 53% equity 
          interest in UAL Corporation ("UAL"), in exchange for wage 
          concessions and work rule changes
          -    Coalition equity interest may be increased up to 63% if the 
               average daily stock price for one year, post closing, exceeds 
               $85.00

     [ ]  The wage concessions are from three employee groups:
          -    ALPA
          -    IAM
          -    Non-Contract Employees

     [ ]  The employee investment of $4.548 billion on a net present value 
          basis (at 10%) is being made in two forms:

          -    Basic 6-year concession package
          -    Additional 12-year concession and work rule package designed to 
               provide longer-term competitive short-haul economics ("U2").

<PAGE>
 
     CONSIDERATION RECEIVED
     BY UAL'S SHAREHOLDERS
     -------------------------------------------------------
 
     Employee Investment (NPV @ 10%): $4.548 billion


<TABLE>
<CAPTION>
                                      Total Value       Value
                                         ($ MM)     Per Share (1)
                                      ------------  -------------
     <S>                               <C>           <C>
 
     Special Distribution:
 
          Cash                           $  743         $25.72
          Debentures                        900          31.14
          Preferred Stock                   900          31.14
                                         ------         ------
     Special Distribution Total          $2,543         $88.00
 
     Common Equity Value
          (47% ownership)                  TBD            TBD
                                        -----------   ------------
     Total Consideration                   TBD            TBD
 
     -----------------------------------------------------------------------
</TABLE>


     TBD - To be determined.
     (1)  Assumes 28.9 million shares outstanding.


<PAGE>
 
     "GIVES / GETS" APPROACH TO VALUATION
     ($MM except per share data)
     --------------------------------------------------------

     Example for Illustrative Purposes Only
     --------------------------------------


<TABLE>
<CAPTION>
<S>                                                              <C>
     Total Employee Investment (Present Value at 10%)             $ 4,548
 
     Pre-Restructuring Value Per Share
          Estimated Normalized Share Price              $133
          Less Present Value of
            Forgone Enhancements                          33
                                                        ----
                                                        $100
            Shares Outstanding (MM)                     28.9
                                                        ----
     Total Pre-Restructuring Value                                  2,890
 
     Incremental Value-Kitchens
            Cash to be Received                         $119
            Present Value of Cost Savings                210
                                                        ----
     Total Incremental Value-Kitchens                                 330
                                                                  -------
 
     Total Value                                                  $ 7,768
 
     Less:  Distribution of Cash & Securities
          ($88 per share)                                          (2,543)
                                                                  -------
 
     Residual Market Value (Post Transaction)                     $ 5,225
                                                                  =======
 
          Per Share                                               $180.80
                                                                  =======
 
          47%                                                     $ 84.97
                                                                  =======
</TABLE>


<PAGE>
 
     SPECIAL DISTRIBUTION TERMS
     --------------------------------------------------------------------------

     Senior Unsecured Debentures


     Amount:                   Tranche A - $450 MM
                               Tranche B -  450
                               --------------------
                               Total       $900 MM

     Maturity:                 Tranche A - 10 years
                               Tranche B - 20 years

     Coupon:                   Tranche A - 10-Year Treasury + ___ - ___ bps
                               Tranche B - 30-Year Treasury + ___ - ___ bps

     Optional Redemption:      Non callable for ___ years.  Callable at a 
                               premium thereafter, declining to par at the end 
                               of year 10.

     Mandatory Redemption:     None

<PAGE>
 
     SPECIAL DISTRIBUTION TERMS
     --------------------------------------------------------------------

     Redeemable Preferred Stock

     Amount:                   $900 MM

     Liquidation Value:        $900 MM

     Maturity:                 Perpetual

     Dividends:                _________% of Liquidation Value

     Optional Redemption:      Non-callable for ________ years.  Thereafter 
                               callable at any time at par

     Vote:                     Non-voting unless UAL defaults on six quarterly 
                               dividends, then can elect two additional public
                               directors

     Ranking:                  Senior to ESOP Preferred

<PAGE>
 
     SPECIAL DISTRIBUTION ISSUES
     -----------------------------------------------------------------------


     [ ]  The cash and securities will be structured as a special distribution 
          to UAL's shareholders, similar to a recapitalization.

     [ ]  The debt and preferred stock will be priced to trade at par on a 
          fully distributed basis.

     [ ]  Initial coupons for the debt and dividend for the preferred stock 
          will be determined upon execution of the definitive documentation, 
          subject to adjustment at the time of the shareholder vote.  However, 
          rates cannot be adjusted more than _________ bp.

     [ ]  Since the first pricing will not occur until the execution of 
          definitive documentation, UAL can obtain new ratings prior to 
          determining rates.

<PAGE>
 
     ADDITIONAL ISSUES FOR BOARD TO CONSIDER
     ----------------------------------------------------------------------

     [ ]  Alternatives available to UAL to maximize value

          *   Restructuring scenarios

          *   Sale to third party

     [ ]  Impact of transaction on UAL's access to financing

          *   Pro forma credit ratios

          *   Potential ratings downgrade -- cap on securities repricing

          *   Restrictions on future equity insurance and asset sales

     [ ]  Time lag between letter agreement and proxy distribution

          *   "Bring-down" fairness opinion

<PAGE>
 
     CLOSING CONDITIONS
     ---------------------------------------------------------------

     [ ]  Negotiation of definitive documentation

     [ ]  Ratification by ALPA and IAM

     [ ]  Approval by UAL shareholders

     [ ]  Listing of pro forma common stock on NYSE

     [ ]  Termination provisions

<PAGE>
 
     ESOP STRUCTURE
     ----------------------------------------------------------------


     [ ]  Coalition acquires UAL's equity through employee trusts/qualified 
          Employee Stock Ownership Plans ("ESOP")

     [ ]  ESOP Trust purchases ESOP Preferred Stock with a loan from UAL

     [ ]  ESOP loan repaid with employer contributions and ESOP Preferred 
          dividends

     [ ]  ESOP Preferred Stock allocated to employee accounts equally over 
          base concession period

     [ ]  However, employees exercise control over all of their shares  
          immediately through ESOP Trust

     [ ]  Allocated shares voted on a confidential pass-through basis and 
          unallocated shares voted proportionately to allocated shares

     [ ]  ESOP share allocation:

          *    ALPA - 46.2%
          *    IAM - 37.2%
          *    Non-Contract - 16.6%

<PAGE>
 
     STOCK VALUATION ISSUES - EARNINGS
     --------------------------------------------------------------------------

     [ ]  New accounting regulations governing "Stock Based Compensation" 
          require:

          *    Stock compensation expense for periodic stock allocations to be 
               measured by market value of shares at time of allocation

          *    Only allocated shares are outstanding for EPS purposes

          *    Circular relationship between ESOP charge and Company's stock 
               price, coupled with size of contemplated ESOP, make future 
               earnings difficult to forecast 

          *    Book earnings will be depressed in early years due to mismatch 
               between term of concessions (which boost earnings) of 12 years 
               and shorter period of only 6 years over which ESOP charges occur

          *    Wall Street equity research community and investors may look 
               through ESOP charges

<PAGE>
 
     STOCK VALUATION ISSUES - TAX CONSIDERATIONS
     -----------------------------------------------------------------------

     [ ]  Under IRS rules, annual ESOP charges are fixed at the outset and are 
          based on historical cost

     [ ]  The tax ESOP charge is based on the original ESOP loan amount 
          recorded on UAL's balance sheet at the time the ESOP shares were 
          purchased

<PAGE>
 
     ADDITIONAL VALUATION ISSUES
     -------------------------------------------------------------------------

     [ ]  Majority employee-owned company

          *   Potential employee conflict between desire for better wages and 
              increase in stock price

     [ ]  Restrictions on sale of equity, asset sales and other corporate 
          decisions

     [ ]  Corporate governance provisions -- effect on stock

<PAGE>
 
     PROJECTED TIMETABLE


<TABLE> 
<CAPTION> 
     ----------------------------------------------------------------------------------
                   DATE                                        EVENT
     -------------------------------------       ------------------------------------------
    <S>                                         <C> 
     December 16 and _____                       UAL Board meetings to discuss transaction

                            If Approved

     December _____                              ALPA, IAM ratification process

     Mid-January 1994                            Execution of definitive documentation

     Late January 1994                           File proxy material with SEC

     February to Mid-March 1994                  SEC proxy review

     Mid-March 1994                              Mail proxy material to UAL shareholders

     Mid-April 1994                              UAL shareholders meeting. If approved, close 
                                                 shortly thereafter
</TABLE>
 



<PAGE>
 
     Presentation to the Board of Directors
     --------------------------------------------------------------------------




                               UAL CORPORATION


                              December 22, 1993





     CS First Boston Corporation                            Lazard Freres & Co. 
     --------------------------------------------------------------------------

<PAGE>
 
     Agenda
     --------------------------------------------------------------------------

     [ ]  Proposed Transaction

     [ ]  Valuation of UAL

     [ ]  Summary

                                      -1-
 

<PAGE>
 
     Outline of Proposal
     --------------------------------------------------------------------------

     Amount/Form    [ ]  ALPA, IAM and salaried/management employees are
                         "Participating Employees" - AFA provision.

                    [ ]  Minimum 53% equity interest to employees via ESOP
                         Trusts in exchange for wage concessions and work rule
                         changes.

                    [ ]  Up to 63% equity interest based on $85/share pivot
                         point and a 33% market value increase.

                    [ ]  UAL stockholders retain 47%-37% equity interest.

                    [ ]  UAL stockholders receive cash, debentures and preferred
                         stock in an amount equal to $88 per share.


     Voting/Control [ ]  12 directors consisting of five public directors
                         (elected by public stockholders), four independent
                         directors (elected by special class of stock held by
                         independent directors), two union directors and one
                         salaried/management employee director.

                    [ ]  Asset sale limitations.

                    [ ]  Equity issuance mechanism.

                    [ ]  Sunset provision triggered at less than 20% ESOP equity
                         interest.

                                      -2-
 

<PAGE>
 


     Coalition Proposal
     
     
<TABLE>
     <CAPTION>
     -------------------------------------------------------------------------------------------------------------
     
                                             Nominal Terms                        Valuation
                                    -----------------------------     ---------------------------------
                                                        Value                               Value     
                                     Total Value         Per           Total Value           Per      
                                        ($MM)         Share/(1)/          ($MM)           Share/(1)/   
                                    ------------     ------------     -------------   -----------------
     <S>                            <C>              <C>              <C>            <C>
     Consideration:                                                                   
            Cash                       $  743          $25.72               $  743          $25.72 
            Debentures
                    900          $31.14/(2)/             900           31.14/(4)/
            Preferred Stock               900           31.14/(3)/             900           31.14/(4)/
                                       ------          ------               ------          ------   
     Subtotal                          $2,543          $88.00               $2,543          $88.00 
                                       ======          ======                            
     Common Equity Value                                              $2,312-2,370    $80.00-82.00
     (47% ownership)
                                                                      ------------   -------------
     Total Consideration                                              $4,855-4,913   $168.00-170.00
                                                                      ============   ==============
     </TABLE>
 
      
     ----------------------------------------------
     /(1)/  Assumes 28.9 million shares outstanding.
     /(2)/  Principal amount.
     /(3)/  Stated value.
     /(4)/  Assumes no limitation by collar.
     
                                       -3-
 

<PAGE>
 
     "Gives/Gets" Analysis
     --------------------------------------------------------------------------
      
     
<TABLE>
     <S>                                                             <C>      <C>
     ($MM except per share data)                                              
                Total Employee Investment (Present Value at 10%)              $4,548
                Pre-Restructuring Value Per Share                             
                  Estimated Normalized Share Price                   $ 133    
                  Less Present Value of Foregone Enhancements           33    
                                                                     -----    
                                                                     $ 100    
                  Shares Outstanding (MM)                             28.9    
                                                                     -----    
     Total Pre-Restructuring Value                                             2,890
                                                                              
     Incremental Value-Kitchens                                                  330
                                                                              ------
     Implied Total Value                                                       7,768
     Less:  Consideration of Cash & Securities                                
                ($88 per share)                                               (2,543)
                                                                              ------
     Residual Market Value (Post Transaction)                                 $5,225
                                                                              ======
                Implied Value Per Share for Public Shareholders - 47%         
                 (initially)                                                  $84.97
                                                                              ======
     </TABLE>

     
                                      -4- 

<PAGE>
 
     "Give-Gets" Comparison
     --------------------------------------------------------------------------
      
     
<TABLE>
     <CAPTION>
                                                              Coalition Proposals
                                                           -------------------------
                                                           December 22   November 11
                                                           -----------   -----------
     <S>                                                   <C>           <C>
     Major Components
     ----------------
          Employee Investment -
            Present Value at 10%                              $4,548MM      $4,259MM
                                                              ========      ========
     Consideration Per Share
          Cash                                                $  25.72      $  21.60
          Debentures                                             31.14         17.36
          Preferred Stock                                        31.14         26.04
                                                              --------      --------
                                                              $  88.00      $  65.00
          Coalition Ownership                                53% - 63%           60%
     Implied Equity Value
       Per Share                                                 85.00         75.00
                                                              --------      --------
     Implied Total Value
       Per Share                                              $ 173.00      $ 140.00
                                                              ========      ========
     </TABLE>

     
                                       -5-
 

<PAGE>
 
     Pro Forma Balance Sheet Outlook
     --------------------------------------------------------------------------
      
     
<TABLE>
     <CAPTION>
      
                                                   At December 31, 1993
                                          ---------------------------------------
                                               No       Transaction       Pro
                                          Transaction   Adjustments      Forma
                                          ------------  ------------  -----------
     <S>                                  <C>           <C>           <C>
     Cash                                     $ 1,819       $  (743)     $ 1,076/(1)/
     Total Debt & Capitalized Rents/(2)/       10,379           900       11,279
     Preferred Stock/(3)/                         591           900          900
     Common Equity                                620        (1,209)        (589)
     Total Debt/Book Capitalization              89.6%                      97.3%
     </TABLE>

     
     -------------------------
     /(1)/  Excludes proceeds from sale of Kitchens.
     /(2)/  Rents of $860.2MM capitalized at 7.5x.
     /(3)/  Includes convertible preferred.  Assumes conversion of preferred and
            contribution into Common Equity for transaction.
     
                                           -6-

<PAGE>
 
     Accounting Issues - Earnings
     --------------------------------------------------------------------------

     [ ]  New accounting regulations governing "Stock Based Compensation" 
          require:

          -  Stock compensation expense for periodic stock allocations to be
             measured by market value of shares at time of allocation.

          -  Only allocated shares are outstanding for EPS purposes.

     [ ]  Circular relationship between ESOP charge and Company's stock price,
          coupled with size of contemplated ESOP, make future earnings 
          difficult to forecast.

     [ ]  Book earnings will be depressed in early years due to mismatch between
          term of concessions and work rule changes (which boost earnings) of 12
          years and shorter period of only 6 years over which ESOP charges 
          occur.

     [ ]  Wall Street equity research community and investors may look through 
          ESOP charges but assume all new stock to be issued is immediately 
          outstanding.

                                      -7-
 

<PAGE>
 
     Earnings Outlook
     --------------------------------------------------------------------------
 
     
<TABLE>
     <CAPTION>
                                                               1994E                           1995E
                                                     --------------------------      ---------------------------- 
                                                       Enhanced       Coalition       Enhanced         Coalition
                                        1993E         Status Quo      Proposal       Status Quo        Proposal
                                     -----------      ----------      ---------      ----------       -----------
     <S>                             <C>              <C>             <C>            <C>               <C>
     Total Revenues                  $   14,254         $14,797        $14,797          $15,800          $15,800
     EBITDA/(1)/                            910           1,215          1,560 /(2)/      1,473            1,982
       Margin                               6.4%            8.2%          10.5%             9.3%            12.5%
     EBIT/(1)/                              189             491            836 /(2)/        679            1,189
       Margin                               1.3%            3.3%           5.7%             4.3%             7.5%
     Net Income to Common                                                                           
       As Reported                       (102.9)/(3)/     284.3          (50.2)           329.4            129.4
       One-time ESOP Change                               284.3          283.2            329.4            467.3
     Earnings per Share                                                                             
       As Reported                        (4.23)           9.84/(4)/     (1.59)/(5)/      11.40/(4)/        3.49/(6)/
       One-time ESOP Change                                9.84/(4)/      4.61 /(7)/      11.40/(4)/        7.60/(7)/
     </TABLE>
 
     --------------------------- 
     /(1)/  Before the ESOP charge.
     /(2)/  Excludes $75m of transaction expenses.
     /(3)/  Excludes $19 penalty payment for early retirement of debt.
     /(4)/  For 28.9 million shares outstanding.
     /(5)/  For 31.6 average million shares outstanding.
     /(6)/  For 37.1 average million shares outstanding.
     /(7)/  For 61.5 million shares outstanding.
      
                                          -8- 

<PAGE>
 
     Debt and Preferred - Terms
     
     
<TABLE>
     <CAPTION>
     --------------------------------------------------------------------------------------------------- 
     --------------------------------------------------------------------------------------------------- 

                                Senior Unsecured Debentures      Redeemable Preferred Stock
     --------------------------------------------------------------------------------------------------- 
     <S>                        <C>                            <C> 
     Amount:                    Tranche A -     $450MM         $900 MM
                                Tranche B -      450MM         ($900 MM liquidation preference)
                                                ------         
                                   Total        $900MM
                              
     Maturity:                  Tranche A -     10 years       Perpetual
                                Tranche B -     20 years
                              
     Optional Redemption:       To be determined               To be determined
                              
     Vote:                      Not applicable                 Nonvoting unless UAL default
                              
     Ranking:                   Pari passu with outstanding    Senior to ESOP Preferred
                                senior-unsecured debt
     </TABLE>
 

   -----------------------------------------------------------------------------
     Coupon/Dividend Rate:     To be priced to trade at par on a fully
                               distributed basis. Initially set at execution
                               of definitive documents, subject to adjustment
                               five days before closing with up to 75 basis
                               points increase.
   -----------------------------------------------------------------------------
                                    
                                           -9-
     

<PAGE>
 
     Debt and Preferred Valuation Issues
     --------------------------------------------------------------------------

     Both Securities

     [ ]  Realization of fully distributed values may take significant time.

     [ ]  Interest/dividend rate collar is tight and may raise "bring-down" 
          fairness opinion issues.

          .  Theoretical analysis suggests valuation impact at approximately 
             $0.50 per share.

     Debt

     [ ]  Similar publicly traded debt for comparative purposes.

     [ ]  Decline in credit rating one notch to non-investment grade could put
          significant upward pressure on the interest rate required to make debt
          trade at par.

     [ ]  No underwriting to facilitate orderly redistribution.


     Perpetual Preferred

     [ ]  No similar airline security.

     [ ]  Large issue - limited precedent.

     [ ]  No underwriting to facilitate orderly redistribution to the largely 
          retail market for this security.


                                      -10-
 

<PAGE>
 
     Summary Financial Impact
     --------------------------------------------------------------------------

     [ ]  A summary of UAL's and selected competitor's current senior debt 
          credit ratings is presented below:
 

<TABLE>
<CAPTION>
                                                UAL   American  Delta  Southwest
                                                ----  --------  -----  ---------
<S>                                             <C>   <C>       <C>    <C>
     Standard & Poor's                           BB      BB+      BB     A-
     Moody's                                    Baa3    Baa3     Ba1    Baa1
</TABLE>
 
 
     [ ]  UAL has been put on Creditwatch by Standard & Poor's with developing
          implications.
 
          .  S&P has announced publicly that if there is a change in rating, 
             it will be minor.
 
     [ ]  Moody's has said it has placed UAL debt under review for possible 
          downgrade.

     [ ]  Duff & Phelps has put UAL on rating watch, direction uncertain.


                                      -11-
 

<PAGE>
 
     Cash Flow Impact and Creditworthiness
     --------------------------------------------------------------------------

     [ ]  Contracted concessions and anticipated additional savings will
          substantially exceed the incremental fixed charges as summarized 
          below:

     
<TABLE>
     <CAPTION>
                                                                Projected
                                                                ---------
     Concessions/(1)/                                        1994       1995
                                                             ----       ----
     <S>                                                     <C>        <C>
        "U2" & Additional Savings                            $446       $520
          Employee Investment                                  26        141
                                                             ----       ----
                                                             $472       $661
                                                             ====       ====
        New Debt - Interest Expense                          $ 72       $ 72
        New Preferred - Dividends                              83         83
        Less Cash to Reduce Debt/Interest Expense/(2)/         65         50
                                                             ----       ----
          Incremental Fixed Charges                          $220       $205
                                                             ====       ====
                                                                     
        Employee Investment/Incremental Fixed Charges        2.1x       3.2x
     </TABLE>

     -------------------
     /(1)/  Before $75MM estimated transaction expenses from Coalition deal.
     /(2)/  The numbers indicated are the additional interest expense as a
            result of distributing $743 million in cash and, therefore, not
            having the ability to reduce debt with this cash. However, these
            numbers are somewhat offset by the incremental cash generated from
            the concessions that is used to repay debt.
                                                       -12-
     

<PAGE>
 
     Coverage Ratios
     --------------------------------------------------------------------------
 
     
<TABLE>
     <CAPTION>
                                                                          Projected
                                                      --------------------------------------------------
                                                                1994                      1995
                                                      ------------------------  ------------------------
                                          Estimated        No                        No                  
                                             1993     Transaction   Pro Forma   Transaction   Pro Forma  
                                          ----------  ------------  ----------  ------------  ---------- 
     <S>                                  <C>         <C>           <C>         <C>           <C>
     Indicative Coverage Ratio
     -------------------------
     EBDRIT/Fixed Charges/(a)/              1.5x         1.8x         1.8x         2.0x         2.1x
     
     Selected Standard & Poor's Ratios
     ---------------------------------
     EBITDA Interest Coverage/(b)/          2.9x         5.3x         4.2x         7.1x         5.8x
     Funds Flow to Total Debt/(c)/          9.2%        12.8%        11.9%        14.2%        15.4%
     </TABLE>

     
     ---------------------- 
     /(a)/  Fixed charges include gross interest expense (interest expense 
            before subtracting capitalized interest and interest income), 
            rents and preferred dividends.
     /(b)/  Interest expense does not include rent expense.
     /(c)/  Interest expense is defined as gross interest expense plus rents.
      
                                          -13-
     

<PAGE>
 
     Stock Ownership Adjustment Mechanism - Structure
     ---------------------------------------------------------------------------

     [ ]  Designed to bridge the 33% "market value gap" between the two sides.

     [ ]  Coalition increases ownership from 53% if UAL's average closing stock
          price for one year exceeds $85 per share value.  Before dilution, to
          reach 63%, price is $113.33; post dilution price equals $89.22.

     [ ]  Until the Coalition reaches its maximum 63% ownership, any market 
          value appreciation in the first year will be shared in the following
          ratio:

          - Coalition:  93%
          - Existing Shareholders:  7%

     [ ]  Market value appreciation split effected by issuing the Coalition new
          shares and consequently diluting existing UAL shareholders.

                                    -14-

<PAGE>
 
     Key Issue:  Pro Forma Equity Trading Valuation
     ---------------------------------------------------------------------------

     [ ]  As a substantial portion of the total value to shareholders will be in
          common stock, the prospective trading value of the stock is critical.



                 Preliminary View of Equity Market Perceptions



<TABLE>
<CAPTION>
     Positives                                    Issues
     <S>                                          <C> 
     [ ]  Excitement about prospects of more      [ ]  Minority interest in employee-owned
          stable company.                              company arising from governance
                                                       structure.
     [ ]  Enhanced labor relations.
                                                  [ ]  Adequacy for meeting near- and long-term
     [ ]  Closer alignment of                          industry challenges.
          shareholder/employee interests.
                                                  [ ]  Sustainability of no snap-back.
     [ ]  Reduction in costs and more    
          flexible work rules to boost            [ ]  Treatment of ESOP charges and share
          competitiveness.                              allocation by analysts.           
                                                  
     [ ]  Favorable impact on cash flow. 
</TABLE>


                                     -15-

<PAGE>
 
     Equity Valuation
     ---------------------------------------------------------------------------


     Range $80 - 85



<TABLE>
<CAPTION>
                                                 Implied               Implied    
     Earnings Per Share               1994    Multiple Range  1995  Multiple Range
     ------------------------------ -------   -------------- ------ --------------
     <S>                            <C>       <C>            <C>    <C> 
     As Reported                    ($1.59)                   $3.49

       $80 - 85                                  NM - NM              22.9 - 24.4x

     Immediate Allocation-Taxed      $4.61                    $7.60

       $80 - 85                                17.4 - 18.4x           10.5 - 11.2x

     Immediate Allocation-Untaxed    $7.86                   $14.02

       $80 - 85                                10.2 - 10.8x            5.7 - 6.1x

     Reference Multiples/1/

       AMR                                        13.2x                   7.1x

       DAL                                        57.5x                  11.8x

       UAL                                        17.6x                   8.2x
</TABLE>


     ------------
     /1/  First Call median estimates as of 12/19/93.

                                     -16-

<PAGE>
 
     Tax Consequences to Shareholders
     ---------------------------------------------------------------------------

     [ ]  Capital gain (not dividend) treatment on distribution of cash and
          debentures.

     [ ]  Tax deferral on retained common equity interest and distribution of
          preferred.  Taxable as capital gain when recognized.

     [ ]  Amount recognized immediately is equal to lesser of (1) total "value"
          of consideration package to shareholders (likely based on average of
          day one high and low trading values) less shareholder basis or (2) sum
          of "values" of distribution cash and debentures portion.

                                     -17-

<PAGE>
 
     Major Steps to Completion
     ---------------------------------------------------------------------------

     [ ]  Ratification by ALPA and IAM.

     [ ]  Identification of new management team and Board.

     [ ]  Negotiation of definitive documentation.

     [ ]  "Bring-down" fairness opinions and proxy mailing.

     [ ]  Approval by UAL shareholders.

                                     -18-

<PAGE>
 
     Agenda
     ---------------------------------------------------------------------------

     [ ]  Proposed Transaction

     [ ]  Valuation of UAL

     [ ]  Summary

                                     -19-

<PAGE>
 
     UAL:  Valuation Range Per Share
     ---------------------------------------------------------------------------
     ($Millions)


<TABLE>
<CAPTION>
     ---------------------------------------------------------------------------
     Methodology                    CS First Boston             Lazard Freres
     ---------------------------------------------------------------------------
     <S>                            <C>             <C>         <C> 
     Discounted Cash Flow             $160 - $200                $170 - $210

     Unaffected Trading Value          130 -  135                 130 -  135

     Acquisition Value                 120 -  200                    N/A

     Public Market Comparables             NA                     140 -  180

       Reference Range                 160 -  200                 150 -  190

       Transaction Value                            $168 - $170
     ---------------------------------------------------------------------------
</TABLE>


                                     -20-

<PAGE>
 
     Airline Share Prices Graph
     ---------------------------------------------------------------------------

     (Textual description of share price graph for EDGAR transmission. The
     following share price graph compares the indexed closing share prices of
     the Company's common stock to AMR Corp. and Delta Air Lines Inc. The graph
     assumes that the value of the Company's, AMR's and Delta's common stock was
     $1.00 at April 30, 1993.)

     Airline Share Prices - April 30 to Present

     Indexed
     Closing
     Prices


<TABLE> 
     <S>  <C> 
     1.15 ___________________________________________________________________________

     1.10 ___________________________________________________________________________

     1.05 ___________________________________________________________________________

     1.00 ___________________________________________________________________________

     0.95 ___________________________________________________________________________

     0.90 ___________________________________________________________________________

     0.85 ___________________________________________________________________________

     0.75 ___________________________________________________________________________

          30  7   14  21  28  4    11  18  25   2   9   16  23  30    6   13  20  27
              May                  June             July                  Aug.
          1993
          3   10  17  24  1   8    15  22  29   5   12  19  26  3     10  17
          Sep             Oct                   Nov             Dec
</TABLE>
 
 
     --- UAL Corp.
     --- AMR Corp.
     --- Delta Air Lines Inc.
     Source:  Tradeline

                                     -21-

<PAGE>
 
     UAL Corp Share Prices Graph
     ---------------------------------------------------------------------------

     (Textual description of UAL share price graph for EDGAR transmission:  The
     following UAL share price graph tracks the price of UAL common stock from
     April 30, 1993 to December 17, 1993.)

     UAL Corp Share Prices - April 30 to Present

Prices


<TABLE> 
     <S>   <C>  
     160.0 __________________________________________________________________________

     150.0 __________________________________________________________________________

     140.0 __________________________________________________________________________

     130.0 __________________________________________________________________________

     120.0 __________________________________________________________________________

     110.0 __________________________________________________________________________

           30  7   14  21  28  4   11  18  25   2   9   16  23  30    6   13  20  
               May                 June             July                  Aug.
           1993
           27  3   10  17  24  1   8    15  22  29   5   12  19  26  3    10  17
               Sep                 Oct                   Nov              Dec
</TABLE>
 
 
     Source:  Tradeline

                                     -22-

<PAGE>
 
     Private Market Value Comments
     ---------------------------------------------------------------------------

     [ ]  Strategic acquiror possibilities are limited:

          - Acquisition by major U.S. airline likely problematic from anti-trust
            perspective.

          - Foreign ownership restrictions limit equity stake to 49% and 
            circumscribe governance ability.

     [ ]  Financial buyers are unlikely given existing leverage, industry
          uncertainty, cyclicality and deal size.

     [ ]  No buyers have come forward.

     [ ]  Agreement does not prohibit entertaining offers for Company.

                                     -23-

<PAGE>
 
     Agenda
     ---------------------------------------------------------------------------

     [ ]  Proposed Transaction

     [ ]  Valuation of UAL

     [ ]  Summary

                                     -24-

<PAGE>
 
     Resolution of Open Issues
     from December 16th Board Meeting
     ---------------------------------------------------------------------------


<TABLE>
<CAPTION>
     Issue                                             Resolution
     ------------------------------------------------------------------------------------------------
     <S>                                               <C> 
     Meeting with new management                       .  Advisors met with Greenwald on December 21.
          - business plan thoughts
          - ability to govern within constraints
     ------------------------------------------------------------------------------------------------
     Equity issuance                                   Can sell nonvoting equity anytime, or voting
          - normal course                              equity to extent it doesn't trigger sunset
          - emergency provision                        provision, with 75% Board approval, including
                                                       all independent directors; No labor director
                                                       required. Financial distress precondition for 
                                                       voting equity.
     ------------------------------------------------------------------------------------------------
     Nomination of "Public Directors"                  .  Slate to be incorporated into definitive
          - involvement of unions                         documentation.
     ------------------------------------------------------------------------------------------------
     Expense reimbursement                             .  Open
          - amount and timing
     ------------------------------------------------------------------------------------------------
     Milestones/Timetable                              .  Union ratification timing     - January 31
          - union ratification timing                  .  Documentation                 - March 15
          - documentation                              .  Mail Proxy                    - Mid-May
          - process to reach proxy vote                .  Shareholder vote              - Mid-June
          - vote                                       .  Closing                       - Mid-June
</TABLE>


                                     -25-

<PAGE>
 
     Summary
     ---------------------------------------------------------------------------

     [ ]  Financial

     [ ]  Governance

     [ ]  Fairness

                                     -26-



<PAGE>
 
     Presentation to the Board of Directors
     ---------------------------------------------------------------------------






                                UAL Corporation


                                 March 14, 1994
               CS First Boston  Lazard Freres & Co.
               -----------------------------------------------------------------

<PAGE>
 
     Progress to Date
     ---------------------------------------------------------------------------


    [ ] Union Ratification

    [ ] Directors and Officers

    [ ] Documentation

        - Recapitalization Agreement
        - Proxy Statement

    [ ] U2 Business Plan

    [ ] Opinions

    [ ] Rating Agencies

    [ ] Shareholder Communications




                                     -1-

<PAGE>
 
     Significant Documentation Issues
     ---------------------------------------------------------------------------

    [ ] Accordion Mechanism

    [ ] Treatment of Convertible Preferred

    [ ] Share Count/Treasury Stock Method

    [ ] Pricing and Terms of the Debentures and Preferred Stock

    [ ] Process Issues





                                     -2-

<PAGE>
 
     UAL Stock Price Performance
     ---------------------------------------------------------------------------

     (Textual description of stock price graph for EDGAR transmission: The
     following UAL stock price performance graph tracks the price of UAL's
     common stock from December 21, 1993 to March 8, 1994.)

     UAL Stock Price Performance

<TABLE>
<CAPTION>
     Prices
     <C>      <C>  <C>  <C>  <C>  <C>  <C>  <C>  <C>  <C>  <C>  <C> 
     150.0    ______________________________________________________  
     145.0    ______________________________________________________  
     140.0    ______________________________________________________  
     135.0    ______________________________________________________  
     130.0    ______________________________________________________  
     125.0    ______________________________________________________  
              21   28   4   11   18   25   1   8   15   22   1   8
              December      January        February          March
              1993          1994
</TABLE>




                                     -3-

<PAGE>
 
     Airlines' Stock Price Performance
     ---------------------------------------------------------------------------

     (Textual description of stock price performance graph for EDGAR
     transmission: The following stock price graph compares the indexed
     closing prices of the Company's common stock to the S&P Industrial Index
     and the indexed closing prices of AMR common stock and DAL common stock.
     The graph assumes that the value of the Company's, DAL's and AMR's common
     stock and the index was 1.00 at December 21, 1993. The graph also
     indicates the timing of (1) Cat-Lite Phase II, (2) Fed Raises Discount
     Rate; and (3) USAir Fare Reduction Plan)

     Airlines' Stock Price Performance


<TABLE>
 
<CAPTION> 
     Indexed
     Closing
     Prices 

     <C>      <C>  <C>  <C>  <C>  <C>  <C>  <C>  <C>  <C>  <C>  <C> 
     1.10     ______________________________________________________  
     1.05     ______________________________________________________  
     1.00     ______________________________________________________  
     0.95     ______________________________________________________  
     0.90     ______________________________________________________  
     0.85     ______________________________________________________  
              21   28   4   11   18   25   1   8   15   22   1   8
              December      January        February          March
              1993          1994
</TABLE>

 
     --- S&P Industrials
     --- AMR
     --- UAL
     --- DAL



                                     -4-

<PAGE>
 
Update on Projections(1)

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
(Dollars in Millions)
- --------------------------------------------------------------------------------
                            DECEMBER 22  MARCH 14   PERCENT CHANGE
- --------------------------------------------------------------------------------
 
 
<S>                         <C>          <C>        <C>
Revenues
  1998                          $18,750   $18,766              0.1%
  1997                           17,828    17,838              0.1
  1996                           16,950    16,978              1.7
  1995                           15,800    15,794              0.0
  1994                           14,797    14,727             (0.5)
 
EBIT
  1998                          $   895   $   921              2.9%
  1997                              950       952              0.2
  1996                              855       860              0.6
  1995                              680       657             (3.4)
  1994                              491       394            (19.8)
 
Unlevered Free Cash Flow
  1998                          $   682   $   810             18.8%
  1997                              197       120            (39.1)
  1996                              657       591            (10.0)
  1995                              115       (21)            NM
  1994                              479       419            (12.5)
- --------------------------------------------------------------------------------
</TABLE>


(1)  Enhanced Status Quo - Scenario C - Midgrowth case.




                                     -5-

<PAGE>
 
Wall Street's View of UAL Outlook
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
                            DECEMBER 22  MARCH 14   PERCENT CHANGE
- --------------------------------------------------------------------------------
<S>                         <C>          <C>        <C>
                        
Enhanced Status Quo     
                        
  1995 EPS                       $11.40     $9.92          (13.0%)
  1994 EPS                         9.84      3.76          (61.8)
                                                           
Wall Street Consensus                                      
                                                           
  1995 EPS/(1)/                  $ 9.10     $6.64          (26.9%)
  1994 EPS                         9.00      7.05          (21.7)
- --------------------------------------------------------------------------------
</TABLE>


(1)  Reflects one analyst's (NatWest) projection.



                                     -6-

<PAGE>
 
    Issues Raised by Changing
    Business Environment
    ---------------------------------------------------------------------------

    [ ] Impact on Valuation of New Common

        - Comparable Multiples
        - Higher Interest/Preferred Dividend Burden

    [ ] Impact on Valuation of Alternative Scenarios

        - Discount Rates
        - Terminal Multiples

    [ ] Coalition's Perspective on Valuation





                                     -7-

<PAGE>
 
Shareholder Consideration
in the Recapitalization
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
                              TOTAL VALUE            VALUE
                                 ($MM)          PER SHARE/(1)/
- --------------------------------------------------------------------------------
<S>                          <C>              <C>
Consideration
  Cash                             $743              $25.80
  Debentures                        900               31.10/(2)/
  Preferred Stock                   900               31.10/(2)/
                                    ---               -----

Subtotal                         $2,543              $88.00
                                 ======              ======

Common Equity Value          $2,110 - 2,225   $73.00 - 77.00/(3)/
  (47% ownership)

Total Consideration          $4,653 - 4,768    $161.00 - $165.00
- --------------------------------------------------------------------------------
</TABLE>


(1)  Assumes 28.9 million shares outstanding.
(2)  Assumes impact of rate ceiling is negligible.
(3)  Adjusted $0-$1 for "Accordion" discount.


                                      -8-

<PAGE>
 
New Common Equity Valuation
- --------------------------------------------------------------------------------
 

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
                                             IMPLIED                 IMPLIED
                                   1994   MULTIPLE RANGE    1995  MULTIPLE RANGE
- --------------------------------------------------------------------------------
 
<S>                            <C>        <C>             <C>     <C>
As Reported                    ($1.36)                    $1.05
  Range $73 - 78                             NM - NM                 NM - NM
 
Immediate Allocation - Taxed    $3.43                     $6.63
  $73 - 78                                21.3x - 22.7x           11.0x - 11.8x
 
Immediate Allocation - Untaxed  $6.57                     $12.88
  $73 - 78                                11.1x - 11.9x            5.7x - 6.1x
 
Reference Multiples/(1)/
  AMR                                         14.4x                    9.7x
  DAL                                           NM                    12.2x
  UAL                                         17.9x                   19.0x
- --------------------------------------------------------------------------------
</TABLE>

(1)  First Call median estimates as of 3/10/94.



                                      -9-

<PAGE>
 
    Next Steps
    ----------------------------------------------------------------------------

    [ ] Interest/Preferred Dividend Rate Negotiation

    [ ] Execute Definitive Documentation

    [ ] File Proxy with SEC

    [ ] Marketing Plan

    [ ] Resolve Underwriting Issues






                                     -10-