Amendment No. 1

Item 1.   Financial Statements

United Air Lines, Inc. and Subsidiary Companies

(In Millions)

See accompanying notes to consolidated financial statements.

United Air Lines, Inc. and Subsidiary Companies

(In Millions)

See accompanying notes to consolidated financial statements.

United Air Lines, Inc. and Subsidiary Companies

(In Millions)

         United Air Lines, Inc. ("United" or the "Company") is a wholly owned subsidiary of UAL Corporation ("UAL").

         The consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to or as permitted by such rules and regulations, although United believes that the disclosures are adequate to make the information presented not misleading.  In management's opinion, all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the results of operations for the three- and nine-month periods have been made.  These financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in United's Annual Report on Form 10-K for the year 1999.

         Pursuant to amended labor agreements which provide for wage and benefit reductions and work-rule changes which commenced July 1994, UAL has agreed to issue convertible preferred stock to employees.  Note 2 of the Notes to Consolidated Financial Statements in the 1999 Annual Report on Form 10-K contains additional discussion of the agreements, stock to be issued to employees and the related accounting treatment.  Shares earned in 1999 were allocated in March 2000 as follows:  434,465 shares of Class 2 ESOP Preferred Stock were contributed to the Non-Leveraged ESOP and an additional 248,572 shares were allocated in "book entry" form under the Supplemental Plan.  Also, 2,390,931 shares of Class 1 ESOP Preferred Stock were allocated under the Leveraged ESOP.  Finally, an additional 857,096 shares of Class 1 and Class 2 ESOP Preferred Stock have been committed to be released by the Company since January 1, 2000.  The final allocation of ESOP Preferred Stock will take place in March 2001.

          The provisions for income taxes are based on the estimated annual effective tax rate, which differs from the federal statutory rate of 35% principally due to state income taxes, dividends on ESOP Preferred Stock and certain nondeductible items.

          Total comprehensive income (loss) for the three- and nine-month periods ending September 30, 2000 was $(173) million and $(93) million, respectively, compared to $217 million and $1.5 billion for the three- and nine-month periods ending September 30, 1999, respectively.  Other comprehensive income consisted of net unrealized gains (losses) on securities of $(62) million and $(232) million for the three- and nine-month periods ending September 30, 2000, respectively and $(137) million and $358 million for the three- and nine-month periods ending September 30, 1999, respectively.

          In the third quarter, United recorded an impairment loss of $38 million, net of tax, related to its warrants held in Priceline.com.

          In June 1999, United sold 17,500,000 common shares of Galileo International, Inc. ("Galileo") in a secondary offering for $766 million, resulting in a pre-tax gain of approximately $669 million ($428 million, net of tax).  This sale reduced United's holdings in Galileo from 32% to approximately 15%, requiring United to discontinue the equity method of accounting for its investment in Galileo.  United has classified its remaining 15,940,000 shares of Galileo common stock as "available-for-sale."

          During the third quarter, the Company issued $921 million in enhanced equipment trust certificates to refinance certain owned aircraft and aircraft under operating leases.  Net proceeds after refinancing the operating leases was $674 million.

          In addition to scheduled principal payments, in the third quarter, the Company repaid $116 million of debentures prior to maturity.  The debentures were scheduled to mature at various times through 2021.  An extraordinary loss of $6 million, net of tax benefits of $4 million was recorded reflecting amounts paid in excess of the debt carrying value.

          United has a global route network designed to transport passengers and cargo between destinations in North America, the Pacific, Latin America and Europe.  These regions constitute United's four reportable segments.

          A reconciliation of the total amounts reported by reportable segments to the applicable amounts in the financial statements follows:

*Earnings before ESOP compensation expense, special charges, gain on sale, investment impairment, income taxes, cumulative effect of accounting change and extraordinary loss on debt.

          During the first quarter of 2000, United changed its method of accounting for the sale of mileage to participating partners in its Mileage Plus program, in accordance with Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements."  Under the new accounting method, a portion of  revenue from the sale of mileage (previously recognized in other revenue) is deferred and recognized as passenger revenue when the transportation is provided.  Accordingly, United has recorded a charge of $209 million, net of tax, for the cumulative effect of a change in accounting principle to reflect the application of the accounting method to prior years.  This change resulted in a reduction to revenues of approximately $17 million and $34 million in the third quarter and nine-month periods, respectively and would have reduced revenue for the third quarter and nine-month periods of 1999 by $12 million and $36 million, respectively.  As of September 30, 2000, the deferred revenue balance relating to Mileage Plus was $405 million.

          United 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 United is subject and its prior experience, that the ultimate disposition of these contingencies is not expected to materially affect United's consolidated financial position or results of operations.

          At September 30, 2000, commitments for the purchase of property and equipment, principally aircraft, approximated $4.4 billion, after deducting advance payments.  An estimated $0.7 billion will be spent during the remainder of 2000, $2.1 billion in 2001 and $1.6 billion in 2002 and thereafter.  The major commitments are for the purchase of A319, A320, B767 and B777 aircraft, which are scheduled to be delivered through 2002.  The above numbers include a recent conversion of 13 option aircraft to firm orders to be delivered in 2002.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION          AND RESULTS OF OPERATIONS

          United's total of cash and cash equivalents and short-term investments was $1.1 billion at September 30, 2000, compared to $527 million at December 31, 1999.  Cash flows from operating activities amounted to $2.5 billion.  Financing activities included the issuance of $674 million in equipment trust certificates, as well as principal payments under debt and capital lease obligations of $420 million and $159 million, respectively.  Included in the debt payments was the retirement of $116 million of long-term debt prior to maturity.  Additionally, the Company issued, and subsequently retired, $200 million in long-term debt during the period to finance the acquisition of aircraft.

          Property additions, including aircraft and aircraft spare parts, amounted to $2.0 billion.  Property dispositions resulted in proceeds of $68 million.  In the first nine months of 2000, United took delivery of four A319, eight A320, one B747, three B767 and eight B777 aircraft.  Twenty-two of these aircraft were purchased and two were acquired under capital leases.  In addition, United retired four DC10 aircraft in the first nine months.

          At September 30, 2000, commitments for the purchase of property and equipment, principally aircraft, approximated $4.4 billion, after deducting advance payments.  Of this amount, an estimated $0.7 billion is expected to be spent during the remainder of 2000.  For further details, see "Contingencies and Commitments" in the Notes to Consolidated Financial Statements.

          During the second and third quarters of 2000, the Company experienced significant operational disruptions, as a result of labor-related delays and cancellations, as well as weather and air traffic control limitations, which adversely affected both revenue and expense performance.  The Company attempted to mitigate the impact of these operational difficulties by reducing capacity, particularly in the domestic markets, where most of the problems were concentrated. The Company estimates the revenue shortfall arising from these disruptions and associated schedule reductions and cancellations to be somewhere between $450 and $500 million for the third quarter.  In addition, the third quarter and nine-month results reflect the impact of the recently approved contract with the Air Line Pilots' Association, International ("ALPA") and the expected impact of open contracts with the International Association of Machinists and Aerospace Workers ("IAM").  The Company has begun to realize the benefits of the various steps taken to improve its operational performance as cancellations are down 60% and on-time departures have improved by 40% since the height of the operational disruptions.

          United's earnings from operations were $849 million in the first nine months of 2000, compared to operating earnings of $1.2 billion in the first nine months of 1999.  United's net earnings before the cumulative effect of an accounting change and an extraordinary loss on early extinguishment of debt were $354 million, compared to net earnings before an extraordinary loss on early extinguishment of debt of $1.1 billion in the same period of 1999.

          In the third quarter of 2000, United's loss from operations was $(30) million compared to operating earnings of $611 million in the third quarter of 1999.  United had a net loss before the extraordinary loss on debt in the 2000 third quarter of $(105) million, compared to net earnings of $354 million in the same period of 1999.

          The 2000 earnings for the quarter and nine months include a special charge of $8 million, net of tax for the planned early retirement of four leased DC10-30 aircraft and an impairment loss of $38 million, net of tax, related to the Company's warrants held in Priceline.com.  In addition, the 2000 earnings for the nine-month period include a special charge of $15 million, net of tax, for the planned early retirement of seven leased B747-238 aircraft, a special charge of $23 million, net of tax, for the retirement of the inflight video system on certain B777-222 aircraft, and a special charge of $3 million, net of tax, associated with the asset write-down on non-operating British Aerospace Advanced Turbo-Prop aircraft previously used in the United Express operation.

          The 1999 earnings for the nine-month period include a gain of $428 million, net of tax, on the sale of a portion of United's investment in Galileo (see "Investments" in the Notes to Consolidated Financial Statements).

          Specific factors affecting United's consolidated operations for the third quarter and first nine months of 2000 are described below.

           Third Quarter 2000 Compared with Third Quarter 1999  

          Operating revenues increased $82 million (2%) and United's revenue per available seat mile (unit revenue) increased 4% to 10.91 cents.  Passenger revenues increased only $9 million (0.2%) on a 3% increase in yield to 12.68 cents.  United's revenue passenger miles decreased 3%, while available seat miles across the system were down 2% over the third quarter of 1999, resulting in a passenger load factor decrease of 0.5 points to 74.6%.  The decrease in available seat miles reflects the Company's response to the operational difficulties as well as the impact of Economy Plus (the removal of seats to provide additional legroom in a premium seating zone on each aircraft).  The following analysis by market is based on information reported to the U.S. Department of Transportation:

          Cargo revenues increased $11 million (5%), while other operating revenues increased $62 million (19%) primarily due to increased fuel sales to third parties.

          Operating expenses increased $723 million (17%) and United's cost per available seat mile (unit cost) increased 20%, from 9.18 cents to 10.98 cents.  Salaries and related costs increased $478 million (34%) due to a new salary program implemented for non-contract employees, the impact of the new ALPA contract, and the estimated costs of IAM contracts currently under negotiation.  Aircraft fuel increased $199 million (43%) due to a 42% increase in the cost of fuel from 58.0 cents to 82.4 cents a gallon.  Commissions decreased $36 million (11%) due to a change in the commission structure implemented in the fourth quarter of 1999.  Depreciation and amortization increased $39 million (18%) due to an increase in the number of owned aircraft.  Other operating expenses increased $177 million (30%) primarily due to costs associated with fuel sales to third parties.

          Other non-operating expense amounted to $136 million in the third quarter of 2000 compared to $58 million in the third quarter of 1999.  Included in other non-operating expense in the 2000 third quarter was an investment impairment of $61 million related to the Company's warrants held in Priceline.com.

          Nine Months 2000 Compared with Nine Months 1999

          Operating revenues increased $1.0 billion (8%) and United's revenue per available seat mile (unit revenue) increased 9% to 11.05 cents.  Passenger revenues increased $875 million (7%) due to a 6% increase in yield to 13.28 cents.  United's revenue passenger miles increased 1%, while available seat miles across the system decreased 1%, resulting in a passenger load factor increase of 1.4 points to 72.9%.   The following analysis by market is based on information reported to the U.S. Department of Transportation:  

          Cargo revenues increased $26 million (4%), despite a 1% decrease in cargo yield.  Other operating revenues increased $132 million (15%) due to increased fuel sales to third parties, partially offset by the decrease in frequent-flyer program partner-related revenues as a result of a change in accounting principle (see "Accounting Changes" in the Notes to Consolidated Financial Statements).

          Operating expenses increased $1.4 billion (11%) and United's cost per available seat mile (unit cost) increased 12%, from 9.29 cents to 10.41 cents.  Salaries and related costs increased $661 million (16%) due to a new salary program implemented for non-contract employees, the impact of the new ALPA contract, and the estimated costs of IAM contracts currently under negotiation.  ESOP compensation expense decreased $392 million (73%) as the Company discontinued recording ESOP compensation expense once the final ESOP shares were committed to be released in April 2000.  Aircraft fuel increased $512 million (40%) due to a 38% increase in the cost of fuel from 55.7 cents to 76.9 cents a gallon.  Commissions decreased $109 million (12%) due to a change in the commission structure implemented in the fourth quarter of 1999.  Purchased services increased $99 million (8%) primarily due to increases in computer reservations fees and credit card discounts.  Depreciation and amortization increased $94 million (15%) due to an increase in the number of owned aircraft.  Other operating expenses increased $404 million (24%) primarily due to costs associated with fuel sales to third parties.

          Other non-operating expense amounted to $225 million in 2000 (excluding the investment impairment - see "Investments" in the Notes to Consolidated Financial Statements) compared to $133 million in 1999 (excluding the gain on the Galileo transaction - see "Investments" in the Notes to Consolidated Financial Statements).  Equity in earnings of affiliates decreased $46 million as a result of the Company discontinuing the equity method of accounting for its investment in Galileo.  Miscellaneous, net includes $11 million in losses on foreign currency options and $3 million in other foreign exchange losses in the first nine months of 2000, compared to $8 million in gains on written yen call options for the same period in 1999.

          On July 12, 2000, the Company's contracts with the IAM became amendable.  The Company has been in negotiations with the IAM since January for new contracts.  Since September 1, the negotiations have been conducted with the assistance of the National Mediation Board ("NMB").  On November 8, at the request of the NMB, negotiations between United and the IAM were recessed.  The NMB announced that it intends to resume discussions with both parties within the next two weeks.  Under the terms of the Railway Labor Act, United's current agreements with the IAM will remain in effect while negotiations continue.

          In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS No. 133"), which establishes accounting and reporting standards requiring that every derivative instrument be recorded in the balance sheet as either an asset or liability measured at its fair value.  SFAS No. 133 requires that changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met.  Special accounting for qualifying hedges allows a derivative's gains and losses to offset related results on the hedged item in the income statement, and requires that a company must formally document, designate and assess the effectiveness of transactions that receive hedge accounting.

          The effective date of SFAS No. 133 has been delayed one year, to fiscal years beginning after June 15, 2000.  The Company plans on adopting SFAS No. 133 in the first quarter of 2001.  United is in the process of reviewing its various contracts to determine which contracts meet the requirements of SFAS No. 133 and would need to be reflected as derivatives under the standard and accounted for at fair value.  In accordance with the provisions of SFAS No. 133, United will recognize a charge for the cumulative effect of a change in accounting principle in the first quarter of 2001, to reflect application of the accounting method to prior years.  Based on current assumptions, the Company estimates this charge to be insignificant.  However, the adoption of SFAS No. 133 could increase volatility in earnings and other comprehensive income in future periods.

          GetThere.com is a leading provider of internet-based travel planning products tailored to individual, corporate, travel supplier and travel agency customers.  During 1998 and 1999, United invested approximately $51 million in GetThere.com resulting in a 28% minority interest in GetThere.com consisting of common stock, warrants and options.  United accounts for its investment in GetThere.com using the equity method of accounting.  

          On August 28, 2000, Sabre Holdings Corporation announced its intentions to

acquire GetThere.com in an all cash tender offer for any or all outstanding shares of GetThere.com common stock at $17.75 per share.  The tender offer commenced September 11 and expired on October 6, 2000.  Accordingly, after converting its options and warrants, United tendered all of its shares in GetThere.com for net proceeds of $147 million, resulting in a pre-tax gain of approximately $109 million ($69 million, net of tax).  This transaction will be recorded in the fourth quarter.

          In October 2000, UAL announced the formation of United NewVentures, Inc., a wholly owned subsidiary which will create businesses to provide innovative solutions for its customers, strengthen United's airline business and create incremental value for UAL's shareholders.  The subsidiary will employ about 100 people, primarily from United's former e-commerce division and will consist of two divisions, United NetWorks and United NetVentures.

          United NetWorks will focus on United-branded e-commerce and wireless activities, including the recently redesigned united.com web site, as well as taking responsibility for the marketing side of Mileage Plus sale of miles to third parties.  Revenue from third-party mileage sales reached $340 million during the first nine months of 2000, compared to $289 million in 1999, as adjusted for the change in accounting principle.   Gross air bookings on united.com in the first nine months of 2000 grew 59% from the same period last year.  Total passenger revenue from sales over the Internet reached $173 million in the third quarter compared to $109 million in the same period of 1999.

          United NetVentures will manage United's investments in other Internet ventures, including two new airline-backed web sites, Orbitz and Hotwire, and identify new business opportunities in e-commerce.

          Information included in the above "Outlook for Fourth Quarter" and "US Airways Acquisition" paragraphs is forward-looking and involves risks and uncertainties that could result in actual results differing materially from expected results.  Forward-looking statements represent the Company's expectations and beliefs concerning future events, based on information available to the Company as of the date of this filing.   Some factors that could significantly impact revenues, expenses, unit costs, and the results and benefits of the pending merger between United and US Airways include, without limitation, the airline pricing environment; industry capacity decisions; competitors' route decisions; obtaining regulatory approvals for the United and US Airways merger; successfully integrating the businesses of United and US Airways; costs related to the United and US Airways merger; achieving cost-cutting synergies resulting from the United and US Airways merger; labor integration issues; the success of the Company's cost-control efforts; the cost of crude oil and jet fuel; the success of fuel hedging strategies; the results of union contract negotiations and their impact on labor costs; operational disruptions as a result of bad weather, air traffic control-related difficulties and labor issues; the growth of e-commerce and off-tariff distribution channels; the success of customer win-back strategies; the effective deployment of customer service tools and resources; actions of the U.S., foreign and local governments; willingness of customers to travel; foreign currency exchange rate fluctuations; the stability of the U.S. economy; inflation; the economic environment of the airline industry and the economic environment in general .  

          Investors should not place undue reliance on the forward-looking information contained herein, which speaks only as of the date of this filing.  United disclaims any intent or obligation to update or alter any of the forward-looking statements whether in response to new information, unforeseen events, changed circumstances or otherwise.

Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          For information regarding the Company's exposure to certain market risks, see Item 7A. Quantitative and Qualitative Disclosures About Market Risk in United's Annual Report on Form 10-K for the year 1999.  Significant changes which have occurred since year-end are as follows:

Foreign Currency Risk -

Price Risk (Aircraft fuel) -

	By:  /s/ Douglas A. Hacker
	Douglas A. Hacker
	Executive Vice President -
	Finance and Planning and
	Chief Financial Officer
	(principal financial officer)
	By:  /s/ M. Lynn Hughitt
	M. Lynn Hughitt
	Vice President and Controller
	(principal accounting officer)