The turmoil, that Jeff just described, has created intense financial pressure that has forced airlines to confront new market realities:

• Pricing transparency and the proliferation of low fare carriers;
• Downward pressure on revenue;
• Fierce competition for passengers; and
• The scramble to reduce costs that has resulted in a decline in service to passengers.
  

Airports have not been immune from the fallout.

The U.S. airline industry has lost $32 billion since 9/11 and is expected to lose an additional $10 billion this year.

One might, therefore, assume that the entire global aviation industry is struggling with these extraordinary losses.

In fact, many of our international competitors... in Europe, the Middle East, Asia and Latin America... are making money, buying new long-range aircraft and upgrading their products and services for passengers.

Our international competitors are merging across borders... such as the combinations of Air France and KLM... of Lufthansa and Swiss.

Cathay Pacific holds an important financial stake in both Dragonair and China's flag carrier, Air China... Singapore Airlines now owns nearly half of Virgin Air and has launched the longest nonstop routes in the world  from Singapore to Los Angeles and New York.

These airline combinations have the scope and scale to be "super-competitors."

For the first time since World War II, the U.S. is no longer leading the global aviation industry, and we are not playing a meaningful role in the transformation taking place among our international competitors.

In the U.S., the industry is encumbered by a legacy of regulation... or more accurately quasi-deregulation. Constructive consolidation domestically is next to impossible and foreign investment historically has been significantly restricted.

Our strategic options are limited to alliances and seeking anti-trust immunity, a burdensome and inefficient process.

There is, however, a sign of progress in "normalizing" the marketplace for U.S. carriers, with the Department of Transportation proposing to loosen the restrictions on foreign investment.

Opening U.S. airlines to foreign investors is a step in the right direction for an industry in need of new capital and global partnership opportunities.

Beyond the U.S. borders, Open Skies talks between the U.S. and Europe, after years of inertia, are also making progress. Today, there is a real possibility that restrictions on Atlantic routes will be removed.

If this agreement is finalized, U.S. airlines will be able to fly to any city in Europe, and European airlines will be able to fly to any city in the U.S.

And this will take governments on both sides of the Atlantic out of the decision-making process of where we fly... how much we charge... and with whom we partner.

This would be a significant step toward true deregulation of the industry, as aviation agreements across the North Atlantic often serve as a blueprint for markets around the globe.

The U.S. regulatory environment for the airlines must be normalized to mirror other industries, such as telecommunications, financial services and energy.

Those of us in the industry have work to do.

However, the U.S. industry is ill prepared to take advantage of the opportunities this environment will present.

U.S. network carriers must confront challenges that they can and should resolve.

At United, we know a little something about such challenges. We are, in fact, a poster child for necessary restructuring within the industry.

Three years ago, United was a failing business, losing $3 billion a year.

Our cost structure was among the highest in the industry, and we were incapable of competing in the U. S. We had no chance of competing with international carriers.

Said simply, we had to get our house in order.

United is here today because we were not in denial about what needed to be done then, nor what needs to be done in the future.

We face the facts, call the question and make the tough choices.

There is no future for a company... or a country... that ignores the realities of the competitive global marketplace, or ignores the facts that will ultimately determine success or failure.

At United, we lowered costs, excluding fuel, by 20 percent across the board  which will result in $7 billion in average annual cost savings... including $850 million annually in unprecedented savings on the cost of our fleet.

We increased productivity by 27 percent  eliminating waste, duplication and inefficiencies.

We negotiated consensual labor agreements... not once, but twice... to bring wages and benefits in-line with market reality.

We made the tough, but necessary decision to resolve our legacy pension issues.

Earlier this week, we reported United's financial results for the third quarter... results that clearly reflect the progress we have made:

• We had an operating profit of $165 million... which is a $245 million improvement over the same quarter one year ago... despite higher fuel costs of $405 million year-over year
• Mainline passenger unit revenue up 11 percent year-over-year, outpacing the industry average;
• And mainline unit costs, excluding fuel, down by 5 percent over last year.
  

United is a fundamentally better company today with sustainable improvements across the business and solid operational performance. Confronting everything that stood between us and viability, we have done more than survive.

Our restructuring is largely complete, and we have finalized a commitment for $3 billion all debt exit financing on excellent terms with JP Morgan Chase and Citibank.

We are on track to emerge from bankruptcy in February 2006 as a much stronger and competitive enterprise, committed to continuous improvement.

Three years ago, we said that there would be no "quick fix"...only sustainable solutions. We knew we had to balance the interests of our customers, employees and investors in every decision we made.

Airlines, including United, have rarely done this well.

Employees have endured the roller coaster of boom and bust. All too often customers bear the brunt of the industry's turmoil. For investors, this industry, for the most part, has been a losing proposition.

Our decisions are based on what is best for United&we start with our customers... providing the products and service they want and value, at prices they are willing to pay.

We have maintained our five major U.S. hubs and expanded our worldwide route network... and that is important for both Dulles and United.

In the emerging global economy, the strongest, most competitive hub airports...in Europe, Asia or the U.S., provide connectivity to more domestic and international destinations with more frequencies.

United chose Dulles as our transatlantic gateway in 1990 and we have continued to add new international destinations... Amsterdam, Brussels, Buenos Aires, Paris, Frankfurt, London, Mexico City, Montreal, Munich, Sao Paulo, Toronto, Zurich.

With one connection you have access to the world's fastest-growing emerging markets in the Asia Pacific region. Our Star Alliance partners can take you to almost anywhere in the world.

In the local Dulles market, the new contracts negotiated with our United Express partners have enabled us to expand our regional service to more than 200 flights daily. And United's new partnership with Colgan Air expands our coverage of destinations across the state of Virginia.

United Express has introduced "explus" to Dulles  United's 70-seat regional jets that have redefined the customer experience by including United First and Economy Plus seating.

As part of our portfolio of products to meet changing customer demand, Ted came to Dulles for price-sensitive leisure travelers, flying to Las Vegas, Florida, Cancun and other vacation destinations.

It is the portfolio of products and services, for the business and leisure traveler, local and international destinations, that contributes most to Dulles as a major U.S. hub.

Bringing business and tourism from around the country and the world to Dulles, is essential to the collateral economic growth of the Dulles Corridor.

Forty years ago, Dulles was the aviation equivalent of the Field of Dreams: Build it and they will come.

United flew the first flights in 1963, initiated hub operations in 1986 and our partnership was established.

The vision was not well understood at the time&but anyone flying in over the Dulles Corridor today can see the tremendous growth&the realization of that vision.

The Committee for Dulles, the state of Virginia, the Metropolitan Washington Airports Authority and the members of the Dulles Corridor community have done a great job.

Dulles understands the importance of what United brings to this partnership and you have worked tirelessly with us to our mutual benefit.

MWAA and United successfully coordinated our efforts to attract new service from South African Airways, one of United's Star Alliance partners.

This was good for United, building our network connectivity to Africa and beyond. And it was good for Dulles, becoming a U.S. gateway to South Africa.

Even before hurricanes disrupted refining capacity in the Gulf, fuel delivery was difficult at Dulles, restricting growth and adding to fuel costs.

MWAA and United, working with a consortium of other airlines, recently finalized plans that will add significant jet fuel storage capacity at Dulles.

Improving the passenger experience is essential for the competitive future of IAD.

We have introduced United's Check and Go curbside service at Dulles. Once we demonstrated that Check and Go was good for passengers and the airport, the Authority has been very supportive.

United, MWAA and the TSA are upgrading staffing and equipment to increase security effectiveness and to begin to ease the screening process for passengers.

We need to balance the costs of future construction with the economic realities we both face and maintain competitive fees at Dulles for the future.

I was recently in California, talking to Governor Schwarzenegger about his state's fuel taxes, the highest in the nation, and how they were uncompetitive.

His reply to me... "We like the money."

IAD's current fees are one of the airport's most important competitive attributes.

To paraphrase the Governor, "We like the fees." And we would like them to remain competitive.

This is a great partnership and we know United has not always lived up to our side of the bargain.

United has done the work, to be all that you want us to be. We are now equal to the opportunity.

Dulles and United have shown that seemingly intractable issues will yield to vision, resolve and hard work.

Dulles works. Today, United works.

We need the regulatory environment to work&providing a regulatory structure that allows us to complete what we need to do to take a lead position in the future of global aviation.

Thank you