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Rating Action:

Moody's upgrades United Air Lines' Series 2000-1 EETC B tranche to Ba3

Global Credit Research - 11 Mar 2011

Approximately $150mm of rated pass through certificates affected

New York, March 11, 2011 -- Moody's Investors Service upgraded the Class B certificates of United Air Lines' (or "United") Series 2000-1 Enhanced Equipment Trust Certificates ("Series 2000-1 EETC") to Ba3 from B3. The ratings reflect Moody's expectation that the three remaining semi-annual payments on the underlying equipment notes will be sufficient for the Trustee to make timely payments of interest and principal on the EETC through the scheduled final distribution date of July 1, 2012.

Following United's bankruptcy filing in 2002 and rejection of two aircraft in the Series 2000-1 EETC, the distribution of funds to the various certificate classes for the Series 2000-1 EETC was modified pursuant to the "post-triggering-event" waterfall. This meant that, in general, all payments made by United on the underlying junior tranche equipment notes were used to pay interest and principal on the Class A certificates, with interest accruing on the junior classes of Series 2000-1 EETC. The Class A certificates were repaid during 2010, so the Class B certificates are now the most senior tranche. All accrued interest on the Class B certificates was paid to certificate holders with the January 1, 2011 distribution funded by the then scheduled payment from United on the underlying equipment notes. The special distribution made to certificate holders on March 3, 2011 sufficiently reduced the B tranche certificate balance, such that the remaining scheduled payments from United will cover the remaining scheduled payments on the B tranche certificates.

Issuer: United Air Lines, Inc. EETC's Series 2000-1

....2000-1B, Upgraded to Ba3; previously on Jul 27, 2006 Assigned B3

RATINGS RATIONALE

The rating of Ba3 is two notches above the corporate family rating of B2. Moody's estimates the loan-to-value at about 40%. While there are diverse aircraft types in the 18 aircraft that comprise the collateral, 7 of the tails are among the oldest aircraft in United's fleet. Moody's believes that this financing could be one of the first to be disaffirmed by United under a bankruptcy scenario, which leads to maintaining similar notching to other ETC or EETC transactions that have significantly less over-collateralization. Additionally, there is no liquidity facility to fund near-term interest payments under a default scenario. The revised terms of Series 2000-1 EETC do however; provide cross-default and cross-collateralization of the equipment notes whose payments fund the certificate payments.

The last rating action for United Air Lines occurred on September 29, 2010 when Moody's upgraded the corporate family rating of United Continental Holdings, Inc. (parent of United) to B2, and changed the outlook to stable.

The principal methodologies used in this rating were Enhanced Equipment Trust and Equipment Trust Certificates published in December 2010, and Global Passenger Airlines published in March 2009.

United-Continental Holdings, Inc. is the parent of United Air Lines, Inc. and Continental Airlines, Inc., and is the largest global airline by revenue.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service information, and confidential and proprietary Moody's Analytics information.

Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of maintaining a credit rating.

Moody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history.

The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

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New York
Jonathan Root
Vice President - Senior Analyst
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Michael J. Mulvaney
MD - Corporate Finance
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's upgrades United Air Lines' Series 2000-1 EETC B tranche to Ba3
No Related Data.
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