UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-K

(Mark One)
X  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
   OF 1934
   For the fiscal year ended December 31, 1998

                                       OR

   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
   ACT OF 1934
   For the transition period from                to               

   Commission file number        1-13153

                           Galileo International, Inc.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

                    Delaware                     36-4156005
--------------------------------------------------------------------------------
          (State or Other Jurisdiction          (IRS Employer
        of Incorporation or Organization)    Identification No.)

           9700 West Higgins Road, Suite 400, Rosemont, Illinois 60018
--------------------------------------------------------------------------------
          (Address of Principal Executive Offices, Including Zip Code)

                                 (847) 518-4000
--------------------------------------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)

                                       N/A
--------------------------------------------------------------------------------
         (Former Name, Former Address and Former Fiscal Year, if Changed
                               Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:
         Title of each class            Name of each exchange on which
                                                   registered
  Common Stock, par value $.01 per          New York Stock Exchange
                share                        Chicago Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate  by check  mark  whether  the  registrant:  (1) had filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

Yes X  No

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  the  registrant's   knowledge,  in  definitive  proxy or   
<PAGE>

information   statements   incorporated  by  reference in Part III of  this Form
10-K or any amendment to this Form 10-K. [ X ]

The  aggregate  market  value  of the  voting  and  non  voting  stock  held  by
non-affiliates  of  the  registrant  as of  March  17,  1999  was  approximately
$2,852,000,000. At March 17,1999, there were 104,792,809 shares of Common Stock,
par value $.01 per share, of the registrant outstanding.


                       DOCUMENTS INCORPORATED BY REFERENCE

Part III of this Form 10-K  incorporates by reference  certain  information from
the Proxy  Statement for the Annual Meeting of Stockholders to be held April 29,
1999.



<PAGE>


                           GALILEO INTERNATIONAL, INC.
                          YEAR ENDED DECEMBER 31, 1998
                                      INDEX

                                                                    PAGE
                                                                    ----
PART I
  ITEM 1.    BUSINESS                                                1
  ITEM 2.    PROPERTIES                                              10
  ITEM 3.    LEGAL PROCEEDINGS                                       10
  ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS     11

PART II
  ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED       11
                    STOCKHOLDER MATTERS
  ITEM 6.    SELECTED FINANCIAL DATA                                 12
  ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL       13
                    CONDITION AND RESULTS OF OPERATIONS
  ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
                    RISK                                             24
  ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA             25
  ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON        50
                    ACCOUNTING AND FINANCIAL DISCLOSURE

PART III
  ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT      50
  ITEM 11.   EXECUTIVE COMPENSATION                                  50
  ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND     50
                    MANAGEMENT
  ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS          50

PART  IV
  ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS    50
                    ON FORM 8-K



<PAGE>



PART I
ITEM 1.  BUSINESS

     Galileo International,  Inc. (the "Company"),  incorporated in the state of
Delaware on May 13, 1997, is one of the world's leading  providers of electronic
global  distribution  services for the travel industry  utilizing a computerized
reservation   system   ("CRS").   The  Company   provides   travel  agencies  at
approximately  40,000  locations,  as well as corporations and consumers who use
the Company's  self-booking  products,  with the ability to access  schedule and
fare  information,  book  reservations  and  issue  tickets  for  more  than 500
airlines.  The Company also provides  subscribers  with  information and booking
capability  covering  approximately  40 car rental  companies  and more than 200
major hotel chains with  approximately  41,000 properties  throughout the world.
The Company completed  approximately 350 million bookings in 1998,  representing
an  estimated  $60  billion in travel  services.  The  Company's  travel  agency
subscribers  operate  more than  160,000  computer  terminals,  all of which are
linked to the Company's Data Centre,  one of the world's largest commercial data
processing  complexes,  with a system uptime  performance  record of better than
99.9%.

     The Company  believes  that,  based on revenues,  it is currently  the most
internationally  diversified provider of electronic global distribution services
for the travel  industry.  Over 56% of the  Company's  1998 global  distribution
revenues were derived from bookings  made by  subscribers  outside of the United
States.  The Company believes that it has attained  significant  market share in
many  of the  most  important  and  competitive  markets  for  travel  services,
including the United States and Canada and markets in Europe, Asia/Pacific,  the
Middle East,  Africa and Latin  America.  The Company  competes in these markets
through  its own local  sales and  marketing  offices  and  through a network of
national  distribution  companies  ("NDCs"),  a distribution  structure that has
enabled  the Company to work  closely  with  associates  that  possess  detailed
knowledge of local  travel  markets.  The Company  believes  that its  extensive
international  business  experience provides a firm base for continued expansion
in overseas markets, many of which offer strong growth potential.

     In addition to its core electronic global  distribution  services business,
the Company offers travel  industry-related  information services that draw upon
the Company's in-depth knowledge of the industry and its expertise in developing
and operating complex,  mission-critical  transaction  processing  systems.  The
Company provides the internal  reservation system used by United Air Lines, Inc.
("United Airlines") and operates GlobalFares(TM),  a fares quotation system used
by over 100 airlines worldwide.


Strategy

     The Company  intends to  reinforce  its  position as a leading  provider of
electronic  global  distribution  services and to continue to  capitalize on its
competitive  advantages,  the key elements of which are: (i) a well-balanced and
global presence,  (ii) established  relationships with a diverse group of travel
vendors and subscribers,  (iii) a technologically  advanced  information  system
operated by a highly skilled technical staff,  (iv) a comprehensive  offering of
innovative  products and (v) a strong business  partnership,  reinforced through
equity  ownership with 11 of the world's leading airlines as well as other major
airlines that act as the Company's distributors in various markets.

     The Company operates  globally and believes that in-depth  knowledge of the
local  travel  markets in which it  distributes  its  products is  essential  to
developing  and  strengthening  its ties to travel  vendors and the local travel
agencies which generate  significant booking volumes. The Company will therefore
continue  to attempt  to expand  its  influence  in local  markets  by  building
alliances with influential associates, such as Air Lanka and Galileo Emirates in
Sri Lanka,  that understand the local travel market and are positioned to design
and implement successful sales and marketing programs and, in certain

                                       1
<PAGE>

markets, by seeking opportunities to vertically integrate its operations through
the acquisition of NDCs. (1) Consistent with this strategy, the Company acquired
two NDCs in 1998 that market the Company's products in Canada,  Sweden,  Finland
and Norway.

     The  Company  strives  to  provide  valued  customer  service  in  order to
strengthen  relationships  with  its  established  base of  travel  vendors  and
subscribers  and to  attract  new travel  vendors  and  subscribers  to its core
electronic  global  distribution  services  business.  During 1998,  the Company
created a new  customer  service  delivery  organization,  a team  charged  with
ensuring  that  the  Company's  products  are  backed  by high  quality  service
offerings valued by the Company's customers. As a part of its work, this team is
setting new customer service standards for the Company, and developing processes
to ensure that service around the world is delivered consistently.

     The Company  also intends to continue to  accelerate  the  development  and
deployment of its products in the marketplace. (1) To this end, as a part of the
realignment  of the United  Kingdom  operations  announced  in early  1999,  the
Company has chosen to  consolidate  development  functions  in Denver to enhance
productivity and accelerate bringing new products to market.

     The Company refines its information  technology on a regular basis in order
to maintain a cost-effective  system that is fully integrated from travel vendor
to subscriber and is tailored to individual customer needs. The Company utilizes
an  architecture  with  standard  open  interfaces  and  protocols to ensure the
efficient  distribution  of  information  among  users.  In  1998,  the  Company
introduced  Viewpoint(TM),  a  point-and-click  graphical user interface booking
system for air, hotel and car rental.  Viewpoint  provides easy access to travel
information  which  speeds the booking  process and lets travel  agents focus on
selling and servicing customers. The Company also introduced  FocalpointNet(TM),
a cost effective  means of connecting to the Apollo(R) or Galileo(R)  system via
the Internet versus the standard dedicated circuit or dial-up telephone line.

     Corporate travel departments and individual  consumers are demonstrating an
increased  interest in directly  accessing the information and services provided
by a CRS.  In  response,  the Company  increased  its  emphasis on  self-booking
products  and  services,  and  reorganized  internally  to  better  support  its
corporate   clients.   Among  the  Company's   1998   initiatives   was  Galileo
Passport(TM),  a new Web-based  booking product  sponsored by travel vendors and
designed to provide  travelers  with a fast and easy method to make business and
leisure travel arrangements.  Also during 1998, the Company introduced Corporate
Travelpoint(TM),  a fully integrated  Web-based system designed to meet the most
exacting travel management  requirements of the largest organizations.  This new
product gives corporate travel managers the ability to rank preferred vendors by
market,  administer  contracts to ensure travelers are using preferred  vendors,
and enforce policy  compliance  through  exception  reporting and approval.  The
Company forged an alliance with Value Integrated Network ("VIN.net") that allows
the Company to offer  corporate  subscribers  a broader and more complete set of
travel and entertainment expense reporting solutions. The Company also forged an
alliance with Apex Solutions to provide enhanced management  reporting tools for
travel  agency  and  corporate   clients.   In  1999,  the  Company  intends  to
aggressively market these products to the world's largest companies. (1)

     During  1998,  the Company also began  investing  in  companies  that offer
innovative  technical  solutions that support the Company's  business  needs. In
late  1998,  the  Company  acquired  S. D.  Shepherd  Systems,  Inc.  ("Shepherd
Systems"),  a  Florida-based  leader  in  marketing  information  data  transfer
("MIDT")  processing,  which currently services 15 of the top 25 airlines in the
world.  Traditionally,  many small and medium sized  airlines have purchased raw
MIDT data and hired  companies to analyze and interpret the data for them.  With
the acquisition of Shepherd Systems, carriers can now receive data directly from
the  Company,  have it  processed  by Shepherd  Systems,  and use the  resulting
information
---------

(1)   See Statement Regarding Forward-Looking Statements on page 20.

                                       2
<PAGE>

to enhance their marketing activities and profitability.  The Company expects to
continue  this  strategy of investing  in  technology  companies  which helps to
increase the value delivered to the Company's customers. (1)


Electronic Global Distribution Services - Markets

     As  of  December  31,  1998,  the  Company   provided   electronic   global
distribution  services for the travel industry in 104 countries via a network of
on-line  terminals  operated at  approximately  39,600 travel  agency  locations
worldwide.

     The geographic  breadth of the Company is  demonstrated  by the table below
which shows the approximate  number of travel agency  locations and terminals by
region.

                            Travel Agency
                              Locations                    Terminals at
                        at December 31, 1998            December 31, 1998
                     ----------------------------   ---------------------------
Region                    Number             %          Number             %
------                    ------             -          ------             -
United States             12,500           31.6%        59,200           36.9%
Europe                    13,300           33.6%        55,300           34.4%
Asia/Pacific               5,600           14.1%        21,300           13.3%
Canada                     3,200            8.1%        11,000            6.9%
Middle East/Africa         3,300            8.3%         9,500            5.9%
Latin America              1,700            4.3%         4,200            2.6%
                     ------------    ------------   -----------    ------------
                          39,600          100.0%       160,500          100.0%
                     ============    ============   ===========    ============


Electronic  Global  Distribution  Services - Customer  Base:  Travel Vendors and
Subscribers

     The Company derives substantially all of its electronic global distribution
services  revenues  from booking  fees paid by travel  vendors.  Travel  vendors
store,  display,  manage and sell their services through the Company's  systems.
Airlines and other travel vendors are offered varying levels of functionality at
which they can participate in the Company's systems, Apollo in North America and
Japan and Galileo in the rest of the world.  In 1998,  approximately  92% of the
Company's booking fee revenues were generated from airlines.

     The booking fee  structure  for airlines  varies based upon the location of
the subscriber  generating the booking.  For bookings made in the United States,
Canada,  Mexico and Japan,  the Company  charges  airlines a fee per transaction
and, thereby,  earns a separate fee for each booking and for each  cancellation.
In the rest of the world,  the Company  charges  airlines a booking fee per "net
segment." In that case, the Company earns a fee for net bookings (gross bookings
less  cancellations).  Globally,  car,  hotel and  leisure  travel  vendors  are
generally charged a fee per net booking. The Company charges premiums for higher
levels of  functionality  selected  by the travel  vendors.  Nearly  100% of the
Company's  booking fees are billed in U.S.  dollars,  which limits the Company's
market risk exposure to fluctuations in other currencies against the U.S.
dollar.

     The Company also offers products to travel  agencies and other  subscribers
that enable them to electronically  locate,  price,  compare and purchase travel
vendors' services through the Company's
---------

(1)   See Statement Regarding Forward-Looking Statements on page 20.

                                       3
<PAGE>

systems.  By  accessing  the  electronic  marketplace  created by the  Company's
systems,  the subscriber is able to obtain  schedule,  availability  and pricing
information,  and purchase  travel  services  from multiple  travel  vendors for
complex  travel  itineraries.  The  Company's  product and service  offerings to
travel  agencies also  facilitate  internal  business  processes such as quality
control and operations and financial information management.  Increasingly, this
includes the integration of products and services from independent  parties that
complement the Company's core product and service offering.

     Travel  agencies  access the Company's  systems using hardware and software
typically  provided  by the  Company or an NDC.  The  Company  and the NDCs also
provide technical  support and other assistance to the travel agencies.  Through
the NDCs and the  Company's  internal  sales  and  marketing  organization,  the
Company has  relationships  with travel  agencies  of all sizes  throughout  the
world.  Multinational  travel  agencies  constitute  an  important  category  of
subscribers because of the high volume of business that can be generated through
a single  relationship.  Bookings  generated by the Company's five multinational
travel  agency  customers  constituted  19.0% of the  bookings  made through the
Company's systems in 1998.

     With the rise in  popularity  of  personal  computers,  commercial  on-line
services and other means of Internet access,  individual consumers  increasingly
have the ability to purchase  services  directly  from travel  vendors that have
electronic  distribution  capability.  The Company has  therefore  developed  or
facilitated  the use of direct  access  products  for travel  vendors and travel
agencies to target  individual  consumers.  Among the  Company's  travel  agency
customers are a number of firms whose  businesses  specialize in attracting  and
servicing  customers  through the Internet.  The Company also provides  software
products to travel  vendors and travel  agencies which enable them to distribute
directly to their customers.


Electronic Global Distribution Services - Product Distribution

     The Company  distributes its products to subscribers  primarily through its
internal sales and marketing organization and its NDCs. In markets not supported
directly by the Company's sales and marketing organization,  the Company prefers
to use the national distribution company structure,  where feasible, in order to
take advantage of the NDC's local market knowledge, as well as its travel vendor
and  subscriber  relationships.  The  NDC is  responsible  for  cultivating  the
relationship with subscribers in its territory, installing subscribers' computer
equipment, maintaining the hardware and software supplied to the subscribers and
providing  ongoing customer  support.  The NDC earns a share of the booking fees
generated from the NDC's  territory,  as well as all  subscriber  fees billed in
that marketplace.

     The Company's  local sales and marketing  groups  distribute  the Company's
products in the United States, Mexico, Canada, Belgium,  France, Germany, Spain,
Portugal,  The Netherlands,  Switzerland,  Sweden,  Finland,  Norway, Hong Kong,
Singapore,  The  Philippines,  Brazil  and  Venezuela.  Booking  made  in  these
countries  collectively  accounted for  approximately  62% of the Company's 1998
bookings.

     Affiliates of certain airline  stockholders own the NDCs whose distribution
territories cover Austria, Greece, Ireland, Italy, Japan and the United Kingdom.
Collectively, these NDCs manage subscriber accounts that generated approximately
21% of the Company's 1998 bookings.

     Associate  NDCs,  typically own or operated by the national  airline of the
relevant country or a local travel-related business, accounted for approximately
17% of the Company's booking volume in 1998.

     The  Company  and  its  NDCs  distribute  direct  access  products  such as
Corporate  Travelpoint,   Travelpoint(TM)  and   Travelpoint.com(TM)  to  travel
agencies for use by their  corporate and individual  customers.  The Company and
its NDCs also distribute the Company's products to certain Internet-based travel
service  providers.  The World Wide Web sites of those travel service  providers
allow individual  consumers  direct access to the Company's  systems and provide
the Company with an additional means of generating booking fees.

                                       4
<PAGE>

     The Company has also  developed or facilitated  the  development of branded
direct access products for certain airlines (such as United Connection by United
Airlines  and Air Manager by Austrian  Airlines).  The Company has adopted  this
approach in marketing and  distributing  direct access products that are branded
by the sponsoring  airline and marketed directly by the airline to its corporate
and individual customers. These products provide access to the Company's systems
and, therefore, generate booking fees for the Company.


Information Services

     As a result of developing  and  operating one of the world's  largest CRSs,
the Company has acquired  significant  knowledge of, and experience in, both the
travel  business and the  information  technology  business.  This knowledge and
experience has created a basis from which the Company has been able to provide a
range of specialized information technology solutions to airlines throughout the
world.  The  Company  currently  provides  fares  quotation  services,  internal
reservation   services,   other  internal   management   services  and  software
development services to such airlines.

     The  Company  currently  provides  fares  quotation  services  through  its
GlobalFares fares quotation system to airlines throughout the world. GlobalFares
is used in  conjunction  with each  airline's  internal  reservation  system and
provides  pricing  information  which meets the challenges and  complexities  of
real-time  fares  quotation  processing.   Currently,   over  100  airlines  use
GlobalFares  and the Company  plans to continue to market  GlobalFares  to other
airlines.

     The Company also provides internal reservation services to United Airlines.
Such  services   include  the  display  of  schedules  and   availability,   the
reservation,  sale and  ticketing  of travel  services  and the display of other
travel-related  information to United  Airlines'  airport  offices,  city ticket
offices and reservation  centers throughout the world. In addition,  the Company
provides  certain other internal  management  services to United Airlines and to
other airline stockholders. Other internal management services currently include
network  management,   departure  control,   availability  displays,   inventory
management, database management and systems and software operations.


Technology

     The Company has made  significant  investments  in  technology  and related
equipment. The Company believes that it will benefit from operating economies of
scale as its technology is easily expandable and can support  incremental volume
with minimal additional investment. (1)

     The Company's computer systems provide real-time,  high-volume  transaction
processing  and  are  supported  by 21  mainframes  with a  combined  processing
capacity  of 5,020  MIPS  (millions  of  instructions  per  second).  Additional
peripheral  hardware provides  approximately  16.8 terabytes of disk information
storage.  The Company's  computer  systems are operational 24 hours a day, every
day of the year.  They  process,  on  average,  over 195  million  requests  for
information  per day.  At peak  times,  the  Company  processes  more than 6,100
messages per second.

     The Company's global communications  network provides a fast, resilient and
reliable  method for travel  agencies and travel vendors to access the Company's
systems.  The  Company's  sites near  Denver  and  London use a meshed  backbone
network to provide direct  connections from the Company to certain  locations in
North America and Europe.  This backbone network provides automatic rerouting in
the event of a circuit failure. In addition to the meshed backbone network,  the
Company  makes  extensive  use  of  independent  international  network  service
providers to increase its reach into the global market.
---------

(1)   See Statement Regarding Forward-Looking Statements on page 20.

                                       5
<PAGE>

     The Company's data and transaction processing services are dependent on the
Company's Data Centre. The Company maintains  comprehensive  security and backup
systems in order to deliver consistent,  reliable service to customers. Although
the  Company  believes  it has taken  sufficient  precautions  to  protect  this
facility and to achieve network security, a natural or manmade disaster or other
calamity that causes significant damage to the facility or the Company's systems
would have a material  adverse effect on the business,  financial  condition and
results of operations of the Company. (1)


Competition - Electronic Global Distribution Services

     The Company  primarily  competes  against  other  well-established  CRSs to
provide  electronic  global  distribution  services to the travel industry.  The
Company's  principal  competitor  in the United  States is SABRE,  its principal
competitor in Europe is Amadeus and its principal  competitor in Asia is Abacus.
To a lesser extent,  the Company also  competes,  on a regional  basis,  against
Axess,  Infini and Topas.  Many of these  competitors  offer  products which are
similar to the products of the Company.

     Competition to attract and retain travel agency subscribers is intense.  In
highly  competitive  markets,  the  Company and other CRSs offer  incentives  to
travel  agency  subscribers  if certain  productivity  or booking  volume growth
targets are achieved.  Although  expansion of the use of such incentive payments
could adversely  affect the Company's  profitability,  the Company's  failure to
continue to make such incentive payments could result in the loss of some travel
agency  subscribers.  If the Company were to lose a  significant  portion of its
current base of travel agencies to a competing CRS or if the Company were forced
to further increase the amounts of such incentive  payments  significantly,  the
Company's  business,  financial  condition  and results of  operations  could be
materially adversely affected.


Competition - Information Services

     Competition within the information services market is segmented by the type
of service offering.  Internal  reservation  services competitors include SABRE,
EDS, IBM and British Airways  (through  Speedwing).  Competitors for data center
and network  outsourcing include IBM, EDS, and niche suppliers such as SABRE and
Speedwing.


Relationship With Airline Stockholders

     As of December 31, 1998, the airline  stockholders owned, in the aggregate,
approximately  64.9% of the  Company's  outstanding  Common  Stock.  The airline
stockholders  controlled by United Airlines and KLM Royal Dutch Airlines ("KLM")
are the Company's two largest stockholders, owning approximately 31.9% and 10.2%
of the outstanding Common Stock, respectively. No other airline stockholder owns
more than 10% of the  outstanding  Common  Stock.  In addition,  Special  Voting
Preferred  Stock allows certain of the airline  stockholders to elect a total of
seven of the thirteen  members of the Company's Board of Directors.  The airline
stockholder  controlled by United  Airlines owns three shares of Special  Voting
Preferred Stock and the airline stockholders controlled by KLM, US Airways, Inc.
("US Airways"), British Airways plc and SAirGroup each own one share, each share
entitling its holder thereof (or in certain circumstances,  holder's transferee)
to  elect  one  director.  As  to  the  remaining  six  directors,  the  airline
stockholders  have  agreed,  pursuant  to an  agreement  with the  Company  (the
"Stockholders' Agreement"), to vote their shares of Common Stock in favor of the
election of three  independent  directors  who will be nominated by the Board of
Directors and the election of three management directors. As a result, as long
---------

(1)   See Statement Regarding Forward-Looking Statements on page 20.

                                       6
<PAGE>

as the Stockholders'  Agreement  remains in effect and the airline  stockholders
own in the aggregate more than 50% of the outstanding  Common Stock, the airline
stockholders will control the election of the entire Board of Directors.

     At the  end of  1998,  the  sales  representation  agreements  with  United
Airlines  and US Airways,  pursuant to which these  airlines  supplied the sales
force for the Company's Apollo brand reservations products to subscribers in the
United States and Mexico, were terminated. In an effort to increase focus on the
Company's product and service  offering,  the Company will be assembling its own
dedicated sales force in 1999. In 1997, the Company entered into non-competition
agreements  with each of the airline  stockholders  which  prohibit  the airline
stockholders  and their  affiliates from competing with the Company in providing
reservation  services to neutral travel agencies.  However,  the non-competition
agreements include certain  exceptions that permit the airline  stockholders and
their affiliates to, among other things,  provide and market certain reservation
services to certain customers of the airline stockholders.

     United Airlines is the largest single travel vendor utilizing the Company's
systems,  generating  revenues that accounted for  approximately  18.2% of total
revenues  in  1998.  No other  travel  vendor  accounted  for 10% or more of the
Company's revenue in 1998.


Industry Regulation

     The Company's  business is subject to regulation in the United States,  the
European Union and Canada.  Each  jurisdiction's  rules are largely based on the
same set of core  premises:  that a CRS must  treat all  participating  airlines
equally, whether or not they are owners of the system; that airlines owning CRSs
must  not  discriminate  against  the  CRSs  they  do  not  own;  and  that  CRS
relationships  with travel  agencies  should not be an impediment to competition
from other CRSs or to the  provision  of  services to the  traveler.  While each
jurisdiction has focused on the CRS industry's role in the airline industry, the
U.S.  CRS Rules and the EC CRS Rules  have the  greatest  impact on the  Company
because of the volume of business transacted by the Company in the United States
and the European  Union.  Neither  jurisdiction  currently seeks to regulate CRS
relationships  with  non-airline  participants  such as  hotel  and  car  rental
companies,  although  changes to the EC CRS Rules effective March 15, 1999 allow
CRSs to  incorporate  rail services into CRS displays and such rail services are
therefore subject to certain sections of the EC CRS Rules.

     The U.S. CRS Rules, among other things,  prohibit a CRS that is owned by an
airline or an  airline  affiliate  from  entering  into  contracts  with  travel
agencies that contain exclusivity clauses or that require the agency to maintain
a certain percentage of computer terminals or bookings for a particular CRS.

     In several  respects,  the United States and European Union regulators have
reached  similar  conclusions  regarding the  appropriate  means of ensuring the
achievement of the desired results. Both jurisdictions recognize that there is a
possibility  that  subscribers  will  book  flights  which  appear  early  on in
availability  displays, as they may be reluctant to read through all information
presented  in  subsequent  displays.  Accordingly,  both  jurisdictions  require
systems to provide airline displays for travel agencies which are ordered on the
basis of neutral  principles and that all airlines must be charged the same fees
for the same level of  participation.  The EC CRS Rules go further  and  require
that fees must be reasonably  structured and  reasonably  related to the cost of
the service provided and used. Moreover,  under EC CRS Rules,  airlines have the
ability to disallow  certain  types of  bookings,  unless they have already been
accepted.

     Both the United States and European  Union  regulators  seek to redress the
potential that a CRS used for internal reservation purposes would offer a travel
agency  subscriber  superior access to the hosted airline and inferior access to
all other airlines.  The EC CRS Rules mandate a separation  between the internal
reservations  functionality  and the  functionality  used by travel  agencies to
provide neutral information,  and require annual confirmation of compliance with
this rule,  among  others,  by  independent  auditors.  While the U.S. CRS Rules
contain several principles  outlining the requirement of unbiased displays,  the
EC CRS 

                                       7
<PAGE>

Rules prescribe a specific  formula which a CRS must use to order its display of
flights.  The U.S. CRS Rules also  require  functional  equivalence  between the
functionality  offered to airlines whose internal reservation systems are hosted
in CRS and those  provided to all other  airlines.  The EC CRS Rules require the
CRS owner  airlines  to provide the same data,  and accept and confirm  bookings
with equal  timeliness in all CRSs,  when requested to do so. The U.S. CRS Rules
contain no counterpart to the European  requirement  that subscribers be offered
access to the CRS on a  nondiscriminatory  basis.  Although  the U.S.  CRS Rules
extend  only to use of CRSs by travel  agencies  (and do not  apply to  products
distributed directly to corporate travel departments and individual  consumers),
European and Canadian  rules apply to all  subscriber  uses of CRSs,  whether by
travel agencies, individuals or corporate travel departments.

     The U.S. CRS Rules are currently under review.  Significant  changes to the
EC CRS Rules were effective March 15, 1999. In addition to the changes affecting
rail mentioned above, the most significant  changes to the EC CRS Rules are: (i)
more  restrictive  data privacy  rules to further  limit  permissible  access to
passenger data, (ii) a new  requirement to  automatically  credit an airline for
booking  fees  related to bookings  rejected by an airline  without any need for
subscriber intervention,  (iii) the identification of corporate implants must be
removed from MIDT  products and the Company must offer MIDT products for sale to
subscribers  both  globally and  selectively,  and to groups of airlines  and/or
subscribers  for  common  processing,   and  (iv)  effective  August  15,  1999,
productivity  benefits to subscribers  must in the future be based upon ticketed
segments.  The Company does not anticipate  that the changes to the EC CRS Rules
will have a material impact on its financial results.

     In its historical role as provider of two distinct systems, Apollo in North
America  and  Japan,  and  Galileo  in the rest of the world,  the  Company  has
developed  familiarity  with the  requirements  and approval  procedures of each
regulatory  jurisdiction,  and is experienced in addressing regulatory issues as
they arise.


Research & Development

     Research and development costs consist of expenditures  incurred during the
course of planned research and investigation aimed at discovery of new knowledge
useful in  developing  new products or  processes,  or  significantly  enhancing
existing  products  or  production  processes,  and the  implementation  of such
through design,  testing of product  alternatives or construction of prototypes.
Research and development costs, excluding amortization of computer software, are
expensed as incurred and were approximately $4.8 million,  $8.6 million and $8.2
million for the years ended December 31, 1998, 1997 and 1996,  respectively.  In
addition,  the Company  invests in  companies  that offer  innovative  technical
solutions to meet the Company's business needs.


Employees

     The  Company  believes  that  its  success  is due  in  large  part  to its
employees.  The Company  strives to hire and retain highly skilled and motivated
personnel.  As of December 31, 1998, the Company  employed  approximately  3,000
people.  Approximately 72% of the Company's  employees are located in the United
States  and  Canada,  24%  in  Europe  and 4% in  Latin  America  and  countries
throughout  the  Asia/Pacific   region.  The  Company's   employees  in  Brazil,
representing  less  than  1%  of  the  Company's  workforce,  are  unionized  in
accordance with local  regulations.  The Company  believes that its relationship
with its employees is good.

                                       8

<PAGE>

Executive Officers

     The executive officers of the Company, their positions with the Company and
their ages, as of the date of this filing,  are as set forth below. There are no
family relationships among any directors or officers.

Name                             Age                Position
----                             ---                --------
James E. Barlett                 55    Chairman,      President,     Chief
                                       Executive Officer
Paul H. Bristow                  56    Senior   Vice   President,    Chief
                                       Financial Officer and Treasurer
Lyn Bulman                       39    Senior   Vice   President,    Human
                                       Resources and Corporate Relations
Michael G. Foliot                44    Senior   Vice   President,   Global
                                       Vendor Marketing
Babetta R. Gray                  40    Senior  Vice   President   Customer
                                       Service  Delivery,  General Counsel
                                       and Secretary
James E. Lubinski                43    Senior Vice President,  Information
                                       Services and Operations
David A. Near                    40    Senior Vice  President,  Subscriber
                                       Marketing


     Mr. Barlett has been President and Chief  Executive  Officer since November
1994 and Chairman  since May 1997.  Prior to joining the  Company,  he served as
Executive  Vice  President of  Worldwide  Operations  and Systems of  MasterCard
International  Corporation  ("MasterCard")  and was a member  of the  MasterCard
International Operations Committee.  Prior to his employment at MasterCard,  Mr.
Barlett  served as Executive  Vice President of Operations for NBD Bancorp where
from 1979 to 1992 he managed  the  redevelopment  of core  banking  systems  and
directed  the   development,   implementation   and   operation  of  the  Cirrus
International  automated  teller switching system and served as Vice Chairman of
Cirrus Inc. Mr. Barlett is also a Director of the Company.

     Mr.  Bristow has been Senior Vice  President  and Chief  Financial  Officer
since February 1993 and Treasurer since May 1997.  Prior to joining the Company,
Mr.  Bristow  served as  financial  advisor to various  companies  in the United
Kingdom  before  which he had  spent  two  years as a member  of a buy-in  group
involved in corporate finance as intermediaries,  and as advisors.  From 1980 to
1988,  he worked for  London  International  Group  plc, a listed  international
consumer products company in London,  initially as Division Finance Director and
then on the Main Board as Group Finance  Director.  Prior to 1980,  Mr.  Bristow
worked  for  ITT  in  Canada,  Norway  and  Singapore;  with  Philip  Morris  in
Switzerland and Canada; and with Arthur Andersen & Co. in Canada. Mr. Bistrow is
also a Director of the Company.

     Ms. Bulman has been Senior Vice  President,  Human  Resources and Corporate
Relations  since May 1995.  From 1990 to March  1993,  she  served as Manager of
Compensation  and  Benefits  and from  April  1993 to May  1995,  she  served as
Director of Human Resources - Europe.  Prior to joining the Company,  Ms. Bulman
held executive  positions in the United Kingdom at Dun & Bradstreet  Corporation
and Fisons (Pharmaceutical Division) plc.

     Mr. Foliot has been Senior Vice  President,  Global Vendor  Marketing since
January 1997. In this position,  Mr. Foliot is responsible for all airline, car,
hotel, leisure,  corporate and consumer,  and GlobalFares sales and marketing as
well as managing all airline  stockholder  relationships.  From 1993 to 1996, he
served as Senior Vice  President  Asia/Pacific  and the Americas of the Company.
From 1990 to 1993,  Mr. Foliot was Vice  President  and General  Manager for all
American  Express  activities  in Canada  related to corporate  card,  corporate
travel and leisure travel  business and prior to that he held various  positions
with American Express International in Singapore, Indonesia and Korea.

     Ms. Gray has been Senior Vice  President,  Customer  Service  Delivery  and
General  Counsel since July 1998, and has been Secretary since May 1997. In this
position,  Ms. Gray is responsible for ensuring that the Company's  products are
backed by high quality service offerings that are valued by its customers.

                                       9
<PAGE>

Prior to that she was Senior Vice  President,  Legal and General  Counsel  since
March 1996, Vice  President,  Legal and General Counsel since September 1995 and
joined the Company as Senior Counsel in April 1990.  Before joining the Company,
Ms.  Gray was  Counsel for Reebok  International  Ltd.  from 1989 to 1990 and an
associate with the Boston law firm of Foley Hoag & Eliot from 1984 through 1988.
Ms. Gray is also a Director of the Company.

     Mr.  Lubinski  has been Senior Vice  President,  Information  Services  and
Operations  since July 1995. In this position,  Mr.  Lubinski is responsible for
ensuring technological  leadership in systems development for the Company. Prior
to joining the Company,  Mr. Lubinski served since 1994 as Senior Vice President
and Division Head of Systems and  Operations for Boatmen's  Trust Company.  From
1978 to 1994,  Mr.  Lubinski  held several  technical  positions at NBD Bancorp,
including First Vice President and Development Manager. Mr. Lubinski is a member
of the Board of Trustees of Stichting "the SITA Foundation" and also a member of
the Board of Trustees for the PorterCare Foundation.

     Mr. Near has been Senior Vice President, Subscriber Marketing since January
1997. In this position,  Mr. Near is responsible  for all subscriber  marketing,
including the Company's  relationships  with its various NDCs. Prior to assuming
these  responsibilities,  Mr. Near served as Senior Vice  President of Intuitive
Products and  Interactive  Services and as Director of Car,  Hotel,  Leisure and
Advertising  Product Management for the Company and Covia Partnership.  Prior to
joining the Company in 1987,  Mr. Near held a number of management  positions at
United Airlines and B.F. Goodrich.


ITEM 2.  PROPERTIES

     The  Company's   principal  executive  offices  are  located  in  Rosemont,
Illinois, a suburb of Chicago,  where the Company leases  approximately  120,000
square feet of office  space  pursuant to a lease that expires in the year 2000.
The Company's Data Centre is located in Englewood, Colorado, a suburb of Denver,
in two  adjacent  buildings  owned  by the  Company.  The Data  Centre  contains
approximately  236,000  square feet of space,  including  approximately  130,000
square feet of raised  floor  computer  room space.  The Company also leases and
owns office space in various other worldwide  locations,  including  development
and marketing offices located in or near Denver,  London and Hong Kong. See note
7 to the Company's consolidated financial statements,  located elsewhere herein,
regarding  closure of the development and marketing offices located near London.
The Company  believes  that its offices  and Data  Centre are  adequate  for its
immediate needs and that  additional or substitute  space is available if needed
to accommodate growth and expansion. (1)


ITEM 3.  LEGAL PROCEEDINGS

     In the  Company's  annual  report on Form 10-K for the  fiscal  year  ended
December 31,  1997,  it was  reported  that on  September  8, 1997,  The Galileo
Company,  the Company's United Kingdom  subsidiary,  had instituted  proceedings
against Weir Systems Ltd  ("Weir") in the High Court of Justice,  Queen's  Bench
Division,  London,  England,  seeking  damages  and other  relief in  respect of
certain computer software and services supplied by Weir, and that on January 30,
1998,  Weir served on The Galileo  Company a Defense  and  Counterclaim.  Weir's
Counterclaim  sought  damages  and other  relief  totaling  approximately  $46.5
million,  plus interest.  The Company  vigorously pursued its claim and defended
the  Counterclaim  made against it. The Galileo Company and Weir have now agreed
terms of  settlement  and, by a Consent  Order dated  December 17, 1998,  it was
ordered that all further proceedings be stayed.
---------

(1)   See Statement Regarding Forward-Looking Statements on page 20.

                                       10
<PAGE>

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

None


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

Price Range of Common Stock

     The Company's Common Stock,  $.01 par value,  began trading on the New York
Stock  Exchange  under the symbol "GLC" in July 1997.  The following  table sets
forth, for the quarters indicated, the range of high and low closing sale prices
for the Company's  Common Stock on the New York Stock Exchange and the dividends
declared.

                              Market Price                       Dividends
      Quarter                     High             Low           Declared
      -------                 ------------         ---           ---------

      1998
           Fourth             $   43   1/2     $  28   3/4         $ 0.075
           Third                  45  7/16        31   3/4           0.075
           Second                 45  1/16        35   1/2           0.075
           First                  39   1/2        26  3/16           0.060
                                                                   -------
                Total                                              $ 0.285
                                                                   =======


      1997
           Fourth             $   29   1/4     $  23   3/8         $ 0.060
           Third                  27 15/16        25  1/16               -
                                                                   -------
                Total                                              $ 0.060
                                                                   =======


On March 17, 1999, the Company's stock was held by approximately  230 holders of
record.

Dividend Policy

     Although  the  Company  expects to  reinvest a  substantial  portion of its
earnings  in its  business,  the  Company  currently  intends to continue to pay
regular  quarterly  cash  dividends.  However,  the  declaration  and payment of
dividends,  as well as the amount thereof,  are subject to the discretion of the
Board of Directors of the Company and will depend upon the Company's  results of
operations,  financial condition, cash requirements,  future prospects and other
factors  deemed  relevant by the Board of  Directors.  There can be no assurance
that the Company will declare and pay any future dividends. (1)
---------

(1)   See Statement Regarding Forward-Looking Statements on page 20.

                                       11


<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA
<TABLE>

                                                            Year Ended December 31,
                                                            -----------------------
                                               1998 (1)   1997 (2)     1996       1995       1994
                                               --------   --------   --------    -------    -------
                                                       (In millions, except share data)

Income Statement Data:
<S>                                           <C>        <C>        <C>          <C>        <C>    
Revenues                                      $ 1,480.8  $ 1,256.1  $ 1,088.3    $ 966.4    $ 813.8
Operating income                                  331.6      211.5      175.4      140.3       69.3
Income before income taxes                        325.5      205.6      167.1      123.7       53.2
Income taxes                                      129.9       44.0        1.9        2.6        4.4
Net income                                        195.6      161.6      165.2      121.1       48.8
Pro forma net income (3)                              -      123.4      100.3       74.2       31.9
Basic earnings per common share                    1.87          -          -          -          -
Pro forma basic earnings per common share (3)         -       1.30       1.14       0.84       0.36
Diluted earnings per common share                  1.86          -          -          -          -
Pro forma diluted earnings per common share (3)       -       1.30       1.14       0.84       0.36
Dividends per common share                        0.285       0.06          -          -          -

Balance Sheet Data:
Current assets                                  $ 243.5    $ 224.3    $ 240.8    $ 187.3    $ 133.8
Total assets                                    1,291.1    1,268.5      599.9      569.0      555.5
Current liabilities                               231.8      201.4      199.6      227.6      191.5
Long-term debt                                     69.5      250.0       70.0      134.2      239.8
Other long-term obligations                       147.1      133.4       74.9       77.6       84.7
Partners' capital                                     -          -      255.4      129.6       39.5
Stockholders' equity                              842.6      683.7          -          -          -

Other Data:
Operating income as a
     percentage of revenue                        22.4%      16.8%      16.1%      14.5%       8.5%
Reservations booked using the
     Company's CRS systems  (4)                   345.7      336.1      316.1      285.4      255.0
Net cash provided by operating activities       $ 379.1    $ 324.7    $ 214.1    $ 172.6    $ 135.8
Capital expenditures  (5)                          98.7       65.9       40.0       64.5       33.2
</TABLE>


(1)For the year ended  December  31,  1998,  operating  expenses  include  $26.4
   million  ($15.9  million  after  tax)  of  special  charges  related  to  the
   realignment  of the  Company's  operations  in the United  Kingdom  and $13.4
   million  ($8.1  million  after  tax)  in  gains  related  to  settlements  of
   contractual disputes from prior years.

(2)Effective  July 30, 1997,  Galileo  International  Partnership  merged into a
   wholly owned limited liability company  subsidiary of Galileo  International,
   Inc. (the "Merger"),  the Company  effected an initial public offering of its
   Common Stock (the  "Offering"),  and the Company incurred debt related to the
   purchase of three national distribution companies.

   For the year ended  December 31, 1997,  the results of the acquired NDCs have
   been   consolidated  with  those  of  the  Company  from  the  date  of  each
   acquisition.  1997  operating  expenses  include $20.1 million ($12.1 million
   after tax) of special charges related to the integration of the acquired NDCs
   and a $15.3  million  nonrecurring  charge to reflect  the  establishment  of
   initial  deferred tax assets and  liabilities.  No provision for U.S. federal
   and state income taxes was recorded  prior to July 30, 1997 as

                                       12
<PAGE>

   such  liability   was  the   responsibility   of   the  partners  of  Galileo
   International Partnership, rather than of the Company.

(3)As a result of the  Merger  and the  Offering,  pro forma net  income and pro
   forma basic and diluted earnings per share data are calculated as though: (i)
   partners'  capital was converted into  88,000,000  shares of Common Stock for
   all periods  presented  and the  16,799,700  shares issued to the public were
   outstanding  from July 30,  1997,  and (ii) the  Company  had  operated  in a
   corporate  form for all  periods  presented  and  accordingly  was subject to
   federal and state income taxes.

(4)Transactions in respect of bookings made in the United States, Canada, Mexico
   and Japan have been  converted to a net segment  basis.  Bookings made in the
   rest of the world are reported on a net segment basis.

(5)Capital   expenditures  include  purchases  of  property  and  equipment  and
   purchases of computer software. In addition, the capitalization of internally
   developed computer software was $14.2 million,  $21.2 million, $21.6 million,
   $24.5 million, and $25.7 million for the years ended December 31, 1998, 1997,
   1996, 1995, and 1994, respectively.


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


Overview

     Effective July 30, 1997,  Galileo  International  Partnership merged into a
wholly owned limited liability company subsidiary of Galileo International, Inc.
(the "Merger") and effected an initial public  offering of its Common Stock (the
"Offering").  References  to the Company mean, at all times prior to the time of
the Merger, Galileo International  Partnership and its consolidated subsidiaries
and, at all times thereafter,  Galileo International,  Inc. and its consolidated
subsidiaries. As a result of this Merger, (i) the Company became subject to U.S.
federal and state  income  taxes that were  previously  borne by the partners of
Galileo International  Partnership and (ii) the Company recorded a $15.3 million
nonrecurring  charge to income  tax  expense  to reflect  the  establishment  of
deferred tax assets and liabilities  arising at the time of the Merger. Upon the
Merger, the airline  stockholders'  partnership interests were exchanged for the
Company's  Common  Stock in the  same  proportion  as that of  their  respective
partnership interests in Galileo International Partnership.

     The Company generates most of its revenues from the provision of electronic
global  distribution  services.  Booking  fees are the  primary  source  of this
revenue and are  charged to travel  vendors for  reservations  made  through the
Company's systems. Booking fees depend on several factors, including the type of
reservation  booked  (primarily  air, car rental or hotel),  the location of the
booking and the level of travel vendor  participation in the Company's  systems.
In  addition  to  booking  fees and  related  premiums  paid by travel  vendors,
subscribers generally pay fees for hardware, software and certain services. Such
fees are often  discounted  or waived for travel agency  subscribers,  depending
upon the level of bookings generated by the travel agency. In highly competitive
markets, the Company often makes incentive payments to travel agency subscribers
that achieve defined productivity or booking volume growth objectives.

     The Company  also  provides  information  services to  airlines,  including
certain of its  airline  stockholders.  The  Company  currently  provides  fares
quotation services,  internal  reservation  services,  other internal management
services and software development services to such airlines.

     The  Company's  expenses  consist  primarily of local sales,  marketing and
customer  service costs,  commissions  paid to national  distribution  companies
("NDCs"),  costs  associated with the operation of the Company's Data Centre and
wages and benefits payable to employees of the Company. Substantially all

                                       13
<PAGE>

of the Company's  expenses are  denominated and paid in U.S.  dollars,  with the
exception of operating expenses incurred outside of the United States.  Costs of
operations shown on the Company's  statements of income consist primarily of the
costs of operating the Data Centre  (including wages and benefits of Data Centre
and  other   technical   services   personnel,   and   hardware,   software  and
communications costs). Commissions, selling and administrative expenses shown on
the Company's  statements of income consist primarily of commissions  payable to
NDCs and other costs of the Company's selling and administrative functions.

     The Company's earnings can be significantly  impacted by events that affect
the travel  industry.  Such impact is  typically  caused by  economic  and other
conditions  that  decrease  the number of bookings  made  through the  Company's
systems as a result of  decreased  demand  for  airline  seats and other  travel
services.  Other events,  such as increased  airline  competition  from low cost
carriers,  excess capacity or deterioration of an airline's financial condition,
can often cause fare promotions within the airline industry.  This may result in
an increased  number of  transactions  and  bookings  for the  Company,  thereby
stimulating the Company's revenue-earning capability.

     During  1998,  the Company  acquired a  Florida-based  airline  information
systems  company,   S.  D.  Shepherd   Systems,   Inc.  (the  "Shepherd  Systems
Acquisition") and two national distribution companies:  Galileo Nordiska AB (the
"Nordiska Acquisition") and Galileo Canada Distributions Systems, Inc. ("Galileo
Canada"),  (the "Canada Acquisition").  The Company also recorded a nonrecurring
charge to operating  expenses of $26.4 million ($15.9 million after tax) related
to a strategic  realignment of the Company's  operations in the United  Kingdom.
This special charge  consisted of $15.0 million in  severance-related  costs and
$11.4  million in costs related to  disposition  of the current  United  Kingdom
facilities.

     During 1997, the Company  acquired three  national  distribution  companies
(the "NDC Acquisitions"): Apollo Travel Services Partnership ("ATS"), Traviswiss
AG ("Traviswiss") and Galileo Nederland BV ("Galileo Nederland").  In connection
with the NDC  Acquisitions,  the  Company  recorded  a  nonrecurring  charge  to
operating  expenses of $20.1  million  ($12.1  million after tax) related to the
integration of the Company and its acquired NDCs. This special charge  consisted
of  $12.3  million  in  severance-related   costs  and  $7.8  million  of  other
integration costs, principally related to duplicate facilities.

     In connection with the NDC Acquisitions in 1997 and the Canada  Acquisition
in 1998,  the Company has entered into  agreements  for the provision of certain
marketing  services (the "Services  Agreements") with the sellers (or affiliates
of such  sellers) of ATS,  Traviswiss,  Galileo  Nederland  and  Galileo  Canada
whereby such sellers (or such  affiliates)  will provide services to the Company
related to growing the respective business operations of the acquired NDCs.


1998 Compared to 1997

     Revenues.   The  Company  generates  its  revenue  from  the  provision  of
electronic global  distribution  services and information  services.  During the
year ended December 31, 1998, the Company generated  approximately  90.7% of its
revenue from electronic global  distribution  services and approximately 9.3% of
its revenue from  information  services.  The following  table  summarizes  1998
revenues and 1997 pro forma revenues (as if the NDC Acquisitions had occurred on
January 1, 1997) for electronic global distribution

                                       14
<PAGE>

services by geographic location as a percentage of total revenues and summarizes
total booking volumes for each of the periods indicated:


                                    1998                    1997
                                    ----                    ----
Percentage of Revenue
---------------------
U.S. Market (1)                     43.8 %                  46.2 %
All Other Markets (1)               56.2                    53.8
                                   -----                   -----
                                   100.0 %                 100.0 %
                                   =====                   =====  
  

Worldwide Bookings
------------------
(in millions)
U.S. Market: (1)
     Air                           131.4                   135.8
     Car/Hotel/Leisure              22.6                    21.4
                                   -----                   -----
                                   154.0                   157.2
All Other Markets: (1)
     Air                           186.0                   173.8
     Car/Hotel/Leisure               5.7                     5.1
                                   -----                   -----
                                   191.7                   178.9
                                   -----                   -----
Total Worldwide Bookings           345.7                   336.1
                                   =====                   =====

---------

(1)The location of the travel agent making the booking determines the geographic
   region credited with the related revenues and bookings.


     Revenues  increased  $224.7 million,  or 17.9%, to $1,480.8 million for the
year ended  December 31, 1998 from $1,256.1  million for the year ended December
31, 1997. The 1998 revenues include the impact of the acquired NDCs whereas 1997
revenues,  prior  to  the  NDC  Acquisitions,  represent  Galileo  International
Partnership revenues. Assuming the NDC Acquisitions occurred on January 1, 1997,
revenues for the year ended December 31, 1997, on a pro forma basis,  would have
increased   $95.4  million   ($40.7  million   increase  in  electronic   global
distribution  services  and $54.7  million  increase  in  information  services)
representing primarily revenue from subscribers for hardware, software and other
services and revenue from airlines for information services performed. Comparing
1998 to pro forma 1997,  revenues increased $129.3 million, or 9.6%, to $1,480.8
million for the year ended December 31, 1998 from $1,351.5  million in pro forma
revenues for the year ended December 31, 1997.

     Growth  in 1998  versus  1997  pro  forma  electronic  global  distribution
services revenues resulted primarily from an increase in airline booking volumes
of 2.5% and an increase in car, hotel and leisure booking volumes of 6.6% during
the year ended  December  31, 1998 as compared  to the year ended  December  31,
1997.  Total  international  booking volumes  increased 7.2% for the year, while
U.S. booking volumes declined 2.1% over the same period last year. Reported U.S.
bookings  declined due to a new fee  structure  the Company  introduced in North
America in March 1998 that only  charges  airline  vendors for passive  bookings
that are ticketed. The Company reports only those bookings for which it receives
a fee.  Excluding  passive airline  bookings,  growth in active bookings for the
year was 1.3% in the  United  States.  The  increase  in  international  booking
volumes  for the year was driven by strong  growth in Europe,  the 

                                       15
<PAGE>

Middle East,  Southeast Asia and Africa.  An air booking fee price increase that
went into effect March 1, 1998 and other yield  improvements also contributed to
the revenue growth during the year.

     Cost of Operations.  Cost of operations  expenses increased $183.0 million,
or 47.5%,  to $568.3  million for the year ended  December  31, 1998 from $385.3
million for the year ended December 31, 1997.  1998 expenses  include the impact
of the  1997  NDC  Acquisitions  as  well  as the  impact  of  the  1998  Canada
Acquisition and Nordiska  Acquisition  from the date of each  acquisition.  1997
expenses,  prior  to  the  NDC  Acquisitions,  represent  Galileo  International
Partnership  expenses.  Additionally,  in conjunction with the NDC Acquisitions,
Nordiska  Acquisition,  Canada Acquisition and the Shepherd Systems Acquisition,
the  Company  records  the  amortization  of the  excess  of the  cost of  these
acquisitions over the fair value of the net assets acquired and the amortization
of other intangibles  acquired.  Assuming the 1997 NDC Acquisitions  occurred on
January 1, 1997,  pro forma cost of operations  for the year ended  December 31,
1997 would have  increased  $156.6 million to $541.9  million.  This increase is
caused by  additional  operating  expenses that were  partially  offset by lower
commissions  as the Company no longer pays  commissions,  but instead incurs the
direct costs of  distributing  its  products in these  markets.  The  additional
operating expenses represent principally the wages,  maintenance,  communication
costs and depreciation of the acquired NDCs.

     Comparing  1998 to pro forma 1997,  cost of operations  expenses  increased
$26.4  million,  or 4.9%, to $568.3 million for the year ended December 31, 1998
from $541.9  million in pro forma expenses for the year ended December 31, 1997.
As a  result  of the  Canada  Acquisition  and  Nordiska  Acquisition,  cost  of
operations  expenses  increased $14.3 million as the Company incurred the direct
costs of  operating in these  markets  since the date of each  acquisition.  The
remaining  increase was  primarily  attributable  to higher wages for  technical
personnel,  increased  communication costs due to market expansion and increased
maintenance costs for subscriber equipment at agency locations, partially offset
by a reduction in network services provided to an airline vendor.  Subsequent to
the NDC  Acquisitions,  Nordiska  Acquisition  and Canada  Acquisition,  cost of
operations  expense  growth was lower than  revenue  growth due to  management's
continued  focus  on  operating   efficiency  and  savings   realized  from  the
integration  of the acquired  NDCs.  The Company  continues to take advantage of
decreasing  technology  costs  on  Data  Centre  equipment  and  has  negotiated
favorable supplier contracts for subscriber equipment.

     Commissions,  Selling and Administrative Expenses. Commissions, selling and
administrative expenses decreased $84.7 million, or 13.2%, to $554.5 million for
the year ended December 31, 1998 from $639.2 million for the year ended December
31, 1997. NDC commissions and subscriber  incentive  payments  decreased  $128.2
million,  or 26.1%,  to $363.6 million for the year ended December 31, 1998 from
$491.8  million for the year ended December 31, 1997. The increase in electronic
global distribution  services revenues resulted in increased commissions to NDCs
which  was more  than  offset  by the  elimination  of  commissions  paid to the
acquired NDCs as, subsequent to these  acquisitions,  the Company no longer pays
commissions  but instead  incurs the direct cost of operating in these  markets.
NDC  commissions  are generally  based on a percentage  of booking  revenues and
have,  therefore,  grown at a rate consistent with the growth in booking fees by
country.  Incentive  payments,  which are  provided to  subscribers  in order to
maintain  and  expand the  Company's  travel  agency  customer  base,  increased
significantly  in 1998 due to the  initiation  of new deals with  multi-national
accounts as well as the impact of payments to  subscribers  previously  borne by
the acquired NDCs.

     Remaining  commissions,   selling  and  administrative  expenses  increased
primarily  because  1998  expenses  include  the impact of the NDC  Acquisitions
whereas  1997  expenses,   prior  to  these   acquisitions,   represent  Galileo
International  Partnership  expenses.  In addition,  the Canada  Acquisition and
Nordiska  Acquisition,  accruals  for  estimated  payments  under  the  Services
Agreements  and a new  employee  profit  sharing  program  resulted in increased
expenses,  which were partially offset by $13.4 million in favorable settlements
of contractual disputes from prior years.

     Special  Charges.  The Company  recorded  special  charges of $26.4 million
during the year ended  December 31, 1998 related to a strategic  realignment  of
the  Company's  operations  in  the  United  Kingdom.  

                                       16
<PAGE>

Special charges include severance  provisions of $15.0 million and $11.4 million
in costs related to disposition of the current United Kingdom facilities.

     The Company recorded special charges of $20.1 million during the year ended
December  31, 1997  related to the  integration  of the  acquired  NDCs into the
Company's operations.  Special charges were comprised primarily of $12.3 million
in severance costs related to termination of employees and $7.8 million of other
integration costs, principally related to duplicate facilities.

     Other Income (Expense),  Net. Other income (expense), net includes interest
expense net of interest  income,  and foreign  exchange  gains or losses.  Other
income (expense),  net increased $0.2 million, to $6.1 million expense,  net for
the year ended  December  31, 1998 from $5.9 million  expense,  net for the year
ended  December  31,  1997.  This  increase  was  primarily  the result of lower
interest income arising from lower average cash and cash equivalents.

     Income  Taxes.  No  provision  for U.S.  federal and state income taxes was
recorded prior to July 30, 1997 as such liability was the  responsibility of the
partners of Galileo International Partnership,  rather than of the Company. As a
result of the July 30, 1997 merger of Galileo  International  Partnership into a
wholly owned limited  liability  company  subsidiary  of Galileo  International,
Inc., the Company  recorded  initial  deferred  income taxes of $15.3 million to
reflect  the  establishment  of  deferred  tax assets and  liabilities  in 1997.
Remaining  income taxes for 1997 represent  U.S.  federal and state income taxes
subsequent  to July 30,  1997 and  income  taxes for  certain  of the  Company's
non-U.S.  subsidiaries.  Subsequent to the Merger,  the Company's  effective tax
rate is approximately 40%.

     Net Income.  Net income was $195.6  million for the year ended December 31,
1998.  Net income was $161.6  million for the year ended  December 31, 1997. Net
income in 1998 reflects the  recognition of U.S.  federal and state income taxes
for the entire year.


1997 Compared to 1996

     Revenues.  Revenues increased $167.8 million, or 15.4%, to $1,256.1 million
for the year ended  December 31, 1997 from  $1,088.3  million for the year ended
December  31, 1996.  1997  revenues  include the impact of the NDC  Acquisitions
whereas 1996 revenues represent Galileo International  Partnership revenues. The
NDC  Acquisitions  resulted in $72.6 million of additional  revenues or 43.3% of
the revenue growth during this period.  The remaining  revenue  growth  resulted
principally  from increased  booking volumes  worldwide and, to a lesser extent,
from an increase in the price per booking charged to airline travel vendors.
This price increase became effective on March 1, 1997.

     Operating Expenses.  Operating expenses increased $131.7 million, or 14.4%,
to $1,044.6 million for the year ended December 31, 1997 from $912.9 million for
the year ended  December 31, 1996.  Excluding  $20.1 million in special  charges
related to the  integration of the acquired NDCs into the Company's  operations,
operating expenses  increased $111.6 million,  or 12.2%, to $1,024.5 million for
the year ended December 31, 1997 from $912.9 million for the year ended December
31, 1996. The NDC Acquisitions  resulted in additional  operating expenses which
were  partially  offset by lower  commissions  as the  Company  no  longer  pays
commissions, but instead incurs the direct costs of distributing its products in
these markets.

     Other Expenses,  Net. Other expenses,  net include interest expense, net of
interest  income,  and foreign  exchange gains or losses.  Other  expenses,  net
decreased  $2.4  million,  to $5.9 million for the year ended  December 31, 1997
from $8.3  million for the year ended  December  31,  1996.  This  decrease  was
primarily the result of currency  fluctuation  gains and higher  interest income
arising  from  higher  average  levels  of cash  and cash  equivalents  over the
periods.

                                       17
<PAGE>

     Income  Taxes.  No  provision  for U.S.  federal and state income taxes was
recorded prior to July 31, 1997, as such liability was the responsibility of the
partners  of  Galileo  International  Partnership  rather  than of the  Company.
Certain of the Company's non-U.S. subsidiaries are subject to income taxes. As a
result of the merger of Galileo  International  Partnership  into a wholly owned
limited liability company subsidiary of Galileo International, Inc., the Company
recorded  initial  deferred  income  taxes  of  $15.3  million  to  reflect  the
establishment of deferred tax assets and liabilities.  The remaining  provisions
for income taxes relate to the period subsequent to July 30, 1997. The Company's
effective tax rate is approximately 40%.

     Net Income.  Net income was $161.6  million for the year ended December 31,
1997.  Net income was $165.2  million for the year ended  December 31, 1996. Net
income in 1997 was  impacted  by the $15.3  million of initial  deferred  income
taxes,  the $12.1 million after tax effect of the special charges  recorded as a
result of the integration of the acquired NDCs into the Company's operations, as
well as the on-going  recognition  of U.S.  federal and state income taxes since
July 30, 1997.


Liquidity and Capital Resources

     Cash and cash equivalents  totaled $9.8 million and working capital totaled
$11.7  million at  December  31,  1998.  At  December  31,  1997,  cash and cash
equivalents  totaled $19.4 million and working  capital  totaled $22.9  million.
Cash and cash  equivalents  decreased by $9.6  million as the Company  carefully
monitors cash  requirements  and utilizes excess cash generated by operations to
pay down  outstanding  debt,  pay dividends to its  stockholders  and repurchase
shares of its Common Stock.

     Cash  flow  used in  investing  activities,  other  than NDC  acquisitions,
principally  relates to  purchases  of  mainframe  data  processing  and network
equipment and purchases of computer  equipment  provided to the Company's travel
agency  subscribers.  Capital  expenditures,  excluding  the  capitalization  of
internally  developed  software,  were $98.7 million for the year ended December
31, 1998  compared to $65.9  million for the year ended  December 31,  1997.  In
1998,  the  Company  also  invested  in three  companies  that offer  innovative
technical   solutions  that  support  the  Company's   business   needs.   These
investments,  totaling $21.8 million,  included the Shepherd System  Acquisition
and minority interests in two other technology companies.

     Cash flow used in financing  activities  includes net  repayments of $180.6
million under credit agreements, $29.9 million in dividends paid to stockholders
and $6.8 million in repurchases of the Company's  Common Stock. On June 5, 1998,
the Company  incurred  additional  borrowings of $34.4 million under a five-year
term loan agreement,  which were used to fund the acquisition of Galileo Canada.
As of December 31, 1998, $69.5 million of debt was outstanding.

     The Company expects that future cash  requirements  will principally be for
capital  expenditures,  repayments of  indebtedness,  acquisitions of additional
NDCs and  other  potential  acquisitions  that are  aligned  with the  Company's
strategic  direction.  The Company  believes  that cash  generated  by operating
activities will be sufficient to fund its future cash requirements,  except that
significant  acquisitions may require  additional  borrowings or other financing
alternatives. (1)

     In connection with the NDC  Acquisitions  and the Canada  Acquisition,  the
Company  has entered  into  Services  Agreements  for the  provision  of certain
marketing  services  with the sellers (or  affiliates  of such  sellers) of ATS,
Traviswiss,  Galileo  Nederland and Galileo Canada whereby such sellers (or such
affiliates)  will  provide  services  to the  Company  related  to  growing  the
respective  business  operations of the acquired NDCs.  Pursuant to the Services
Agreements,  the Company will be required to pay the sellers (or such affiliates
of the sellers) of ATS, Traviswiss, Galileo Nederland and Galileo Canada fees of
up to $200.0  million,  $6.8 million,  $4.7 million and $20.5 million (each on a
present value basis as of the date of the
---------

(1)   See Statement Regarding Forward-Looking Statements on page 20.

                                       18
<PAGE>

agreements),  respectively,  in the sixth  year  (eighth  year for a portion  of
Galileo Canada) following the acquisitions,  contingent upon improvements in the
Company's  airline  booking fee revenue in the sellers'  respective  territories
over the five-year period following each acquisition,  as measured by the annual
price increase rate and over the five-year period (seven-year period in the case
of Galileo  Canada)  following each  acquisition,  as measured by the annual air
segment  growth  rate.  The  Company  has  reviewed  and,  to the extent  deemed
appropriate,  established  accruals for these payments based on an evaluation of
the  likelihood  that  the  revenue  goals  required  under  the  terms of these
agreements will be met. As of December 31, 1998,  accruals totaling $9.3 million
have been recorded and are reflected in the  accompanying  consolidated  balance
sheet.

     In  addition  to  reinvesting  a  substantial  portion of  earnings  in its
business,  the Company currently intends to pay regular quarterly  dividends and
to repurchase additional shares of its Common Stock. The declaration and payment
of future  dividends,  as well as the amount  thereof,  and the amount of future
repurchases  of its Common Stock are subject to the  discretion  of the Board of
Directors  of the  Company  and  will  depend  upon  the  Company's  results  of
operations,  financial condition, cash requirements,  future prospects and other
factors  deemed  relevant by the Board of  Directors.  There can be no assurance
that the Company will declare and pay any future dividends or repurchase  shares
of its Common Stock. (1)
---------

(1)   See Statement Regarding Forward-Looking Statements on page 20.





















                                       19


<PAGE>

Statement Regarding Forward-Looking Statements

     These  statements  are  forward-looking  statements  within the  meaning of
Section  21E  of  the  Securities   Exchange  Act  of  1934,  as  amended.   All
forward-looking  statements in this report are based upon information  available
to the Company on the date of this report.  The Company undertakes no obligation
to publicly update or revise any forward-looking statements, whether as a result
of new information,  future events or otherwise. Any forward-looking  statements
involve  risks and  uncertainties  that could cause actual  events or results to
differ  materially from the events or results  described in the  forward-looking
statements.  Readers  are  cautioned  not  to  place  undue  reliance  on  these
forward-looking statements.

     Risks associated with the Company's forward-looking statements include, but
are not  limited  to:  risks  related to the loss and  inability  to replace the
bookings  generated by one or more of its five largest travel agency  customers;
risks   associated  with  the  competition  and   technological   innovation  by
competitors, which could require the Company to reduce prices, to change billing
practices, to increase spending or marketing or product development or otherwise
to take actions that might  adversely  affect its operations or earnings;  risks
associated with industry  consolidation,  including strategic alliances,  in the
CRS industry;  risks of the Company's sensitivity to general economic conditions
and events that affect airline  travel and the airlines that  participate in the
Company's  Apollo  and  Galileo  systems;  risks that may  adversely  affect the
Company's relationships and agreements with its airline stockholders,  including
United Airlines and its affiliates;  risks relating to the Company's  investment
in  technology,  including  the  ability of the  Company to timely  develop  and
achieve market acceptance of new products, or to achieve Year 2000 compliance in
a  timely  and  cost-effective  manner;  risks  associated  with  the  Company's
international  operations  and expansion  into  developing  and new CRS markets,
governmental approvals, trade and tariff barriers, and political risks; risks of
new or different  legal or regulatory  requirements  governing the CRS industry;
risks  associated  with the  integration of acquired  businesses,  including the
amount and timing of cost savings and synergies that may be achieved;  and risks
of a natural disaster or other calamity that may cause significant damage to the
Company's Data Centre facility.















                                       20

<PAGE>

Quarterly Comparisons

     The following tables set forth an unaudited summary of quarterly  financial
data (in  thousands,  except share data).  This quarterly  information  has been
prepared on the same basis as the annual consolidated  financial statements and,
in  management's  opinion,   reflects  all  adjustments  necessary  for  a  fair
presentation of the information for the periods presented. The operating results
for any  quarter  are not  necessarily  indicative  of results for a full fiscal
year.

     The Company  experiences a seasonal pattern in its operating results,  with
the fourth  quarter  typically  having the lowest total  revenues and  operating
income  due to early  bookings  by  customers  for  holiday  travel and due to a
decrease in business travel during the holiday season. In addition,  1998 fourth
quarter  operating  expenses  include  special  charges of $26.4 million  ($15.9
million  after  tax)  related  to  a  strategic  realignment  of  the  Company's
operations  in the United  Kingdom  and 1997 third  quarter  operating  expenses
include  special  charges of $20.1 million  ($12.1 million after tax) related to
the integration of the Company and its acquired NDCs.
<TABLE>

                                                           1998
                                                           ----
                                          First      Second      Third      Fourth
                                         Quarter     Quarter    Quarter    Quarter
                                         --------    --------   --------   --------
<S>                                      <C>         <C>        <C>        <C>     
Total revenues                           $377,010    $380,637   $377,461   $345,710
Operating expenses                        270,731     288,695    291,130    298,684
Operating income                          106,279      91,942     86,331     47,026
Net income                                 62,303      53,951     51,131     28,229
Basic earnings per share                     0.59        0.51       0.49       0.27
Diluted earnings per share                   0.59        0.51       0.49       0.27

                                                         1997 (1)
                                                         --------
                                          First      Second      Third      Fourth
                                         Quarter     Quarter    Quarter    Quarter
                                         --------    --------   --------   --------
Total revenues                           $307,646    $307,200   $327,655   $313,602
Operating expenses                        241,335     253,634    276,490    273,114
Operating income                           66,311      53,566     51,165     40,488
Pro forma net income (2)                   39,397      32,386     29,263     22,322
Pro forma basic earnings per share (2)       0.44        0.36       0.29       0.21
Pro forma diluted earnings per share (2)     0.44        0.36       0.29       0.21
</TABLE>

---------

(1)Represents  Galileo  International  Partnership  through  July 30, 1997 and
   Galileo International, Inc. subsequent to July 30, 1997.

(2)Pro forma net income and basic and diluted  earnings  per share data for 1997
   are  calculated  as though:  (i) the  partners'  capital was converted in the
   Merger into  88,000,000  shares of Common Stock as of January 1, 1997 and the
   16,799,700  shares issued to the public were  outstanding from July 30, 1997,
   and (ii) the Company had operated in a corporate  form  effective  January 1,
   1997 and accordingly was subject to federal and state income taxes.

                                       21
<PAGE>

Effect of Recently Issued Accounting Pronouncements

     The Company  will  implement  the  provisions  of  Statement  of  Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities"  ("Statement  133"),  which is required to be adopted for  financial
statements  issued for the fiscal year ending  December 31, 2000.  Statement 133
standardizes  the  accounting  for  derivative  instruments,  including  certain
derivative instruments embedded in other contracts,  by requiring that an entity
recognize  those items as assets or  liabilities  in the  statement of financial
position and measure them at fair value.  Management  believes  that adoption of
Statement  133  will not  have a  material  impact  on the  Company's  financial
statements.


Year 2000 (1)

     The Year 2000 issue is a result of computer  programs  being  written using
two digits rather than four to define the  applicable  year. Any of the computer
programs or systems of the Company or the Company's  vendors and suppliers  that
have  date-sensitive  software may  recognize a date using "00" as the year 1900
rather than 2000.

     Beginning in September 1995, the Company  implemented a program designed to
help ensure that all hardware and software used in connection with the Company's
business,  including the Company's software products, will manage and manipulate
data involving the  transition of dates from 1999 to 2000 without  functional or
data abnormality and without producing inaccurate results related to such dates.
An internal analysis of the Company's  hardware and software has led the Company
to conclude that the majority of the Company's  systems have been  engineered to
be Year 2000  compliant  and should  provide a seamless  transition  to the Year
2000.  In  addition,  the  Company  has  consulted  outside  experts,  including
attorneys and independent auditors, regarding its Year 2000 plans.

     The Company electronically  exchanges information with the computer systems
of the Company's  vendors and  suppliers,  including  air,  car,  hotel and tour
vendors.  The Company uses standardized  travel industry  interchange formats to
electronically  exchange  information  with many of such vendors and  suppliers.
Many of these  formats  did not  require  modification  in order to be Year 2000
compliant.  Where required,  modifications to these formats have been completed.
The Company's  GlobalFares  system began  successfully  processing airline fares
with Year 2000 dates in July 1998. In addition, the investigation and assessment
of the Company's network systems is complete and remediation for such systems is
in progress and on-track for  completion  during the third quarter of 1999.  The
Company has completed remediation planning for the Company's travel agency-based
software and began  distribution of Year 2000 upgrades for operating systems and
package  installation  systems  used in  connection  with the  Company's  travel
agency-based   software  during  the  third  quarter  of  1998.  The  Year  2000
remediation of the Company's travel  agency-based  software addresses  aesthetic
modifications  only  and  is not  essential  for  the  reservation  booking  and
ticketing  capability of these products.  The Company will continue to work with
its NDCs to distribute and install, where necessary, upgrades to PC hardware and
software  either on a normal  maintenance  cycle where it exists,  or a separate
implementation plan where it does not exist.

     Remediation activities related to the Company's mainframe computer systems,
which include the Company's  Apollo and Galileo CRSs, were completed on schedule
in 1998. The Company's  Apollo and Galileo  systems  successfully  processed the
first Year 2000 airline reservation  bookings on January 3, 1999 and February 4,
1999,  respectively,  with airlines  which  support Year 2000 in their  systems.
Non-mainframe activities are on track for completion before the third quarter of
1999.

     Embedded  systems are not an integral  component in the  Company's  primary
business or operations.  Nevertheless,  the Company has identified and validated
as compliant or, where necessary, is in the process
---------

(1)  See  Statement  Regarding   Forward-Looking   Statements  on  page  20.  

                                       22
<PAGE>

of  remediating  embedded  systems in certain of the  Company's  facilities  and
environmental  systems.  The Company does not  anticipate  any material  adverse
impact  to its  business  or  operations  related  to Year 2000  performance  of
embedded systems.

     As an electronic global  distribution  system,  the Company's  products are
dependent  upon data provided by its air, car,  hotel and tour vendor  customers
and other  suppliers of data. The Company is also dependent on critical  service
providers,  such as telecommunications firms for worldwide product distribution.
The  Company  is  continuing  to  assess  Year  2000  issues  arising  from  its
relationships with third parties, including its NDCs, to determine the extent to
which the Company's  interface systems are vulnerable to failure by such parties
to remediate their own Year  2000-sensitive  systems.  The Company has requested
Year  2000  compliance  status  information  from all of its  vendor  customers,
critical  other  suppliers of data and its NDCs.  The Company  continues to work
closely with its NDCs to provide  assistance to meet their Year 2000 challenges.
While  many of these  third  parties  have  reported  that they are not  finding
significant  problems in their own systems,  there can be no guarantee  that the
systems of these  third  parties  will be made Year 2000  compliant  in a timely
manner.  Vendor  customers,  service  providers and NDCs continue to participate
with the Company in Year 2000 testing.

     The  Company  completed  contingency  plans for its  mainframe  systems  on
schedule in 1998 and anticipates  that the contingency  plans for  non-mainframe
systems will be complete  prior to the third  quarter of 1999.  The Company will
continue to review and revise  contingency  plans to address  possible Year 2000
failures of its  internal  systems  and  business  processes  or those of vendor
customers,  critical service suppliers, other suppliers of data and its NDCs, on
whose systems the Company is dependent. The Company's contingency plans identify
the  interruption  of  local  services  provided  by  third  parties,   such  as
telecommunication firms and power supply companies, as the events which would be
most likely to occur.  However,  should a problem occur,  it would  generally be
localized  and the  Company  does not  anticipate  that it would have a material
adverse  effect on the  Company's  business,  financial  condition or results of
operations.  The Company's contingency planning involved risk assessment for all
of the  Company's  business  functions  and  operating  and  staff  departments,
including the  identification of assumptions and  dependencies.  The contingency
plans for each business function and operating and staff department  provide for
proactive  preparation  for Year 2000  challenges,  checklists  of activities to
perform for validation of possible failures and reactive planning to address any
actual Year 2000  failures.  The  contingency  plans also address  on-site staff
coverage on January 1, 2000 for all operating and staff departments, and include
support personnel from the Company's critical hardware and software suppliers.

     The interruption of services provided by critical service  providers,  such
as  telecommunications  firms and power supply companies,  due to their own Year
2000  difficulties,  could  have a  material  adverse  effect  on the  Company's
business and  operations.  With respect to bookings for travel after  January 1,
2000,  any  failure  on the part of the  Company,  its vendor  customers,  other
suppliers of data or NDCs to ensure that their systems are Year 2000  compliant,
regardless of when such bookings occur,  could have a material adverse effect on
the business, financial condition and results of operations of the Company.

     Testing is a critical  component in the  Company's  Year 2000  preparedness
program.  The Company's system for Year 2000 hardware and software validation --
called the "Time Machine" -- is  essentially a copy of the Company's  production
environment which performs date-sensitive tests and supports connectivity to the
systems of its vendor customers, suppliers of data, NDCs and certain other third
parties without interrupting  existing systems and without risk of contaminating
"live" production data.

     The Company  incurred  $8.0 million of expenses in 1998 and $4.4 million of
expenses in 1997 related to Year 2000  remediation.  The Company  expects future
expenditures to total approximately $9.0 million. All of such costs are expected
to be expensed as incurred.  Further,  the Company  expects to incur  additional
costs after 1999 to remediate  and replace less critical  software  applications
and embedded systems, however, such expenses are not expected to have a material
adverse  effect on the  Company's  business,  financial  condition or results of
operations.

                                       23
<PAGE>

     The cost of the  Company's  Year  2000  project  and the dates on which the
Company plans to complete its Year 2000  modifications are based on management's
best  estimates,  which were derived  utilizing  numerous  assumptions of future
events, third parties' Year 2000 readiness and other factors.

     Based on the  Company's  current  schedule for  completion of its Year 2000
project,  the Company believes that its planning is adequate to secure Year 2000
readiness of its critical systems.  Nevertheless,  achieving Year 2000 readiness
is subject  to  various  risks and  uncertainties,  many of which are  described
above.  The Company is not able to predict  all of the factors  that could cause
actual results to differ materially from its current expectations about its Year
2000 readiness.  At this time, the Company  believes the major risks  associated
with Year 2000  processing  are a system  failure or  miscalculation  causing an
inability to process bookings or engage in other normal business activities.  If
the Company,  or third  parties with whom the Company has  significant  business
relationships,  fail to achieve  Year 2000  readiness  with  respect to critical
systems,  there could be a material  adverse  effect on the Company's  business,
financial condition and results of operations.


New European Currency

     In January 1999, certain European countries  introduced a new currency unit
called the "euro". The Company planned, developed and successfully implemented a
project to ensure that hardware and software systems operated or licensed in the
Company's business,  including systems provided to its travel agency subscribers
and its vendor customers,  are designed to properly process  reservations in the
euro currency.  The Company completed the necessary development and successfully
issued  tickets in the new single  currency on the first  official  trading day,
January  4, 1999.  The  Company  estimates  that the  introduction  of the euro,
including the total costs for the euro project,  will not have a material effect
on the Company's business, financial condition, and results of operations. (1)


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Certain of the Company's  expenses are subject to  fluctuations in currency
values  and  interest  rates.  The  Company  addresses  these  risks  through  a
controlled  program  of risk  management  that  includes  the use of  derivative
financial instruments.  To some degree, the Company is exposed to credit-related
losses  in  the  event  of   nonperformance   by   counterparties  to  financial
instruments,  but management does not expect any  counterparties to fail to meet
their obligations given their high credit ratings. (1) The Company does not hold
or issue financial instruments for trading purposes.

     As discussed in the notes to consolidated financial statements, the Company
enters  into  foreign   exchange   forward   contracts  to  manage  exposure  to
fluctuations  in foreign  exchange  rates  related to the  funding of its United
Kingdom and Canadian  operations.  At December 31, 1998, the Company had entered
into foreign exchange forward  contracts which provide for purchases of GBP 11.5
million and CAD 20.0 million at various dates  throughout  1999. At December 31,
1998 and 1997, the notional  principal amounts of outstanding  forward contracts
were  $31.3  million  and  $62.4  million,   respectively.  The  fair  value  of
outstanding forward contracts at December 31, 1998 and 1997 was $0.8 million and
$1.4 million, respectively.

     The Company has also entered into interest rate swap  agreements to convert
portions of its variable rate debt to fixed rate.  The Company  accounts for its
interest  rate swap  agreements  as a hedge of its interest  rate  exposure.  At
December  31,  1998 and 1997,  the Company had  outstanding  interest  rate swap
agreements  having a total  notional  value of $34.4 million and $89.0  million,
respectively, with fixed interest rates averaging 5.87% and 5.03%, respectively.
The fair value of outstanding  swap agreements at December 31, 1998 and 1997 was
$(1.0) million and $0.5 million, respectively. 
---------

(1)   See Statement Regarding Forward-Looking Statements on page 20.

                                       24
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                                                  PAGE
                                                                  ----
 Financial Statements of Galileo International, Inc.
 (Formerly Galileo International Partnership through July 30,
 1997)

   Independent Auditors' Report                                     26

   Consolidated Balance Sheets as of December 31, 1998 and 1997     27

   Consolidated Statements of Income for the years ended
   December 31, 1998, 1997 and 1996                                 29

   Consolidated Statements of Cash Flows for the years ended
   December 31, 1998, 1997 and 1996                                 30

   Consolidated Statements of Stockholders' Equity for the
   years ended December 31, 1998, 1997 and 1996                     31

 Notes to Consolidated Financial Statements                         32



















                                       25



<PAGE>

                          Independent Auditors' Report

The Board of Directors
Galileo International, Inc.:

We  have  audited  the  accompanying  consolidated  balance  sheets  of  Galileo
International,   Inc.  and  subsidiaries   (the  "Company"),   formerly  Galileo
International  Partnership  through July 30,  1997,  as of December 31, 1998 and
1997, and the related consolidated  statements of income,  stockholders' equity,
and cash flows for each of the years in the  three-year  period ending  December
31, 1998. These consolidated  financial statements are the responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,   in  all  material   respects,   the  financial   position  of  Galileo
International,  Inc. and  subsidiaries as of December 31, 1998 and 1997, and the
results  of their  operations  and their cash flows for each of the years in the
three-year period ended December 31, 1998, in conformity with generally accepted
accounting principles.

                                    KPMG LLP




Chicago, Illinois
February 1, 1999















                                       26
<PAGE>

                           GALILEO INTERNATIONAL, INC.
       (FORMERLY GALILEO INTERNATIONAL PARTNERSHIP THROUGH JULY 30, 1997)
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)
<TABLE>

                                                                      December 31, 
                                                               --------------------------
                                                                   1998           1997
                                                                   ----           ----
                         ASSETS
                         ------
<S>                                                           <C>            <C>    
Current assets:                                           
    Cash and cash equivalents                                      $ 9,828       $ 19,367
    Accounts receivable:                                                   
      Trade receivables and others                                 159,225        154,263
      Due from affiliates                                           32,380         33,156
                                                               -----------    -----------
                                                                   191,605        187,419
      Less allowances                                               13,747         22,012
                                                               -----------    -----------
    Net accounts receivable                                        177,858        165,407
    Deferred tax asset                                              31,885         19,167
    Prepaid expenses                                                11,711          9,643
    Other current assets                                            12,245         10,691
                                                               -----------    -----------
      Total current assets                                         243,527        224,275
Property and equipment, at cost:                          
    Land                                                             6,470          6,470
    Buildings and improvements                                      77,210         74,038
    Equipment                                                      392,299        330,112
                                                               -----------    -----------
                                                                   475,979        410,620
    Less accumulated depreciation                                  281,010        221,439
                                                               -----------    -----------
Net property and equipment                                         194,969        189,181
Computer software, at cost                                         413,212        420,458
    Less accumulated amortization                                  223,965        195,883
                                                                 ---------    -----------
Net computer software                                              189,247        224,575
Intangible assets, at cost:                                                
    Customer list                                                  405,600        405,600
    Goodwill                                                       197,676        158,446
    Other                                                           56,535         56,500
                                                                ----------    -----------
                                                                   659,811        620,546
    Less accumulated amortization                                   50,005         14,359
                                                               -----------    -----------
Net intangible assets                                              609,806        606,187
Other noncurrent assets                                             53,531         24,279
                                                               -----------    -----------
                                                               $ 1,291,080    $ 1,268,497
                                                               ===========    ===========

                                     (Continued)

            See accompanying notes to consolidated financial statements.
</TABLE>

                                       27
<PAGE>

                           GALILEO INTERNATIONAL, INC.
       (FORMERLY GALILEO INTERNATIONAL PARTNERSHIP THROUGH JULY 30, 1997)
                     CONSOLIDATED BALANCE SHEETS (continued)
                        (in thousands, except share data)

<TABLE>

                                                                      December 31, 
                                                               --------------------------
                                                                  1998            1997
                                                                  ----            ----
              LIABILITIES AND STOCKHOLDERS' EQUITY
              ------------------------------------
<S>                                                            <C>          <C>      
Current liabilities:                                      
    Accounts payable:                                                      
      Trade payables and other                                    $ 30,876       $ 49,649
      Due to affiliates                                             16,025          7,305
                                                               -----------    -----------
                                                                    46,901         56,954
    Accrued commissions                                             32,424         31,175
    Accrued restructuring costs                                     29,457         13,786
    Accrued compensation and benefits                               24,584         15,077
    Income taxes payable                                            11,873          1,721
    Other accrued taxes                                             14,580         12,724
    Other accrued liabilities                                       66,031         62,008
    Capital lease obligations, current portion                       5,976          7,918
                                                               -----------    -----------
      Total current liabilities                                    231,826        201,363
Pension and postretirement benefits                                 55,982         44,399
Deferred tax liability                                              25,404         19,618
Other noncurrent liabilities                                        42,969         41,645
Capital lease obligations, less current portion                     22,752         27,776
Long-term debt                                                      69,520        250,000
                                                               -----------    -----------
Total liabilities                                                  448,453        584,801
Stockholders' equity:
    Special voting preferred stock:  $.01 par value;
      7 shares authorized; 7 shares issued and
      outstanding                                                      ---            ---
    Preferred stock:  $.01 par value;  25,000,000 shares
      authorized; no shares issued                                     ---            ---
    Common stock:   $.01 par value;   250,000,000 shares  
      authorized; 104,930,750 and 104,799,700 shares issued;
      104,761,650 and 104,799,700 shares outstanding                 1,049          1,048
    Additional paid-in capital                                     668,466        663,688
    Retained earnings                                              184,575         18,832
    Unamortized restricted stock grants                             (3,559)           ---
    Accumulated other comprehensive income                          (1,139)           128
    Common stock held in treasury, at cost;     
      169,100 shares in 1998                                        (6,765)           ---
                                                               -----------    -----------
Total stockholders' equity                                         842,627        683,696
                                                               -----------    -----------
                                                               $ 1,291,080    $ 1,268,497
                                                               ===========    ===========


          See accompanying notes to consolidated financial statements.
</TABLE>

                                       28
<PAGE>

                           GALILEO INTERNATIONAL, INC.
       (FORMERLY GALILEO INTERNATIONAL PARTNERSHIP THROUGH JULY 30, 1997)
                        CONSOLIDATED STATEMENTS OF INCOME
                        (in thousands, except share data)
<TABLE>


                                                                      Year ended December 31,
                                                               -------------------------------------
                                                                   1998         1997         1996
                                                                   ----         ----         ----

Revenues:
<S>                                                            <C>          <C>          <C>        
   Electronic global distribution services                     $ 1,342,705  $ 1,180,114  $ 1,050,635
   Information services                                            138,113       75,989       37,624
                                                               -----------   ----------   ----------
                                                                 1,480,818    1,256,103    1,088,259
Operating expenses:
   Cost of operations                                              568,271      385,298      254,600
   Commissions, selling and administrative                         554,509      639,164      658,320
   Special charges                                                  26,460       20,111          ---
                                                               -----------   ----------   ----------
                                                                 1,149,240    1,044,573      912,920
                                                               -----------   ----------   ----------
Operating income                                                   331,578      211,530      175,339
Other income (expense):                                                                   
   Interest expense, net                                            (9,629)      (8,842)      (8,060)
   Other, net                                                        3,532        2,925         (181)
                                                               -----------   ----------   ----------
Income before income taxes                                         325,481      205,613      167,098
Income taxes:
   Income taxes                                                    129,867       28,641        1,882
   Initial deferred income taxes                                       ---       15,335          ---
                                                               -----------   ----------   ----------
                                                                   129,867       43,976        1,882
                                                               -----------   ----------   ----------
Net income                                                       $ 195,614    $ 161,637    $ 165,216
                                                               ===========   ==========   ==========
                                                                             
Income before income taxes as reported                                        $ 205,613    $ 167,098
Pro forma income tax expense                                                     82,245       66,839
                                                                             ----------   ----------
Pro forma net income                                                          $ 123,368    $ 100,259
                                                                             ==========   ==========
Weighted average number of shares outstanding (1998),
   and pro forma weighted average number of shares
   outstanding (1997 and 1996)                                 104,796,282   94,999,875   88,000,000
                                                               ===========   ==========   ==========
Basic earnings per share (1998), and pro forma
   basic earnings per share (1997 and 1996)                         $ 1.87       $ 1.30       $ 1.14
                                                               ===========   ==========   ==========
Diluted weighted average number of shares outstanding
   (1998), and pro forma diluted weighted average number
   of shares outstanding (1997 and 1996)                       105,186,241   95,024,199   88,000,000
                                                               ===========   ==========   ==========
Diluted earnings per share (1998), and pro forma
   diluted earnings per share (1997 and 1996)                       $ 1.86       $ 1.30       $ 1.14
                                                               ===========   ==========   ==========

          See accompanying notes to consolidated financial statements.

</TABLE>

                                       29
<PAGE>
<TABLE>

                                      GALILEO INTERNATIONAL, INC.
                   (FORMERLY GALILEO INTERNATIONAL PARTNERSHIP THROUGH JULY 30, 1997)
                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                                             (in thousands)


                                                                            Year ended December 31,     
                                                                     -----------------------------------
                                                                        1998         1997         1996

Operating activities:                                                                        
<S>                                                                  <C>          <C>          <C>      
   Net income                                                        $ 195,614    $ 161,637    $ 165,216
   Adjustments to reconcile net income to net cash provided
     by operating activities:
      Depreciation and amortization                                    172,537      134,073       80,369
      (Gain) loss on disposal of property and equipment                   (419)         728          973
      Deferred income taxes, net                                        (5,167)      15,284          ---
      Changes in operating assets and liabilities, net of
        effects from acquisition of businesses:
         (Increase) decrease in accounts receivable, net                (8,149)       6,998      (27,820)
         (Increase) decrease in other current assets                    (2,826)       1,377        4,763
         (Increase) decrease in noncurrent assets                      (28,428)     (10,281)       2,260
         Increase in accounts payable and accrued commissions            2,903        6,057        4,812
         Increase (decrease) in accrued liabilities                     30,258       (8,536)     (15,715)
         Increase (decrease) in income taxes payable                    10,140       (3,973)        (360)
         Increase (decrease) in noncurrent liabilities                  12,615       21,374         (420)
                                                                     ---------    ---------    ---------
Net cash provided by operating activities                              379,078      324,738      214,078
Investing activities:
   Purchase of property and equipment                                  (89,442)     (53,696)     (32,572)
   Purchase and capitalization of computer software                    (23,496)     (33,449)     (28,978)
   Proceeds on disposal of property and equipment                        3,750          322          408
   Acquisition of businesses, net of cash acquired
      of $3,576 and $26,244, respectively                              (50,433)    (688,451)         ---
   Refund of lease deposit                                                 ---          ---       40,461
   Other investing activities                                           (5,076)         ---          ---
                                                                     ---------    ---------    ---------
Net cash used in investing activities                                 (164,697)    (775,274)     (20,681)
Financing activities:
   Borrowings under credit agreements                                   49,392      450,000      158,000
   Repayments under credit agreements                                 (230,004)    (320,000)    (239,375)
   Dividends paid to stockholders                                      (29,871)      (6,288)         ---
   Payments of capital lease obligations                                (7,311)      (4,149)      (5,559)
   Proceeds from sale of stock, net of fees paid                           ---      384,288          ---
   Repurchase of common stock for treasury                              (6,765)         ---          ---
   Proceeds from exercise of employee stock options, net                   787          ---          ---
   Distributions to partners of Galileo International Partnership          ---     (112,150)     (36,599)
                                                                     ---------    ---------    ---------
Net cash (used in) provided by financing activities                   (223,772)     391,701     (123,533)
Effect of exchange rate changes on cash                                   (148)           6          (35)
                                                                     ---------    ---------    ---------
(Decrease) increase in cash and cash equivalents                        (9,539)     (58,829)      69,829
Cash and cash equivalents at beginning of year                          19,367       78,196        8,367
                                                                     ---------    ---------    ---------
Cash and cash equivalents at end of year                               $ 9,828     $ 19,367     $ 78,196
                                                                     =========    =========    =========

          See accompanying notes to consolidated financial statements.
</TABLE>

                                       30
<PAGE>

                           GALILEO INTERNATIONAL, INC.
       (FORMERLY GALILEO INTERNATIONAL PARTNERSHIP THROUGH JULY 30, 1997)
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                        (in thousands, except share data)
<TABLE>

                                                                Special   
                                                                 Voting              Additional
                                                    Partners'  Preferred   Common    Paid - in
                                                     Capital     Stock      Stock     Capital
                                                    ---------  ---------   -------   ----------



<S>                                                <C>          <C>        <C>        <C>
Balance at December 31, 1995                        $ 137,316       $ -        $ -          $ -
Comprehensive income:
   Net income                                         165,216         -          -            -
   Foreign currency translation adjustments                 -         -          -            -
Comprehensive income
Distributions to partners                             (36,599)        -          -            -
                                                    ---------  ---------   -------    ---------
                                                      
Balance at December 31, 1996                          265,933         -          -            -
Comprehensive income prior to the Merger:
   Net income prior to the Merger                     136,517         -          -            -
   Foreign currency translation adjustments
    prior to the Merger                                     -         -          -            -
Comprehensive income prior to the Merger
Distributions to partners                            (112,150)        -          -            -
Conversion of partners' net investment into
   Common stock and Special voting preferred
   stock, 88,000,000 and 7 shares, respectively      (290,300)        -        880      279,568
Issuance of 16,799,700 shares of Common stock
   in initial public offering                               -         -        168      384,120
Comprehensive income subsequent to the Merger:
   Net income subsequent to the Merger                      -         -          -            -
   Foreign currency translation adjustments
   subsequent to the Merger                                 -         -          -            -
Comprehensive income subsequent to the Merger
Dividends paid ($.06 per share)                             -         -          -            -
                                                    ---------  ---------   -------    ---------
                                                      
Balance at December 31, 1997                                -         -      1,048      663,688
Comprehensive income:
   Net income                                               -         -          -            -
   Foreign currency translation adjustments                 -         -          -            -
Comprehensive income
Issuance of 97,900 shares of restricted stock               -         -          1        3,991
Amortization of restricted stock grants                     -         -          -            -
Issuance of 33,150 shares of Common stock under
   employee stock option plans                              -         -          -          787
Repurchase of 169,100 shares of Common stock
   for treasury                                             -         -          -            -
Dividends paid ($0.285 per share)                           -         -          -            -
                                                    ---------  ---------   -------    ---------
Balance at December 31, 1998                              $ -       $ -    $ 1,049    $ 668,466
                                                    =========  =========   =======    =========

          See accompanying notes to consolidated financial statements.
</TABLE>


<TABLE>

                                                                                  Accumulated
                                                                   Unamortized       Other
                                                        Retained   Restricted    Comprehensive   Treasury
                                                        Earnings  Stock Grants      Income         Stock       Total

<S>                                                  <C>            <C>             <C>         <C>         <C>      
Balance at December 31, 1995                                $ -           $ -        $ (7,763)        $ -    $ 129,553
Comprehensive income:
   Net income                                                 -             -               -           -      165,216
   Foreign currency translation adjustments                   -             -          (2,795)          -       (2,795)
                                                                                                             ---------
Comprehensive income                                                                                           162,421
Distributions to partners                                     -             -               -           -      (36,599)
                                                      ---------      --------        --------    --------    ---------
Balance at December 31, 1996                                  -             -         (10,558)          -      255,375
Comprehensive income prior to the Merger:
   Net income prior to the Merger                             -             -               -           -      136,517
   Foreign currency translation adjustments
    prior to the Merger                                       -             -             706           -          706
                                                                                                             ---------
Comprehensive income prior to the Merger                                                                       137,223
Distributions to partners                                     -             -               -           -     (112,150)
Conversion of partners' net investment into
   Common stock and Special voting preferred
   stock, 88,000,000 and 7 shares, respectively               -             -           9,852           -            -
Issuance of 16,799,700 shares of Common stock
   in initial public offering                                 -             -               -           -      384,288
Comprehensive income subsequent to the Merger:
   Net income subsequent to the Merger                   25,120             -               -           -       25,120
   Foreign currency translation adjustments
   subsequent to the Merger                                   -             -             128           -          128
                                                                                                             ---------
Comprehensive income subsequent to the Merger                                                                   25,248
Dividends paid ($.06 per share)                          (6,288)            -               -           -       (6,288)
                                                      ---------      --------        --------    --------    ---------
Balance at December 31, 1997                             18,832             -             128           -      683,696
Comprehensive income:
   Net income                                           195,614             -               -           -      195,614
   Foreign currency translation adjustments                   -             -          (1,267)          -       (1,267)
                                                                                                             ---------
Comprehensive income                                                                                           194,347
Issuance of 97,900 shares of restricted stock                 -        (3,992)              -           -            -
Amortization of restricted stock grants                       -           433               -           -          433
Issuance of 33,150 shares of Common stock under
   employee stock option plans                                -             -               -           -          787
Repurchase of 169,100 shares of Common stock
   for treasury                                               -             -               -      (6,765)      (6,765)
Dividends paid ($0.285 per share)                       (29,871)            -               -           -      (29,871)
                                                      ---------      --------        --------    --------    ---------
Balance at December 31, 1998                          $ 184,575      $ (3,559)       $ (1,139)   $ (6,765)   $ 842,627
                                                      =========      ========        ========    ========    =========
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       31
<PAGE>

                          GALILEO INTERNATIONAL, INC.
                   Notes to Consolidated Financial Statements
                        (in thousands, except share data)
   

1.   SIGNIFICANT ACCOUNTING POLICIES
    

Nature of Operations

     Galileo International, Inc. (the "Company"), formerly Galileo International
Partnership,  is one of the  world's  leading  providers  of  electronic  global
distribution   services  for  the  travel  industry   utilizing  a  computerized
reservation  system  ("CRS").  The Company  provides  travel  agencies and other
subscribers  with the  ability to access  schedule  and fare  information,  book
reservations  and  issue  tickets  for  airlines.   The  Company  also  provides
subscribers  with  information  and  booking  capability   covering  car  rental
companies and hotel properties throughout the world. The Company distributes its
products in 104 countries on six continents.

Principles of Consolidation and Business Acquisitions

     The  consolidated  financial  statements  include  the  accounts of Galileo
International,   Inc.  and  all  majority-owned  subsidiaries.  All  significant
intercompany accounts and transactions are eliminated in consolidation.
   
     Effective July 30, 1997,  Galileo  International  Partnership merged into a
wholly owned limited liability company subsidiary of Galileo International, Inc.
(the  "Merger").  References to the Company mean, at all times prior to the time
of  the  Merger,   Galileo   International   Partnership  and  its  consolidated
subsidiaries and, at all times thereafter,  Galileo International,  Inc. and its
consolidated  subsidiaries.  In connection with the Merger, the Company effected
an initial  public  offering of its Common Stock,  par value $.01 per share (the
"Common  Stock")  at an  initial  public  offering  price of  $24.50  per  share
resulting in net proceeds to the Company,  after  exercise of the  underwriters'
over-allotment  option,  of $384,288  after  deducting  underwriting  discounts,
commissions and other expenses (the "Offering").

     During  1998,  the Company  acquired a Florida  based  airline  information
systems  company,  S. D. Shepherd  Systems,  Inc.  ("Shepherd  Systems") and two
national  distribution  companies:  Galileo Nordiska AB ("Nordiska") and Galileo
Canada Distributions Systems, Inc. ("Galileo Canada").  Nordiska, Galileo Canada
and Shepherd Systems were acquired on January 1, June 1 and November 19, 1998 at
purchase prices of $2,066, $34,392 and $16,740, respectively. In connection with
the  acquisitions,  the Company also incurred  expenses of $811, which have been
accounted  for as part of the purchase  prices.  The Company  accounted  for the
acquisitions using the purchase method of accounting.  Accordingly, the costs of
the acquisitions  were allocated to the assets acquired and liabilities  assumed
based on their  respective  fair  values.  Goodwill  related  to the cost of the
acquisitions  is being  amortized over 10 to 25 years and is included in cost of
operations  expenses.  The results of operations  and cash flows of the acquired
companies have been consolidated with those of the Company from the date of each
acquisition.  In connection with the acquisition of Galileo Canada,  the Company
incurred  $34,392 of debt under a five-year term loan  agreement.  The aggregate
impact of the acquisitions in 1998 was immaterial.

     During 1997, the Company  acquired three  national  distribution  companies
(the "NDC Acquisitions"): Apollo Travel Services Partnership ("ATS"), Traviswiss
AG  ("Traviswiss")  and Galileo  Nederland  BV ("Galileo  Nederland"),  (ATS and
Traviswiss were acquired on July 30, 1997 and Galileo Nederland on September 17,
1997) at  purchase  prices of  $700,000,  $8,502 and  $2,000,  respectively.  In
connection  with the NDC  Acquisitions,  the Company also  incurred  expenses of
$4,193,  which  have been  accounted  for as part of the  purchase  prices.  The
Company  accounted  for  the NDC  Acquisitions  using  the  purchase  method  of
accounting. Accordingly, the costs of the NDC Acquisitions were allocated to the
assets acquired and liabilities  assumed based on their  respective fair values.
Goodwill  related to the cost of the NDC Acquisitions is being amortized over 25
years and is included in cost of operations expenses.  The results of operations
and cash flows of the  acquired  NDCs have been  consolidated  with those of the

                                       32
<PAGE>

Company  from  the  date  of  each  acquisition.  In  connection  with  the  NDC
Acquisitions,  the  Company  incurred  $340,000,  net, of debt under a five-year
credit agreement.

     In connection with the  acquisitions  of Traviswiss and Galileo  Nederland,
the Company  terminated  certain  revenue  sharing  obligations  in exchange for
agreements to pay SAirGroup and KLM Royal Dutch Airlines ("KLM"), in four annual
installments beginning on the acquisition dates, a total of $22,400 and $14,800,
respectively.  The  remaining  liability  was $21,200 at December 31, 1998.  The
related intangible asset of $37,200 is being amortized over 17 years.
    
Uses of Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements,  and the  reported  amounts  of  revenues  and  expenses  during the
reporting period. Actual results could differ from those estimates.

Foreign Currency Translation

     The  Company  uses the U.S.  dollar for  financial  reporting  purposes  as
substantially  all of the Company's  billings are in U.S.  dollars.  The balance
sheets of the Company's  foreign  subsidiaries  are translated into U.S. dollars
using the balance  sheet date  exchange  rate,  and  revenues  and  expenses are
translated using the average exchange rate. The resulting  translation gains and
losses are recorded as a separate  component of  stockholders'  equity.  Foreign
currency  transaction  gains  and  losses  are  reflected  in  the  consolidated
statements of income.

Cash and Cash Equivalents

     Cash in excess of  operating  requirements  is  invested  daily in  liquid,
income-producing  investments,  having  maturities of three months or less.  The
carrying amounts reported on the balance sheet for cash equivalents include cost
and accrued interest, which approximate fair value.

Fair Value of Financial Instruments

     The Company's  financial  instruments are valued at their carrying amounts,
which, except for derivative financial instruments,  are reasonable estimates of
fair value due to the relatively short period to maturity of the instruments, or
variable interest rates, in the case of long-term debt.

Allowance for Doubtful Accounts Receivable
   
     The allowance for doubtful  accounts  receivable  was $13,747,  $22,012 and
$14,747 at December 31, 1998,  1997 and 1996,  respectively.  Provisions for bad
debts were  $(3,862),  $4,219 and $5,671 for the years ended  December 31, 1998,
1997 and  1996,  respectively.  Write-offs  of  uncollectible  accounts,  net of
recoverables  and allowance  adjustments,  were $5,124,  $652 and $2,637 for the
years ended December 31, 1998, 1997 and 1996,  respectively.  The 1998 provision
includes a $7,548 recovery  settlement  related to a contractual  dispute from a
prior year.
    
Accounting for the Impairment of Long-Lived Assets
   
     Statement of Financial  Accounting  Standards No. 121,  "Accounting for the
Impairment of  Long-Lived  Assets and for  Long-Lived  Assets to be Disposed Of"
("Statement  121"),  requires that  long-lived

                                       33

<PAGE>

assets and certain identifiable intangibles to be held and used by any entity be
reviewed for impairment  wherever  events or changes in  circumstances  indicate
that the carrying amount of an asset may not be recoverable.  Statement 121 also
requires  that  long-lived  assets and certain  identifiable  intangibles  to be
disposed of be reported at the lower of carrying  amount or fair value less cost
to sell. The carrying amount of the Company's  long-lived assets at December 31,
1998 and 1997  primarily  represents  the  original  amounts  invested  less the
recorded depreciation and amortization.  Management believes the carrying amount
of these investments is not impaired.
    
Property and Equipment

     Depreciation  of property and  equipment  is provided on the  straight-line
method over the following estimated useful lives of the assets:

       Buildings and improvements                        5-35 years
       Equipment                                         3-10 years

Depreciation  expense for the years ended  December 31, 1998,  1997 and 1996 was
$83,724, $54,591 and $31,533, respectively.

Computer Software
   
     Effective  January 1, 1998, the Company adopted the provisions of Statement
of Position 98-1,  "Accounting for the Costs of Computer  Software  Developed or
Obtained for Internal Use." Accordingly,  certain costs to develop  internal-use
computer software are being capitalized.  Prior to 1998, the Company capitalized
certain  software  development  costs in accordance  with Statement of Financial
Accounting  Standards No. 86,  "Accounting for the Costs of Computer Software to
Be Sold, Leased or Otherwise Marketed." The ongoing assessment of recoverability
of capitalized  software  development  costs requires  considerable  judgment by
management with respect to certain external  factors,  including but not limited
to, estimated economic life and changes in software and hardware technology.
    
     Computer software consists  principally of purchased  computer software and
capitalized computer software  development costs.  Amortization is provided on a
straight-line  method over  estimated  useful lives of 3-10 years.  Amortization
expense  for the years  ended  December  31,  1998,  1997 and 1996 was  $52,688,
$62,820 and $47,611, respectively.

Intangible Assets

     Intangible  assets  are  amortized  on the  straight-line  method  over the
following useful lives:

   
        Customer list                                         17 years
        Goodwill                                           10-25 years
        Other                                               8-17 years

     The Company  assesses  the  recoverability  of these  intangible  assets by
determining whether the carrying amount of the assets are recoverable over their
remaining lives.  Amortization expense for the years ended December 31, 1998 and
1997 was $35,692 and $14,356, respectively.
    
                                       34
<PAGE>

Revenue Recognition

     Fees are charged to airline, car rental, hotel and other travel vendors for
bookings made through the  Company's  CRS and are  dependent  upon the level and
usage of functionality within the CRS at which the vendor participates.  Booking
fee revenue is recognized at the time the  reservation is made for air bookings,
at the time of pick-up for car bookings,  and at the time of check-out for hotel
bookings.

Research and Development
   
     Research  and  development  costs,   excluding   amortization  of  computer
software,  are expensed as incurred  and were $4,786,  $8,550 and $8,185 for the
years ended December 31, 1998, 1997 and 1996, respectively.
    
Derivative Financial Instruments
   
     In the normal course of business,  portions of the  Company's  expenses are
subject to  fluctuations  in currency  values and  interest  rates.  The Company
addresses  these risks  through a  controlled  program of risk  management  that
includes  the use of  derivative  financial  instruments.  To some  degree,  the
Company is exposed to  credit-related  losses in the event of  nonperformance by
counterparties  to financial  instruments,  but  management  does not expect any
counterparties  to  fail to meet  their  obligations  given  their  high  credit
ratings.  The Company does not hold or issue  financial  instruments for trading
purposes.

     The Company  enters  into  foreign  exchange  forward  contracts  to manage
exposure to fluctuations in foreign exchange rates related to the funding of its
United Kingdom and Canadian operations.  The Company accounts for such contracts
by recording any unrealized gains or losses in income each reporting  period. At
December  31,  1998,  the Company  had entered  into  foreign  exchange  forward
contracts  which  provide for  purchases of GBP 11,500 and CAD 20,000 at various
dates  throughout  1999. At December 31, 1998 and 1997,  the notional  principal
amounts of outstanding forward contracts were $31,323 and $62,421, respectively.
The fair value of  outstanding  forward  contracts at December 31, 1998 and 1997
was $821 and $1,417, respectively.

     The Company has also entered into interest rate swap  agreements to convert
portions of its variable rate debt to fixed rate.  The Company  accounts for its
interest rate swap agreements as a hedge of its interest rate exposure. See Note
4 for further information regarding the Company's interest rate agreements.
    
Income Taxes
   
     In 1998 and  subsequent  to the Merger in 1997,  the Company  accounts  for
income  taxes in  accordance  with the  provisions  of  Statement  of  Financial
Accounting  Standards No. 109,  "Accounting for Income Taxes" ("Statement 109").
Under the asset and liability  method of Statement 109,  deferred tax assets and
liabilities are recognized for the future tax  consequences  attributable to the
difference  between the financial  statement carrying amounts of existing assets
and liabilities and their respective tax bases and operating loss and tax credit
carryforwards.  Deferred tax assets and  liabilities  are measured using enacted
tax rates  expected  to apply to  taxable  income  in the  years in which  those
temporary  differences are expected to be recovered or settled.  Under Statement
109, the effect on deferred tax assets and  liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date.

     Prior  to the  Merger  in  1997,  the  Company  operated  in the  form of a
partnership  and  accordingly  the  Company's  income tax  liabilities  were the
responsibility of its partners.
    
                                       35
<PAGE>

Earnings per Share
   
     Basic  earnings  per share data for the year  ended  December  31,  1998 is
calculated  based on the weighted  average  shares  outstanding  for the period.
Diluted earnings per share is calculated as if the Company had additional Common
Stock  outstanding  from the  beginning of the year or the date of grant for all
dilutive stock  options,  net of assumed  repurchased  shares using the treasury
stock  method.  This resulted in an increase in the weighted  average  number of
shares outstanding for the year ended December 31, 1998 of 389,959.

     Pro forma basic  earnings per share data for 1997 and 1996 is calculated as
though (i) the  partners'  capital was  converted in the Merger into  88,000,000
shares of Common Stock as of January 1, 1996 and the 16,799,700 shares issued to
the  public  were  outstanding  from July 30,  1997,  and (ii) the  Company  had
operated in a corporate form effective as of January 1, 1996 and accordingly was
subject to federal and state income taxes.

     Pro forma diluted  earnings per share data for 1997 is calculated as if the
Company's  dilutive  stock options were  outstanding  from July 30, 1997, net of
assumed  repurchased  shares using the treasury  stock method,  causing a 24,324
increase in the weighted average number of shares outstanding in 1997.
    

2.   TRANSACTIONS WITH AFFILIATES
   
     Prior to the Merger,  for financial  reporting  purposes,  affiliates  were
considered to be all airline owners of Galileo International  Partnership,  with
individual ownership  percentages ranging from 38.0% to 0.1%.  Subsequent to the
Offering,  the airline  stockholders,  in aggregate,  own 64.9% of the Company's
outstanding  Common Stock, with only United Air Lines, Inc. ("United  Airlines")
and KLM deemed to be affiliates due to indirect ownership, individually, greater
than 10% of the Company's outstanding Common Stock.

     The Company recognized  electronic global  distribution  services revenues,
primarily in the form of booking fees, from affiliates totaling $170,346 for the
year ended  December  31, 1998,  $63,820 for the five months ended  December 31,
1997,  $236,015 for the seven  months ended July 30, 1997 and,  $355,535 for the
year ended  December 31, 1996.  The Company also received  information  services
revenues from affiliates totaling $128,839 for the year ended December 31, 1998,
$50,126 for the five  months  ended  December  31,  1997,  $19,805 for the seven
months  ended July 30, 1997 and,  $34,335 for the year ended  December 31, 1996.
Total  revenues from United  Airlines of  approximately  $269,942,  $209,106 and
$164,179  were  greater than 10% of the  Company's  revenues for the years ended
December 31, 1998, 1997 and 1996, respectively.

      The Company,  in the ordinary course of business,  purchases services from
affiliates.  Services  purchased from  affiliates and classified  within cost of
operations in the  accompanying  consolidated  statements of income totaled zero
for the year ended  December 31, 1998,  zero for the five months ended  December
31, 1997,  $2,051 for the seven months ended July 30, 1997 and,  $14,232 for the
year ended December 31, 1996.  Services purchased from affiliates and classified
within commissions,  selling and administrative expenses totaled $15,623 for the
year ended  December  31, 1998,  $5,399 for the five months  ended  December 31,
1997,  $267,935  for the seven  months  ended July 30, 1997 and $424,536 for the
year ended December 31, 1996.

     At the time of the  Merger,  the Company  entered  into  Computer  Services
Agreements  with  certain  airline  stockholders  pursuant  to which the Company
provides certain fares quotation services,  internal reservation services, other
internal management services and software development services. The 

                                       36
<PAGE>

Company  will  provide  the fares  quotation  services  under  existing  pricing
arrangements for a period of approximately  five years. The Company will provide
the remaining above  mentioned  services to United Airlines for a minimum period
of four  years  from  the  date of the  Offering  for the  internal  reservation
services  and a  minimum  of two  years  from the date of the  Offering  for the
internal management services, generally at prices in effect immediately prior to
the  Offering,  which are based upon a fully  allocated  cost  methodology.  The
software  development services will be provided to United Airlines for a minimum
of six  years  from  the  date of the  Offering  at  prices  based  upon a fully
allocated cost methodology.
    

3.   LEASES AND COMMITMENTS
   
     The Company leases various office  facilities and equipment under operating
leases with remaining  terms of up to 15 years.  Rental expense under  operating
leases was $25,756,  $24,493 and $23,935 for the years ended  December 31, 1998,
1997 and 1996, respectively.

     The Company also leases data  processing  equipment  under capital  leases.
Equipment,  at cost,  includes $26,027,  $25,969 and $21,930 relating to capital
leases  at  December  31,  1998,  1997  and  1996,   respectively.   Accumulated
depreciation includes $21,842,  $15,616 and $8,831 relating to capital leases at
December 31, 1998, 1997 and 1996, respectively, with lease amortization included
in depreciation expense.
    
     During  1996,  the Company  issued a letter of credit in  exchange  for the
refund of a $40,461  lease  deposit held by the lessor of the  Company's  United
Kingdom facility.

     Future  minimum  lease  payments  under  capital  leases and  noncancelable
operating leases at December 31, 1998 are as follows:

                                                   Capital        Operating
                                                  --------        ---------
1999                                               $ 7,478         $ 22,057
2000                                                 6,698           15,898
2001                                                 6,698           11,580
2002                                                 6,698            8,528
2003                                                 6,698            8,238
Thereafter                                               -           33,304
                                                  --------         --------

Total minimum lease payments                        34,270           99,605
Less sublease income                                     -          (17,020)
                                                                   --------
Net rental payments                                                $ 82,585
                                                                   ========
Less amount representing interest                   (5,542)
                                                  -------- 
 
Present value of future minimum                             
   lease paymentnts                                 28,728
Current portion of present value of
  future minimum lease payments                      5,976
                                                  --------
Long-term portion of present value of
  future minimum lease payments                   $ 22,752
                                                  ========

                                       37
<PAGE>

4.   LONG-TERM DEBT

     Outstanding  long-term  debt consists of the following at December 31, 1998
and 1997:

                                                       1998             1997
                                                       ----             ----
Five-year revolving credit agreement                $ 35,000        $ 250,000
Term loan                                             34,392                -
Other                                                    128                -
                                                    --------        ---------
                                                      69,520          250,000
                                                    --------        ---------
Less current portion of long-term debt                     -                -
                                                    --------        ---------
Long-term debt                                      $ 69,520        $ 250,000
                                                    ========        =========

   
     On June 5, 1998, in connection with the acquisition of Galileo Canada,  the
Company  incurred  $34,392 of debt under a five-year  term loan  agreement  (the
"Term Loan"). In addition, on June 5, 1998, the Company entered into an interest
rate swap  agreement  for a  notional  amount of  $34,392  to fix the  effective
interest  rate of the Term Loan until  maturity in June 2003.  At  December  31,
1998,  the notional  interest  rate on the Term Loan was 5.55% and the effective
interest rate was 6.17%.  The Term Loan  requires  quarterly  interest  payments
throughout the five-year term.

     The Company is party to a $200,000  364-day credit agreement and a $400,000
five-year credit agreement (collectively,  the "Credit Agreements") with a group
of banks.  Facility  fees range from 5.5 to 15.0 basis  points under the 364-day
credit  agreement and from 8.0 to 22.5 basis points under the  five-year  credit
agreement.  Interest  on the  borrowings  may be either  Base  rate,  CD rate or
Euro-dollar  rate based and is reset in six month  intervals.  At  December  31,
1998,  the  nominal  interest  rate  for  loans  outstanding  under  the  Credit
Agreements was 5.58%.

     At December 31, 1998, borrowings totaled $35,000 under the five-year credit
agreement  with no  required  repayments  until  maturity  in July  2002 and the
balance  outstanding on the Term Loan was $34,392,  with no required  repayments
until  maturity  in June 2003.  No amounts  were  outstanding  under the 364-day
credit agreement.

     The Company has entered into  interest  rate swap  agreements to reduce the
impact of changes in interest rates on its outstanding  borrowings.  At December
31, 1998 and 1997,  the Company had  outstanding  interest rate swap  agreements
having a total notional value of $34,392 and $89,009,  respectively,  with fixed
interest  rates  averaging  5.87% and  5.03%,  respectively.  The fair  value of
outstanding  swap  agreements at December 31, 1998 and 1997 was $(979) and $547,
respectively.  For the  years  ended  December  31,  1998,  1997 and  1996,  the
effective  interest rate on the Company's  outstanding  debt under the Term Loan
and Credit Agreements was 5.89%, 5.31% and 5.73%, respectively.

     Total  interest,  including  interest  under  capital  leases,  of $11,876,
$12,266 and $11,307 was incurred for the years ended December 31, 1998, 1997 and
1996, respectively.

                                       38
<PAGE>

5.   EMPLOYEE  PENSION AND OTHER  POSTRETIREMENT BENEFITS

     The Company  has defined  benefit  pension  plans and other  postretirement
benefit  plans that  cover  substantially  all U.S.  employees.  Other  benefits
include  health care  benefits  provided to retired U.S.  employees  and retiree
flight  benefits  provided to certain  former  United  Airlines  employees.  The
Company has no significant  postretirement  health care benefit plans outside of
the United States.  The majority of its U.S.  employees may become  eligible for
these  benefits  if they  reach  normal  retirement  age while  working  for the
Company.

     The following tables provide a reconciliation  of the changes in the plans'
benefit  obligations  and fair value of assets for the years ending December 31,
1998 and 1997,  and a statement of the funded status as of December 31, 1998 and
1997:
    
                                      Pension Benefits       Other Benefits
                                      ----------------       --------------
                                      1998       1997       1998       1997
                                      ----       ----       ----       ----

Reconciliation of benefit obligation
Obligation at January 1               $ 90,304   $42,707    $40,120    $21,497
Service cost                             6,964     4,541      1,910      1,337
Interest cost                            7,178     4,654      2,733      2,062
Plan amendments                              -         -     (1,613)         -
Actuarial (gain) loss                   10,388     1,507        538       (323)
Acquisitions                                 -    38,017          -     15,767
Benefit payments                        (1,404)   (1,122)      (272)      (220)
                                     ---------   -------   --------   -------- 
Obligation at December 31            $ 113,430   $90,304    $43,416    $40,120
                                     =========   =======   ========   ========

Reconciliation of fair value of plan assets
Fair value of plan assets at
  January 1                           $ 79,781   $34,768        $ -        $ -
Actual return on plan assets            21,362     9,381          -          -
Acquisitions                                 -    32,531          -          -
Employer contributions                      18     4,223        272        220
Benefit payments                        (1,404)   (1,122)      (272)      (220)
                                     ---------   -------   --------   -------- 
Fair value of plan assets at
  December 31                         $ 99,757   $79,781        $ -        $ -
                                     =========   =======   ========   ========

Funded status
Funded status at December 31         $ (13,673) $(10,523)  $(43,416)  $(40,120)
Unrecognized transition obligation       2,239     2,487          -          -
Unrecognized prior-service cost          2,961     3,324     (1,455)         -
Unrecognized (gain) loss                (7,195)   (3,705)     4,776      4,138
                                     ---------   -------   --------   -------- 
Net amount recognized                $ (15,668)  $(8,417)  $(40,095)  $(35,982)
                                     =========   =======   ========   ======== 

                                       39


<PAGE>
   
     The following  table  provides the amounts  recognized in the  consolidated
balance sheets as of December 31, 1998 and 1997:

                                       Pension Benefits      Other Benefits
                                       ----------------      --------------
                                        1998       1997       1998       1997
                                        ----       ----       ----       ----
Accrued benefit liability            $ (15,668)  $(8,417)  $(40,095)  $(35,982)
Additional minimum liability              (129)     (219)         -          -
Intangible asset                           129       219          -          -
                                     ---------   -------   --------   --------
Net amount recognized                $ (15,668)  $(8,417)  $(40,095)  $(35,982)
                                     =========   =======   ========   ======== 


     The Company's  nonqualified  pension plan was the only pension plan with an
accumulated  benefit obligation in excess of plan assets. The plan's accumulated
benefit   obligation   was  $604  and  $403  at  December  31,  1998  and  1997,
respectively.  There  are no plan  assets  in the  nonqualified  plan due to the
nature of the plan. The Company's plans for  postretirement  benefits other than
pensions also have no plan assets.  The aggregate  benefit  obligation for those
plans was $43,416 and $40,120 as of December 31, 1998 and 1997, respectively.

     The following  table provides the  components of net periodic  benefit cost
for the plans for years ended December 31, 1998, 1997 and 1996:
<TABLE>
                                            Pension Benefits              Other Benefits
                                            ----------------              --------------
                                        1998      1997      1996       1998      1997      1996
                                        ----      ----      ----       ----      ----      ----

<S>                                     <C>       <C>       <C>        <C>       <C>       <C>    
Service cost                            $ 6,964   $ 4,541   $ 3,725    $ 1,910   $ 1,337   $ 1,169
Interest cost                             7,178     4,654     3,093      2,733     2,062     1,542
Expected return on plan assets           (7,500)   (4,748)   (2,526)         -         -         -
Amortization of transition
   obligation                               249       249       249          -         -         -
Amortization of prior-service cost          582       581       524       (259)        -         -
Amortization of net (gain) loss              16       (11)       55          -        51       274
                                        -------   -------   -------    -------   -------   -------
Net periodic benefit cost                 7,489     5,266     5,120      4,384     3,450     2,985
Settlement gain                               -      (157)        -          -         -         -
                                        -------   -------   -------    -------   -------   -------
Net periodic benefit cost after
 settlements                            $ 7,489   $ 5,109   $ 5,120    $ 4,384   $ 3,450   $ 2,985
                                        =======   =======   =======    =======   =======   =======

</TABLE>
     The  prior-service  costs are amortized on a  straight-line  basis over the
average  remaining  service period of active  participants.  Gains and losses in
excess of 10% of the greater of the benefit  obligation  and the  market-related
value of assets are  amortized  over the  average  remaining  service  period of
active participants.

                                       40
<PAGE>

     The assumptions used in the measurement of the Company's benefit obligation
are shown in the following table:

                                         Pension Benefits      Other Benefits
                                         ----------------      --------------
                                          1998      1997      1998       1997
                                          ----      ----      ----       ----
Weighted-average assumptions
 as of December 31:
Discount rate                             6.75%     7.25%     6.75%      7.25%
Expected return on plan assets            9.50%     9.50%      N/A        N/A
Rate of compensation increase             4.00%     4.25%      N/A        N/A


     The health care trend rate used to determine the accumulated postretirement
benefit  obligation was 11% for 1998,  decreasing by 1% each year until reaching
4% for the year 2005 and beyond.

     Assumed  health  care cost  trend  rates have a  significant  effect on the
amounts  reported for the health care plans.  A 1% change in assumed health care
cost trend rates would have the following effects:

                                                1% Increase   1% Decrease
                                                -----------   -----------
Effect on total of service and interest cost
components of net periodic postretirement
health care benefit cost                            $ 44         $ (72)

Effect on the health care component of the
accumulated postretirement benefit
obligation                                           526          (814)

     The Company has a defined  contribution pension plan covering a majority of
the United Kingdom  employees which requires the Company to annually  contribute
10% of  eligible  employee  compensation  on  behalf  of each  participant.  The
Company's  contributions  to the plan were $2,319,  $2,410 and $2,289 during the
years ended December 31, 1998, 1997 and 1996, respectively.

     The  Company  offers  its  U.S.-based  employees  a  401(k)  savings  plan.
Employees can elect to contribute  pretax  earnings,  as limited by the Internal
Revenue  Code, to their account and can determine how the money is invested from
a selection of options  offered by the  Company.  The  Company's  contributions,
matching  participating  employees up to a designated level, were $2,705, $1,982
and  $1,983  during  the  years  ended   December  31,  1998,   1997  and  1996,
respectively.
    





                                       41
<PAGE>
6.   GEOGRAPHIC AND SEGMENT INFORMATION
   
     The  Company  derives  substantially  all of its  revenues  from the global
travel industry.  The location of the travel agent making the booking determines
the geographic region credited with the related  revenues.  Data relating to the
Company's operations by geographic area is set forth below:

                             United States        Other
                                Market           Markets           Total
                                ------           -------           -----

1998
----
Revenues                      $ 588,312        $ 754,393      $ 1,342,705
Identifiable assets             162,912           32,057          194,969

1997
----
Revenues                        536,218          643,896        1,180,114
Identifiable assets             160,719           28,462          189,181

1996
----
Revenues                        498,522          552,113        1,050,635
Identifiable assets              82,477           23,721          106,198

     Revenues  consist of  electronic  global  distribution  revenues  only.  No
country  outside the United States  contributes  more than 10% of revenue or had
more than 10% of identifiable  assets in any of the years  presented.  Providing
geographic area data for information services revenues would be impracticable.
    

7.   SPECIAL CHARGES
   
     The Company  recorded special charges of $26,460 ($15,902 after tax) during
the year ended  December  31,  1998  related to a strategic  realignment  of the
Company's  operations  in the United  Kingdom  and,  to a lesser  degree,  other
realignments within the Company.  These special charges were comprised primarily
of $15,025 in severance costs related to termination of 399 employees, primarily
in the development and marketing groups, and $11,435 of other costs, principally
related to the closing of the remaining Swindon,  United Kingdom facilities.  As
of December 31, 1998, $54 of severance  costs have been paid and charged against
the liability and 10 employees  have been  terminated.  The Company  expects the
realignment activities to be substantially complete in 1999. Also related to the
closing of Swindon,  United Kingdom  facilities,  in 1993 the Company,  formerly
Covia  Partnership,  combined with The Galileo Company Ltd. and consolidated its
two data  center  facilities  resulting  in the closing of the  Swindon,  United
Kingdom  data  center.  In  connection  therewith,  the  estimated  cost  of the
consolidation  was  charged to  expense.  At  December  31,  1998 and 1997,  the
estimated  remaining  liabilities for all of the above  mentioned  restructuring
activities,  principally related to Swindon,  United Kingdom severance costs and
facility closure costs, were $44,115 and $20,908, respectively, and are included
in the accompanying consolidated balance sheets.

     The Company  recorded special charges of $20,111 ($12,099 after tax) during
the year ended December 31, 1997 related to the integration of the NDCs acquired
in 1997 into the  Company's  operations.  The  special  charges  were  comprised
primarily of $12,315 in severance  costs related to termination of 202 employees
and $7,796 of other  integration  costs,  principally  related to the closing of
duplicate  facilities.  As of December 31, 1998,  $9,170 of severance costs have
been  paid and  charged  against  the  liability  and 

                                       42
<PAGE>
108  employees  have  been  terminated.  The  Company  expects  the  integration
activities to be complete in 1999. At December 31, 1998, the estimated remaining
liability  related  to  the  integration  was  $3,414  and  is  included  in the
accompanying consolidated balance sheet.


8. SUPPLEMENTAL INFORMATION
    
     Supplemental  cash flow  information  and noncash  investing  and financing
activities are as follows:

                                              1998         1997        1996
                                              ----         ----        ----
Supplemental cash flow information
  Cash paid during the period for:
    Interest                               $ 11,994     $ 12,786    $ 11,517
    Income taxes                            123,508       32,001           -

Supplemental noncash investing and
financing activities
  Capital lease obligations and accounts
  payable from acquisition of equipment       $ 901      $ 7,295     $ 3,705


9.   INCOME TAXES
   
     For financial reporting  purposes,  income before income taxes includes the
following components:

                                             1998          1997          1996
                                             ----          ----          ----
 
Domestic operations                       $ 317,862     $ 198,071     $ 159,365
Foreign operations                            7,619         7,542         7,733
                                          ---------     ---------     ---------
Total net income before income taxes      $ 325,481     $ 205,613     $ 167,098
                                          =========     =========     =========


     The provisions for income taxes consist of the following:

                                             1998         1997
                                             ----         ----
Current taxes:
     Federal                              $ 112,799     $ 26,867
     State                                   20,803        5,317
     Foreign                                  1,432       (3,501)
                                          ---------     --------
        Total                               135,034       28,683
Deferred taxes:
     Federal                                 (3,834)         (36)
     State                                   (1,333)          (6)
                                          ---------     --------
        Total                                (5,167)         (42)
                                          ---------     --------
Provision for income taxes                $ 129,867     $ 28,641
                                          =========     ========

                                       43
<PAGE>

     No provision for U.S.  federal and state income taxes was recorded prior to
July 30,  1997,  as such  liability  was the  responsibility  of the partners of
Galileo International  Partnership,  rather than of the Company.  Certain of the
Company's non-U.S.  subsidiaries are subject to income taxes. As a result of the
Merger, the Company recorded initial deferred income taxes of $15,335 to reflect
the  establishment  of  deferred  tax  assets  and  liabilities.  The  remaining
provisions  for income taxes for the year ended  December 31, 1997 relate to the
period subsequent to July 30, 1997.

     Deferred tax assets related to the Canada Acquisition were $1,765. Deferred
tax assets (liabilities) are comprised of the following at December 31, 1998 and
1997:     
                                                         1998         1997
                                                         ----         ----
Current:
     Special charges                                   $ 10,319          $ -
     Productivity payments                                7,701        5,021
     Compensation accruals                                6,639        6,045
     Bad debt reserves                                    4,352        7,294
     Other                                                2,874          807
                                                      ---------    --------- 
                                                       $ 31,885     $ 19,167
                                                      =========    =========

Noncurrent:
     Software amortization                            $ (69,036)   $ (65,430)
     Postretirement medical and pension accruals         21,834       17,158
     Depreciation                                        17,169       11,552
     Other liabilities                                   (5,968)      (1,329)
     Facilities reserves                                  5,736        8,651
     Other assets                                         4,532        9,780
     Services agreements                                  3,610            -
     Rights agreements                                   (3,281)           -
                                                      ---------    --------- 
                                                      $ (25,404)   $ (19,618)
                                                      =========    ========= 








                                       44
<PAGE>
   
     The  effective  tax  rate on  income  before  taxes  differs  from the U.S.
statutory  rate.  The 1997  provision for income taxes is based on income earned
for the period  July 31 through  December  31,  1997 of  $67,627,  and  includes
foreign tax expense  incurred  for the period  January 1, 1997  through July 30,
1997 of $1,469.  The following table reconciles the U.S. statutory rate with the
effective rate for the years ended December 31, 1998 and 1997:

                                                     1998          1997
                                                     ----          ----
Tax at U.S. federal income tax rate               $ 113,918     $ 23,669
Increase (decrease) in taxes resulting from:
     State income taxes, net of U.S.                 13,522        3,457
        federal income tax benefit
     Amortization of excess of cost over
        net assets acquired and related               2,111          880
        purchase accounting adjustments
     Tax effect of non-deductible expenses              344          175
     Foreign and U.S. tax effects attributable          323          110
        to foreign operations
     Other                                             (351)         350
                                                  ---------     --------
Taxes on income at effective rate                 $ 129,867     $ 28,641
                                                  =========     ========


     Undistributed  earnings of the  Company's  corporate  foreign  subsidiaries
amounted to  approximately  $3,401 at December  31,  1998.  Those  earnings  are
considered to be indefinitely reinvested, and accordingly, no provision for U.S.
federal and state  income  taxes and foreign  withholding  taxes have been made.
Upon distribution of those earnings, the company would be subject to U.S. income
taxes  (subject to a reduction  for foreign tax credits) and  withholding  taxes
payable  to the  various  foreign  countries.  Determination  of the  amount  of
unrecognized  deferred U.S.  income tax liability is not  practicable;  however,
unrecognized  foreign tax credit  carryovers  would be  available to reduce some
portion of the U.S. liability.  Withholding taxes of approximately $240 would be
payable upon  remittance of all previously  unremitted  earnings at December 31,
1998.
    
10.  STOCKHOLDERS' EQUITY

Special Voting Preferred Stock
   
     The Company's Special Voting Preferred Stock (the "Special Preferred"),  of
which  seven  shares are  authorized,  issued and  outstanding,  permits,  under
certain circumstances,  each holder of a share of Special Preferred to elect one
director to the Company's Board of Directors.  The Special  Preferred  shares do
not provide the holder with any further  stockholder  voting privileges nor does
the  holder  receive  dividends  on such  shares.  In the event of  liquidation,
dissolution or winding-up of the Company,  holders of the Special  Preferred are
entitled to $100 per share, but holders are not entitled to any further payment.
Substantial  restrictions  exist  as  to  the  transferability  of  the  Special
Preferred shares by the holders.
    
Preferred Stock

     The Board of  Directors  of the  Company  is  authorized,  without  further
stockholder  action,  to divide  any or all shares of its  authorized  Preferred
Stock  into  one or  more  series  and to  fix  and  determine  the  rights  and
qualifications,  limitations  or  restrictions  thereon  of  each  such  series,
including voting powers, dividend rights,  liquidation  preferences,  redemption
rights and conversion or exchange privileges.

                                       45
<PAGE>

Common Stock

     Each  share of Common  Stock  entitles  the  holder  thereof to one vote in
elections  of  directors  and  all  other   matters   submitted  to  a  vote  of
stockholders.  Each  share  also  has an equal  and  ratable  right  to  receive
dividends  paid from the  Company's  assets,  as and if declared by the Board of
Directors.

Common Stock Held in Treasury
   
     The Board of Directors of the Company  authorized the use of up to $100,000
to repurchase outstanding shares of Common Stock. The repurchased shares will be
accumulated  by the Company and held in  treasury  for the purpose of  providing
available  shares for the Company's  employee benefit plans, for possible resale
in future public or private offerings, and for other general corporate purposes.
The purchases will be funded through the Company's working capital.  The amount,
timing  and  price of  purchases  will  depend on  market  conditions  and other
factors. The number of shares of Common Stock purchased was 169,100 in 1998.
    
Stock Incentive Plan

     During  1997,  the  Company  adopted  the 1997  Stock  Incentive  Plan (the
"Plan"). The Plan, whose purpose is to attract, retain and motivate officers and
other key employees and  consultants  of the Company,  provides for the award of
Common Stock in the form of stock  options,  stock  appreciation  rights,  stock
awards or such other forms as determined  to be consistent  with the purposes of
the Plan. The Company granted employees,  employed by the Company on the date of
the closing of the  Offering,  options to purchase the  Company's  Common Stock.
Such options vest in equal  installments  over a three-year period measured from
the date of the Offering. In addition,  the Company granted to senior management
options to purchase the Company's Common Stock, which vest in equal installments
over a five-year period. All of the foregoing options have a ten-year term.
   
     During 1998, the Company granted each employee,  employed by the Company on
the date of grant,  options to purchase shares of the Company's Common Stock. In
addition,  the Company granted senior management and other key employees options
to purchase the  Company's  Common Stock.  All of the foregoing  options vest in
equal  installments over a three-year period measured from the date of grant and
have a ten-year term, except for options granted to the Company's  President and
Chief  Executive  Officer,  which vest in equal  installments  over a  five-year
period and have a nine-year term.
    
     An aggregate of 8,140,000  shares of Common Stock are reserved for issuance
under the Plan. The number of shares  available for issuance under the Plan will
be  proportionately  adjusted in the event of certain  changes in the  Company's
capitalization or a similar transaction.  Shares issued pursuant to the Plan may
be authorized but unissued shares, treasury shares or any combination thereof.

     The Company also  adopted the 1997  Non-Employee  Director  Stock Plan (the
"Director  Plan") to retain the  services of qualified  individuals  who are not
employees  of the  Company to serve as members  of the Board of  Directors.  The
Director Plan authorizes awards of options,  based on the director's term, which
generally vest six months after the date of grant,  have an exercise price equal
to the fair market value at the date of grant, and expire ten years from date of
grant.  Directors who are employees of an airline  stockholder will receive,  in
lieu of such options, a cash payment equal to the value of the option calculated
on the basis of the  Black-Scholes  option  valuation  model.  An  aggregate  of
500,000  shares of Common Stock are  reserved  for  issuance  under the Director
Plan.
   
     During 1998,  the  Company's  Board of  Directors  approved the issuance of
97,900  shares of restricted  Common Stock to the Company's  President and Chief
Executive  Officer.  Half of  these  shares  

                                       46
<PAGE>

vest in equal  installments  over a five-year  period from the date of grant and
the  remaining  shares  vest  in  equal  installments  over a  four-year  period
beginning  one year from the date of grant.  During 1998,  $433 of  compensation
cost for restricted shares was recognized in the financial statements.

     Stock option  activity during 1998 and 1997 is as follows (number of shares
in thousands):

                                            1998                  1997
                                    ---------------------  ---------------------
                                                Weighted               Weighted
                                                 Average                Average
                                      Number    Exercise    Number     Exercise
                                    of Shares     Price    of Shares     Price
                                    ---------   ---------  ---------   ---------

Outstanding at January 1                 1,064    $ 25.40           -    $   -  
Granted                                  1,889      40.75       1,107      25.37
Exercised                                  (33)     24.57           -          -
Forfeited                                  (96)     30.56         (43)     24.50
Expired                                      -          -           -          -
                                         -----                  -----    
Outstanding at December 31               2,824    $ 35.51       1,064    $ 25.40
                                         =====                  =====   


Options exercisable at December 31         188      24.76           -          -

Weighted average fair value of
options granted during the year                   $ 14.53                 $ 6.73


     The following table summarizes  information about stock options outstanding
at December 31, 1998 (number of shares in thousands):
    

                        Options Outstanding                Options Exercisable
              -----------------------------------------   ----------------------
                             Weighted          Weighted                 Weighted
 Range of                    Average           Average                  Average
 Exercise       Number       Remaining         Exercise      Number     Exercise
  Prices      of Shares   Contractual Life       Price     of Shares      Price
----------    ---------   ----------------     --------    ---------    --------

$24 to $29          971         8.6             $ 25.52          187     $ 24.69
$34 to $41        1,853         9.3               40.74            1       37.81
                  -----                                        -----
$24 to $41        2,824         9.1               35.51          188       24.76
                  =====                                        =====          

                                       47
<PAGE>
   
     The company  applies APB  Opinion  No. 25 in  accounting  for its Plan and,
accordingly,  no compensation  cost has been recognized for its stock options in
the financial statements. The following table presents pro forma information had
the Company  determined  compensation  cost based on the fair value at the grant
date for its stock options under Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation":
    
                                                       1998         1997
                                                       ----         ----
Valuation assumptions:
       Expected option term (years)                       5.0           5.0
       Expected volatility                              35.0%         25.0%
       Expected dividend yield                           1.0%          1.0%
       Risk-free interest rate                           5.0%          5.0%

Pro forma effects (1):
       Net income as reported                       $ 195,614     $ 161,637
       Pro forma effect                                (4,118)         (624)
                                                    ---------     ---------
       Net income as adjusted                       $ 191,496     $ 161,013
                                                    =========     =========

       Basic earnings per share as adjusted (2)        $ 1.83        $ 1.29
                                                    =========     =========

       Diluted earnings per share as adjusted (2)      $ 1.82        $ 1.29
                                                    =========     =========


(1)  Estimated using Black-Scholes option pricing model.
(2)  Basic and diluted  earnings per share as reported  for 1997 are  calculated
     using  pro  forma  net  income  and  weighted   average  number  of  shares
     outstanding as discussed in footnote 1.

     The  Black-Scholes   option  valuation  model  was  developed  for  use  in
estimating the fair value of traded  options which have no vesting  restrictions
and are fully  transferable.  In addition,  option  valuation models require the
input of highly  subjective  assumptions  including  the  expected  stock  price
volatility.  Because the Company's  employee stock options have  characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially  affect the fair value estimate,  in
management's  opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.


11.  COMMITMENTS & CONTINGENCIES

     The Company is involved in various  matters of litigation as both plaintiff
and defendant. In the opinion of management, none of these matters, individually
or in the  aggregate,  if  determined  against the Company would have a material
adverse effect on the business,  consolidated  financial condition or results of
operations of the Company.

   
     In connection  with the NDC  Acquisitions  and the  acquisition  of Galileo
Canada,  the Company entered into agreements  (the "Services  Agreements")  with
United Airlines, US Airways, Air Canada, 

                                       48
<PAGE>

SAirGroup,  and KLM (collectively,  the "Service  Providers") to provide certain
marketing  services to the  Company.  During the sixth year  (eighth  year for a
portion  of  Galileo  Canada)  following  the  effective  date  of the  Services
Agreements, the Company is contractually required to pay the Service Providers a
fee  of up to  $232,000  (on a  present  value  basis  as of  the  date  of  the
agreements),  contingent upon  improvements in the Company's airline booking fee
revenue  in the  seller's  respective  territories  over  the  five-year  period
immediately following the acquisitions, as measured by the annual price increase
rate and over the  five-year  period  (seven-year  period in the case of Galileo
Canada)  immediately  following the acquisitions,  as measured by the annual air
segment  growth rate.  The Company has currently  estimated the probable  future
liabilities  under  the  Service  Agreements  and  is  ratably  recording  these
liabilities  over the  remaining  contract  periods.  At December 31, 1998,  the
estimated  liability  related  to the  Services  Agreements  was  $9,257  and is
included  in  other  noncurrent  liabilities  in the  accompanying  consolidated
balance sheet.

     In  connection  with the  Shepherd  Systems  Acquisition,  the  Company  is
contractually required to make additional payments up to an aggregate of $5,040,
which have been  accounted for as part of the purchase  price.  Payments are due
ratably over the five calendar years commencing with the calendar year ending on
December 31, 1999 and are based on a calculation of the relevant calendar year's
annual cash flow of  Shepherd  Systems.  At December  31,  1998,  the  liability
related  to these  payments  was  $5,040  and is  included  in other  noncurrent
liabilities in the accompanying consolidated balance sheet.
    

12.  BUSINESS AND CREDIT CONCENTRATIONS

     The  Company  derives  substantially  all of its  revenues  from the travel
industry.  Accordingly,  events  affecting  the  travel  industry,  particularly
airline  travel  and  participating   airlines,  can  significantly  affect  the
Company's business, financial condition and results of operations.

     Travel agencies are the primary  channel of  distribution  for the services
offered by travel  vendors.  If the  Company  were to lose and not  replace  the
bookings generated by any significant travel agencies,  its business,  financial
condition and results of operations could be materially adversely affected.









                                       49
<PAGE>

ITEM 9. CHANGES AND  DISAGREEMENTS  WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

None.


PART III
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Incorporated  herein by  reference is the  information  set forth under the
headings "Proposal 1:  Election of  Directors"  on pages 3-6 and "Section  16(a)
Beneficial Ownership Reporting Compliance" on page 9 in the Company's definitive
Proxy Statement for its 1999 Annual Meeting of Stockholders,  filed on or before
March 23, 1999. Information regarding "Executive Officers" is included in Item 1
under the heading "Executive Officers".


ITEM 11.  EXECUTIVE COMPENSATION

     Incorporated  herein by  reference is the  information  set forth under the
heading  "Executive  Compensation"  on pages 10-15 in the  Company's  definitive
Proxy Statement for its 1999 Annual Meeting of Stockholders,  filed on or before
March 23, 1999.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Incorporated  herein by  reference is the  information  set forth under the
headings "Voting  Rights  and  Stockholders'  Agreement"  on  page 2, "Principal
Holders of  Securities" on page 3 and  "Ownership of Common  Stock by  Directors
and Executive  Officers" on page 9 in the Company's  definitive  Proxy Statement
for its 1999 Annual Meeting of Stockholders, filed on or before March 23, 1999.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Incorporated  herein by  reference is the  information  set forth under the
heading "Certain  Relationships and Related  Transactions" on pages 17-19 in the
Company's   definitive   Proxy   Statement  for  its  1999  Annual   Meeting  of
Stockholders, filed on or before March 23, 1999.


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

(a)(3)  Exhibits required to be filed by Item 601 of Regulation S-K

Exhibit Number                Exhibit Description

2.1  General  Partnership  Interest  Purchase  Agreement among United Air Lines,
     Inc.,Covia  LLC,  U.S.  Airways,  Inc.,  USAM  Corp.,  Air  Canada,  Resnet
     Holdings,   Inc.,   Apollo   Travel   Services   Partnership   and  Galileo
     International Partnership (2)

2.2  Share Purchase Agreement between SAirGroup (LTD.) and Galileo International
     Partnership (2)

2.3  General Share Purchase Agreement among Koninklijke Luchtvaart  Maatschappij
     N.V., Galileo Nederland B.V. and Galileo International Partnership (1)

                                       50
<PAGE>

2.4  Merger   Agreement  among  Galileo   International   Partnership,   Galileo
     International, L.L.C. and Galileo International, Inc. (2)

3.1  Restated Certificate of Incorporation of Galileo International, Inc. (2)

3.2  Restated By-Laws of Galileo International, Inc. (2)

4.1  Registration  Rights  Agreement among Galileo  International,  Inc.,  Covia
     LLC., USAM Corp., RESNET Holdings,  Inc., Distribution Systems Inc., Roscor
     A.G., Travel Industry Systems B.V., Retford Limited, Racom Teledata S.p.A.,
     Travidata Inc., Olynet Inc. and Coporga, Inc. (2)

4.2  Specimen Certificate representing Common Stock (1)

10.1 Stockholders'  Agreement among Galileo International,  Inc., certain of its
     Stockholders and certain related parties of such Stockholders (2)

10.2 Services Agreement among Galileo  International,  L.L.C., United Air Lines,
     Inc., US Airways, Inc. and Air Canada (2)

10.3 Services Agreement between Galileo International, L.L.C. and SwissAir Swiss
     Air Transport Ltd. (2)

10.4 Form  of  Services   Agreement   between  the  Registrant  and  Koninklijke
     Luchtvaart Maatschappij N.V. (1)

10.5 Amended and Restated Non-Competition Agreement among Galileo International,
     Inc.,  Galileo  International,  L.L.C.,  and United Air  Lines,  Inc.,  UAL
     Corporation,  Covia LLC, Air  Wisconsin,  Inc. and Air Wis  Services,  Inc.
     together with Schedule 1 indicating other substantially  similar agreements
     (2) (9)

10.6 Rights  Waiver  Agreement  between  SAirGroup  and  Galileo   International
     Partnership (2)

10.7 Form of Rights Waiver Agreement between Koninklijke Luchtvaart Maatschappij
     N.V. and Galileo International Partnership (1)

10.8 Credit  Agreements:  
     (a) Amended and Restated  $200,000,000  364-Day Credit Agreement  (7) 
          (i)  Amendment  No.  1 
     (b)  $400,000,000  Five-Year  Credit Agreement (2) 
          (i) Assignment  and  Assumption  Agreement (4) 
          (ii) Amendment No. 1 (4) 
          (iii) Amendment No. 2 (6) 
          (iv) Amendment No. 3 
     (c) Galileo Canada ULC $34,391,917 Credit Agreement (6)

10.9 Galileo International, Inc. Guaranty (6)

10.10 Hillmead Underlease (1)

                                       51
<PAGE>

10.11 Underlease,   dated  1996,   between   The   Galileo  Company  and  Lucent
      Technologies Network Systems UK Limited (1)

10.12 Lease,  dated  March 1, 1994,  between  St. Martins  Property  Investments
      Limited and The Galileo Company (1)

10.13 Lease,  dated December 2, 1987, between St. Martins  Property  Investments
      Limited and Galileo Distribution Systems Limited (1)

10.14 Englewood, Colorado Office Lease, dated April 18, 1988 (1)

10.15 First Amendment to Englewood,  Colorado  Office Lease, dated June 23, 1988
      (1)

10.16 Rosemont Office Lease, dated March 31, 1995 (1)

10.17 Term  Lease  Master  Agreement dated  May  9,  1988,  between  IBM  Credit
      Corporation and Covia Partnership (1)

10.18 Master Lease Agreement, dated November 11, 1988,  between  Comdisco,  Inc.
      and Covia Partnership (1)

10.19 Software  License  Agreement, dated August 1, 1994 between  Allen  Systems
      Group, Inc. and Galileo International (1)

10.20 Program  Product Master License Agreement  between Candle  Corporation and
      Galileo International Partnership (1)

10.21 Foundation  License  Addendum to Order Form between Galileo  International
      and Computer Associates International,  Inc. (1) 
      (a) Amendment No. 1 to the Addendum to Order Form

10.22 Software  License  Agreement and Addendum, dated August 19, 1994,  between
      Sterling Software (U.S.A.), Inc. and Galileo International (1)

10.23 Master Equipment Lease,  dated April 4, 1996, between AT&T Systems Leasing
      Corporation and Galileo International Partnership (1)

10.24 Dun & Bradstreet Software Services Inc. License Agreement (1)

10.25 Master  Agreement  for MCI  Enhanced  Services,  dated February  14, 1996,
      between  MCI Telecommunications   Corporation  and  Galileo  International
      Partnership (1)
      (a)Second Amendment to the Master Agreement for MCI Enhanced  Services (4)
      (b)Amendment Number Three to Master Agreement for Enhanced Services (4)

10.26 Communications  Services  Agreement,  dated April 1, 1997, between Galileo
      International and AT&T Corp. (1)

10.27 Form of Galileo International Distributor Sales and Service Agreement (1)

10.28 Form of Global Airline Distribution Agreement (1)

                                       52
<PAGE>

10.29 Agreement  for the  Provision of Services  between The Galileo Company and
      Galileo International Partnership (1)

10.30 AT&T Contract Tariff Order (6)

10.31 AT&T OneNet Contract dated December 28, 1999

*10.32 Galileo International Severance Plan (1)

*10.33 Galileo International Savings and Investment Plan (1)
       (a)First  Amendment to the Galileo  International  Savings and Investment
       Plan effective January 1, 1995 (8)
       (b)Second Amendment to the Galileo  International  Savings and Investment
       Plan effective  December  31,  1997 (8)
       (c)Third  Amendment to the Galileo  International  Savings and Investment
       Plan effective February 1, 1999 (8)

*10.34 Galileo International Car Policy (1)

*10.35 Galileo Retirement and Death Benefit Scheme (1)

*10.36 Galileo International Employee Pension Plan (1)

*10.37 Galileo International Flextrack Benefits Plan (1)

*10.38 Galileo International Retiree Medical Plan (1)

*10.39 Galileo International,  Inc. 1997 Stock Incentive Plan, as revised May 1,
       1998 (5)

*10.40 Galileo International, Inc. 1997 Non-Employee Director Stock Plan (1)

*10.41 Form of Deferred Compensation Arrangements For Senior Officers of Galileo
       International, Inc. (3)

*10.42 Galileo UK Health Benefit Policy (1)

*10.43 Employment Agreement of James E. Barlett

*10.44 Travel Accident Insurance Plan
       (a)  Plan specific for Asia, the Americas and Pacific
       (b)  Plan specific for Africa, Europe and the Middle East

*10.45 Galileo International Management Incentive Plan 1998 Plan Summary (6)

*10.46 Non-Qualified  Stock Option  Agreement  (Standard Form - Executive Group)
       (6)

*10.47 Non-Qualified  Stock Option  Agreement  (Standard Form - Non-Employee
       Directors) (6) 

11.1   Computation of Per Share Earnings

21.1   Subsidiaries of the Registrant

                                       53
<PAGE>

23.1 Consent of KPMG

27.1 Financial Data Schedule

(1)  Incorporated  by reference to Exhibits  1.1,  2.2,  4.2 10.4,  10.9,  10.11
     through 10.40, 10.42,  10.44, 10.45 and 23.2 to the Company's  Registration
     Statement  on  Form  S-1,   including  all  amendments   (Registration  No.
     333-27495). 

(2)  Incorporated  by reference  to Exhibits  2.1,  2.3,  2.4 through 4.1,  10.1
     through 10.3, 10.5 through 10.8, 10.10 and 10.41 to the Company's Form 10-Q
     for the quarterly period ended June 30, 1997. 

(3)  Incorporated  by reference to Exhibit 10.43 to the Company's  Form 10-Q for
     the quarterly period ended September 30, 1997.

(4)  Incorporated  by  reference  to  Exhibit  10.10 and 10.29 to the  Company's
     Annual Report on Form 10-K for the fiscal year ended December 31, 1997.

(5)  Incorporated  by  reference  to  Exhibit  4.3 to  the  Company's  Form  S-8
     Registration Statement filed June 1, 1998 (Registration No. 333-55767).

(6)  Incorporated by reference to Exhibits  10.1-10.8 to the Company's Form 10-Q
     for the quarterly period ended June 30, 1998.

(7)  Incorporated  by reference to Exhibit 10.1 to the  Company's  Form 10-Q for
     the quarterly period ended September 30, 1998.

(8)  Incorporated by reference to Exhibit 4.3(b) through 4.3(d) to the Company's
     Form S-8 Registration  Statement filed February 1, 1999  (Registration  No.
     333-71507).

(9)  Portions  of this  Exhibit  have been  omitted  pursuant  to a request  for
     confidential treatment. The omitted material has been filed separately with
     the Securities and Exchange Commission.

* Management contract or compensatory plan or arrangement.

(b)  Reports on Form 8-K

The  Company  did not file any  reports  on Form 8-K during  the  quarter  ended
December 31, 1998.







                                       54

<PAGE>

                                               SIGNATURES


     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its  behalf by the  undersigned, thereunto  duly  authorized, on the 22nd day of
March, 1999.

                                          GALILEO INTERNATIONAL, INC.


                                          By:   /s/ James E. Barlett          
                                                --------------------------------
                                                James E. Barlett, 
                                                Chairman, President and 
                                                Chief Executive Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


Signature                   Title                      Date

/s/ James E. Barlett        Chairman, President and    February 18, 1999
--------------------        Chief Executive Officer
James E. Barlett            (principal executive
                            officer)

/s/ Paul H. Bristow         Director, Senior Vice      February 18, 1999
--------------------        President, Chief     
Paul H. Bristow             Financial Officer and
                            Treasurer (principal
                            financial and accounting
                            officer)

/s/ Babetta R. Gray         Director, Senior Vice      February 18, 1999
--------------------        President, Customer
Babetta R. Gray             Service Delivery, General
                            Counsel and Secretary

/s/ Frederic R. Brace       Director                   February 18, 1999
--------------------
Frederic F. Brace

/s/ David A. Coltman        Director                   February 18, 1999
--------------------
David A. Coltman

/s/ Wim Dik                 Director                   February 18, 1999
--------------------
Wim Dik

/s/ James E. Goodwin        Director                   February 18, 1999
--------------------
James E. Goodwin

/s/ Mina Gouran             Director                   February 18, 1999
--------------------
Mina Gouran

/s/ Thomas A. Mutryn        Director                   February 18, 1999
--------------------
Thomas A. Mutryn


                                       55
<PAGE>

Signature                   Title                      Date

/s/Frank H Rovekamp         Director                   February 18, 1999
--------------------
Frank H. Rovekamp

/s/Derek M. Stevens         Director                   February 18, 1999
--------------------
Derek M. Stevens

/s/ Kenneth Whipple         Director                   February 18, 1999
--------------------
Kenneth Whipple































                                       56
<PAGE>

(c)   Exhibit Index
      -------------

Exhibit Number          Exhibit Description
--------------          -------------------

2.1  General  Partnership  Interest  Purchase  Agreement among United Air Lines,
     Inc.,  Covia LLC,  U.S.  Airways,  Inc.,  USAM Corp.,  Air  Canada,  Resnet
     Holdings,   Inc.,   Apollo   Travel   Services   Partnership   and  Galileo
     International Partnership (2)

2.2  Share Purchase Agreement between SAirGroup (LTD.) and Galileo International
     Partnership (2)

2.3  General Share Purchase Agreement among Koninklijke Luchtvaart  Maatschappij
     N.V., Galileo Nederland B.V. and Galileo International Partnership (1)

2.4  Merger   Agreement  among  Galileo   International   Partnership,   Galileo
     International, L.L.C. and Galileo International, Inc. (2)

3.1  Restated Certificate of Incorporation of Galileo International, Inc. (2)

3.2  Restated By-Laws of Galileo International, Inc. (2)

4.1  Registration  Rights  Agreement among Galileo  International,  Inc.,  Covia
     LLC., USAM Corp., RESNET Holdings,  Inc., Distribution Systems Inc., Roscor
     A.G., Travel Industry Systems B.V., Retford Limited, Racom Teledata S.p.A.,
     Travidata Inc., Olynet Inc. and Coporga, Inc. (2)

4.2  Specimen Certificate representing Common Stock (1)

10.1  Stockholders' Agreement among Galileo International,  Inc., certain of its
      Stockholders and certain related parties of such Stockholders (2)

10.2  Services  Agreement among Galileo International, L.L.C., United Air Lines,
      Inc., US Airways, Inc. and Air Canada (2)

10.3  Services   Agreement  between  Galileo  International, L.L.C. and SwissAir
      Swiss Air Transport Ltd. (2)

10.4  Form  of  Services   Agreement   between  the  Registrant and  Koninklijke
      Luchtvaart Maatschappij N.V. (1)

10.5  Amended   and   Restated    Non-Competition    Agreement   among   Galileo
      International,  Inc., Galileo International, L.L.C., and United Air Lines,
      Inc., UAL Corporation, Covia LLC, Air Wisconsin, Inc. and Air Wis Services
      Inc.  together  with  Schedule 1  indicating  other  substantially similar
      agreements (2) (9)

10.6  Rights  Waiver  Agreement  between  SAirGroup  and  Galileo  International
      Partnership (2)

10.7  Form  of   Rights   Waiver   Agreement   between  Koninklijke   Luchtvaart
      Maatschappij N.V. and Galileo International Partnership (1)

                                      
<PAGE>

10.8 Credit Agreements:
     (a) Amended and Restated $200,000,000 364-Day Credit Agreement (7) 
          (i) Amendment No.  1 
     (b)  $400,000,000  Five-Year  Credit  Agreement  (2) 
          (i)  Assignment  and Assumption  Agreement  (4) 
          (ii)  Amendment  No. 1 (4) 
          (iii)  Amendment No. 2 (6)
          (iv) Amendment No. 3 
     (c) Galileo Canada ULC $34,391,917 Credit Agreement (6)

10.9 Galileo International, Inc. Guaranty (6)

10.10 Hillmead Underlease (1)

10.11 Underlease,   dated  1996,   between   The   Galileo  Company  and  Lucent
      Technologies Network Systems UK Limited (1)

10.12 Lease,  dated  March 1, 1994,  between  St.  Martins Property  Investments
      Limited and The Galileo Company (1)

10.13 Lease,  dated December 2, 1987,  between St. Martins  Property Investments
      Limited and Galileo Distribution Systems Limited (1)

10.14 Englewood, Colorado Office Lease, dated April 18, 1988 (1)

10.15 First Amendment to Englewood,  Colorado Office Lease,  dated June 23, 1988
      (1)

10.16 Rosemont Office Lease, dated March 31, 1995 (1)

10.17 Term  Lease  Master  Agreement  dated  May  9,  1988, between  IBM  Credit
      Corporation and Covia Partnership (1)

10.18 Master Lease Agreement,  dated November 11, 1988,  between  Comdisco, Inc.
      and Covia Partnership (1)

10.19 Software  License  Agreement,  dated August 1, 1994 between  Allen Systems
      Group, Inc. and Galileo International (1)

10.20 Program  Product Master License  Agreement  between Candle Corporation and
      Galileo International Partnership (1)

10.21 Foundation  License  Addendum to Order Form between Galileo  International
      and Computer Associates International,  Inc. (1) 
      (a) Amendment No. 1 to the Addendum to Order Form

10.22 Software  License  Agreement and Addendum,  dated August 19, 1994, between
      Sterling Software (U.S.A.), Inc. and Galileo International (1)

10.23 Master Equipment Lease,  dated April 4, 1996, between AT&T Systems Leasing
      Corporation and Galileo International Partnership (1)

                                       
<PAGE>

10.24 Dun & Bradstreet Software Services Inc. License Agreement (1)

10.25 Master  Agreement  for MCI  Enhanced Services,  dated  February  14, 1996,
      between  MCI  Telecommunications  Corporation  and  Galileo  International
      Partnership  (1) 
      (a) Second Amendment to the Master Agreement for MCI Enhanced Services (4)
      (b) Amendment Number Three to Master Agreement for Enhanced Services (4)

10.26 Communications  Services  Agreement, dated April 1, 1997,  between Galileo
      International and AT&T Corp. (1)

10.27 Form of Galileo International Distributor Sales and Service Agreement (1)

10.28 Form of Global Airline Distribution Agreement (1)

10.29 Agreement  for the  Provision of Services  between The Galileo Company and
      Galileo International Partnership (1)

10.30 AT&T Contract Tariff Order (6)

10.31 AT&T OneNet Contract dated December 28, 1999

*10.32 Galileo International Severance Plan (1)

*10.33 Galileo International Savings and Investment Plan (1)
       (a) First Amendment to the Galileo  International  Savings and Investment
       Plan effective  January  1,  1995  (8)  
       (b) Second Amendment to the Galileo International  Savings and Investment
       Plan effective December 31, 1997 (8)
       (c) Third  Amendment to the Galileo International  Savings and Investment
       Plan effective February 1, 1999 (8)

*10.34 Galileo International Car Policy (1)

*10.35 Galileo Retirement and Death Benefit Scheme (1)

*10.36 Galileo International Employee Pension Plan (1)

*10.37 Galileo International Flextrack Benefits Plan (1)

*10.38 Galileo International Retiree Medical Plan (1)

*10.39 Galileo International,  Inc. 1997 Stock Incentive Plan, as revised May 1,
       1998 (5)

*10.40 Galileo International, Inc. 1997 Non-Employee Director Stock Plan (1)

*10.41 Form of Deferred Compensation Arrangements For Senior Officers of Galileo
       International, Inc. (3)

*10.42 Galileo UK Health Benefit Policy (1)

                                     
<PAGE>

*10.43 Employment Agreement of James E. Barlett

*10.44 Travel Accident Insurance Plan
       (a)  Plan specific for Asia, the Americas and Pacific
       (b)  Plan specific for Africa, Europe and the Middle East

*10.45 Galileo International Management Incentive Plan 1998 Plan Summary (6)

*10.46 Non-Qualified  Stock Option  Agreement  (Standard Form - Executive Group)
       (6)

*10.47 Non-Qualified  Stock Option  Agreement  (Standard Form - Non-Employee
       Directors) (6) 

11.1  Computation of Per Share Earnings

21.1  Subsidiaries of the Registrant

23.1  Consent of KPMG

27.1  Financial Data Schedule

(1)   Incorporated  by reference to Exhibits  1.1,  2.2, 4.2 10.4,  10.9,  10.11
      through 10.40, 10.42, 10.44, 10.45 and 23.2 to the Company's  Registration
      Statement on Form S-1, including all amendments (Registration No.
      333-27495).

(2)   Incorporated  by reference  to Exhibits  2.1,  2.3, 2.4 through 4.1,  10.1
      through  10.3,  10.5 through 10.8,  10.10 and 10.41 to the Company's  Form
      10-Q for the quarterly period ended June 30, 1997.

(3)   Incorporated  by reference to Exhibit 10.43 to the Company's Form 10-Q for
      the quarterly period ended September 30, 1997.

(4)   Incorporated  by  reference  to  Exhibit  10.10 and 10.29 to the Company's
      Annual Report on Form 10-K for the fiscal year ended December 31, 1997.

(5)   Incorporated  by  reference  to  Exhibit  4.3 to the  Company's  Form  S-8
      Registration Statement filed June 1, 1998 (Registration No. 333-55767).

(6)   Incorporated by reference to Exhibits 10.1-10.8 to the Company's Form 10-Q
      for the quarterly period ended June 30, 1998.

(7)   Incorporated  by reference to Exhibit 10.1 to the Company's  Form 10-Q for
      the quarterly period ended September 30, 1998.

(8)   Incorporated  by  reference  to  Exhibit  4.3(b)  through  4.3(d)  to  the
      Company's  Form  S-8   Registration   Statement  filed  February  1,  1999
      (Registration No. 333-71507).

(9)   Portions  of this  Exhibit  have been  omitted  pursuant  to a request for
      confidential  treatment.  The omitted  material has been filed  separately
      with the Securities and Exchange Commission.


* Management contract or compensatory plan or arrangement.

                                       

<PAGE>

                                                             Exhibit 10.8 (a)(i)
CONFORMED COPY


            AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT


      AMENDMENT dated as of November 18, 1998 to the Amended and Restated Credit
Agreement  dated as of July 22,  1998 (the  "Credit  Agreement")  among  GALILEO
INTERNATIONAL,  INC. (the "Borrower"), the BANKS party thereto (the "Banks") and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").

                              W I T N E S S E T H :

      WHEREAS,  the  parties  hereto  desire to amend the  Credit  Agreement  in
certain respects as more fully set forth below;

      NOW, THEREFORE, the parties hereto agree as follows:

      SECTION 1. Defined Terms;  References.
Unless  otherwise  specifically  defined herein,  each term used herein which is
defined in the Credit  Agreement  has the  meaning  assigned to such term in the
Credit Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby"
and each other similar reference and each reference to "this Agreement" and each
other similar  reference  contained in the Credit  Agreement  shall,  after this
Amendment becomes effective, refer to the Credit Agreement as amended hereby.

      SECTION 2.  Amendments to the Credit Agreement.

      (a) The definition of Restricted Payment in Section 1.01 is amended by the
addition of the following proviso:

      ; provided that  repurchases by the Borrower of shares of its common stock
      subsequent to October 31, 1998 shall not constitute Restricted Payments to
      the  extent  that the  aggregate  amount  expended  for  such  repurchases
      subsequent to October 31, 1998 does not exceed $250,000,000.

      (b) The definition of Material Debt in Section 1.01 is amended by changing
the  parenthetical  "(other  than the Notes)" to read "(other than (i) the Loans
and (ii) Debt  owing to the  Borrower  or to a  wholly-owned  Subsidiary  of the
Borrower)".



<PAGE>

      (c) The  definition of Material  Financial  Obligations in Section 1.01 is
amended  by the  addition  of the  following  parenthetical  phrase  immediately
following the words "Derivatives Obligations" in the first sentence:

      (other than (i) the Loans and (ii) Debt or other  obligations owing to the
      Borrower or to a wholly-owned Subsidiary of the Borrower).

      (d)  The  figure   "$10,000,000"   in   Section   2.13(a)  is  changed  to
"$5,000,000".

      (e) The  figures  "90"  and "45"  appearing  in  subsections  (a) and (b),
respectively, of Section 5.01 are changed to "100" and "50".

          SECTION 3.  Governing  Law.  This  Amendment  shall be governed by and
     construed in accordance with the laws of the State of New York.

          SECTION 4. Counterparts. This Amendment may be signed in any number of
     counterparts,  each of which shall be an original,  with the same effect as
     if the signatures thereto and hereto were upon the same instrument.

      SECTION 5.  Effectiveness.  This Amendment shall
become effective on the date when the Agent shall have received from each of the
Borrower and the Required  Banks a  counterpart  hereof  signed by such party or
facsimile or other written confirmation (in form satisfactory to the Agent) that
such party has signed a counterpart hereof.

<PAGE>

      IN WITNESS  WHEREOF,  the parties  hereto have caused this Amendment to be
duly executed as of the date first above written.

                              GALILEO INTERNATIONAL, INC.


                              By: /s/ Paul H. Bristow             
                                  ---------------------------------
                                  Title: Senior Vice President and
                                           Chief Financial Officer


                              MORGAN GUARANTY TRUST COMPANY OF
                                  NEW YORK


                              By: /s/ Diana H. Imhof              
                                  ---------------------------------
                                  Title: Vice President


                              BANK OF AMERICA NATIONAL TRUST
                                  AND SAVINGS ASSOCIATION


                              By: /s/ Nelson D. Albrecht          
                                  ---------------------------------             
                                  Title: Vice President


                              BANK OF MONTREAL


                              By: /s/ Leon H. Sinclair           
                                  ---------------------------------             
                                  Title: Director


                              MIDLAND BANK PLC


                              By: /s/ Dean Cooper                 
                                  ---------------------------------             
                                  Title: Corporate Banking Manager


                              THE BANK OF TOKYO-MITSUBISHI,
                                  LTD., CHICAGO BRANCH


                              By: /s/ Hajime Watanabe            
                                  ---------------------------------
                                  Title: Deputy General Manager


                              THE SUMITOMO BANK, LIMITED
                                  CHICAGO BRANCH


                              By: /s/ John H. Kemper              
                                  ---------------------------------
                                  Title: Senior Vice President


                              ABN AMRO BANK N.V.


                              By: /s/ John L. Church             
                                  ---------------------------------
                                  Title: Group Vice President


                              By: /s/ Angela Reitz
                                  ---------------------------------
                                  Title: Vice President


<PAGE>


                              BANK AUSTRIA CREDITANSTALT
                                  CORPORATE FINANCE, INC.
                                  (as successor by assignment to Bank
                                  Austria Aktiengesellschaft, New York
                                  Branch)


                              By: /s/ Martin Rahe                 
                                  ---------------------------------
                                  Title: Senior Vice President


                              By: /s/ David W. Hanni  
                                  --------------------------------- 
                                  Title: Vice President


                              CREDIT LYONNAIS
                                  NEW YORK BRANCH


                              By: /s/ Philippe Soustra            
                                  ---------------------------------
                                  Title: Senior Vice President


                              SOCIETE GENERALE
                                  CHICAGO BRANCH


                              By: /s/ Jose A. Moreno              
                                  ---------------------------------
                                  Title: Director



<PAGE>


                              UBS AG, STAMFORD BRANCH


                              By: /s/ Denise M. Clerkin
                                  ---------------------------------
                                  Title: Associate Director
                                  Loan Portfolio Support, US


                              By: /s/ Richart T. Conway    
                                  --------------------------------- 
                                  Title: Associate Director
                                  Loan PortfolioSupport, US


                              THE NORTHERN TRUST COMPANY


                              By: /s/ Mark Taylor                 
                                  ---------------------------------
                                  Title: Second Vice President


                              THE SANWA BANK, LIMITED,
                                  CHICAGO BRANCH


                              By: /s/ Gordon P. Holtby            
                                  ---------------------------------
                                  Title: Vice President and Manager


                              WESTDEUTSCHE LANDESBANK
                                  GIROZENTRALE


                              By: /s/ Lisa Walker                 
                                  ---------------------------------
                                  Title: Vice President


                               By:  /s/ Elisabeth R. Wilds          
                                  ---------------------------------
                                  Title: Associate


                              THE LONG-TERM CREDIT BANK OF
                                  JAPAN, LTD.


                              By: /s/ Armund J. Schoen, Jr.       
                                  ---------------------------------
                                  Title: Senior Vice President


<PAGE>

                                             Exhibit 10.8 (b) (iv)
CONFORMED COPY


          AMENDMENT NO. 3 TO FIVE-YEAR CREDIT AGREEMENT


      AMENDMENT dated as of November 18, 1998 to the Five-Year  Credit Agreement
dated as of July 23, 1997 (as heretofore amended,  the "Credit Agreement") among
GALILEO  INTERNATIONAL,  INC.  (the  "Borrower"),  the BANKS party  thereto (the
"Banks") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").

                       W I T N E S S E T H :

      WHEREAS,  the  parties  hereto  desire to amend the  Credit  Agreement  in
certain respects as more fully set forth below;

      NOW, THEREFORE, the parties hereto agree as follows:

      SECTION 1. Defined Terms;  References.
Unless  otherwise  specifically  defined herein,  each term used herein which is
defined in the Credit  Agreement  has the  meaning  assigned to such term in the
Credit Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby"
and each other similar reference and each reference to "this Agreement" and each
other similar  reference  contained in the Credit  Agreement  shall,  after this
Amendment becomes effective, refer to the Credit Agreement as amended hereby.

      SECTION 2.  Amendments to the Credit Agreement.

      (a) The definition of Restricted Payment in Section 1.01 is amended by the
addition of the following proviso:

      ; provided that  repurchases by the Borrower of shares of its common stock
      subsequent to October 31, 1998 shall not constitute Restricted Payments to
      the  extent  that the  aggregate  amount  expended  for  such  repurchases
      subsequent to October 31, 1998 does not exceed $250,000,000.

      (b) The definition of Material Debt in Section 1.01 is amended by changing
the  parenthetical  "(other  than the Notes)" to read "(other than (i) the Loans
and (ii) Debt  owing to the  Borrower  or to a  wholly-owned  Subsidiary  of the
Borrower)".

      (c) The  definition of Material  Financial  Obligations in Section 1.01 is
amended  by the  addition  of the  following  parenthetical  phrase  immediately
following the words "Derivatives Obligations" in the first sentence:

      (other than (i) the Loans and (ii) Debt or other  obligations owing to the
      Borrower or to a wholly-owned Subsidiary of the Borrower).

      (d)  The  figure   "$10,000,000"   in   Section   2.13(a)  is  changed  to
"$5,000,000".

      (e) The  figures  "90"  and "45"  appearing  in  subsections  (a) and (b),
respectively, of Section 5.01 are changed to "100" and "50".

      SECTION 3.  Governing Law.  

This Amendment shall be governed by and construed in accordance with the laws of
the State of New York.

      SECTION 4.  Counterparts.

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

      SECTION 5.  Effectiveness.  

This  Amendment  shall  become  effective  on the date when the Agent shall have
received from each of the Borrower and the Required  Banks a counterpart  hereof
signed  by such  party or  facsimile  or  other  written  confirmation  (in form
satisfactory to the Agent) that such party has signed a counterpart hereof.


Amendment to be duly executed as of the date first above written.
<PAGE>

                                  GALILEO INTERNATIONAL, INC.



                              By: /s/ Paul H. Bristow             
                                  Title: Senior Vice President and
                                           Chief Financial Officer


                              MORGAN GUARANTY TRUST COMPANY OF
                                  NEW YORK



                              By: /s/ Diana H. Imhof              
                                  Title: Vice President


                              BANK OF AMERICA NATIONAL TRUST
                                  AND SAVINGS ASSOCIATION



                              By: /s/ Nelson D. Albrecht          
                                  Title: Vice President


                              BANK OF MONTREAL



                              By: /s/ Leon H. Sinclair            
                                  Title: Director


                              MIDLAND BANK PLC



                              By: /s/ Dean Cooper                 
                                  Title: Corporate Banking Manager


                              THE BANK OF TOKYO-MITSUBISHI,
                                  LTD., CHICAGO BRANCH



                              By: /s/ Hajime Watanabe             
                                  Title: Deputy General Manager


                              THE SUMITOMO BANK, LIMITED
                                  CHICAGO BRANCH



                              By: /s/ John H. Kemper              
                                  Title: Senior Vice President



                              ABN AMRO BANK N.V.


                              By: /s/ John L. Church              
                                  Title: Group Vice President

                              By:  /s/ Angela Reitz 
                                  Title: Vice President


                                  BANK AUSTRIA



                              By:  /s/ Martin Rahe                
                                  Title: Senior Vice President

                              By: /s/ David W. Hanni               
                                  Title: Vice President



                              CREDIT LYONNAIS
                                  NEW YORK BRANCH



                              By: /s/ Philippe Soustra            
                                  Title: Senior Vice President


                              ROYAL BANK OF CANADA



                              By: /s/ Michael J. Madnick          
                                  Title: Senior Manager



                              SOCIETE GENERALE
                                  CHICAGO BRANCH



                              By: /s/ Jose A. Moreno              
                                  Title: Director


                                     UBS AG,
                                  STAMFORD BRANCH



                              By: /s/ Denise M. Clerkin           
                                  Title: Associate Director
                                      Loan Portfolio Support, US



                              By: /s/ Richard T. Conway 
                                  Title: Associate Director
                                      Loan Portfolio Support, US

                              THE NORTHERN TRUST COMPANY



                              By: /s/ Mark Taylor                 
                                  Title: Second Vice President



                              THE SANWA BANK, LIMITED,
                                  CHICAGO BRANCH



                              By: /s/ Gordon P. Holtby            
                                  Title: Vice President and Manager


                              WESTDEUTSCHE LANDESBANK
                                  GIROZENTRALE



                              By: /s/ Lisa Walker                 
                                  Title: Vice President


                              By /s/ Elisabeth R Wilds                      
                                  Title: Associate


                              THE LONG-TERM CREDIT BANK OF
                                  JAPAN, LTD.



                              By: /s/ Armund J. Schoen, Jr.       
                                  Title: Senior Vice President

<PAGE>

                                                Exhibit 10.21 (a)



                                    ADDENDUM
                                       TO
                                   ORDER FORM
                                       OF
                     GALILEO INTERNATIONAL LLC ("LICENSEE")
                                       AND
                 COMPUTER ASSOCIATES INTERNATIONAL, INC. ("CA")





The attached Order Form and the referenced  License Agreement are amended to add
the following  provisions with respect to Licensee's use of the Licensed Program
listed in Exhibit "A". (The Order Form,  License Agreement and this Addendum are
referred  to  collectively  as the "MIPS  Based  License.")  In the event of any
conflict  between  the terms of this MIPS Based  License  Addendum  and those of
either the Order Form or the  referenced  License  Agreement,  the terms of this
Addendum shall  prevail.  Capitalized  terms used herein without  definition are
used as defined in the attached Order Form and the referenced License Agreement.

1.    Definitions.

      (a)The "Licensee" shall mean, individually and collectively,  Licensee and
         Licensee's majority-owned subsidiaries.  No other third person shall be
         or be deemed  to be  entitled  to the use or  benefit  of the  Licensed
         Program at any Licensee Site.

      (b)The "Licensee  Site(s)" shall mean the data center  site(s)  identified
         on Exhibit "B" to this Addendum  which  Licensee  represents are owned,
         operated or controlled by Licensee.

      (c)"MIPS Capacity" shall mean the aggregate  computing power (expressed in
         millions  of  instructions  per  second  and  rounded  to the next even
         multiple of 10) of all computers  located at the Licensee  Site(s),  or
         which can remotely access such computers,  irrespective of the platform
         designation  of the hardware or operating  systems,  provided that such
         remote computer is capable of accessing, using, executing or benefiting
         from the Licensed Program. Notwithstanding the above, the parties agree
         that the MIPS associated exclusively with the parallel sysplex coupling
         facility  shall not be considered  for the purpose of  calculating  the
         MIPS Capacity hereunder.

2. License Fee. The initial  License Fee,  inclusive of usage and maintenance of
   the  Licensed  Programs  for the  term  expiring  on  January  29,  2002,  is
   $XXXXXX payable as follows:

                  Amount                        Due

                                        September 30, 1998
                                        September 30, 1999
                                        September 30, 2000


<PAGE>

3. Authorized  Use.  The  Licensed  Programs  may be  used  only  by and for the
   benefit,  and to process  exclusively  the data,  of Licensee at the Licensee
   Site(s),  provided  that the MIPS  Capacity  does not  exceed  1060 MIPS (the
   "Licensed  MIPS  Capacity").  Any increase in Licensed MIPS Capacity shall be
   subject to paragraph 4 hereof. The Supplemental  License Fee shall be due and
   payable, without any requirement of notice or demand by CA, within 30 days of
   the date on which the MIPS Capacity exceeds the Licensed MIPS Capacity.

4. Supplemental  License Fee.  Licensee may increase the Licensed  MIPS Capacity
   upon prior written notice to CA and payment of CA's Supplemental  License Fee
   calculated using CA's then prevailing fee schedule,  as well as an annual UMF
   equal to $1,036 per MIPS. In each instance,  the Supplemental License Fee and
   initial UMF shall be billable upon Licensee giving CA notice of its desire to
   increase  Licensed  MIPS  Capacity  including  by  request  that CA  issue an
   authorization  key for an additional or  replacement  CPU. Such fees shall be
   paid within thirty (30) days notwithstanding any installment payment schedule
   for the initial  License  Fee.  The UMF shall be prorated for the year of the
   increase  and  shall  be  payable  in full  thereafter.  Notwithstanding  the
   foregoing,  Licensee shall not be obligated to pay a Supplemental License Fee
   for any  increase  in the MIPS  Capacity  up to 1060 MIPS,  but shall only be
   obligated to pay the annual UMF respecting such additional MIPS. In the event
   that Licensee exceeds the current Licensed MIPS Capacity, Licensee and CA may
   negotiate in good faith a new MIPS based  license for the Licensed  Programs,
   provided that  Licensee  shall still be obligated to pay the License Fees due
   under paragraph 2 hereof.

5. MIPS Capacity Calculation.  MIPS Capacity shall be calculated by reference to
   CA's  published  schedules of the MIPS capacity of  processors.  In the event
   that any  particular  processor is not  accounted for on CA's  schedule,  the
   manufacturer's  published specification of MIPS capacity shall control.. With
   respect  only  to the IBM  9672E  Series  of  processors,  the  MSU  standard
   (expressed in millions of service units),  shall be multiplied by a factor of
   5.4 to yield the  corresponding  MIPS  Capacity.  In the event  that the MIPS
   capacity of a  particular  CPU is in  question,  then the average of the MIPS
   ratings of Comdisco and The Meta Group will be used.

6. Quarterly  Reports;  Audit. On or before the 15th day following each calendar
   quarter beginning with the first full quarter  commencing after the effective
   date of this Order Form (the "Effective  Date"),  Licensee shall report to CA
   in writing,  as of the end of each such  quarter,  the MIPS  Capacity at each
   Licensee  Site,  listing  each CPU located at, or  remotely  accessing,  each
   Licensee Site by manufacturer,  model, operating system, location and (except
   for micro  processors) the serial number thereof.  CA shall thereupon  review
   such report and advise  Licensee of any applicable  Supplemental  License Fee
   and annual UMF due. The parties agree that in order to verify the accuracy of
   Licensee's  report,  Licensee will, at CA's request upon  reasonable  notice,
   grant CA access to each Licensee Site, and Licensee shall provide any further
   information as CA may reasonably require.

7. License  Suspension.  All  licenses  and Order  Forms  respecting  use of the
   Licensed  Programs  granted to Licensee by CA or any of its  predecessors for
   use at any Licensee Site are hereby suspended subject to their  reinstatement
   upon  termination of this license and Licensee's  election to revert to prior
   license  terms  under  paragraph  9 section  II of this  Agreement,  subject,
   however,  to the  obligations of Licensee (a) to pay all contracted  payments
   when and as the same shall otherwise have become due and payable but for such
   termination,  and (b) to maintain the confidentiality of the Licensed Program
   and comply with the  non-disclosure  provisions of such terminated  licenses.
   Any  future  use of or access to the  Licensed  Program  by  Licensee  at any
   Licensee Site shall be controlled  exclusively by the terms of the referenced
   License Agreement and this Order Form,  including this and any other Addendum
   thereto.


<PAGE>

8. License  Transfers.  Not withstanding any provision of any license granted by
   CA or its  predecessors  (regardless of when such license was or is granted),
   (a) the Licensed Programs may be used during the existence of this license at
   a  Licensee  Site only  pursuant  to this  MIPS  Based  License  and under no
   circumstances  pursuant  to any other  license;  (b) no other  license may be
   transferred  to a  Licensee  Site and (c) the  Licensed  Programs  may not be
   transferred  to a Licensee  Site from any other  site;  even if the  Licensed
   Programs are to be run on the same CPU as the one on which they are currently
   running.

   In the event that Licensee certifies in writing to CA that it has a bona fide
   disaster recovery plan with respect to the computer software programs used in
   its  operations,  Licensee  may  make one copy of the  Licensed  Program  for
   archival  purposes  and use  such  archival  copy  on a CPU  other  than  the
   designated CPU or at an  installation  site other than that identified on the
   Order Form, such other CPU or installation  site to be owned or controlled by
   Licensee.  The use of such  archival copy shall be limited (a) for purpose of
   conducting  limited testing of the disaster  recovery  plan's  procedures and
   effectiveness  (which  testing  shall not exceed one week in any three  month
   period) and (b) during any period  subsequent to the  occurrence of an actual
   disaster  during which the Licensee  cannot operate the Licensed  Program and
   the Designated CPU or at the installation  site identified on the Order Form.
   Licensee  agrees to furnish  such further  documentation  with respect to its
   disaster recovery plan and procedures as CA may reasonably  request from time
   to time.

9. Term and Renewal.  This MIPS Based  License  shall have an initial term of 40
   months.  If the parties do not agree in writing  upon renewal  payment  terms
   prior to the  expiration  of the then current term,  (a) the then  prevailing
   MIPS Capacity  (either 1060 MIPS or the then current  Licensed MIPS Capacity,
   whichever is greater),  shall be frozen without  Licensee having the right to
   exceed the same, (b) Licensee shall pay the annual usage and  maintenance fee
   for the  Licensed  Program  based  upon CA's then  prevailing  published  fee
   schedule for software  licensed per CPU at each distinct  Licensee  Site, and
   (c) Licensee may not use the Licensed Program  thereafter to process data for
   any additional entities other than Licensee's majority-owned subsidiaries, or
   II.  Licensee  may revert to the  License  Agreement(s)  for each  respective
   Licensed  Program as applicable  immediately  preceding the Effective Date of
   this Agreement  under which the Licensed  Programs may be used on CPU(s) with
   an aggregate MIPS capacity up to the then  prevailing  licensed MIPS capacity
   (which shall in no event be less than 1060 MIPS).

10.Confidentiality.  Licensee hereby  acknowledges that the terms of the license
   granted hereunder by CA are personal to Licensee and are highly  confidential
   except as required by law.  Licensee hereby agrees that it shall not disclose
   any of the terms of this Agreement (including,  without limitation, the terms
   relating to pricing and  authorized  use) to any person or entity  other than
   Licensee's  employees,  auditors,  and attorneys who have a need to know such
   information  in connection  with their  performance  of services for Licensee
   except as required by law.

11.Total Client Care (TCC) Program.  Licensee will be, and will remain, enrolled
   in CA's TCC Program during the initial term hereof and any renewal period.

12.Eligibility.  Licensee  represents  that  neither  it nor any  subsidiary  is
   engaged in the  business  of  providing  data  processing  services  to third
   persons under any facility management, service bureau, outsourcing or similar
   arrangement,  and  Licensee  agrees  not to use or  operate  or permit use or
   operation  of the Licensed  Programs  under any such  arrangement,  except as
   provided in paragraph 17 of this Agreement.


<PAGE>

13.Future  Product  Discount.  At any time  after the first  anniversary  of the
   effective  date of this  Order  Form  (the  "Effective  Date")  and  prior to
   expiration  of the initial term of the license  granted  hereby (the "Term"),
   Licensee  may give CA  written  notice  of its  intention  not to renew  this
   license respecting any Licensed Program as of the expiration of the Term (the
   "Notice").  In such event,  CA shall grant  Licensee a discount  equal to the
   aggregate of that portion of the installment(s) of the license fee respecting
   such  Licensed  Program due on the next  anniversary  of the  Effective  Date
   following  CA's  receipt  of the Notice  and on each  subsequent  anniversary
   thereof  (the  "Discount").  Subject to full  payment of the license fees due
   hereunder,  Licensee may apply the Discount toward satisfaction of up to: (a)
   fifty percent (50%) of the  installments of CA's prevailing  license fees for
   programs newly licensed during the Term under an A8 or A0 payment option;  or
   (b) thirty-five percent (35%) of such license fees payable under a G1 payment
   option. If at expiration of the Term,  Licensee desires to continue usage and
   maintenance  of such Licensed  Program,  then  Licensee  shall pay to CA as a
   one-time   renewal  fee  the  aggregate  of  that  portion  of  the  Discount
   attributable  to such  Licensed  Program  actually  applied  by  Licensee  as
   provided herein,  plus CA's then prevailing  annual UMF. The Discount may not
   be combined with any other discount or credit then available to Licensee;  no
   portion of the Discount shall be  reimbursable in cash; and no portion of the
   Discount  shall survive  expiration of the Term.  Nothing herein shall affect
   Licensee's obligation to pay the license fees as provided herein.

14.Year 2000 Compliance:  With the exception of CA-7 SMART CONSOLE,  CA warrants
   that, where  applicable,  the Licensed  Programs will be year 2000 compliant.
   "Year  2000  Compliant"  means  that  the  Licensed  Programs  will  have the
   following capabilities:

   A. Will manage and manipulate data involving dates,  including single century
      formulas  and  multi-century  formulas,  and will not cause an  abnormally
      ending  scenario  within the  application  or result in  incorrect  values
      generated involving such dates; and

   B. Will provide that all date related user interface  functionalities and all
      date related data  interface  functionalities  will be clearly  defined to
      include the  definition of century,  i.e.,  where 2 digit year is provided
      clear  definition of the  assumptions  used for century shall be provided.
      For example,  years 60 through 99 assume  century to be 19, while years 00
      through 59 assume century to be 20.

   CA warrants that the Licensed Programs shall include, at no cost to Licensee,
   design and  performance so Licensee shall not  experience  software  abending
   and/or invalid and/or incorrect results from software in the operation of the
   business  of  the  Licensee.   The  software   design  to  ensure  Year  2000
   compatibility   shall  include,   but  not  limited  to,  date  data  century
   recognition,  calculations  which  accommodate same century and multi-century
   formulas and date values, and the date data interface values that reflect the
   century.

15.Amendment.  Any  amendment  of this MIPS  Based  License  must be in  writing
   signed by the parties.

16.Assignment.  Notwithstanding  anything  contained  in the  Order  Form or the
   License Agreement referenced therein to the contrary, Licensee shall have the
   right,  upon  prior  written  notice  to CA, to assign  this  License  to the
   purchaser of all or substantially all of the assets of Licensee or Licensee's
   successor  by merger or  otherwise  by  operation  of law without  additional
   charge,  provided  that (a) all usage and  maintenance  fees  relating to the
   Licensed  Program(s)  shall have been paid  through the date of the  proposed
   assignment,  and (b) the proposed  assignee shall have executed and delivered
   to CA a License  Agreement  in the form hereof as well as an Order Form,  and
   Licensee and the proposed  assignee shall both have executed and delivered to
   CA the Assignment  Addendum generally used by CA which provides,  among other
   things,  that the scope of authorized  usage of the Licensed Program shall be
   restricted to the original licensee hereunder.


<PAGE>

17.Notwithstanding  any contrary provision of this MIPS Based License,  Licensee
   may use the Licensed Program for discrete application  processing.  "Discrete
   Application  Processing"  shall  occur when  Licensee  provides  third  party
   entities with access solely to a proprietary Licensee software application of
   a public domain software application which requires the Licensed Programs for
   systems support and operation,  but such entities are not provided any direct
   or indirect  access to the Licensed  Programs  and Licensee  does not perform
   general data processing services for such entities.  At no time will Licensee
   utilize the Licensed  Programs to provide general data  processing  services,
   nor facilities management, outsourcing or service bureau services.

COMPUTER ASSOCIATES                       LICENSEE:   GALILEO INTERNATIONAL,
INTERNATIONAL, INC                                    L.L.C.

By:    /s/ B. Cergol                            By:     /s/ Lori M. Tobin
      (Authorized Signature)                    (Authorized Signature)
      B. Cergol                                 Lori M. Tobin  
      (Name)                                    (Name)
      Division Manager - Sales Account          Senior Manager, Purchasing
      (Title)                                   (Title)
      October 21, 1998                          September 30, 1998 
      (Date)                                    (Date)


<PAGE>

                                    EXHIBIT A


                                LICENSED PROGRAMS


CA-ACF2
CA-ACF2 VIEWPOINT
CA-ADS/ONLINE
CA-DELIVER
CA-DELIVER TSO/SPIF/ISPF
CA-EASYTRIEVE PLUS
CA-EASYTRIEVE PLUS DB2 OPTION
CA-EASYTRIEVE PLUS IDMS/R OPTION
CA-ELEVEN
CA-ELEVEN/DISASTER RECOVERY
CA-ELEVEN/NOTEPAD
CA-ELEVEN/REPORTS+
CA-ELEVEN/VIEWPOINT
CA-ENDEVOR/MVS
CA-ENDEVOR/MVS AUTO. CONFIG.
CA-ENDEVOR/MVS EXTENDED PROCESSING
CA-ENDEVOR/MVS EXTERNAL SECURITY
CA-ENDEVOR/MVS FOOTPRINT SYNC.
CA-ENDEVOR/MVS PANVALET INTERFACE
CA-IDMS
CA-IDMS DATA DICTIONARY
CA-IDMS DBA TOOLKIT
CA-IDMS DC
CA-IDMS DEV. TOOLKIT
CA-IDMS DISTRIBUTED DATABASE SYS.
CA-IDMS ONLINE QUERY
CA-IDMS PERFORMANCE MONITOR
CA-IDMS/ADS ALIVE
CA-INTERTEST W/XA-ESA
CA-INTERTEST/BATCH
CA-JCLCHECK
CA-MULTI-IMAGE ALLOCATION
CA-MULTI-IMAGE CONSOLE
CA-MULTI-IMAGE INTEGRITY W/O EDIF
CA-ONE
CA-ONE/COPYCAT  CA-ONE/VIEWPOINT CA-OPS/MVS II JES 2 CA-OPTIMZIER II CA-PANVALET
CA-PANVALET  CMS OPTION  CA-PANVALET  ISPF CA-PDSMAN (5) ALL COMPONENT  CA-SEVEN
CA-SEVEN/NOTEPAD   CA-SEVEN/REPORT  BALANCING  CA-SEVEN/REPORTS+  CA-SEVEN/SMART
CONSOLE   CA-SEVEN/VIEWPOINTCA-VIEW   CA-VIEW   CA-VIEW   ERO   OPTION   CA-VIEW
TSO/SPF/ISPF INTERFACE CA-VIEW VTAM CA-XCOM FOR MVS CA-View





CA-IDMS DBA TOOLKIT includes:
CA-IDMS/ADS TRACE
CA-IDMS/DB EXTRACTOR
CA-IDMS/DC SORT
CA-IDMS/DICTIONARY MIGRATOR
CA-IDMS/DICTIONARY MODULE EDITOR
CA-IDMS/DICTIONARY QUERY FACILITY
CA-IDMS/ONLINE TEST

CA-IDMS DEV. TOOLKIT includes:
CA-IDMS/DB ANALYZER
CA-IDMS/DB AUDIT
CA-IDMS/DB REORG
CA-IDMS/DML ONLINE
CA-IDMS/JOURNAL ANALYZER CA-IDMS/LOG ANALYZER  CA-IDMS/MASTERKEY  CA-IDMS/ONLINE
LOG DISPLAY CA-IDMS/SCHEMA MAPPER CA-IDMS/TASK ANALYZER

<PAGE>

                                    EXHIBIT B




                                  LICENSEE SITE

                            Galileo International LLC
                             5350 South Valentia Way
                            Englewood, Colorado 80111


<PAGE>
                                                                  Exhibit 10.31
                          GENERAL TERMS AND CONDITIONS

                                AT&T PROPRIETARY
                                AT&T PROPRIETARY
                                     020698


                                MASTER AGREEMENT

   CUSTOMER Name                  AT&T                    AT&T Contact

   Galileo International, L.L.C.                          R. J. Paliseno
                                                          District Manager
                                                          Master Agreement Team
   Address                        Address                 AT&T Telephone No.
   5350 S Valentia Way            55 Corporate Drive      908-658-7028
   Englewood   CO      80111      Room 32B17A             AT&T Telefax:
                                  Bridgewater     NJ      908-306-3788
                                  08807
   City             State         City
   Zip Code                       State   Zip Code

   CUSTOMER Billing Address:
   Attention:  Network Finance
   5350 S Valentia Way
   Englewood   CO     80111
   City             State   Zip
   Code

   This Agreement  consists of this Cover Sheet,  the attached General Terms and
   Conditions,  the  Addendum to Master  Agreement  and all Service  Attachments
   ("Attachments")  attached  hereto  or  subsequently  signed  by  the  parties
   (collectively,  this  "Agreement").  In the  event of  conflict  between  the
   General Terms and Conditions and any  Attachment,  the Attachment  shall take
   precedence.

   This Agreement  shall become  effective when signed by both parties and shall
   continue in effect for as long as any  Attachment  remains in effect,  unless
   earlier  terminated in accordance  with the provisions of the Agreement.  The
   term of each Attachment is stated in the Attachment.

   As of the effective date of this Agreement, the Attachments are as follows:

   AT&T Contract Tariff





<PAGE>


   CUSTOMER'S   SIGNATURE  BELOW   ACKNOWLEDGES   THAT  CUSTOMER  HAS  READ  AND
   UNDERSTANDS  EACH OF THE TERMS AND CONDITIONS OF THIS AGREEMENT AND AGREES TO
   BE BOUND BY THEM.


   CUSTOMER: Galileo International,               AT&T CORP.
   L.L.C.___________
                                                  By: /s/ Robert R. Marcucci
   By: /s/ James E. Barlett                          (Authorized Signature)
      (Authorized Signature)


      James E. Barlett                              Robert R. Marcucci
   (Typed or Printed Name)                        (Typed or Printed Name)

     Chairman, President & CEO                       Division Manager
   (Title)                                         (Title)
     December 21, 1998                               December 28, 1998
   -------------------                             -------------------
   (Date)                                          (Date)

<PAGE>


                          GENERAL TERMS AND CONDITIONS

                                AT&T PROPRIETARY
The following  terms and conditions  shall apply to the provision and use of the
products and services  (individually a "Service" and collectively the "Services"
) provided pursuant to the Attachments.

1.0   DEFINITIONS
1.1  "Affiliate" of a party means any entity that controls,  is controlled by or
is under common control with such party, and, in the case of AT&T, it also means
any  entity  which  AT&T has  authorized  to offer  any  Service  or part of any
Service.   1.2  "Content"  means   information  made  available,   displayed  or
transmitted  in  connection  with  a  Service  (including,  without  limitation,
information made available by means of an HTML "hot link", a third party posting
or similar  means)  including  all  trademarks,  service  marks and domain names
contained therein as well as the contents of any bulletin boards or chat forums,
and,  all  updates,  upgrades,  modifications  and other  versions of any of the
foregoing.  1.3 "User" means anyone whom CUSTOMER allows, by action or omission,
to  use  or  access  any  Service  including,  without  limitation,   CUSTOMER'S
Affiliates.

2.0   CHARGES AND BILLING
2.1 CUSTOMER  shall pay AT&T for its and Users' use of the Services at the rates
and charges specified in the Attachments, without deduction, setoff or delay for
any reason, including circumstances arising under any other Attachment.  Charges
set forth in the Attachments are exclusive of any applicable taxes. CUSTOMER may
be required to pay a deposit  before  Services are  provided if AT&T  determines
that CUSTOMER is not  creditworthy or as specified in Section 10.1. 2.2 CUSTOMER
shall pay all shipping charges, taxes (excluding those on AT&T's net income) and
other similar charges (and any related  interest and penalties)  relating to the
sale,  transfer of  ownership,  installation,  license,  use or provision of the
Services,  except to the extent a valid tax exemption certificate is provided by
CUSTOMER to AT&T prior to the delivery of Services. 2.3 Payment is due within 30
days  after  the  date  of  invoice  and  shall  refer  to the  invoice  number.
Restrictive endorsements or other statements on checks accepted by AT&T will not
apply.  CUSTOMER  shall  reimburse  AT&T  for all  costs  (including  reasonable
attorney fees) associated with collecting  delinquent or dishonored payments. At
AT&T's  option,  interest  charges  may be added to any past due  amounts at the
lower of 1.5% per month or the maximum rate allowed by law.

3.0   RESPONSIBILITIES OF THE PARTIES
3.1 AT&T shall  provide  Services to CUSTOMER in  accordance  with the terms and
conditions and at the charges specified in this Agreement. 3.2 CUSTOMER warrants
that its and Users' use of the Services and the Content will at all times comply
with all applicable  laws,  regulations and written and electronic  instructions
for use.  AT&T  reserves the right to terminate  affected  Attachments,  suspend
affected  Services and/or remove CUSTOMER or Users' Content from the Services if
AT&T  (i)  determines,  in  its  sole  discretion,  that  AT&T's  public  image,
reputation  or goodwill  will be adversely  affected or that such use or Content
does not conform with the requirements set forth in this Agreement, or that AT&T
could be  subject  to  liability;  or (ii)  receives  notice  from  anyone  that
CUSTOMER's or Users' use or Content may violate any laws or regulations.  AT&T's
actions or inaction under this Section shall not  constitute  review or approval
of CUSTOMER's or Users' use or Content. 3.3 AT&T grants to CUSTOMER the right to
permit Users to access and use the Services, provided that CUSTOMER shall remain
solely responsible for such access and use and shall defend,  indemnify and hold
harmless  AT&T from and  against  all Damages  (including,  without  limitation,
reasonable attorney fees),  whether or not arising out of third-party claims and
regardless of the form of action, whether in contract, tort, strict liability or
otherwise,  concerning  or relating to: any  noncompliance  by CUSTOMER or Users
with any provision of this Agreement; negligent acts or omissions by CUSTOMER or
Users;  CUSTOMER's or Users'  Content or use of the Services;  and claims by any
User relating to any Service failure, defect or outage.

4.0   USE OF INFORMATION
4.1 All documentation,  technical information,  Software,  business information,
proposals for new Services or other materials that are disclosed by either party
to the other in the course of  performing  this  Agreement  shall be  considered
proprietary  information  ("INFORMATION") of the disclosing party, provided such
information  is in written  or other  tangible  form that is  clearly  marked as
"proprietary" or  "confidential",  or is disclosed orally and is both identified
as  proprietary  or  confidential  at the time of disclosure and summarized in a
writing so marked within 15 business days  following the oral  disclosure.  This
Agreement shall be deemed to be AT&T INFORMATION.  4.2 Each party's  INFORMATION
shall,  for a period of 3 years following its disclosure  (except in the case of
Software,  for an indefinite  period):  (i) be held in confidence;  (ii) be used
only for purposes of performing  this  Agreement  and using the  Services;  and,
(iii) not be disclosed  except to the receiving  party's  employees,  agents and
contractors having a need-to-know (provided that such agents and contractors are
not  direct  AT&T  competitors  and  agree  in  writing  to use  and  disclosure
restrictions as restrictive as this Article 4) or to the extent required by law.
4.3 The restrictions in Section 4.2 shall not apply to any information that: (i)
is independently  developed by the receiving party; or (ii) is lawfully received
by the receiving party free of any obligation to keep it confidential;  or (iii)
becomes  generally  available  to the  public  other  than  by  breach  of  this
Agreement.  4.4  CUSTOMER  authorizes  AT&T to: (i) monitor and record calls and
transmissions  using the Services and calls or  transmissions to AT&T concerning
the Services in order to detect fraud,  check quality and operate,  maintain and
repair the Services; and (ii) disclose such information to the extent AT&T deems
it is legally required.

5.0  PUBLICITY AND MARKS
5.1 No public  statements or  announcements  relating to this Agreement shall be
issued by either party without the prior written consent of the other party. 5.2
Each party agrees not to display or use, in advertising or otherwise, any of the
other party's trade names, logos, trademarks,  service marks or other indicia of
origin  (collectively  "Marks") without the other party's prior written consent,
provided that such consent may be revoked at any time.

6.0   SOFTWARE
6.1 AT&T grants CUSTOMER a personal,  non-transferable and non-exclusive license
(without the right to  sublicense) to use, in object code form, all software and
associated  written and electronic  documentation and data furnished pursuant to
the Attachments  (collectively,  the "Software"),  solely in connection with the
Services  and  solely in  accordance  with  applicable  written  and  electronic
documentation.  CUSTOMER will refrain from taking any steps to reverse assemble,
reverse compile or otherwise  derive a source code version of the Software.  The
Software  shall at all times remain the sole and  exclusive  property of AT&T or
its  suppliers.  "Third-Party  Software"  means  Software that bears a copyright
notice  of a  third  party.  "AT&T  Software"  means  all  Software  other  than
Third-Party  Software.  6.2 CUSTOMER  shall not copy or download  the  Software,
except  to  the  extent   expressly   provided   otherwise  in  the   applicable
documentation  for the  Service  or in a writing  signed by AT&T.  Any copy must
contain the same  copyright  notices and  proprietary  markings as the  original
Software. 6.3 CUSTOMER shall ensure that its employees and Users comply with the
terms and  conditions  of this  Article 6. 6.4 The term of the  license  granted
hereunder  shall be coterminous  with the Attachment  which covers the Software.
6.5 CUSTOMER agrees to comply with any additional restrictions that are provided
with any  Third-Party  Software.  6.6 AT&T  warrants that all AT&T Software will
perform substantially in accordance with its applicable published specifications
during a warranty  period of ninety (90) days  beginning on the date of delivery
of the AT&T Software to CUSTOMER. If CUSTOMER returns to AT&T, within the 90-day
warranty period, any AT&T Software that does not comply with this warranty, then
AT&T,  at its  option,  will  either  repair or replace  the portion of the AT&T
Software  that does not comply or refund the amount  paid by  CUSTOMER  for such
failed or defective  AT&T  Software.  This  warranty will apply only if the AT&T
Software  is used in  accordance  with the  terms of this  Agreement  and is not
altered, modified or tampered with by CUSTOMER or Users.

7.0   DISPUTE RESOLUTION
7.1 Except as described in Section 7.3, all disputes,  controversies  or claims,
whether based in contract, tort, statute, fraud,  misrepresentation or any other
legal  theory,  arising out of or relating to this  Agreement  and the  Services
provided under this Agreement ( collectively, "Disputes"), not resolved amicably
between the parties shall be settled by final and binding arbitration  conducted
in New York or other  mutually  agreed  location by one neutral  arbitrator,  in
accordance with this Agreement and the then current Commercial Arbitration Rules
of the American  Arbitration  Association ("AAA"). The arbitrability of Disputes
shall  also be  determined  by the  arbitrator.  Each  party  shall bear its own
expenses and the parties shall equally share the filing and other administrative
fees of the AAA and the expenses of the  arbitrator,  except that the arbitrator
shall be entitled to award a  different  allocation  of costs and fees where the
arbitrator  determines  that a  filed  claim  is  frivolous.  Any  award  of the
arbitrator  shall be in  writing  and shall  state the  reasons  for the  award.
Judgment   upon  an  award  may  be  entered  in  any  Court  having   competent
jurisdiction.  The  arbitrator  shall not have the power to award any damages in
excess of the liability  limitations set forth in this Agreement,  including any
Attachment.  The  arbitrator  shall  not  have the  power  to order  pre-hearing
discovery of documents or the taking of depositions,  but may compel  attendance
of  witnesses  and the  production  of  documents  at the  hearing.  The Federal
Arbitration Act, 9 U.S.C.  Sections 1 to 14, shall govern the interpretation and
enforcement  of this Section 7.1. 7.2 The  parties,  their  representatives  and
participants and the arbitrator shall hold the existence,  content and result of
the arbitration in confidence, except to the limited extent necessary to enforce
a  final  settlement  agreement  or  to  obtain  or  enforce  a  judgment  on an
arbitration  decision and award. 7.3 Disputes relating to: (i) the lawfulness of
rates,  terms,  conditions or practices  concerning Services that are subject to
the Communications Act of 1934, as amended,  or the rules and regulations of the
FCC, a state public utility commission or other  administrative  agency; or (ii)
non-compliance  with Articles 4, 5 or 6 of this Agreement,  a violation of which
would cause  irreparable  harm for which damages would be  inadequate;  or (iii)
billing  or  payment  of  charges  under  an  Attachment  where  the  amount  in
controversy  is  less  than  $50,000;  or (iv)  Software,  technology  or  other
intellectual property;  shall be exempt from the binding arbitration requirement
described  in Section  7.1. As to Disputes  described  in this  Section 7.3, the
claimant  reserves the right to seek relief from an  administrative  agency or a
court of competent jurisdiction, as appropriate.

8.0   FORCE MAJEURE
Neither AT&T nor CUSTOMER shall be liable for any delay, failure in performance,
loss or damage due to: fire, explosion, power blackout,  earthquake,  flood, the
elements,  strike, embargo, labor disputes, acts of civil or military authority,
war, acts of God, acts or omissions of carriers or suppliers, acts of regulatory
or  governmental  agencies,  or other  causes  beyond  such  party's  reasonable
control,  whether  or not  similar  to the  foregoing,  except  that  CUSTOMER's
obligation to pay for charges incurred shall not be excused.

9.0   LIMITATIONS OF LIABILITY
9.1 For purposes of Section  3.3,  and Articles 8 and 9 and all other  exclusive
remedies  and  limitations  of  liability  set  forth in this  Agreement  or any
Attachment,  "AT&T" shall be defined as AT&T, its Affiliates,  and its and their
employees,   directors,  officers,  agents,   representatives,   subcontractors,
interconnection  service  providers  and  suppliers;  and  "Damages"  will refer
collectively  to all injury,  damage,  liability,  loss,  penalty,  interest and
expense incurred. 9.2 AT&T'S ENTIRE LIABILITY, AND CUSTOMER'S EXCLUSIVE REMEDIES
AGAINST AT&T, FOR ANY DAMAGES  CAUSED BY ANY SERVICE  DEFECT OR FAILURE,  OR FOR
OTHER CLAIMS ARISING IN CONNECTION  WITH ANY SERVICE OR THIS AGREEMENT SHALL BE:
(i) FOR  BODILY  INJURY  OR  DEATH TO ANY  PERSON  NEGLIGENTLY  CAUSED  BY AT&T,
CUSTOMER'S  RIGHT TO PROVEN  DIRECT  DAMAGES;  (ii) FOR  DEFECTS OR  FAILURES OF
SOFTWARE,  THE REMEDIES SET FORTH IN SECTION 6.6;  (iii) FOR DAMAGES  OTHER THAN
THOSE SET FORTH ABOVE AND NOT EXCLUDED UNDER THIS  AGREEMENT OR ANY  ATTACHMENT,
AT&T'S  LIABILITY  SHALL BE LIMITED TO PROVEN  DIRECT  DAMAGES NOT TO EXCEED PER
CLAIM  (OR IN THE  AGGREGATE  DURING  ANY  TWELVE-MONTH  PERIOD)  THE  TOTAL NET
PAYMENTS  MADE BY  CUSTOMER  FOR THE  APPLICABLE  SERVICE  UNDER THE  APPLICABLE
ATTACHMENT  DURING  THE 12  MONTHS  PRECEDING  THE  MONTH  IN WHICH  THE  DAMAGE
OCCURRED.  9.3 IN NO EVENT  SHALL AT&T BE LIABLE FOR ANY  INDIRECT,  INCIDENTAL,
CONSEQUENTIAL,   PUNITIVE,   RELIANCE  OR  SPECIAL  DAMAGES,  INCLUDING  WITHOUT
LIMITATION, DAMAGES FOR LOST PROFITS, ADVANTAGE, SAVINGS OR REVENUES OF ANY KIND
OR  INCREASED  COST OF  OPERATIONS,  WHETHER OR NOT AT&T HAS BEEN ADVISED OF THE
POSSIBILITY  OF SUCH DAMAGES.  9.4 AT&T ALSO SHALL NOT BE LIABLE FOR ANY DAMAGES
ARISING OUT OF OR RELATING TO: INTEROPERABILITY,  INTERACTION OR INTERCONNECTION
PROBLEMS WITH APPLICATIONS, EQUIPMENT, SERVICES OR NETWORKS PROVIDED BY CUSTOMER
OR  THIRD  PARTIES;  SERVICE  INTERRUPTIONS  OR  LOST  OR  ALTERED  MESSAGES  OR
TRANSMISSIONS,  EXCEPT AS OTHERWISE  PROVIDED IN AN  ATTACHMENT  OR TARIFF;  OR,
UNAUTHORIZED ACCESS TO OR THEFT, ALTERATION,  LOSS OR DESTRUCTION OF CUSTOMER'S,
USERS' OR THIRD PARTIES'  APPLICATIONS,  CONTENT,  DATA, PROGRAMS,  INFORMATION,
NETWORK OR SYSTEMS.  9.5 EXCEPT AS EXPRESSLY  PROVIDED IN THIS  AGREEMENT,  AT&T
MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AND SPECIFICALLY DISCLAIMS ANY WARRANTY
OF MERCHANTABILITY,  FITNESS FOR A PARTICULAR PURPOSE, TITLE OR NON-INFRINGEMENT
OR ANY  WARRANTY  ARISING  BY USAGE OF  TRADE,  COURSE OF  DEALING  OR COURSE OF
PERFORMANCE.  AT&T DOES NOT WARRANT THAT THE SERVICES WILL BE  UNINTERRUPTED  OR
ERROR-FREE,  OR THAT THE SERVICES WILL MEET CUSTOMER'S  REQUIREMENTS OR THAT THE
SERVICES  WILL  PREVENT  UNAUTHORIZED  ACCESS  BY THIRD  PARTIES.  AT&T DOES NOT
AUTHORIZE  ANYONE TO MAKE A  WARRANTY  OF ANY KIND ON ITS  BEHALF  AND  CUSTOMER
SHOULD  NOT RELY ON  ANYONE  MAKING  SUCH  STATEMENTS.  9.6 THE  LIMITATIONS  OF
LIABILITY  SET FORTH IN THIS ARTICLE 9 AND IN ANY  ATTACHMENT  SHALL APPLY:  (i)
REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR
OTHERWISE;  AND (ii) WHETHER OR NOT DAMAGES WERE FORESEEABLE.  THESE LIMITATIONS
OF LIABILITY  SHALL SURVIVE FAILURE OF ANY EXCLUSIVE  REMEDIES  PROVIDED IN THIS
AGREEMENT. 9.7 This Agreement does not expressly or implicitly provide any third
party (including Users) with any remedy, claim, liability,  reimbursement, cause
of action or other right or privilege.

10.0  TERMINATION
10.1 If a party fails to perform or observe any  material  term or  condition of
this Agreement and the failure continues unremedied for 30 days after receipt of
written notice, the other party may terminate for cause any Attachment  affected
by the  breach.  If CUSTOMER  fails to pay any charge when due and such  failure
continues unremedied for ten days after written notice by AT&T, AT&T may, at its
option,   terminate  affected   Attachments,   suspend  Service  under  affected
Attachments,  require a deposit under any or all  Attachments  as a condition of
continuing to provide Services and/or terminate this entire  Agreement.  10.2 An
Attachment  may be  terminated  immediately  upon written  notice by: (i) either
party if the other party has violated the other's  Marks,  becomes  insolvent or
involved in a liquidation  or  termination  of its business,  files a bankruptcy
petition,  has an  involuntary  bankruptcy  petition  filed  against  it (if not
dismissed within 30 days of filing),  becomes adjudicated  bankrupt,  or becomes
involved  in an  assignment  for the  benefit  of its  creditors;  or (ii)  AT&T
pursuant to Section 3.2 or in the event of a material breach of any provision of
Article 6. 10.3 CUSTOMER shall be responsible for payment of all charges under a
terminated Attachment incurred as of the effective date of termination. CUSTOMER
shall  also be  liable  to AT&T  for  Termination  Charges,  as  specified  in a
terminated  Attachment,  in the event that AT&T terminates under Section 10.1 or
10.2, or CUSTOMER  terminates without cause. 10.4 Termination by either party of
an Attachment does not waive any other rights or remedies it may have under this
Agreement. 10.5 Except as provided under Section 10.1, termination or suspension
of an  Attachment  shall not  affect  the  Services  provided  or the rights and
obligations of the parties under any other Attachment.

11.0  GENERAL PROVISIONS
11.1 Any  supplement,  modification or waiver of any provision of this Agreement
or any Attachment must be in writing and signed by authorized representatives of
both  parties.  11.2 This  Agreement may not be assigned by either party without
the prior written consent of the other, except that AT&T may, without CUSTOMER's
consent,  assign  this  Agreement  or any  Attachment  to a  present  or  future
Affiliate or successor  and may assign its right to receive  payments.  AT&T may
subcontract  work  to be  performed  under  this  Agreement,  but  shall  retain
responsibility for all such work. 11.3 If any portion of this Agreement is found
to be invalid or unenforceable,  the remaining provisions shall remain in effect
and the  parties  shall  promptly  begin  negotiations  to  replace  invalid  or
unenforceable  portions that are  essential  parts of this  Agreement.  11.4 Any
initial  demand for  arbitration  pursuant to Section  7.1 and any legal  action
arising in connection  with this Agreement must begin within two years after the
cause of action  arises.  11.5 All  notices  under  this  Agreement  shall be in
writing and either  mailed by  certified or  registered  mail,  postage  prepaid
return  receipt  requested,  sent  by  express  courier  or hand  delivered  and
addressed to each party at the address set forth on the front of this  Agreement
or, if the notice  relates to a specific  Attachment,  the  address set forth in
such  Attachment,  or, in any case,  such other  address a party  designates  in
writing.  11.6  State law issues  concerning  construction,  interpretation  and
performance of this Agreement  shall be governed by the  substantive  law of the
State of New  York,  excluding  its  choice of law  rules.  The  United  Nations
Convention on Contracts for  International  Sale of Goods shall not apply.  11.7
The  respective  obligations  of CUSTOMER  and AT&T which by their  nature would
continue  beyond  the  termination  or  expiration  of  this  Agreement  or  any
Attachment  shall survive  termination  or  expiration of this  Agreement or any
Attachment.  11.8 THIS AGREEMENT  CONSTITUTES THE ENTIRE  AGREEMENT  BETWEEN THE
PARTIES WITH RESPECT TO THE SERVICES TO BE PROVIDED  HEREUNDER.  THIS  AGREEMENT
SUPERSEDES  ALL PRIOR  AGREEMENTS,  PROPOSALS,  REPRESENTATIONS,  STATEMENTS  OR
UNDERSTANDINGS,  WHETHER WRITTEN OR ORAL, CONCERNING SUCH SERVICES OR THE RIGHTS
AND  OBLIGATIONS  RELATING  TO  THOSE  SERVICES.  THIS  AGREEMENT  SHALL  NOT BE
CONTRADICTED,  EXPLAINED  OR  SUPPLEMENTED  BY ANY  WRITTEN OR ORAL  STATEMENTS,
PROPOSALS,  REPRESENTATIONS,  ADVERTISEMENTS,  SERVICE  DESCRIPTIONS OR CUSTOMER
PURCHASE ORDER FORMS NOT EXPRESSLY SET FORTH IN THIS AGREEMENT OR AN ATTACHMENT.


<PAGE>

                                                                  Exhibit 10.43

                              EMPLOYMENT AGREEMENT


            EMPLOYMENT  AGREEMENT  dated as of June 18th,  1998 between  GALILEO
INTERNATIONAL,  L.L.C., a limited  liability company organized under the laws of
the State of Delaware and doing  business at 9700 West Higgins Road,  Suite 400,
Rosemont, Illinois (the "Company"), and JAMES E. BARLETT, an individual residing
at 13350 Buckland Hall Road, St. Louis, Missouri ("Executive").


                                     W I T N E S S E T H :


            WHEREAS,  the  Company  is  a  wholly-owned  subsidiary  of  Galileo
International,  Inc., a Delaware  corporation (the "Parent"),  and is engaged in
the travel  services and  computer  reservation  systems  business in the United
States, the United Kingdom and elsewhere in the world;

            WHEREAS, Executive serves as Chairman, President and Chief Executive
Officer of the  Company and the Parent  pursuant  to the terms of an  Employment
Agreement  dated as of October  31,  1994  between  the  Company's  predecessor,
Galileo  International  Partnership,  and Executive  (the  "Existing  Employment
Agreement"); and

            WHEREAS,  the Company and  Executive  wish to terminate the Existing
Employment Agreement,  the Company wishes to continue to employ Executive as the
Chairman,  President and Chief  Executive  Officer of the Company and the Parent
pursuant to the terms of this Agreement and Executive wishes to continue in such
employment;

            NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

            1. Employment; Position and Responsibilities.  The Company agrees to
employ  Executive,  and  Executive  agrees  to  serve,  as  President  and Chief
Executive  Officer of the Company and the Parent.  In such  capacity,  Executive
shall have authority and responsibility, subject to control and direction by the
Board of Directors of the Parent (the  "Board"),  to  administer  and manage the
business of the Company,  the Parent and the other  subsidiaries  of the Parent.
Executive shall also serve as Chairman of the Board, provided that he is elected
to serve in such capacity.  Executive will be located at the Rosemont,  Illinois
office of the Company or at such other  location as the Board may  designate  as
the principal office of the Company.  Executive acknowledges that his employment
hereunder will require substantial travel.

            2 . Obligations of Executive.  During the Term of this Agreement (as
hereinafter  defined) Executive agrees that he will devote  substantially all of
his time,  attention  and energies to the business of the Company,  that he will
exercise  the highest  degree of loyalty and conduct in the  performance  of his
duties and that he will do nothing  that  harms,  directly  or  indirectly,  the
business or reputation of the Company.

            3.    Compensation.

            (a) Executive's salary during the Term of this Agreement and for the
period from April 1, 1998 until June 18, 1998, the  commencement  of the Term of
this  Agreement,  shall be at the rate of $550,000 per annum.  The  Compensation
Committee of the Board (the  "Committee") will review  Executive's  salary on an
annual basis and increases  will be at the  discretion  of the Committee  taking
into account Executive's individual job performance.


            (b) Executive will  participate,  on a basis  comparable  (except as
otherwise provided in this Agreement) to other executives of the Company, in the
Company's annual management incentive  compensation plan (the "MIP") , a copy of
which  has been  furnished  to  Executive.  The  terms of the MIP will  apply to
Executive except as otherwise  provided by this Agreement.  The annual incentive
compensation  payment  for  Executive  for  each  year  during  the Term of this
Agreement shall be determined by the Committee,  provided that the target annual
incentive  compensation  payment  for each  such  year  shall be equal to 80% of
Executive's annual rate of salary for such year and the maximum annual incentive
compensation  payment  for each such year shall be equal to 150% of  Executive's
annual rate of salary for such year. Nothing in this Agreement shall prevent the
Company from changing the MIP or from reducing or terminating  annual  incentive
compensation  payments  thereunder   altogether,   provided  that  the  changes,
reductions  or  terminations   are  applicable  to  executives  of  the  Company
generally.

            (c)  The  Committee  shall,  in its  discretion  and  to the  extent
permitted by the Galileo  International,  Inc. 1997 Stock  Incentive Plan or any
other plan  pursuant  to which  stock  options  may be granted to  Executive  in
accordance  with  this  Section  3(c),  grant   nonqualified  stock  options  to
Executive,  as  long-term  compensation,  each  year  during  the  Term  of this
Agreement, provided that the target grant for each such year shall be options to
purchase the number of shares of common stock,  par value $.01 per share, of the
Parent  ("Common  Stock"),  having an aggregate fair market value on the date of
grant  equal to 800% of  Executive's  annual  rate of salary for such year.  The
actual  number of shares of Common  Stock  subject to each such option  shall be
determined  by the  Committee  based upon an annual  assessment  of  Executive's
performance  conducted by the Committee or the Board,  or both. The terms of the
options to be granted in  accordance  with this Section 3(c) shall be determined
by the  Committee,  provided  that,  with respect to each such  option,  (i) the
exercise  price  shall be equal to 100% of the fair  market  value of a share of
Common  Stock on the date of  grant,  (ii) the  term  shall be 10  years,  (iii)
one-third  of the  shares  subject  to  such  option  shall  vest  on the  first
anniversary  of the date of grant and an  additional  one-third  of such  shares
shall  vest on each of the next two  anniversaries  of the date of  grant,  (iv)
vesting shall  continue  following the retirement of Executive with the approval
of the Board or termination of Executive's  employment  pursuant to Section 4(b)
hereof,  provided that, in either event,  Executive complies with the provisions
of Section 6 hereof if such retirement or termination of employment occurs prior
to a change in control,  as such term is defined in Section  10.2 of the Galileo
International,  Inc. 1997 Stock  Incentive  Plan ("Change in Control"),  (v) the
period of  exercisability  shall  continue,  in the event of the  retirement  of
Executive  with the  approval  of the Board or the  termination  of  Executive's
employment pursuant to Section 4(b) or Section 4(c) hereof, for a period of five
years  following  such  retirement or  termination  of employment or the earlier
expiration  of the  term of such  option,  provided  that,  in any  such  event,
Executive complies with the provisions of Section 6 hereof if such retirement or
termination  of  employment  occurs  prior to a Change in Control,  and (vi) the
period of  exercisability  shall  continue,  in the event of the  termination of
Executive's employment for any reason other than retirement with the approval of
the Board or termination  pursuant to Section 4(b) or Section 4(c) hereof, for a
period of six months  following  such  termination  of employment or the earlier
expiration of the term of such option.

            (d) The Committee shall grant to Executive,  as a special  incentive
compensation  award,  nonqualified stock options and shares of restricted Common
Stock having the terms set forth in this Section 3(d).

            (i)  Promptly  following  the  execution  of  this  Agreement,   the
Committee  shall grant to  Executive  nonqualified  options to purchase  256,000
shares of Common  Stock.  The terms of the  options to be granted in  accordance
with this Section  3(d)(i) shall be determined by the Committee,  provided that,
with respect to each such option,  (A) the exercise price shall be equal to 100%
of the fair market  value of a share of Common  Stock on the date of grant,  (B)
the term shall be nine years, (C) 20% of the shares subject to such option shall
vest on the first anniversary of the date of grant and an additional 20% of such
shares shall vest on each of the next four  anniversaries  of the date of grant,
(D) vesting  shall  continue  following  the  retirement  of Executive  with the
approval  of the Board or  termination  of  Executive's  employment  pursuant to
Section 4(b) hereof, provided that, in either event, Executive complies with the
provisions of Section 6 hereof if such  retirement or  termination of employment
occurs  prior to a Change in  Control,  (E) the period of  exercisability  shall
continue,  in the event of the  retirement of Executive with the approval of the
Board or the termination of Executive's  employment  pursuant to Section 4(b) or
Section 4(c) hereof,  for a period of five years  following  such  retirement or
termination of employment or the earlier  expiration of the term of such option,
provided  that, in any such event,  Executive  complies  with the  provisions of
Section 6 hereof if such retirement or termination of employment occurs prior to
a Change in Control, and (F) the period of exercisability shall continue, in the
event of the  termination  of  Executive's  employment for any reason other than
retirement  with the  approval of the Board or  termination  pursuant to Section
4(b)  or  Section  4(c)  hereof,  for a  period  of six  months  following  such
termination of employment or the earlier expiration of the term of such option.

            (ii)  Promptly  following  the  execution  of  this  Agreement,  the
Committee  shall grant to Executive  48,950 shares of  restricted  Common Stock,
with 20% of such shares  vesting on the first  anniversary  of the date of grant
and an  additional  20% of  such  shares  vesting  on  each  of  the  next  four
anniversaries of the date of grant. In addition,  one year following the date of
such grant the Committee shall grant to Executive an additional 48,950 shares of
restricted  Common  Stock,  with  25%  of  such  shares  vesting  on  the  first
anniversary of the date of grant and an additional 25% of such shares vesting on
each of the next three anniversaries of the date of grant.  Vesting of shares of
restricted  Common Stock granted in accordance with this Section  3(d)(ii) shall
continue following the retirement of Executive with the approval of the Board or
termination of Executive's employment pursuant to Section 4(b) hereof,  provided
that, in either event, Executive complies with Section 6 hereof.

            (e) Executive  shall be entitled to paid annual  vacation,  personal
leave and holidays during each calendar year during his employment in accordance
with the policies of the Company.  Executive will participate in health, welfare
(including  disability) and defined benefit and contribution  retirement  plans,
including but not limited to the pension plan and 401(k) savings plan,  that are
maintained  by the  Company on the same  basis as such  benefits  are  generally
available to employees of the Company in the United  States,  and subject to the
right of the Company to change,  reduce or  terminate  such plans or benefits in
respect of employees generally.

            (f) Executive will be reimbursed for reasonable business, travel and
relocation  expenses  in  accordance  with the normal  policies  of the  Company
including  dues, fees and expenses  associated with membership in  professional,
business and civic  organizations in which  Executive's  participation is in the
interest of the Company.  The Company will also reimburse Executive for one club
membership (i.e., initial fees and dues); will provide Executive with an airfare
allowance  of up to  $21,000  per year based upon ID50  tickets on  airlines  of
stockholders of the Parent,  and will provide to Executive a cellular  telephone
for  business use and a monthly car  allowance  based on a three year lease of a
$45,000  automobile.  The benefits  and payments  described in this Section 3(f)
shall not include an income tax gross-up,  and Executive will be responsible for
any  tax on  their  value.  Executive's  expenses  will  be  accounted  for  and
reimbursed  through the Company's normal expense  reporting and approval process
and his  expense  reports  will  also be  reviewed  annually  by the  Board or a
committee or designee of the Board.

            4.  Termination.  This Agreement  shall commence as of June 18, 1998
and shall end on June 17, 2003,  provided that this  Agreement may be terminated
effective  immediately  by the Company for Cause or by Executive for Good Reason
as herein  provided,  in which event the date on which notice of  termination is
given shall be the Termination  Date. Such term of this Agreement is referred to
herein as the "Term of this  Agreement" and, except as provided in the preceding
sentence,  the  date of  termination  of  Executive's  employment  hereunder  is
referred to herein as the "Termination Date."

            (a) If Executive  terminates  his  employment  under this  Agreement
without Good Reason, or if the Company  terminates his employment for Cause, the
Company shall have no financial  obligation  to Executive  other than to pay his
base salary through the  Termination  Date,  and  Executive's  participation  in
employee benefit plans of the Company shall cease as of such  Termination  Date.
The Company shall give Executive written notice of a termination for Cause.

            (i) For purposes of this Agreement,  "Cause" shall mean: (A) any act
or omission  that  constitutes  a material  breach by Executive  of, or material
misrepresentation  or omission  under,  this  Agreement;  (B) the  commission by
Executive  of  a  dishonest,  illegal  or  wrongful  act  (1)  involving  fraud,
misrepresentation  or moral turpitude,  (2) causing damage to the Company or (3)
involving  potential  damage to the business and reputation of the Company;  (C)
Executive's  willful and repeated  absence from his employment;  (D) Executive's
willful failure or refusal to perform specific and reasonable  directives of the
Company; or (E) material and prolonged  deficiencies in Executive's  performance
of his assigned duties and  responsibilities.  In respect of events described in
clauses  (C),  (D) and (E)  above,  the  Company  shall give  Executive  notice,
reasonable as to time,  place and manner in the  circumstances  (notwithstanding
that such notice may not comply with Section 9), and an  opportunity to cure the
absence, failure, refusal or disregard in question,  provided that such absence,
failure,  refusal  or  disregard  is  reasonably  susceptible  of  cure  in  the
circumstances.

            (ii) For purposes of this  Agreement,  "Good  Reason" shall mean the
occurrence  of any of the  following  events,  provided  Executive has not given
Cause for termination or become  Disabled:  (A) the Company shall have defaulted
in its obligation to pay compensation to Executive when, as and if due within 10
business  days of written  notice to the Company  that such payment was not made
when due,  or (B) the  Company  shall have  failed or  refused  to  appoint  and
maintain  Executive in a job having the  responsibilities  and  authority as set
forth in Section 1 hereof. Executive shall give written notice to the Company of
a termination by him for Good Reason.

            (b) If the Company  terminates the  employment of Executive  without
Cause or Executive  terminates his employment with Good Reason prior to a Change
in Control,  or two years or more following a Change in Control,  then, provided
that  Executive  complies with the provisions of Sections 5 and 6 hereof for the
periods described in Sections 4(b)(i) and 4(b)(ii) hereof if such termination of
employment  occurs  prior  to  a  Change  in  Control,  the  Company  shall  pay
compensation and provide benefits to Executive as follows:

            (i)  Promptly  after  the  Termination  Date  the  Company  will pay
Executive a lump sum equal to the total of (x) his base  salary,  at its rate in
effect at the Termination  Date, for a period of 12 months or the remaining Term
of this Agreement  (assuming early  termination had not occurred)  following the
Termination  Date,  whichever  is less,  plus (y) an amount  equal to the annual
incentive compensation he would have received under the MIP attributable to such
period assuming 100% target achievement on his part, and

            (ii) If the period described in Section 4(b)(i) hereof is 12 months,
then,  commencing  12 months after the  Termination  Date and for a period of 24
months or the remaining Term of this Agreement  (assuming early  termination had
not occurred)  following the date which is 12 months after the Termination Date,
whichever is less,  the Company will pay  Executive's  salary on a monthly basis
plus a monthly amount equal to the annual incentive compensation Executive would
have  received  under the MIP  attributable  to such month  assuming 100% target
achievement  on his part.  Such monthly  payments shall be reduced by any income
Executive  may generate by engaging  during such period in other  employment  or
business activities (not including investments).  Executive shall have a duty to
seek  opportunities to generate such other income in mitigation of the Company's
obligation to make monthly payments to him hereunder.

            (iii)  The  Company  shall  provide  group  insurance   benefits  to
Executive  pursuant to Section 3(d) hereof for the periods described in Sections
4(b)(i) and 4(b)(ii) hereof after the Termination  Date. To the extent the terms
of its  plans  so  permit,  the  Company  will  continue  for the  same  periods
Executive's  participation  in any  defined  benefit  and  defined  contribution
retirement  plans,  including  any pension and 401(k)  savings  plans,  that are
maintained by the Company.

            (c) If the Company  terminates the  employment of Executive  without
Cause or Executive  terminates his employment  with Good Reason within two years
following  a Change in  Control,  then the Company  shall pay  compensation  and
provide benefits to Executive as follows:

            (i) Within 10 days after the  Termination  Date the Company will pay
Executive a lump sum equal to the product of (A) the sum of (w) his base salary,
at its rate in effect at the  Termination  Date plus (x) an amount  equal to the
annual incentive  compensation he would have received under the MIP attributable
to the 12-month  period  following  the  Termination  Date  assuming 100% target
achievement on his part, multiplied by (B) the lesser of (y) the number of years
remaining in the Term of this  Agreement  (assuming  early  termination  had not
occurred) following the Termination Date,  including  fractional years (with the
numerator of any such fractional year being the number of days remaining in such
year until the end of the Term of this Agreement (assuming early termination had
not occurred) and the  denominator of such  fractional  year being 360), and (z)
the number three.

            (ii) The Company shall provide group insurance benefits to Executive
pursuant to Section 3(d) of this Agreement for the number of years  described in
clause (B) of Section  4(c)(i)  after the  Termination  Date.  To the extent the
terms of its plans so permit,  the Company will  continue for the same number of
years Executive's  participation in any defined benefit and defined contribution
retirement  plans,  including  any pension and 401(k)  savings  plans,  that are
maintained by the Company.

            (iii)  All  options  to  purchase  Common  Stock  and all  shares of
restricted  Common Stock held by Executive on the Termination  Date shall become
immediately vested on such date.

            (d) If Executive  dies or becomes  incapable by reason of Disability
of  performing  his  duties  under  this  Agreement,  the  Company  will  pay to
Executive, or to a person duly authorized to act on his behalf or to his estate,
the sum of (i) any unpaid salary  accrued to the date of death or the Disability
Date and (if death or  Disability  occurs  after  June 30 of any  year)  (ii) an
amount  equal to a  reasonable  estimate  of the  amount  Executive  would  have
received as annual incentive  compensation under the MIP for that year, prorated
on the basis of a ratio of the  number of days in such year prior to the date of
death or the  Disability  Date to 360.  Payment of such amount shall satisfy all
obligations of the Company to Executive under this Agreement, but in the case of
Disability  Executive's  employment  hereunder shall continue for the purpose of
continuing  his  eligibility to receive  medical,  disability and other benefits
pursuant to Section 3(d) hereof for 12 months  after the  Disability  Date.  For
purposes of this Agreement,  "Disability" shall mean the inability of Executive,
by reason of  physical  or mental  illness or injury,  to perform his duties for
more than a total of 12  consecutive  weeks during any 12-month  period (such 12
weeks must be  consecutive,  but shall not include  vacations);  the last day of
such 12 consecutive week period is referred to herein as the "Disability  Date".
The  Company  shall give  Executive  or a person duly  authorized  to act on his
behalf written notice of a termination based on Disability.

            (e) In the  event it shall be  determined  by the  Company's  public
accounting  firm  that  any  payment  or  distribution  by  the  Company  or its
affiliated companies to or for the benefit of Executive (whether paid or payable
or  distributed  or  distributable  pursuant to the terms of this  Agreement  or
otherwise,  but determined  without regard to any additional  payments  required
under  this  Section  4(e)) (a  "Payment"),  would be  subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended, or any
interest or penalties are incurred by Executive  with respect to such excise tax
(such excise tax, together with any such interest and penalties, are hereinafter
collectively  referred to as the "Excise Tax"), then Executive shall be entitled
to receive within 10 days following such  determination or such  incurrence,  as
the case may be, an additional payment (a "Gross-Up  Payment") in an amount such
that  after  payment  by  Executive  of all taxes  (including  any  interest  or
penalties imposed with respect to such taxes),  including,  without  limitation,
any income taxes (and any interest and penalties  imposed with respect  thereto)
and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

            (f) The payments to Executive  pursuant to Section 4 hereof shall be
paid in lieu of any  other  amount  of  severance  relating  to  salary or bonus
continuation  to be received by Executive  upon  termination  of  employment  of
Executive under any severance plan, policy or arrangement of the Company.

            5.  Confidentiality.  During  and after the Term of this  Agreement,
Executive  covenants and agrees that, other than as required by law, he will not
disclose to anyone (including  representatives of airlines that are stockholders
of  the  Parent)  without  the  Company's  written  consent,   any  confidential
materials,  documents,  records  or other  information  of any  type  whatsoever
concerning or relating to the business and affairs of the Company that Executive
may have acquired in the course of his employment  hereunder,  including but not
limited to: (i) trade secrets of the Company; (ii) lists of customers or clients
of the  Company;  and (iii)  information  relating to methods of doing  business
(including information concerning operations,  technology and systems) in use or
contemplated use by the Company and not generally known among competitors in the
travel services and computer reservation systems business.

            6. Non-Competition.  (a) Executive acknowledges that the services he
is to render to the Company  hereunder are special and unique in character,  and
that their loss cannot be adequately  compensated at law or by damages.  In view
of (i) the  unique  value to the  Company  of the  services  to be  provided  by
Executive  hereunder,  (ii) the  confidential  information  that  Executive will
acquire  in the  course of his  employment  hereunder  and  (iii) as a  material
inducement to the Company to enter into this  Agreement and to pay Executive the
compensation and benefits provided for hereunder, Executive covenants and agrees
that  during  the  Term  of  this  Agreement,  and,  if  Executive's  employment
terminates prior to a Change in Control,  for the periods  described in Sections
4(b)(i) and 4(b)(ii) hereof Executive will not

            (A) manage, operate, control, participate in alone or in combination
with  others,  render  financial or other  assistance  to or be connected in any
manner with the ownership, management,  representation,  operation or control of
or otherwise  render  service or assistance to any travel  services and computer
reservation systems company, airline or multinational customer of the Company or
any affiliate  thereof (each a "Travel  Company") that is actively engaged in or
interested  in  developing  and/or  expanding a range of services  comparable to
those provided by the Company as a partner, director,  officer, employee, agent,
contractor or in any other capacity,  or otherwise directly or indirectly assist
any Travel Company to compete in any manner with any business  activity  engaged
in or actively  being pursued (with or without the  assistance or involvement of
Executive)  by the  Company  at the time of  termination  related  to the travel
services and computer reservation systems business; or

            (B) combine  with a group of two or more other  former  employees of
the Company to compete  with the  Company in the travel  services  and  computer
reservation  systems business,  or solicit employees of the Company to leave the
employ of such entity for the purpose of  engaging  together in any  employment,
competitive with the Company or otherwise.

            (b)  Executive  and the Company  recognize  that, as a result of the
globalization of markets and technology  through advances in  telecommunications
systems  and  the  internationalization  of the  travel  services  and  computer
reservation system business,  the market for the aforedescribed  business is not
susceptible to geographic definition.  Consequently, and given the nature of the
position  Executive will hold with the Company,  Executive and the Company agree
that the  restrictions  contained in Section 6 upon the  activities of Executive
are geographically unlimited and reasonable as such.

            (c) It is the desire and intent of the parties  that the  provisions
of Section 5, of this  Section 6 and of Section 7 below shall be enforced to the
fullest extent  permissible  under the laws and public  policies of the State of
Illinois.  If any  particular  provisions  or  portions  of Section 5 or of this
Section  6  or  Section  7  below  shall  be   adjudicated   to  be  invalid  or
unenforceable,  Section 5, this  Section 6 and  Section 7 below  shall be deemed
amended to delete therefrom such provision or portion  adjudicated to be invalid
or unenforceable, such amendment to apply only in the particular jurisdiction in
which such adjudication is made.

            7. Systems and  Technology  Ownership.  Executive  acknowledges  and
agrees that during the Term of this  Agreement  he will  disclose to the Company
all material products,  ideas, processes,  systems inventions and business plans
developed by him which relate,  directly or indirectly,  to the travel  services
and systems business of the Company (collectively, the "Intellectual Property").
Executive further agrees that any Intellectual Property so developed will be the
sole property of the Company and that Executive  will, at the Company's  request
and cost,  do  whatever  is  necessary  to secure the rights  thereto by patent,
copyright  or  otherwise  to the  Company.  In  connection  with the  foregoing,
Executive  represents,  warrants and covenants that any Intellectual Property or
other  copyrightable or patentable subject matter that Executive delivers to the
Company has been or will be created  solely by  Executive or that at the time of
delivery  thereof  Executive will have the right to transfer such subject matter
to the Company for use in its travel services and computer  reservation  systems
business. Further, and not by way of limitation, Executive hereby assigns to the
Company all of his right, title and interest in and to any Intellectual Property
from the  moment  of  creation  thereof.  This  Section 7 shall not apply to any
Intellectual Property or invention for which no equipment, supplies, facility or
trade  secret  information  of the  Company  was used and  which  was  developed
entirely  on  Executive's  own time,  unless (a) the  Intellectual  Property  or
invention  relates (i) to the business of the Company,  or (ii) to the Company's
actual  or  demonstrably  anticipated  research  or  development,   or  (b)  the
Intellectual  Property or invention results from any work performed by Executive
for the Company.

            8.  Governing  Law.  This  Agreement  is  governed  by  and is to be
construed and enforced in accordance with the laws of the State of Illinois, not
including  its conflict of laws  principles.  If, under such law, any portion of
this  Agreement  is at any time  deemed to be in  conflict  with any  applicable
statute,  rule, judicial  interpretation  binding on the parties,  regulation or
ordinance,  such  portion  shall be deemed to be  modified or altered to conform
thereto or, if that is not possible, to be omitted from this Agreement,  and the
invalidity of any such portion shall not affect the force, effect or validity of
the remaining portions hereof.

            9. Notices.  All notices  required to be given under this  Agreement
shall be in writing and shall be deemed  effective  when  received  and shall be
delivered  in  person,  or  by  facsimile  transmission  (with  confirmation  of
receipt),  or by mail, postage prepaid,  for delivery as registered or certified
mail  addressed,  (a) in the  case  of  Executive,  to him at his  then  current
business  address  with  the  Company,  with a copy to  Executive's  residential
address as reflected above (or such other  residential  address as Executive may
notify the Company from time to time) or, (b) in the case of the Company, to the
Company's Senior Vice President - Human Resources or to such other person as the
Company may designate in writing to Executive.

            10. Resolution of Disputes.

            (a)  The  parties  agree  that  all  disputes  arising  under  or in
connection with this Agreement  (except to the extent specified in Section 10(b)
below),  and any and all claims by Executive relating to his employment with the
Company including claims of discrimination  arising under Title VII of the Civil
Rights Act of 1964, as amended,  the Age  Discrimination  in Employment Act, the
Americans with Disabilities Act and similar federal, state and local legislation
will be submitted to  arbitration in Chicago,  Illinois  before a panel of three
arbitrators  chosen  under the rules of the  American  Arbitration  Association;
provided,  however,  that any court with  jurisdiction over the parties may have
jurisdiction  over any action  brought  with regard to or any action  brought to
enforce any  violation  or claimed  violation  of Section 5, 6 or 7. The parties
each  hereby  specifically  submit to the  jurisdiction  of any federal or state
court located in the State of Illinois and further agree that service of process
may be made  within or without  the State of  Illinois  by giving  notice in the
manner  provided in Section 9. Each party hereby  waives any right to a trial by
jury in any dispute  between  them.  In the event the  principal  offices of the
Company  are moved to a state  other  than  Illinois,  arbitration  of  disputes
hereunder  shall take place in such state,  and the  parties  shall be deemed to
have consented to personal jurisdiction in such state.

            (b) Executive  recognizes that irreparable injury would be caused to
the  Company,  not  adequately  compensable  by money  damages,  by  Executive's
violation  of any  provision of Section 5, 6 or 7 of this  Agreement.  Executive
further agrees that in the event of any such  violation or threatened  violation
the  Company or any of its direct or indirect  subsidiaries  or  affiliates,  in
addition to such other  rights and  remedies as may exist in its or their favor,
may apply to a court of law or equity to enforce  the  specific  performance  of
such provisions and, without notice to Executive, may apply for an injunction or
temporary  restraining  order  against  any act  which  would  violate  any such
provisions.

            (c) The  covenants of Executive  contained in Sections 5, 6 and 7 of
this  Agreement  shall be  construed  as  independent  of all  other  provisions
contained in this Agreement.

            11.  Miscellaneous.  (a)  Executive  represents  and warrants to the
Company  that  Executive  has no  contracts  or  agreements  of any nature  that
Executive  has entered  into with any other  person,  firm or  corporation  that
contain any  restraints on  Executive's  present or future  services.  Executive
further represents that he has brought to his employment hereunder, and will use
in connection with such employment, no customer lists or proprietary information
including  computer  software  that was used by him or to which he had access by
reason of his prior employment and that is the property of his former employer.

            (b)   Executive   acknowledges   and  agrees  that  this   Agreement
constitutes the entire understanding  between the Company and Executive relating
to the  employment  of  Executive  by the  Company,  the Parent or any direct or
indirect  subsidiary  or  affiliate  of the Company,  and  supersedes  all prior
written  and oral  agreements  and  understandings  with  respect to the subject
matter of this Agreement,  including the Existing Employment Agreement. Upon the
execution  of  this  Agreement,  the  Existing  Employment  Agreement  shall  be
terminated and shall be of no further force or effect.

            (c) This  Agreement  may be  amended  only by a  subsequent  written
agreement signed by Executive and the Company.

            (d) No waiver by either party of or failure to assert any  provision
or  condition  of this  Agreement  by him or it to be  performed  or right to be
exercised  shall be deemed a waiver of such or similar or dissimilar  provisions
and conditions or rights at the same time or any prior or subsequent time.

            (e) This  Agreement and all rights and  obligations of Executive are
personal to Executive and shall not be assignable  and any purported  assignment
in violation hereof shall not be valid or binding on the Company.

            (f) This Agreement may be signed in counterpart.


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


                              GALILEO INTERNATIONAL, L.L.C.


                              By   /s/ Frank H.. Rovekamp     __  
                                   Frank H. Rovekamp
                                    Chairman of the Compensation Committee


                             By /s/ Kenneth Whipple 
                                  Kenneth Whipple
                                  Galileo International Board Lead Director


                               EXECUTIVE:


                              /s/ James E. Barlett 
                              James E. Barlett


<PAGE>

                                                               Exhibit 10.44 (a)

                           GALILEO INTERNATIONAL, INC.
                          GROUP POLICY NUMBER 08320000
                   GROUP POLICY EFECTIVE DATE: JULY 1, 1998

                             Description of Benefits

This Description of Benefits  explains only the general purpose of the insurance
described,  but in no way changes or affects the  insurance  afforded  under the
Master  Policy.  All  coverages  are  subject to the actual  provisions,  terms,
conditions and limitations of the Master Policy.

                                  Class I & II
                                Principal Amount

A benefit amount equal to two (2x) the Insured  Employee's  Annual Base Salary*.
The benefit amount shall be rounded to the next higher multiple of $1,000.00, if
not  already a multiple  thereof,  and shall be  subject to a maximum  amount of
$300,000.00.

*The Insured Employee's Benefits shall be defined as the Insured Employee's base
salary (or base earnings  rate) plus lead  differentials,  if any, but not shift
differentials,  bonuses or overtime. For a commissioned salesperson, the benefit
amount includes base salary plus  commissions  income paid in the prior calendar
year If employees  are on commission  status,  and are employed for less than 12
months,  the base salary and  commission  earnings are annualized to arrive at a
12-month annual pay rate.


Dear Group Member,

This is your Certificate while you are insured under the Policy and replaces any
other Certificate which may have been given to you under the Policy.

The text on the pages which follow  describes your Group Insurance  benefits and
includes the limitations and all other Policy provisions which apply to you. The
insured  Member is referred to as "you",  and the  Insurance  Company as "we" or
"us".

Any  reference  to  Dependents'  Insurance  applies  to you  only  if  you  have
dependents insured.

The complete  Policy,  of which this  Certificate  is a part,  is on file in the
Policyholder's office.

CC:  0832000 798
                                TABLE OF CONTENTS

                                                                            PAGE
Definitions & Insurance Provisions                                     GTO-R 1-4
Plan Summary For You                                                   GPS 100 C
Accidental Death & Dismemberment                                    GTO-R 105 CE
Insurance
Hazard 12                                                              GTO-R 128
Personal Sojourn Endorsement                                           GTO-R 114
Monthly Coma Benefit                                                   GEN-R 100
Seat Belt Benefit                                                      GEN-SB-DP
Beneficiary & Assignment Provisions                                    GTO-R 145
Replacement of Coverage & Additional                                   GTO-R 147
Provisions
Endorsement Number 1                                                     GBE-100
Employee Retirement Income Security Act                               ERISA 0295
Illinois Life & Health Insurance                                      DIS 16-795
Guaranty Association Act


<PAGE>


                                   DEFINITIONS
FOR ALL BENEFITS:

Policyholder means the Employer named on the front page of this Certificate.

Policy  Year  means the  period  from the  Policy  Effective  Date,  or from any
Anniversary Date, to the next Anniversary Date.

Member, Insured Person, or You means a person who is insured under the Policy as
n employee of the Policyholder.

Active  Work or  Actively  at Work  means  being  on the job as  required  of an
employee of the Policyholder.

Month means any of the 12 calendar months of the year.

Time Effective.  When any date is referred to the effective time shall be
12:01 A.M. at the address of the Policyholder.

Doctor means a person who is  practicing  within the scope of his or her license
as (1) a doctor of medicine;  (2) a doctor of osteopathy;  (3) a dentist;  (4) a
podiatrist:  (5) a  chiropractor;  (6) an  optometrist;  or (7) a  psychologist.
Doctor does not include the Member nor the  spouse,  parent,  child,  brother of
sister of the Member or of the spouse of the Member.

FAA means the Federal Aviation Administration or its foreign equivalent.

                              INSURANCE PROVISIONS

WHEN INSURANCE STARTS

Eligible Status.  You are eligible for insurance if you are:  (1) An active
full-time employee of the Policyholder under age 70; (2) An active full-time
employee of the Policyholder age 70 or older.

Exception:  You are not eligible if you are in full time service in any armed
forces for more than 30 days.

Your Effective Date.  Subject to the PROVISO, your insurance will start on
the date you become eligible.

If you become  entitled  to greater or lesser  benefits  because you change to a
different Class of Members, any change will become effective on the date of such
change in Class.

                                                      (Continued on next page)


<PAGE>


                        INSURANCE PROVISIONS - Continued

PROVISO.  If you are not  Actively  at Work on the  date  your  insurance  would
otherwise  start,  it will not start  until the date you return to Active  Work.
This also applies when your insurance is being increased or benefits added while
you are insured under the Policy.

Continued Are Not Required.  You are not required to pay any part of the
premiums for Members' Insurance.

WHEN INSURANCE STOPS

Your insurance will stop on the earliest of the following dates:

(1)   The date the Policy terminates.

(2)      The end of the  last  Month  for  which  the  Policyholder  pays us the
         premiums for your insurance


<PAGE>


                                  PLAN SUMMARY
                                     FOR YOU

                             (No Dependent Coverage)
ACCIDENTAL DEATH                                                Principal Amount

ACCIDENTAL DISMEMBERMENT

(1)   Loss of both  hands of both  feet,  sight of both  eyes,  one hand and one
      foot, speech and hearing of both ears, or either hand or foot and sight of
      one eye, Quadriplegia (total paralysis
      of both upper and lower limbs                             Principal Amount

(2)   Paraplegia (total paralysis of                           Three-Fourths the
      both lower limbs)                                         Principal Amount

(3)   Hemiplegia  (total  paralysis  of upper and lower limbs on one side of the
      body), either hand
      or foot, sight of one eye,                                    One-Half the
      speech or hearing of both ears                            Principal Amount

(4)   Loss of hearing of one ear,
      or thumb and index finger                                  One-Quarter the
      of same hand                                              Principal Amount


 The            Principal  Amount of your  Accidental  Death  and  Dismemberment
                Benefits is stated on the front cover of this Certificate.

<PAGE>


                 ACCIDENTAL DEATH AND DISMEMBERMENT INSURANCE

If you suffer accidental bodily injury which, independently of all other causes,
results in any of the losses described herein, we will pay the benefits shown in
the Plan Summary provided that:

(1)            such loss must occur (a) while  insured for the benefit;  and 9b)
               within 365 days of the accidental that causes the loss; and
(2)            such  loss  must be a result  of an  accidental  that  occurs  as
               described in the numbered Hazards herein.

Payment for Dismemberment will be made to you. Payments for loss of life will be
made under the terms of the Beneficiary and Assignment Provisions.  If more than
one loss is sustained  as a result of the  accident,  payment  shall be made for
only the one loss for which the  largest  amount is payable.  No loss  sustained
prior to such accident shall be included in determining the amount payable

Accidental Death.  For loss of life.

Dismemberment.  For loss of:

      - Both hands or both feet or sight of both eyes.
      - One hand and one foot.
      - Speech and hearing of both ears.
- Either hand or foot and sight of one eye.
- Either hand or foot.
- Sight of one eye.
- Speech or hearing of both ears.
      - Hearing of one ear.
      - Thumb and index finger of same hand.

For Dismemberment benefits, the term "loss" Also means:

- Quadriplegia.
      - Paraplegia.
      - Hemiplegia.

Definitions.  Loss of sight means  total and  permanent  loss of sight.  Loss of
hearing  means total and permanent  loss of hearing.  Loss of speech means total
and  permanent  loss of speech.  Loss of a hand means  severance at or above the
wrist.  Loss of a foot means severance at or above the ankle.  Loss of thumb and
index  finger  means   severance   at  or  above   metacarpophalangeal   joints.
Quadriplegia  means the total and  permanent  paralysis  of both upper and lower
limbs.  Paraplegia means the total and permanent  paralysis of both lower limbs.
Hemiplegia  means the total and permanent  paralysis of upper and lower limbs of
one side of the body.

<PAGE>


ACCIDENTAL DEATH AND DISMEMBERMENT INSURANCE - Continued

Limitations.  Unless we agree in writing, no benefits will be paid if loss
directly or indirectly results from:

-  Suicide or  intentionally  self-inflicted  injury,  while sane or insane.  In
   Missouri, suicide or intentionally self inflicted injury, while sane.
-  Your commission of or attempt to commit an assault or felony.
-     Bodily or mental infirmity, disease of any kind, or medical or surgical
treatment of any
   such infirmity or disease.
-  Except as prescribed  by a Doctor,  your use of: (1) PCP Also known as "Angel
   Dust"); LSD or other hallucinogens;  (3) cocaine,  heroin or other narcotics;
   (4) amphetamines or other stimulants;  (5) barbiturates or other sedatives or
   tranquilizers; or (6) any combination of two or more of these substances.
-     Any poison or gas voluntarily taken administered, absorbed, or inhaled.
-     Travel or flight in any kind of aircraft, except as provided by the
Hazard Provisions
      herein.
-     Travel or flight as a pilot or crew member in any kind of aircraft,
except if provided by a       Specified Aircraft Provision.
-     Travel or flight in any kind of aircraft used for:  (1) firefighting;
(2) exploration; (3) pipe     or powerline work; or (4) aerial photography.
-  Any bacterial infection, except when caused by accidental bodily injury.
-     War, whether or not declared except if provided by a War Risk Provision.
   -  Taking part in an insurrection.

Common Accident Aggregate Limit.  We will not pay benefits in excess of the
Aggregate Limit.  The Aggregate Limit means all benefits payable as the
result of a Common Accident.

If, as result  of a Common  Accident,  the total  benefits  payable  exceed  the
Aggregate Limit, we will pay each Insured Person or Beneficiary,  a share of the
Aggregate Limit.  Each share will be an amount that is in the same proportion to
the benefit  payable for the covered loss suffered by each Insured Person as the
Aggregate Limit is to the total of all benefits that would have been payable for
all covered losses suffered in the Common Accident.

Aggregate Limit:  $1,500.000.00

                      EXPOSURE AND DISAPPEARANCE PROVISION

Subject to all other Policy provisions:

(1)      Loss that results from  unavoidable  exposure to the elements  shall be
         considered  accidental bodily injury and benefits will be payable under
         the Policy; and
(2)      Benefits will be payable under the Policy if, after one year, your body
         has not been found after the conveyance in which you were traveling:
(a) disappeared; (b) made a forced landing; (c) sank; or (d) was wrecked.


<PAGE>


                                    HAZARD 12
24-                    HOUR ACCIDENT PROTECTION-BUSINESS ONLY
               Excluding Policyholder Owned or Leased Aircraft

                         (Inside or Outside City Limits)

Benefits will be payable under the Policy provided the accident that causes
the covered loss occurs:
(1)   while you are Working for the Policyholder; and
(2)   while you are on an Authorized Trip which includes: (a) riding as a
         passenger in the aircraft listed below;  (b) boarding or alighting from
         such aircraft; or @being struck by such aircraft.

Aircraft:
o     any Certified civilian aircraft operated by a pilot who holds a
         Certificate of Competency;
o     any transport aircraft operated by the MAC.

Such Aircraft shall not include aircraft owned or leased by the Policyholder.

Working for the Policyholder  means furthering the business of the Policyholder.
Vacation,  leaves  of  absence,  and  commuting  to and from  work  shall not be
considered Working for the Policyholder.

Authorized  Trip means a trip taken  anywhere in the world while  Working for he
Policyholder.  Such an Authorized Trip begins from the time you leave:  (1) your
residence; or (2) your place of regular employment,  whichever occurs later. The
Authorized Trip ends when you return to: (1) your  residence;  or (2) your place
of regular employment, whichever occurs first.

Certified means the aircraft has a valid  "Standard"  Airworthiness  Certificate
issued by the Civil Aeronautics Administration or its foreign equivalent.

Certificate of Competency means a valid and current certificate of competency of
a rating applicable to the type of aircraft being operated.

MAC means the Military Airlift Command or its foreign equivalent.


<PAGE>


                          PERSONAL SOJOURN ENDORSEMENT

The  definition of  Authorized  Trip in Hazard 12 is removed in its entirety and
replaced with the following:

      Authorized Trip means a trip taken anywhere in the world while Working for
      the Policyholder.  Such an Authorized Trip begins from the time you leave:
      (1) your  residence;  or (2) your place of regular  employment,  whichever
      occurs  later.  The  Authorized  Trip ends when you  return  to:  (1) your
      residence;  or (2) your  place of  regular  employment,  whichever  occurs
      first.

      Authorized  Trip shall also include  sojourns  taken for personal  reasons
      during the course of the Authorized Trip.

<PAGE>


      MONTHLY COMA BENEFIT

"Coma" and "Comatose" means being in a state of complete mental unresponsiveness
with no evidence of appropriate responses to stimulation.

If, while insured for this benefit,  you suffer a covered accident which, within
365 days of such accident and independently of all other causes, results in your
being in a coma  continuously  for at least 31 consecutive  days, a Monthly Coma
Benefit will be paid. The Monthly Coma Benefit will be payable for each month of
continuous  coma,  but in no event  shall more than 100  months of Monthly  coma
Benefit be paid.  No Monthly  Coma  Benefit  will be payable  after the comatose
condition  has  ceased,  whether  by death,  recovery,  or any  other  change of
condition.

The Monthly Coma Benefits will be 1% of the difference  between the benefit that
would be payable for the accidental death and the amount of any benefits paid or
payable under this policy for other losses as result of such accident.  Under no
circumstances will the total benefits payable for all losses which are caused by
the same  accident,  exceed the amount that would be payable for the  accidental
death.

Your  Monthly  Coma  Benefit  will  be paid  according  to the  Beneficiary  and
Assignment Provisions Applicable to Benefits for Loss of Life.

If, after qualifying for a Monthly Coma Benefit, you suffer another loss covered
under the terms of this  contract,  due to the same  accident  that  caused  the
comatose  condition,  the  benefit  paid for such other loss will be the benefit
stated in the Plan  Summary  reduced  by the  total  amount  of  benefits  paid,
including  Monthly Coma Benefits  paid,  with respect to you as a result of that
accident. If you are comatose and continue to qualify for a Monthly Coma Benefit
after such other loss,  the amount of Monthly Coma Benefit will be  redetermined
using the calculation stated above.

The  Beneficiary is responsible  for providing to  Transamerica  Occidental Life
Insurance  Company  proof of the  continuing  comatose  condition.  Transamerica
Occidental Life Insurance  Company retains the right to investigate to determine
whether coma exists and continues.

Except as provided herein, all other provisions,  exclusions, and limitations of
the policy apply to this benefit.

<PAGE>


SEAT BELT BENEFIT

In consideration of the reduced chance of accidental loss of life when seat belt
are used properly, the following is added to the policy:

A seat belt benefit will be payable subject to the exclusions and limitations of
this  policy  and  endorsement,  if an  insured  person  dies as the result of a
covered accident when:

(1)      the insured  person was the operator of or passenger in an  automobile,
         at the time that accident occurred; and
(2)      the  insured  person  was  properly  using a seat belt at the time that
         accident occurred; and
(3)      that  accident  occurs  while this  endorsement  is effective as to the
         insured person; and
(4)      seat belt usage has been verified in the police accident report.  If no
         statement  regarding  seat belt usage was made in the  police  accident
         report,  a signed  statement by a doctor,  paramedic;  police  officer,
         coroner; or other person of competent  authority,  who was at the scene
         of the accident,  will be accepted. The statement must verify that seat
         belts were being  utilized  properly,  and the verifying  party must be
         related to the insured person or his beneficiary.

The seat belt benefit  will be an amount equal to 10% of the amount  payable for
accidental  loss life of the  insured  person;  subject  to a maximum  seat belt
benefit of $10,000.00 per insured person.

"Automobile" means a validly registered or licensed four wheel private passenger
motor vehicle.

"Automobile"  does not include:  a motorcycle or motor  scooter,  or any sidecar
thereof;  a bus; any motor  vehicle  intended for off-road  use; a  semi-tractor
trailer;  a tractor or any other farm or ranch vehicle;  any motor vehicle being
used without its owner's permission.

"Seat  belt"  means:  (1) any passive  restraint  device  which meets  published
federal   safety   standards,   which  has  been  installed  by  the  automobile
manufacturer, and which has not been altered after such installation; or (2) any
child passive restraint  device,  which meets published federal safety standards
and its approved by the National  Transportation  Safety Board,  and is properly
secured and used only as recommended by its manufacturer.


<PAGE>


                          SEAT BELT BENEFIT - Continued

                                   EXCLUSIONS

No seat belt benefits are payable if loss results, directly or indirectly from:

(1)      except as  prescribed  by a doctor,  the use of any of the following by
         the  insured  person or the  operator  of the  automobile  in which the
         insured  person is a  passenger  -  alcohol;  PCP (also  known as Angel
         Dust), LSD or other hallucinogens; cocaine, heroin, or other narcotics;
         amphetamines  or other  stimulants;  barbiturates or other sedatives or
         tranquilizers; or any combination of these substances;
(2)      any poison or gas voluntarily taken, administered, absorbed, or inhaled
         by the insured  person or the operator of the  automobile  in which the
         insured person is a passenger;
(3)      the use of the  automobile,  in which the insured person is a passenger
         or operator,  in a race,  speed or endurance  test, or for acrobatic or
         stunt driving, or for any illegal purposes;
(4)      the use of the  automobile,  in which the insured person is a passenger
         or operator, on other than regularly maintained roadways.

In all other  respects the  provisions  and  conditions of the policy remain the
same.


<PAGE>


                      BENEFICIARY AND ASSIGNMENT PROVISIONS
                     APPLICABLE TO BENEFITS FOR LOSS OF LIFE

Named  Beneficiary means the party or parties which you designate to receive the
policy benefits which are payable on account of your death.

Payment  Beneficiary.  Benefits  for  loss  of life  are  payable  to the  Named
Beneficiary if such party  survives you. If there is no Named  Beneficiary or if
the Named  Beneficiary  does not survive  you,  the  benefits are payable to the
surviving  persons(s)  in the  first  of the  following  classed  of  successive
preference beneficiaries:  your (1) beneficiary named in writing under any group
life  insurance  policy issued to the  Policyholder;  (2) spouse;  (3) children,
including legally adopted children;  (4) parents;  (5) brothers and sisters; (6)
estate.  We may  rely on an  affidavit  by a  person  in any of the  classes  of
preference  beneficiaries  as the basis for our payment.  Payment made before we
have received  written  notice at our Home Office of a valid claim by some other
person releases us from further obligation.

Your Named Beneficiary, if any, will be the persons(s) named by you in your most
recent  written  beneficiary  designation  placed on file in the  records of the
Policyholder.  Payment  made by us to such Named  Beneficiary  released  us from
further obligation.

If  two  or  more  persons  become  entitled  to  benefits:  (1)  as  the  Named
Beneficiary,  and you have not specified their respective  interests;  or (2) as
preference beneficiaries, they will share equally.

Benefits  for  loss of life  will be paid in  accordance  with  the  beneficiary
designation  in effect under the Former Plan unless you notify the  Policyholder
of a change. Former Plan means the group policy which is replaced by this Policy
immediately after the Former Plan terminated.

Assignment.  You may assign all rights and interests in and to those benefits
which are payable on account of your death.  The assignment shall not be made
to, nor be for the benefit of, the Policyholder.

After your death,  the  beneficiary may assign the benefits which are payable to
him or her.

The owner's right and those of any beneficiary will be subject to the assignment
on and  after  the  date it is  received  by us at our Home  Office.  We are not
responsible for the adequacy of any assignment.

Benefit for loss of life payable to minor will be paid to the legally  appointed
guardian of the minor's  estate.  If there is no  guardian,  the benefits may be
paid to the adult or adults whom we determine  have assumed the custody and main
support of the minor.


<PAGE>


                             REPLACEMENT OF COVERAGE

The following provisions shall apply to each person who had valid coverage under
the Former Plan on the date it ceased and is in a class which is eligible on the
Policy  Effective  Date.  If the required  premiums  are paid,  the person shall
become insured on such Effective Date,  whether or not the active  employment or
effective date requirements have been met. The following provisions shall apply.

o        If insurance for your group starts after the Policy Effective Date, the
         latter term as applied to you means the date  insurance  for your group
         starts under the Policy.

o        No benefit will be paid for loss sustained  before the Policy Effective
         Date.

o        Any  waiting  period  required  by the  Policy  shall be reduced by the
         length  of time  such  person  was  continuously  covered  for  similar
         benefits  under  the  Former  Plan  immediately  prior  to  the  Policy
         Effective Date.

Former Plan means the group policy which is replaced by this Policy  immediately
after the Former Plan terminated.

                              ADDITIONAL PROVISIONS

Notice of Claim.  Written  notice of claim must be given  within 20 days after a
covered loss occurs of starts, or as soon after that as possible. The notice may
be given  either to us at our Home Office or to one of our agents.  The terms of
the notice shall identify clearly the Insured Person.

Claim Forms.  When we receive a notice of claim, we will finish forms for filing
proofs of loss. If the forms are not  furnished  within 15 days after we receive
notice,  written proof from the claimant as to the nature and extent of the loss
sent to us within the time limit stated in the Proofs of Loss section below will
be deemed proof loss.

Proof of Loss. In case of continuing loss for which we make recurrent  payments,
the Insured  Person must give us written  proof of loss within 90 days after the
end of each period for which an amount is payable.  For any other loss,  written
proof must be given within 90 days after the date of loss.

Failure to furnish  proof  within  the time  required  will not void or reduce a
claim if the proof is furnished as soon as it was reasonably  possible to do so.
Except in the event of legal  incompetence,  this  extension  of the time  limit
shall in no event exceed one year.

Time of Payment of Claim.  All  payments  will be made when we receive  proof of
loss; however,  for any loss for which recurrent payments are provided,  benefit
amounts  shall be paid as they  accrue,  but not less  often than  monthly.  Any
unpaid  balance at the end of the  period  for which we are liable  will be paid
when we receive proof of loss.

<PAGE>


ADDITIONAL PROVISIONS - Continued

Payment of Claims.  Payment for loss will be mad when we receive proof of
such loss.  Except as stated below, all benefits will be paid to the Insured
Person.

Loss of life  benefits,  if any, will be paid in  accordance  with the provision
which apply to such benefits.  Any other benefits  accrued but paid at death may
be paid to the deceased person's estate or at our option, to the beneficiary.

At our option,  benefits which are payable to a deceased person's estate or to a
person  who is a minor  or who is not  competent  to give a  valid  release  may
instead be paid by us to any person who is related by blood or marriage and whom
we deem to be entitled to receive them. Such payment shall not exceed $1,000 and
will fully discharge us to the extent of the payment.

Physical  Examination  and  Autopsy.  We reserve  the right to have the  Insured
Person examined, at our own expense, as often as is reasonably necessary while a
claim is pending. We may also have an autopsy performed unless forbidden by law.

Legal  Actions.  No attempt to recover on the Policy through legal action may be
made until at least 60 days after  written  proof of loss has been  furnished as
required  by the Policy.  No such  action may be started  later than three years
from the time written proof of loss is required to be furnished.

Conformity  with Laws. Any provision of the Policy which,  on it effective date,
is in conflict with the laws of the Governing Jurisdiction, is hereby amended to
conform to the minimum requirements of such laws.



<PAGE>


                              ENDORSEMENT NUMBER 1

This Endorsement is to be attached to and form a part of Policy No. 08320000

issued to Galileo International, Inc.

The effective date of this Endorsement is July1, 1998.

In  consideration  of the  payment  of  premium  for this  policy,  it is hereby
understood and agreed that:

1. The  Personal  Sojourn  Endorsement,  Policy Form GTO-R 114 of this Policy is
   limited to the first seven (7) consecutive days of such travel.



























In all other respects the provisions and the conditions of the policy remain the
same.

The Company has executed this endorsement at Los Angeles, California.


<PAGE>


                           Information Required by the
                           Employee Retirement Income
                  Security Act of 1974, as amended ("ERISA")

Appeal of Claim Denial.  If a claim is denied is whole or in part,  the claimant
will receive:  (1) a written explanation giving detailed reasons for denial; (2)
specific  reference  to policy  provisions  on which the denial is based;  (3) a
description of any additional material or information necessary for the claimant
to perfect the claim;  (4) an explanation of why such material or information is
necessary; (5) an explanation of our claim appeal procedure.

If the  claimant  is not  satisfied,  or does not agree with the reasons for the
denial of the claim,  the claimant  may appeal the decision to us,  Transamerica
Life Companies,  ERISA Appeals Unit, Suite T-12-06, P.O. box 30852, Los Angeles,
California  90030-0852.  We provide the benefits  under the Group Master  Policy
identified on the front cover of your Certificate.

We are the fiduciary  under the plan designated to review any claim appeals with
respect  to  the  policy  by the  claimant.  We are  vested  with  discretionary
authority to determine  eligibility  for benefits and to construe and  interpret
the plan/policy  terms and provisions.  Our decision with respect to eligibility
and plan/policy terms and provisions is final,  conclusive and binding as to all
parties.

The appeal must be writing,  and can be made by the  claimant or the  claimant's
duly authorized  representative.  It must set out the claimant's reasons for the
appeal and the  claimant's  dissatisfaction  or  disagreement.  Any  evidence or
documentation  to support  the  claimant's  position  should be  submitted  with
written  appeal.  Upon  written  request,  the  claimant  may  review  pertinent
documents that pertain to the claim and its denial.

The appeal must be made  within 60 days of the date the  claimant  receives  the
letter denying the claim.

We will promptly review the claim and appeal. We will advise the claimant of our
decision in writing, giving specific reasons for the decision with references to
pertinent policy  provisions n which the decision is based. The written decision
will be sent to the  claimant  not later than 60 days  after our  receipt of the
written appeal,  unless special  circumstances  require an extension of time for
processing  the  appeal,  or  obtaining  more  information,   or  conducting  an
investigation  of the facts. In no event will the written decision be sent later
than 120 days after we receive the written appeal.

If the claimant  disagrees  with our  decision on appeal,  the claimant may file
suit in federal or state court  asking the court to overturn  our decision as an
abuse of discretion. If the court rules in the claimant's favor, it may order us
to pay the  claimant's  court costs an legal fees.  If the claimant  loses,  the
court may  order  the  claimant  to pay our  court  costs  and  legal  fees (for
examples, if the court finds the claimant's suit to be frivolous.


<PAGE>


                            ILLINOIS LIFE AND HEALTH
                       INSURANCE GUARANTY ASSOCIATION ACT

Residents  of Illinois  who  purchase  health  insurance,  life  insurance,  and
annuities should know that the insurance companies licensed in Illinois to write
these types of insurance are members of the Illinois  Life and Health  Insurance
Guaranty Associate.  The purpose of this Guaranty  Association is to assure that
policyholders  will be  protected,  within limit,  in the unlikely  event that a
member insurer becomes financially unable to meet is obligations. If this should
happen,  the  Guaranty  Association  will  assess  its  other  member  insurance
companies for the money to pay the covered claims of policy holders that live in
Illinois (and their payees, beneficiaries,  and assignees) and, in some cases to
keep coverage in force. The valuable extra protection provided by these insurers
through the Guaranty Association is not unlimited, however, as noted below.

                                ILLINOIS LIFE AND
                      HEALTH INSURANCE GUARANTU ASSOCIATION
                                   DISCLAIMER

      The  Illinois  Life and Health  Insurance  Guaranty  Association  provides
coverage on claims under some types of policies if the insurer becomes  impaired
or insolvent. COVERAGE MAY NOT BE AVAILABLE FOR YOUR POLICY. Even if coverage is
provided,  there  are  substantial  limitations  and  exclusions.   Coverage  is
generally  conditioned on continued residence in Illinois.  Other conditions may
also preclude coverage.

      You should not rely on  availability of coverage under the Life and Health
Insurance Guaranty Association when selecting an insurer. Your insurer and agent
are prohibited  from using this existence of the  Association of its coverage to
sell you an insurance policy.

      The Illinois Life and Heath Insurance Guaranty Association or the Illinois
Department of Insurance will respond to any questions you may have which are not
answered by this document. Policyholders with additional questions may contact:

              Illinois Life and Health Insurance Guaranty Association
                           8420 West Bryn Mawr Avenue
                             Chicago, Illinois 60631
                                 (312) 714-8050

                        Illinois Department of Insurance
                           320 West Washington Street
                                    4th Floor
                           Springfield, Illinois 62767
                                 (217) 782-4515



<PAGE>


                         Summary of General Purpose And
                         Current Limitations of Coverage

      The Illinois law that provides for this safety-net  coverage is called the
Illinois Life and Health  Insurance  Guaranty  Association Law ("Law") (215 ILCS
5\531.01,  et  seq.).  The  following  contains  a brief  summary  of the  Law's
coverage,  exclusions and limits. The summary does not cover all provisions, nor
does it in any way change  anyone's  rights or obligations  under the Law or the
rights or  obligations  of the Guaranty  Association.  If you have obtained this
document from an agent in connections with the purchase of a policy,  you should
be aware  that its  delivery  to you does not  guarantees  that  your  policy is
covered by the Guaranty Association.

a)    Coverage
      The Illinois Life and Health Insurance Guaranty Association provides
coverage to policyholders that reside in Illinois for insurance issued by
members of the Guaranty Association, including:
1)    life insurance, health insurance, and annuity contracts;
2)    life, health or annuity certificates under direct group policies or
         contracts:
3)    unallocated annuity contracts; and
4)       contracts to furnish health care services and subscription certificates
         for medical or health car services issued by certain licensed entities.
         The  beneficiaries,  payees,  or  assignees  of such  persons  are also
         protected, even if they live in another state.

b)    Exclusions from Coverage:
1)    The Guaranty Association does not provide coverage for:
A)    any policy or portion or a policy for which the individual has assumed
            the risk;
B)    any policy of reinsurance (unless an assumption certificate was issued);
C)    interest rate guarantees which exceed certain statutory limitations;
D)    certain unallocated annuity contracts issued to an employee benefit
            plan protected  under the Pension Benefit  Guaranty  Corporation and
            any  portion of a contract  which in not issued to or in  connection
            with a specific  employee,  union, or association of natural persons
            benefit plan or a government lottery;
E)    any portion of a variable life insurance or variable annuity contract
            not guaranteed by an insurer; or
F)    any stop loss insurance.
2) In addition, persons are not protected by the Guaranty Association if: A) the
Illinois Director of Insurance determines that, in the case of an
            insurer which is not domiciled in Illinois, the insurer's home state
            provides  substantially  similar  protection  to Illinois  residents
            which will be provided in a timely manner, or
B)    their policy was issued by an organization which is not a member
            insurer of the Association.

c) Limits on amount of Coverage:
1)       The Law also limits the amount the Illinois  Life and Health  Insurance
         Guaranty  Association  is obligated to pay. The Guaranty  Association's
         liability is limited to the lesser of either:

A)    the contractual obligations for which the insurer is liable or for
            which the insurer would have been liable if it were not an
            impaired or insolvent insurer, or
B)          with respect to any one life,  regardless of the number of policies,
            contracts, or certificates:
i)    in the case of life insurance, $300,000 in death benefits but not more
               than $100,000 in net cash surrender or withdrawal values;
ii)            in the case of health  insurance,  $300,000  in health  insurance
               benefits, including net cash surrender or withdrawal values; and
iii)  with respect to annuities, $100,000 in the present value of annuity
               benefits, including net cash surrender or withdraw values, and
               $100,000 in the present value or annuity benefits for
               individual participating in certain government retirement
               plans covered by an unallocated annuity contracts other than
               those issued to certain governmental retirement plans is
               $5,000,000 in benefit per contract holder, regardless of the
               number of contracts.

2)       However,  in no event is the Guaranty  Association liable for more than
         $300,000 with respect to any one individual.

<PAGE>

                                                               Exhibit 10.44 (b)

                                                                           Group


                                    Sedgwick


                            Certificate of Insurance


 THE INSURED IS REQUESTED TO READ THIS CERTIFICATE AND IF INCORRECT TO RETURN IT
                           IMMEDIATELY FOR ALTERATION


This Certifies that Sedgwick  Limited  (hereinafter  referred as the Broker) has
effected insurance whereby in consideration of the Insured having paid or agreed
to pay the  Premium  and any  Insurance  Premium  Tax due  certain  Insurers  as
detailed on Schedule attached hereto agree each for his own part and not one for
another  that  Insurers  will  subject to the terms  Exceptions  and  Conditions
contained herein or endorsed hereon pay Compensation to or indemnify the Insured
as hereinafter provided.

In Witness Whereof this Certificate has been signed on behalf of the Broker




                                    ------------------------------------------
                                                Authorized Signature


                               General Conditions

1. This  Certificate  and the  Schedule  shall be read  together and any word or
expression  to which a specific  meaning has been  attached in either shall bear
such  meaning  wherever  it may  appear  2.  As soon as  practicable  after  the
happening  of any event which may give rise to a claim  written  notice shall be
given to the Broker 3. All  certificates  information  and evidence  required by
Insurers  shall be furnished  free of expense to and in the form  prescribed  by
them The Insured Person shall as often as required submit to medical examination
on behalf of and at the  expense of  Insurers  in  connection  with any claim 4.
Insurers  shall not be bound to accept or be affected by any notice of any trust
charge lien  assignment or other  dealing with or relating to this  insurance 5.
Compensation  shall be payable only to the Insured or to the Insured's  personal
representatives  whose receipt shall effectually  discharge  Insurers Nothing in
this  Certificate  shall be deemed  to give the  Insured  Person or the  Insured
Person's personal  representatives the right to claim from or sue Insurers 6. No
sum payable under this insurance  shall carry interest 7. The Insured shall give
notice to the Broker  within a  reasonable  time of any  material  change in the
Business or the Insured Person's Occupation and shall pay any additional premium
required  by Insurers  in  consequence  thereof 8. If any part of the Premium is
calculated  on  estimates  furnished  by the Insured  the Insured  shall keep an
accurate record containing all relative  particulars and shall allow Insurers to
inspect  such record The Insured  shall  within one month from the expiry of the
Period of Insurance furnish such information as Insurers may require The Premium
shall  thereupon  be adjusted 9.  Insurers may cancel any  insurance  under this
Certificate in respect to Death Disablement or Medical Expenses  consequent upon
war invasion act or foreign enemy  hostilities  (whether war be declared or not)
civil war rebellion revolution insurrection military or usurped power by sending
7 days' notice to the Insured at the Insured's  last known address  Insurance in
respect of any journey  involving travel outside the Insured Person's country of
residence which shall have been commenced before the expiry of such notice shall
not be  affected  hereby 10.  Insurers  may cancel this  insurance  by sending 3
months'  notice to the Insured at the  Insured's  last known address The Insured
shall thereupon  become  entitled to the return of a  proportionate  part of the
Premium  Insurance  in respect of any journey  which  shall have been  commenced
before the  expiry of such  notice  shall not be  affected  thereby  11. The due
observance and fulfilment of the terms  Conditions  and  Endorsements  so far as
they  relate to  anything  to be done or  complied  with by the  Insured  or the
Insured  Person  and the truth of any  information  supplied  by the  Insured in
connection with this Insurance shall be conditions precedent to any liability of
Insurers to make any payment hereunder 12. If at the time any claim to indemnity
arises  under  this  Certificate  there be any other  insurance  in force in the
Insured's  name  covering the same loss  Insurers  shall not pay more than their
rateable proportion of such claim




<PAGE>


                        CERTIFICATE OF INSURANCE - GROUP

                                GENERAL SCHEDULE


Certificate No.: G8R5669


Insured:         The Galileo Company and/or subsidiary companies


Address:         Galileo Centre Europe, Windmill Hill, Swindon, Wilts SN5 6PH


Business:        Production of computerised reservation and information systems
                 for travel agents, the provision of marketing, legal, financial
                 and software development services to Galileo International
                 L.L.C.



Period of Insurance:

a)    From  1 July 1998  to  30 June 199  both days inclusive

b)    Any  subsequent  period  for  which  the  Insured  shall  agree to pay and
      Insurers shall agree to accept a renewal premium

Premium:

First                                     (pound)27,504.80

Insurance Premium Tax @ 4% on 100%        (pound)  1,100.19

Total                                     (pound)28,604.99


INSURERS


Royal & Sun Alliance Insurance plc                                100.00%


Date:  19th February 1999


0304.1


<PAGE>




                        CERTIFICATE OF INSURANCE - GROUP

                          SCHEDULE (PERSONAL ACCIDENT)



Insured Person:   A.   Any Director or Employee of the Insured resident in Great
                       Britain, Northern Ireland, The Isle of Man or the Channel
                       Islands

                  B.    Visitors

Operative Time:   A.    24 Hours

                  B.    Whilst lawfully on the Insured's  Swindon  premises  or 
                        any of the Insured's NDC premises


Benefits                            Compensation
A.

1.        3 x annual salary as defined

2.        3 x annual salary as defined

3.(a)     3 x annual salary as defined

(b)       3 x annual salary as defined

  (c) (i) 3 x annual salary as defined

     (ii) 25% of the Compensation shown in (c) (i) above

1.        3 x annual salary as defined

5.(a)     (pound)Nil       ) per week for a maximum of
  (b)     (pound)Nil       ) Nil weeks in all

6.    Reimbursement up to 15% of the  Compensation  paid for any of Benefits 1-4
      or 30% of the total weekly  Compensation  paid whichever is the greater in
      respect of any one Insurance Person subject to a maximum of (pound)10,000



B.

1.    (pound)10,000

2.    (pound)10,000

3.(a) (pound)10,000

(b)   (pound)10,000

0304.2(a) Standard Benefits



<PAGE>


                                                                           Group


                                Personal Accident

If during the  Operative  Time in any  Period of  Insurance  an  Insured  Person
sustains accidental bodily injury which independently of any other cause results
within  twenty-four  months in Death  Disablement  or the  incurring  of Medical
Expenses Insurers will pay Compensation to the Insured or the Insured's personal
representatives

                                  Disappearance

In the event of the  disappearance  of an  Insured  Person  if after a  suitable
period of time it is reasonable to believe that such Insured  Person has died as
a result of accidental  bodily  injury the Death  Benefit  shall become  payable
subject to a signed  undertaking that if the belief is subsequently  found to be
wrong such Death Benefit shall be refunded to Insurers

                                    Exposure

Death  Disablement  or Medical  Expenses as the direct  result of exposure of an
Insurance Person shall be deemed to have been caused by accidental bodily injury


Benefits                                  Compensation

1.    Death                                                 1.

2. Loss of two or more Limbs or both Eyes or one of each 2.

3.(a) Loss of one Limb or Eye                               3.(a)
   (b)      Permanent total loss of speech                                 (b)
   (c)      Permanent total loss of hearing                                (c)
      (i)   in both ears                                                  (i)
      (ii)  in one ear                                              (ii)
4.    Permanent Total Disablement from the Insured Person's usual 4.
      occupation in the Business
5.(a) Temporary Total Disablement from usual occupation           5.(a)
   (b)      Temporary Partial Disablement                            (b)
6.    Medical  Expenses being the cost of medical  surgical or other 6. remedial
      attention  treatment  or  appliances  given or  prescribed  by a qualified
      member  of the  medical  profession  and all  hospital  nursing  home  and
      ambulance charges

                               Special Conditions

(a)   Compensation  shall not be payable in  respect of any one  Insured  Person
      under  more  than  one of  Benefits  1 to 4 in  connection  with  the same
      accidental bodily injury

(b)   On the  happening of any  accidental  bodily injury giving rise to a claim
      under any of Benefits 2, 3(a),  3(b),  3(c)(i) or 4 this  insurance  shall
      cease to apply to that Insured Person

(c)  If  no  Death  Benefit  is  included  in  respect  of  the  Insured  Person
     Compensation  shall not be payable under  Benefits 2 to 4 until at least 13
     weeks after the date of the accidental  bodily injury and such Compensation
     shall then only be payable if the Death  Benefit would not if included have
     been payable in the meantime as a result of the accidental bodily injury If
     the Death Benefit is included but is less than the appropriate Compensation
     under Benefits 2 to 4 the Compensation  payable under Benefits 2 to 4 shall
     not exceed the Death  Benefit  until 13 weeks have elapsed from the date of
     the accidental  bodily injury and the balance shall then only be payable if
     the Death Benefit has not in the meantime become payable as a result of the
     accidental bodily injury

(d)   Compensation  shall not  exceed  (pound)2,000,000  in  respect  of any one
      Insured Person but in respect of Benefit 3 shall not exceed (pound)500,000
      any one Insured Person

(e)   Insurers total liability in respect of all Insured  Persons  travelling in
      the same aircraft  (other than light  aircraft or  helicopters)  shall not
      exceed  (pound)5,000,000  In respect of all Insured Persons  travelling in
      any one light aircraft or helicopter  Insurers total  liability  shall not
      exceed  (pound)2,000,000  If the total of claims for all  Insured  Persons
      travelling in any one aircraft or helicopter  exceeds the respective limit
      the amount insured for each person shall be proportionately  reduced until
      the total of all claims does not exceed the appropriate limit

(f) If the Insured Person is not normally gainfully employed

      (i)   Compensation  under  Benefits 5(a) and 5(b) shall be limited  within
            the rate  specified to medical and other  expenses  necessitated  by
            such Disablement and not otherwise recoverable under this insurance
      (ii)  Benefit 4 shall  read  "Permanent  total  Disablement  from  gainful
            employment of any and every kind"

(a)   If the Insured  Person is under school age or is a minor still  undergoing
      full time  education the maximum  amount  payable under Benefit 1 shall be
      (pound)5,000 and under Benefits 2 to 4 (pound)50,000

(b)   If the  Insured  comprises  more than one party  having an interest in the
      Insured Person the Compensation  shall represent the total Compensation in
      respect of that Insured Person for all interests covered by the insurance

                                   Definitions

1.    Temporary  Partial  Disablement  shall mean disablement from a substantial
      part of the Insured Person's usual occupation

2.    Loss of Limb shall mean
      (i)   in the case of a lower limb loss by permanent  physical severance at
            or above the ankle or  permanent  total loss of use of an entire leg
            or foot
      (ii)  in the case of an upper limb loss by permanent physical severance of
            the entire four fingers  through or above the meta carpo  phalangeal
            joints or permanent total loss of use of an entire arm or hand

1.    Loss of Eye shall  include  total and  irrecoverable  loss of sight  which
      shall be deemed to have  occurred  (i) in both eyes when the  condition is
      shown to the satisfaction of the Insurers
            to be permanent and without  expectation of recovery and the Insured
            Person's name has been added to the Register of Blind Persons on the
            authority of a fully qualified ophthalmic specialist
(ii)        in one eye when the degree of sight  remaining  after  correction is
            3/60 or less on the Snellen  scale and the  Insurers  are  satisfied
            that the condition is permanent and without expectation of recovery

                                   Exceptions

Insurers shall not be liable in respect of Death Disablement or Medical Expenses
consequent upon
1.    the Insured Person
      (a)   engaging in aviation otherwise than as a passenger
      (b)   committing or attempting to commit suicide
      (c)   suffering  from sickness or disease not resulting from bodily injury
            or suffering from bodily injury due to a gradually  operating  cause
            or naturally occurring condition or degenerative process
2.   bodily  injury  of any  person  aged 75 years or more at  inception  of the
     Period of Insurance

3.          (a)  war  whether  declared  or not  between  any  of the  following
            countries  namely France the United  Kingdom the former  constituent
            parts of the  Union of Soviet  Socialist  Republics  and the  United
            States of America or the Peoples Republic of China
      (b)   war in Europe  whether  declared  or not  (other  than civil war but
            including  any  enforcement  action by or on  behalf  of the  United
            Nations) in which any of those countries or any Armed Forces thereof
            are engaged
      unless  the  accidental  bodily  injury  occurs in the course of a journey
      involving travel outside the Insured Person's country of residence

                                        Hijack or Kidnap

In the event of an  Insured  Person  being the  subject of a hijack or kidnap 1.
this insurance shall remain in force beyond the renewal date in respect of the
      Insured  Person  who is at that  time the  subject  of a hijack  or kidnap
      provided that the renewal premium under this  Certificate is paid (Renewal
      Premium shall mean the Premium which Insurers would have charged to extend
      the Certificate for twelve months had the Insured Person not been hijacked
      or kidnapped)
2.    The  Insurers  will pay  (pound)200  for each  period  of 24 hours or part
      thereof that the Insured  Person is so restrained  subject to a maximum of
      (pound)10,000

Hijack  shall mean the  unlawful  seizure or wrongful  exercise of control of an
aircraft or other conveyance in which an Insured Person is travelling

Kidnap shall mean the illegal taking and holding captive of an Insured Person

                             Hospitalisation Benefit

If as the result of accidental bodily injury occurring during the Operative Time
the Insured  Person is admitted to a Hospital as a registered  in-patient on the
recommendation of a Medical Practitioner Insurers will pay (pound)15 per full 24
hours for up to 52 weeks  Benefit shall not be payable for the first 48 hours of
each admission unless any admission  subsequent to the initial  admission can be
directly attributed to the same accidental bodily injury

Hospital shall mean any institution anywhere in the world which meets fully each
of the following  criteria 1. maintains  permanent and full-time  facilities for
the care of overnight resident
      patients
2.    has  diagnostic  and  therapeutic  facilities for the surgical and medical
      diagnosis  treatment and care of injured and sick persons by and under the
      supervision of a staff of Medical Practitioners
3.    continuously  provides 24 hours a day nursing service  supervised by State
      Registered Nurses or nurses with equivalent qualifications
4.    is not other than incidentally
      (a)   a mental institution or
      (b)   a nursing or convalescent home or a place for the aged or
      (c)   a place for drug addicts or alcoholics
Medical Practitioner shall mean any legally qualified medical practitioner other
     than 1
      1. an Insured Person
      2.    a member of the immediate family of an Insured Person
      3.    an employee of the Insured



<PAGE>


                        CERTIFICATE OF INSURANCE - GROUP

                                SCHEDULE (TRAVEL)


Insured Person:         Any Director or Employee of the Insured


Operative Time:         Whilst on a Journey as defined


Journey:                (a)   This insurance is restricted to but shall apply
automatically
                              in  respect  of  any  journey  undertaken  on  the
                              business of the Insured which commences during the
                              period of insurance involving travel outside Great
                              Britain, Northern Ireland,
the
                       Isle of Man or the Channel Islands

                        (b)   within or between Great Britain, Northern Ireland,
                              the Isle of Man or the Channel Islands

                           Excluding to and form work

                        Cover  applies  from the  time of  leaving  the  Insured
                        Persons residence or place of business whichever is left
                        last at the  commencement  of the journey  until arrival
                        back  at the  Insured  Persons  residence  or  place  of
                        business  whichever  is reached  first at the end of the
                        journey including while staying temporarily at any place
                        on route or in the destination area in the course of the
                        journey


Except by specific  agreement with Insurers prior to commencement of the Journey
this  insurance will not apply in respect of any Journey of more than 18 months'
duration  except that if the Journey is not  completed  within 18 months' due to
delay or  interruption  of Public  Transport  Services or the  hijacking  of the
Insured  Person's  aircraft or other  conveyance or the kidnapping of an insured
Person the period shall be extended automatically without additional premium for
such  further  period  as may be  reasonably  necessary  for  completion  of the
journey.

It  is  noted  that  the  renewal  premium  of  (pound)27,504.80   includes  the
territories of Netherlands, Switzerland and Nordiska

It is also noted and agreed that the policy includes the additional  territories
of France, Belgium, Germany, Portugal, Spain and Dubai

Compensation/Sums  Insured/Indemnity  Limit:  (Applicable  separately  for  each
Insured Person in respect of each Journey undertaken)

PERSONAL ACCIDENT

Benefits          Compensation

1.    (pound)25,000
2.    (pound)25,000
3.(a)             (pound)25,000
   (b)                  (pound)25,000
   (c) i.               (pound)25,000
        ii.             (pound) 25% of the Compensation shown in (c) (i) above
4.                (pound)25,000
5. (a)                  (pound)Nil     ) per week for a maximum of
    (b)                       (pound)Nil     ) Nil weeks in all

1.    Reimbursement up to 15% of the  Compensation  paid for any of Benefits 1-4
      or 30% of the total weekly  Compensation  paid whichever is the greater in
      respect of any one Insured Person subject to a maximum of (pound)10,000.

MEDICAL AND EMERGENCY TRAVEL EXPENSES           Sum Insured (pound)Unlimited
                                                            (pound) Nil  UK

PERSONAL BAGGAGE                                Sum Insured (pound)3,000

LOSS OF MONEY                                         Sum Insured (pound)1,000

CANCELLATION CURTAILMENT AND CHANGE OF ITINERARY
(only included if Medical and Emergency
Travel Expenses Covered)                              Sum Insured (pound)2,000

TRAVEL DELAY
(only included if Medical and Emergency
Travel Expenses Covered)                            Sum Insured 1 Unit

PASSPORT INDEMNITY
(only included if Medical and Emergency
Travel Expenses Covered)                            Indemnity Limit (pound)500

PERSONAL LIABILITY
(only included if Personal Accident and/or
Medical and Emergency Travel Expenses
Covered)                                        Indemnity Limit (pound)2,000,000
                                                any one event


<PAGE>


LEGAL EXPENSES
(only included if Medical and Emergency
Travel Expenses Covered)                        Indemnity Limit(pound)25,000





0304.3(a) Standard P.A. Benefits




<PAGE>


                      Medical and Emergency Travel Expenses


Insurers will  indemnify the Insured on behalf of the Insured  Person  concerned
(in original currency if so required and currency regulations  permit)in respect
of all Medical  Expenses and Emergency Travel Expenses  necessarily  incurred as
the direct result of an Insured Person  falling ill or sustaining  bodily injury
or dying during a Journey

The liability of Insurers in respect of illness or bodily injury or each Insured
Person shall be limited to the Sum Insured  specified  in the Schedule  (Travel)
for Medical and Emergency Travel Expenses

Medical  Expenses  shall mean the cost of  medical  surgical  or other  remedial
attention  treatment or appliances  given or prescribed by a qualified member of
the medical  profession  and all  hospital  nursing home and  ambulance  charges
Dental and optical expenses are not payable unless incurred in an emergency

Emergency  Travel Expenses shall mean the additional cost (less any saving by or
recovery  available  to the person  concerned)  of transport  accommodation  and
rescue incurred in respect of the Insured Person and

(a)   of any  relatives or friends who have  necessarily  to travel to or remain
      with or escort the Insured  Person and in the case of death the  necessary
      cost of funeral  expenses  and of  transporting  the body or ashes and the
      deceased's  personal property to the Insured Person's country of residence
      and

(b)   any one or more Insured  Persons who decide to return to their  country of
      residence as a result of the

            (i)   death
            (ii) illness or bodily injury necessitating return to the country of
residence

     of any other  Insured  Person  who is a member  of the party  with whom the
Insured Person is travelling
                                   Exceptions

Insureds shall not be liable

1.    in respect of Expenses consequent upon

      (a)   the Insured Person

            (i)  engaging  in  aviation  otherwise  than  as  a  passenger  (ii)
            committing or attempting to commit suicide

      (b)  pregnancy of the Insured  Person and rising  within two months of the
estimated date of birth

      (c)   bodily  injury or  illness  of any  person  aged 75 years or more at
            inception of the Period of Insurance

2.    in respect of Expenses

      (a)   for any Insured Person travelling against medical advice or for the 
      purpose of obtaining treatment

      (b) incurred more than two years after the need for treatment arises

3.    in respect of Expenses incurred in the United Kingdom or the country where
      the  Insured  Person is  normally  resident  other than  those  arising in
      connection with a Journey  involving travel from the United Kingdom or the
      country where the Insured Person is normally resident and then only

      (a)   for an amount not exceed (pound)10,000 per Insured Person and

      (b)   incurred within 3 months of the Insured Persons return to the United
            Kingdom or the country where the Insured Person is normally resident

4.    for the first(pound)50 of each claim in respect of any Insured  Person 
      under 12 months of age

5.    in respect of Expenses consequent upon

      (a)   war whether  declared or not between any of the following  countries
            namely France the United Kingdom the former constituent parts of the
            Union of Soviet Socialist Republics and the United States of America
            or the Peoples Republic of China

      (b)   war in Europe  whether  declared  or not  (other  than civil war but
            including  any  enforcement  action by or on  behalf  of the  United
            Nations) in which any of those countries or any Armed Forces thereof
            are engaged

      unless the Expenses  occur in the course of a Journey  involving  travel 
      outside the Insured Person's country of residence



                                      Emergency Assistance


      A 24 hour  emergency  aid  service  operated by  International  Assistance
      Services  Limited (IAS) is available so that an Insured Person may request
      help in the event of an emergency  overseas  relating to medical  problems
      for which the cost is covered by the Medical and Emergency Travel Expenses
      Section of this Certificate



      International Assistance Services Limited telephone numbers etc., are

            Telephone:  0181-763 3155
            Telex:            8951673 IAS-G
            Facsimile:  0181-763 3035

      Their address is: 32, High Street
                        Purley
                        Surrey CR8 2PP





<PAGE>


                                                                           Group


                                        Personal Baggage


Insurers will indemnify the Insured on behalf of the Insured Person concerned in
respect  of loss of or damage to any  personal  property  taken on a Journey  or
acquired  while away by the Insured Person or when sent as Luggage in Advance up
to but not  exceeding  the sum Insured  specified in the  Schedule  (Travel) for
Personal Baggage

The Sum Insured shall be maintained at its full amount and following any loss or
damage shall be automatically reinstated without charge to the Insured

In addition in the event of theft or transport or mis-direction due to any cause
outside the control of the Insured Person  occurring  during a Journey or whilst
sent as Luggage in Advance whereby the Insured Person is temporarily deprived of
the use of any article of clothing toilet requisite  suitcase or other essential
container and it becomes necessary to replace such property by a similar article
for use during the Journey  Insurers will  reimburse any  reasonable  expense so
incurred not exceeding  (pound)500 in respect of such Insured  Person Any amount
so paid shall be deducted from any  subsequent  claim for such  articles  should
they be recovered damages or be permanently lost

In the  event of the  total  loss of  destruction  of any  article  the basis of
settlement  shall be the cost of replacing  the article as new PROVIDED THAT the
article is  substantially  the same as but not better than the original  article
when new

                                   Exceptions

Insurers shall not be liable for

      1.    loss of or damage to coins bank and currency  notes  cheques  postal
            and money orders travellers'  cheques travel tickets passports green
            cards and petrol and other coupons  which have monetary  value bonds
            negotiable instruments or securities of any kind

      2.    more  than  25%  of  the  Sum  Insured  for   Personal   Baggage  or
            (pound)1,250  whichever  is the less for any one article pair or set
            unless such article pair or set is notified to and a higher limit is
            accepted by Insurers A pair or set of articles shall be deemed to be
            a single  article and in the event of a partial loss Insurers  shall
            not be liable  for more than a  reasonable  proportion  of the total
            value of the pair or set

      3.    chipping  or  breakage  of china or  glass  or other  articles  of a
            fragile  nature  unless  caused  by  fire or by an  accident  to the
            vehicle  vessel or  aircraft  in or on which such  article was being
            conveyed

      4.    damage to sports equipment while in use

      5.    loss or damage caused by

            (a)   wear and tear depreciation moth vermin atmospheric or climatic
                  conditions or any other gradually operating cause

            (b)   any process of cleaning dyeing repairing or restoring

            (c)   delay  confiscation  or detention by order of any  Government
                  or Public Authority

      6.    mechanical or electrical breakdown

      7.    loss or damage  directly  occasioned  by  pressure  waves  caused by
            aircraft and other aerial devices travelling at sonic and supersonic
            speeds

      8.    loss destruction or damage  occasioned by or happening through or in
            consequence  of  war  invasion  act  of  foreign  enemy  hostilities
            (whether  war be  declared  or not) civil war  rebellion  revolution
            insurrection or military or usurped power

      9.    loss destruction or damage to any property whatsoever or any loss or
            expense   whatsoever   resulting   or  arising   therefrom   or  any
            consequential  loss directly or indirectly  caused by or contributed
            to by or arising from

            (a)   ionising radiations or contamination by radioactivity from any
                  nuclear waste from the combustion of nuclear fuel

(a)               the radioactive toxic explosive or other hazardous  properties
                  of any explosive nuclear assembly or nuclear component thereof



<PAGE>


                                                                           Group


                     Cancellation Curtailment and Change of Itinerary


Insurers will indemnify the Insured on behalf of the Insured Person concerned up
to  the  Sum  Insured  specified  in  the  Schedule  (Travel)  for  Cancellation
Curtailment and Change of Itinerary expenses arising after the inception date of
this insurance as follows

1.    Cancellation

      If before  departure  the  Insured  Journey is  cancelled  as a direct and
      necessary  result of any cause  outside  the control of the Insured or the
      Insured Person Insurers will reimburse all deposits  advance  payments and
      other charges for transport and accommodation

      (a) which have been paid or will be payable and (b) which  become  forfeit
      under contract and (c) which cannot be recovered elsewhere

2.    Curtailment (including Replacement)

      If after  departure  the  Insured  Journey  is  curtailed  as a direct and
      necessary  result of any cause  outside  the control of the Insured or the
      Insured Person Insurers will reimburse

      (a)   for all deposits  advance  payments and other  charges for transport
            and  accommodation  (i) which have been paid or will be payable  and
            will not be used and
            (ii) which become  forfeit under  contract and (iii) which cannot be
            recovered elsewhere

      (b)   the additional cost of travel and accommodation necessarily incurred
            to return the Insured  Person to their country of residence less any
            saving available

      (c)   the additional cost of travel and accommodation necessarily incurred
            as a direct result of a replacement for an Insured Person being sent
            abroad to assume the duties of the  Insured  Person  less any amount
            recoverable elsewhere

3.    Change of Itinerary

      If after departure pre-booked  arrangements in connection with the Insured
      Journey are altered as a direct and necessary  result of any cause outside
      the control of the Insured or the Insured  person  Insurers will reimburse
      the additional cost of travel and  accommodation  necessarily  incurred to
      enable the Insured Person to continue the Insured Journey less than saving
      available


                                   Exceptions

Insurers shall not be liable

1.    if the Journey is cancelled curtailed or the itinerary is changed as a 
result of

      (a)   disinclination to travel

      (b)   pregnancy if cancellation  curtailment or change of itinerary occurs
            within two months of the expected date of birth

      (c)   the financial circumstances of the Insured or unemployment or change
            of employment of the Insured Person

      (d)   the default of any
            (i)  provider  of  transport  or  accommodation  (ii)  agent of such
            provider (iii) agent acting for the Insured or the Insured Person

      (e)   regulations made by any Government or Public Authority

      (f)   strike labour dispute  mechanical  breakdown or failure of the means
            of transport  (other than  disruption  of road and rail  services by
            avalanche  snow or  flood)  other  than  where the  departure  of an
            aircraft or ship on which the Insured  Person is booked to travel is
            delayed by at least 24 hours  unless the delay is due to a strike or
            industrial action which existed or of which advance warning had been
            given prior to the date on which the Journey was booked

2.    for any claim

      (a)   involving a person who is travelling or intending to t ravel against
            the advice of a Medical Practitioner or for the purpose of obtaining
            treatment

      (b) for an Insured Person aged less than one year at  commencement  of the
Journey

      (c)   for an  Insured  Person  aged 75 years or more at  inception  of the
            Period of Insurance

3.    for loss  destruction or damage to any property  whatsoever or any loss or
      expense  whatsoever  resulting or arising  therefrom or any  consequential
      loss directly or indirectly caused by or contributed to by or arising from

      (a)   ionising  radiations  or  contamination  by  radioactivity  from any
            nuclear  fuel or from  any  nuclear  waste  from the  combustion  of
            nuclear fuel

      (b)   the radioactive toxic explosive or other hazardous properties of any
            explosive nuclear assembly or nuclear component thereof

                               Passport Indemnity

Insurers will indemnify the Insured on behalf of the Insured Person concerned up
to the Sum Insured specified in the Schedule (Travel) for Passport  Indemnity in
respect of the necessary additional cost of travel and accommodation incurred to
enable the Insured  Person to obtain a replacement  passport if after  departure
the Insured person's passport is lost stolen or destroyed

                                    Exception

Insurers  shall not be liable if the loss or destruction of the passport has not
been reported to the consular  representative  of the relevant  issuing  country
within 24 hours of discovery

                                  Travel Delay

If the  departure  of the ship or  aircraft  or other  conveyance  on which  the
Insured Person is booked to travel on an Insured  Journey which includes  travel
outside of the United Kingdom is delayed because of a strike  industrial  action
adverse weather or mechanical  breakdown Insurers will compensate the Insured on
behalf of the Insured Person for the  inconvenience  caused  Insurers  liability
will not exceed the number of United of Benefit shown in the Schedule


One Unit of Benefit is

(a)   (pound)20 if the Insured Person's departure is delayed for at least 12 
hours

(b)   a further(pound)10 for each additional full 12 hours

up to a maximum of (pound)60 in respect of any one Insured Person

The maximum number of Units is 5

                                   Exceptions

Insurers shall not be liable if

1.    the Insured Person fails to check in according to the itinerary supplied
      unless such failure was itself due to strike or industrial action

2.    the delay is due to a strike or  industrial  action  which  existed  or of
      which  advance  notice  had been  given on or before the date on which the
      Journey was booked

3.    the delay is due to the withdrawal from service temporarily or permanently
      of any  ship or  aircraft  on the  orders  or  recommendation  of any Port
      Authority  or the Civil  Aviation  Authority  or any  similar  body in any
      country

4.    the  Insured or the  Insured  Person  decides to cancel the  Journey and a
      claim is paid under the  Cancellation  Curtailment and Change of Itinerary
      Insurance Section of this Certificate


<PAGE>


                                                                           Group


                               Personal Liability

Insurers will indemnify the Insured person up the Indemnity  Limit  specified in
the Schedule  (Travel) in respect of legal  liability  for damages  arising from
accidental

(a)   Injury to any person

(b)   loss or damage to material property

happening during a Journey

Insurers will also pay claimants costs and expenses for which the Insured Person
or  the  Insured  Person's  personal   representatives  are  legally  liable  in
connection  with the Event  giving  rise to the  claim  and all other  costs and
expenses incurred with their written consent

                                   Definitions

1.    Event shall mean one  occurrence  or all  occurrences  of a series  
      consequent on or attributable to one source or original cause

2. Injury shall mean bodily injury death disease or illness

3.    Insured  person  shall mean the  Insured  Person or the  Insured  Person's
      personal representatives

                               Special Conditions

(a)   Insurers must be given immediate  written notice with full  particulars of
      any  occurrence  which may give rise to a claim Every  letter writ summons
      and process  must be  forwarded  to Insurers as soon as possible  Insurers
      must be told  immediately  the Insured or the Insured  Person are aware of
      any prosecution inquest or inquiry in connection with any occurrence which
      may give rise to a claim

(b)   No admission offer promise payment or indemnity may be made by the Insured
      or  the  Insured  Person  or on  their  behalf  without  Insurers  written
      agreement

(c)   Insurers are entitled to take over the defence and settlement of any claim
      or to prosecute any claim in the name of the Insured  Person for their own
      benefit  Insurers have full  discretion in the conduct of any  proceedings
      and the settlement of any claim

(d)   Insurers  may at any time pay the  Insured  Person  the amount for which a
      claim can be settled up to a limit of  (pound)2,000,000  (less any damages
      already paid) Insurers will then be under no further  liability other than
      for costs and expenses incurred prior to their making such a payment

                                   Exceptions

Insurers shall not be liable

1.    where legal liability arises out of

      (a)   the Insured Person's profession trade or business

      (b)   the  ownership  possession  or use by or on  behalf  of the  Insured
            Person of any caravan  mechanically  propelled  vehicle  aircraft or
            other aerial  device  hovercraft  or  water-borne  craft (other than
            hand-propelled or sailing craft in territorial waters)

2.    for loss of or  damage  to any  property  which  at the time of the  Event
      giving rise to such legal  liability is owned by or held in trust by or in
      the custody or control of the Insured Person This Exception does not apply
      to loss or damage to premises and their  fixtures  and fittings  leased or
      rented to the  Insured  Person  where  such legal  liability  has not been
      accepted by agreement

3.    for liability  occasioned by or happening through or in consequence of war
      invasion act of foreign enemy hostilities (whether war be declared or not)
      civil war rebellion revolution insurrection or military or usurped power

4.    for liability of  whatsoever  nature  directly or indirectly  caused by or
      contributed to by or arising from

      (a)   ionising  radiations  or  contamination  by  radioactivity  from any
            nuclear  fuel or from  any  nuclear  waste  from the  combustion  of
            nuclear fuel

      (b)   the radioactive toxic explosive or other hazardous properties of any
            explosive nuclear assembly or nuclear component thereof



<PAGE>


                                                                           Group


                                 Legal Expenses


Insurers will indemnify the Insured on behalf of the Insured Person concerned in
respect  of Legal  Expenses  incurred  by or on behalf of an  Insured  Person in
pursuit of a claim for damages and/or compensation against a third party who has
caused  bodily  injury  to or death or  illness  of that  Insured  Person  by an
incident occurring during an Insured Journey which involves travel outside Great
Britain, Northern Ireland the Isle of Man or the Channel Islands

The  liability of Insurers in respect of Legal  Expenses  incurred in connection
with any one  Insured  Person Any One Claim  shall be  limited to the  Indemnity
Limit specified in the Schedule

                                   Definitions

1.    Appointed Representative
      A solicitor firm of solicitors or any appropriately  qualified person firm
      or company  appointed to act for the Insured Person in accordance with the
      terms of this Insurance

2.    Any One Claim
      All claims or legal  proceedings  including any appeal  against  judgement
      consequent  upon the same original cause event or  circumstances  shall be
      regarded as one claim

3.    Legal Expenses

      (a)   Any fees expenses and other disbursements reasonably incurred by the
            Appointed  Representative  in  connection  with  any  claim or legal
            proceedings including costs and expenses of expert witnesses as well
            as those  incurred by Insurers in connection  with any such claim or
            legal proceedings

      (b)   Any costs payable by the Insured Person  following an award of costs
            by any court or tribunal and any costs  payable  following an out of
            court  settlement  made  in  connection  with  any  claim  or  legal
            proceedings

      (c)   Any fees expenses and other disbursements reasonably incurred by the
            Appointed Representative in appealing or resisting an appeal against
            the judgement of a court tribunal or arbitrator


                      Special Claims Settlement Conditions


1.    Insurers  consent  to pay Legal  Expenses  must  firstly  be  obtained  in
      writing.  This  consent  will be given if the  Insured  Person can satisfy
      Insurers that

      (a)   there are reasonable grounds for pursuing or defending the legal 
            proceedings and

      (b) it is  reasonable  for Legal  Expenses to be provided in a  particular
case

      The  decision to grant  consent  will take into account the opinion of the
      Insured Person's Appointed  Representative as well as that of Insurers own
      advisers  Insurers may require at the Insured  Person's expense an opinion
      of counsel on the merits of the claim or legal proceedings If the claim is
      subsequently  admitted the Insured  Person's  costs in  obtaining  such an
      opinion will be covered by this insurance

2.    In the event of any dispute, other than in respect of the admissibility of
      a claim upon  which  Insurers  decision  is final  such  dispute  shall be
      referred to single arbitrator who shall be either a solicitor or barrister
      agreed upon by the parties or failing  agreement  one who is  nominated by
      the President for the time being of the appropriate Law Society

                                   Exceptions

Insurers shall not be liable for

1.    any Legal Expenses incurred in the defence against any civil claim or 
      legal proceedings made or brought against the Insured Person

2.    any fines or other penalties imposed by a court of criminal jurisdiction

3.    any  Legal  Expenses   incurred  in  connection   with  any  criminal  act
      deliberately or intentionally committed by the Insured Person

4.    any Legal Expenses incurred in the pursuance of any claim against a Travel
      Agent  Tour  Operator  Insurer  or their  agents  which are  eligible  for
      consideration under an Arbitration Scheme or Complaints Procedure

5.    any claim or circumstance  notified more than two years after the incident
      from which the cause of action arose
<PAGE>

COMPUTATION OF EARNINGS PER SHARE                                Exhibit 11.1
    (in thousands, except per share data)


                                                1998       1997      1996
                                                ----       ----      ----

Average shares issued
    (proforma for 1997 and 1996)              104,807     95,000    88,000
Effect of dilutive options and restricted
     stock                                        390         24         -

Treasury stock                                    (11)         -         -
                                              -------    -------   -------
    Total                                     105,186     95,024    88,000
                                              =======    =======   =======


Income before income taxes as reported      $ 325,481  $ 205,613 $ 167,098
Income taxes (proforma for 1997 and 1996)     129,867     82,245    66,839
                                              -------    -------   -------
Net income to common stockholders             195,614    123,368   100,259
                                              =======    =======   =======

Earnings per common share:
    Basic earnings per share
    (proforma for 1997 and 1996)                 1.87       1.30      1.14
                                              =======    =======   =======
    Diluted earnings per share
    (proforma for 1997 and 1996)                 1.86       1.30      1.14
                                              =======    =======   =======
<PAGE>
<TABLE>

                                                                    Exhibit 21.1
                           GALILEO INTERNATIONAL, INC.
                            Schedule of Subsidiaries

<S>                                       <C>                                 <C>    

                                                                              Place of Organization/
Name and Business Address of Subsidiary   Ownership                           Incorporation
---------------------------------------   ---------                           -------------

Apollo Galileo Mexico S.A. de C.V.        99% Apollo Galileo USA Partnership  Mexico
Sudermann #321                            1% Habinus Trading Corporation
Colonia Chapultepec Morales
11570 Mexico D.F. MEXICO

Apollo Galileo USA Partnership            99% Apollo Galileo USA Sub I, Inc.  Delaware,
9700 W. Higgins Road, Ste. 400            1% Apollo Galileo USA Sub II, Inc.  United States
Rosemont, Illinois 60018 USA

Apollo Galileo USA Sub I, Inc.            100% Galileo International, L.L.C.  Delaware,
9700 W. Higgins Road, Ste. 400                                                United States
Rosemont, Illinois 60018 USA

Apollo Galileo USA Sub II, Inc.           100% Galileo International, L.L.C.  Delaware,
9700 W. Higgins Road, Ste. 400                                                United States
Rosemont, Illinois 60018 USA

Covia Canada Partnership Corp.            100% Galileo International, L.L.C.  Canada
C/o Fasken Campbell Godfrey
Toronto Dominion Bank Tower, 
Box 20, Ste. 4200
Toronto-Dominion Center
Toronto, Ontario M5K 1N6 CANADA

Galileo Asia Limited                      100% Galileo International, L.L.C.  Delaware,
9700 W. Higgins Road, Ste. 400                                                United States
Rosemont, Illinois 60018 USA

Galileo Belgium S.A.                      99% The Galileo Company             Belgium
Boulevard du Regent Iaan 54, Fifth Floor  1% Galileo France SARL
1000 Brussels, BELGIUM

Galileo Brasil Limited                    100% Galileo International, L.L.C.  Delaware,
9700 W. Higgins Road, Ste. 400                                                United States
Rosemont, Illinois 60018 USA


<PAGE>


Galileo Canada Holding Inc.               100% Galileo International, Inc.    Canada
C/o Fasken Campbell Godfrey
Toronto Dominion Bank Tower, 
Box 20, Ste. 4200
Toronto-Dominion Center
Toronto, Ontario M5K 1N6 CANADA

Galileo Canada Two Inc.                   100% Galileo Canada Holding Inc.    Canada
C/o Fasken Campbell Godfrey
Toronto Dominion Bank Tower, 
Box 20, Ste. 4200
Toronto-Dominion Center
Toronto, Ontario M5K 1N6 CANADA

Galileo Canada Distribution Systems Inc.  100% Galileo Canada Holding Inc.    Canada
3330 Front Street W. 7th
Toronto, Ontario M5V 3B7 CANADA

Galileo Canada ULC                        100% Galileo International, Inc.    Nova Scotia,
1959 Upper Water Street                                                       Canada
P.O. Box 997
Halifax, Nova Scotia B3J 2X2 CANADA

Galileo Deutschland GmbH                  100% The Galileo Company            Germany
Dusseldorfer Strasse 4-8
60329 Frankfurt
GERMANY

Galileo do Brasil & Cia                   99% Galileo Latin America, L.L.C.   Brazil
Avenida Paulista, 475-8(degree)                 1% Galileo Brasil Limited
Andar
Edificia Kyoei, CEP 01311-908
Sao Paulo - SP
BRAZIL

Galileo Espana, S.A.                      100% The Galileo Company            Spain
Edificio La Piovera Azul
Calle Peonias 2
28042 Madrid
SPAIN

Galileo France SARL                       100% The Galileo Company            France
7-13 Boulevard de Courbevoie
92521 Neuilly-sur-Seine CEDEX
FRANCE


<PAGE>


Galileo International B.V.                100% Galileo International, Inc.    The Netherlands
World Trade Centre, Amsterdam Airport
Schiphol Boulevard 249, 1118 BH Luchthaven
Schiphol, THE NETHERLANDS

Galileo International, L.L.C.             100% Galileo International, Inc.    Delaware,
9700 W. Higgins Road, Ste. 400                                                United States
Rosemont, Illinois 60018 USA

Galileo International Limited             100% The Galileo Company            United Kingdom
Galileo Centre Europe
Windmill Hill
Swindon
Wiltshire SN5 6PH
UNITED KINGDOM

Galileo International Services, Inc.      100% Apollo Galileo USA Partnership Delaware,
9700 W. Higgins Road, Ste. 400
United States
Rosemont, Illinois 60018 USA

Galileo Latin America, L.L.C.             99% Galileo International, L.L.C.   Delaware,
9700 W. Higgins Road, Ste. 400            1% Galileo Brasil Limited           United States
Rosemont, Illinois 60018 USA

Galileo Nederland B.V.                    100% Galileo International, Inc.    The Netherlands
Netpunusstraat 35
2132 JA Hoofddorp / Beukenhorst
THE NETHERLANDS

Galileo Nordiska AB                       100% Galileo International, Inc.    Sweden
S-117 85 Stockholm
SWEDEN

Galileo Portugal Limited                  100% The Galileo Company            United Kingdom
Edif. Amadeu Souza Cardosa
Alameda Antonio Sergio 22 - 3(degree) A
2795 LINDA-A-VELHA
PORTUGAL

Galileo Switzerland AG                    100% Galileo International, Inc.    Switzerland
Schaffhauserstr. 144
Panalpina Building
CH-8058 Kloten
SWITZERLAND


<PAGE>


Galileo Technologies, Inc.                100% Galileo International, L.L.C.  Delaware,
9700 W. Higgins Road, Ste. 400                                                United States
Rosemont, Illinois 60018 USA

Galileo Venezuela, C.A.                   99% Galileo International, Inc.     Venezuela
Av. Francisco de Miranda                  1% Galileo International, L.L.C.
Torre Provincial, Torre A
Piso 7, Oficinia 71, Chacao
Caraca 1060
VENEZUELA

Magellen Technologies, Inc.               100% Galileo International, Inc.    Delaware,
9700 W. Higgins Road, Ste. 400                                                United States
Rosemont, Illinois 60018 USA

The Galileo Company                       99% Galileo International, L.L.C.   United Kingdom
Galileo Centre Europe                     1% Non-GI Entities
Windmill Hill
Swindon
Wiltshire SN5 6PH
UNITED KINGDOM

S.D. Shepherd Systems, Inc.               100% Galileo International, Inc.    Delaware,
1401 Manatee Ave., W., Ste. 1000                                              United States
Bradenton, FL 34205

</TABLE>
<PAGE>

                                                                    Exhibit 23.1

                               Consent of KPMG LLP

The Board of Directors
Galileo International, Inc.:

We consent to  incorporation  by reference in the  registration  statements (No.
333-71507 and No.  333-55767) on Form S-8 of Galileo  International  Inc. of our
report dated February 1, 1999,  relating to the  consolidated  balance sheets of
Galileo  International,  Inc. and subsidiaries as of December 31, 1998 and 1997,
and the related  consolidated  statements of income,  stockholders'  equity, and
cash flows for each of the years in the  three-year  period  ended  December 31,
1998,  which report  appears in the December 31, 1998 annual report on Form 10-K
of Galileo International, Inc.


                                    KPMG LLP


Chicago, Illinois
March 18, 1999