US Airways 2003 Annual Report Download - page 103

Table of Contents
(b) Government Compensation
In April 2003, President George W. Bush signed into law the 2003 Emergency Wartime Supplemental Appropriations Act (Emergency Wartime Act),
which included $2.4 billion for reimbursement to the airlines for certain aviation-related security expenses. The Emergency Wartime Act included the
following key provisions: (1) $2.3 billion of the appropriation was for grants to be made by the Transportation Security Administration (TSA) to U.S. air
carriers based on the proportional share each carrier paid or collected as of the date of enactment of the legislation for passenger security and air carrier
security fees; (2) the TSA would not impose passenger security fees during the period beginning June 1, 2003 and ending September 30, 2003; (3) $100
million of the appropriation would be available to compensate air carriers for the direct costs associated with the strengthening of flight deck doors and locks
on aircraft; (4) aviation war risk insurance provided by the federal government was extended until August 2004; and (5) certain airlines that receive the
aviation-related assistance must agree to limit the total cash compensation for certain executive officers during the 12-month period beginning April 1, 2003
to an amount equal to the annual salary paid to that officer during the air carrier's fiscal year 2002. Any violation of this agreement will require the carrier to
repay to the government the amount reimbursed for airline security fees. The Company does not anticipate any difficulties in complying with this limitation
on executive compensation and believes the likelihood of repaying the government for the amount of the security fee reimbursement is remote. The
Company's security fee reimbursement was $212 million, net of $4 million due to certain affiliates, and was recorded as a reduction to operating expenses
during the second quarter of 2003. In September 2003, the Company received approximately $6 million of compensation associated with flight deck door
expenditures which was recorded as an offset to capital costs.
On September 22, 2001, President Bush signed into law the Stabilization Act which provides, among other things, for $5 billion in payments to
compensate U.S. air carriers for losses incurred as a result of the September 11, 2001 terrorist attacks. US Airways received approximately $306 million from
the U.S. Government under the Stabilization Act. The rules governing the distribution were finalized during 2002 and an adjustment of $3 million was
recognized in 2002 to reduce the amount of compensation received. The payments partially compensated the Company for its direct and incremental losses
incurred beginning on September 11, 2001 and ending on December 31, 2001.
(c) Gain on Sale of Hotwire, Inc.
During the fourth quarter of 2003, US Airways recorded a $30 million gain on the sale of its investment in Hotwire, Inc. The gain is reflected in Other,
net on the Company's Consolidated Statement of Operations.
(d) Merger Termination Fees
In connection with the merger termination agreement, in July 2001, UAL Corporation paid $50 million to US Airways. Separately, US Airways paid a
merger termination fee of approximately $2 million to Robert L. Johnson, a member of the Board of Directors of the Company and US Airways, representing
reimbursement for his expenses in connection with his activities to establish a new airline which would have addressed certain potential competitive issues
surrounding the proposed merger transaction, and supported regulatory approval of the new airline. This amount is included in Other, net on the Company's
Consolidated Statements of Operations.
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