US Airways 2003 Annual Report Download - page 29

Table of Contents
Pittsburgh Leases
Pittsburgh International Airport currently serves as a hub for US Airways. On July 25, 2003, US Airways, Allegheny County and ACAA reached an
agreement resolving and releasing all bankruptcy claims filed by Allegheny County and ACAA against US Airways with regard to Pittsburgh International
Airport. The agreement resolves all bankruptcy claims, including claims relating to the rejections of the airline operating agreements and other related
terminal lease agreements effective January 5, 2004. Under the agreement, in exchange for the release of all claims, Allegheny County and ACAA entered
into a stipulation under which Allegheny County and ACAA will be granted an allowed general unsecured claim in the amount of $211 million to be shared
with claims of other unsecured creditors receiving distributions of equity in accordance with the Plan of Reorganization (see "Claims Resolution" above).
On January 5, 2004, US Airways entered into a long-term lease agreement for 10 gates and related terminal and support facilities at Pittsburgh
International Airport, to replace the lease that was rejected as part of the Company's Chapter 11 reorganization. Under the agreement, US Airways will lease
ten gates and associated operations and ticketing space on a signatory basis through 2018. The balance of 40 gates and other facilities currently used by US
Airways and US Airways Express carriers at Pittsburgh will be leased on a month-to-month, non-signatory basis.
Additionally, US Airways has entered into a three-year lease agreement, effective January 5, 2004, for its current on-airport support facilities at
Pittsburgh International Airport, including maintenance hangars, cargo, mail sorting and foodservice facilities. This includes an option for either party to
terminate such agreement with respect to all or part of the facilities after the first year.
US Airways will continue to negotiate with ACAA, Allegheny County and the Commonwealth of Pennsylvania in the hope that a broader agreement
can be reached in order to maintain its hub operations at Pittsburgh. State and local officials are exploring whether new revenue sources can be devoted to
relieve airlines operating at Pittsburgh of some of the cost of servicing the $640 million debt load the airport currently carries. In the meantime, US Airways
has agreed to operate a schedule close to its existing service at Pittsburgh through September 2004 in order to allow negotiations to continue.
Results of Operations
As discussed above, the Company emerged from Chapter 11 and adopted fresh-start reporting on March 31, 2003. References to "Predecessor
Company" refer to the Company prior to March 31, 2003. References to "Successor Company" refer to the Company on and after March 31, 2003, after
application of fresh-start reporting. As a result of the application of fresh-start reporting, the Successor Company's financial statements are not comparable
with the Predecessor Company's financial statements. However, for purposes of discussion of the results of operations, full year 2003 has been compared to
2002 as included, in part, in the Company's Consolidated Statements of Operations (which are contained in Part II, Item 8 of this report) and in "Selected
Operating and Financial Statistics" below. Except where noted, operating statistics referred to below are for scheduled service only.
2003 Compared With 2002
Operating Revenues–Operating revenues decreased $153 million, or 2.2%. Passenger transportation revenues decreased $149 million or 2.4%. Revenue
passenger miles (RPMs) declined 4.4% which decreased revenues by $277 million, partially offset by a 2.1% improvement in yield which increased revenues
by $127 million. Passenger transportation
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