US Airways 2005 Annual Report Download - page 10

Table of Contents
United States, Canada and the Bahamas, including 39 airports also served by US Airways. During 2005, US Airways Express air carriers enplaned
approximately 18.7 million passengers, approximately 53% of whom connected to US Airways Group's flights. Of these 18.7 million passengers,
approximately 7.6 million were enplaned by US Airways Group's wholly owned regional airlines, approximately 1.9 million were enplaned by US Airways'
MidAtlantic division, approximately 8.0 million were enplaned by third-party carriers operating under capacity purchase agreements and approximately
1.2 million were enplaned by carriers operating under prorate agreements, as described below. In addition, US Airways Express operators offer
complementary service in existing US Airways markets by operating flights during off-peak periods between US Airways flights.
The US Airways Express code share arrangements are either in the form of capacity purchase or prorate agreements. The capacity purchase agreements
provide that all revenues, including passenger, mail and freight revenues, go to US Airways. In return, US Airways agrees to pay predetermined fees to these
airlines for operating an agreed upon number of aircraft, without regard to the number of passengers on board. In addition, these agreements provide that
certain variable costs, such as fuel and airport landing fees, will be reimbursed 100% by US Airways. US Airways controls marketing, scheduling, ticketing,
pricing and seat inventories. Under the prorate agreements, the prorate carriers pay certain service fees to US Airways and receive a prorated share of ticket
revenue paid for connecting customers. US Airways is responsible for pricing and marketing of connecting services to and from the prorate carrier. The
prorate carrier is responsible for pricing and marketing the local, point to point markets, and is responsible for all costs incurred operating the aircraft. All
US Airways Express carriers use US Airways' reservation systems, and have logos, service marks, aircraft paint schemes and uniforms similar to those of
US Airways.
The following table sets forth US Airways Express code share agreements and the number and type of aircraft operated under those agreements at
December 31, 2005.
Number/Type
Carrier Agreement Type of Aircraft
PSA(1) Capacity Purchase 49 regional jets
Piedmont(1) Capacity Purchase 59 turboprops
Chautauqua Airlines, Inc. ("Chautauqua") Capacity Purchase 30 regional jets
Mesa Capacity Purchase 24 regional jets
Air Wisconsin Airlines Corporation ("Air Wisconsin") Capacity Purchase 60 regional jets
Republic Airways ("Republic") Capacity Purchase 10 regional jets
Colgan Airlines, Inc. Prorate 28 turboprops
Air Midwest, Inc. Prorate 14 turboprops
Trans States Airlines, Inc. ("Trans States") Prorate 8 regional jets(2)
(1) PSA and Piedmont are wholly-owned subsidiaries of US Airways Group.
(2) Prior to September 2005, Trans States operated up to eight turboprops under a prorate agreement and 13 regional jets under a capacity purchase
agreement. In September 2005, Trans States began operating under a prorate agreement and operated eight regional jets as US Airways Express as of
December 31, 2005.
In April 2004, MidAtlantic, US Airways' regional jet division, began operating as part of the US Airways Express network. As of December 31, 2005,
MidAtlantic operated 18 Embraer ERJ-170 regional jets with 72 seats. MidAtlantic served approximately 1.9 million passengers in 2005. On June 23, 2005,
US Airways exercised its option under its agreement with Republic and Wexford Capital LLC to sell certain assets used by MidAtlantic, including the
regional jets, a flight simulator and certain commuter slots at Reagan National and LaGuardia. Under the terms of the agreement, Republic purchased ten
regional jets owned by US Airways and leased the ten purchased aircraft back to US Airways subject to
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