US Airways 2005 Annual Report Download - page 11

Table of Contents
their future transfer to Republic. Republic also assumed the leases of 15 additional regional jets. Republic entered into a regional jet service agreement that
continues the operation of the aircraft as a US Airways Express carrier under a ten-year capacity purchase agreement. In addition to the aircraft, Republic
purchased commuter slots at Reagan National and LaGuardia and leases the slots back to US Airways.
America West Express
AWA has a regional airline code share agreement with Mesa. Mesa, operating regional jets and large turboprop aircraft as America West Express,
provides regional feeder service to and from Phoenix and Las Vegas to destinations in the western United States, Canada and northern Mexico. AWA collects
the revenue and income generated from the services provided by Mesa and, in return, (1) reimburses Mesa for actual non-controllable costs and costs and
expenses incurred at stations maintained and operated by Mesa, (2) pays Mesa for actual controllable non-maintenance costs, subject to a cap, and controllable
maintenance costs at fixed rates, and (3) shares with Mesa a percentage of the revenue allocated to the flight segments flown by Mesa. Through this
arrangement with Mesa, AWA offered America West Express service to an additional 30 destinations as of December 31, 2005. As of December 31, 2005, the
America West Express fleet included 62 aircraft comprised of 38 86-seat CRJ 900s, 18 50-seat CRJ 200s and six 37-seat Dash 8 turboprop aircraft.
Marketing and Alliance Agreements with Other Airlines
AWA and US Airways maintain alliance agreements with each other and with several leading domestic and international carriers to give customers a
greater choice of destinations. Airline alliance agreements provide an array of benefits that vary by partner. By code sharing, each airline is able to offer
additional destinations to its customers under its flight designator code without materially increasing operating expenses and capital expenditures. Frequent
flyer arrangements provide members with extended networks for earning and redeeming miles on partner carriers. The Company's club members also have
access to certain partner carriers' airport lounges.
AWA
AWA has a variety of code share agreements with different carriers. Among international carriers, AWA has code share relations with ALIA/ Royal
Jordanian, British Airways, EVA Airways and Virgin Atlantic Airways. The code shares primarily funnel international traffic onto AWA's domestic flights.
The agreement with British Airways terminated last year, and a complete end of AWA's relationship with British Airways is scheduled for 2006. AWA also
has a code share agreement to feed Northwest Airlines flights to Asia with Phoenix and Las Vegas passengers. This relationship also is scheduled to end in
2006.
Domestically, AWA code shares with Hawaiian Airlines on intra-Hawaii flights and with Big Sky Airlines to smaller markets in Idaho, Montana, and
Washington.
AWA and US Airways entered into a broad systemwide code share agreement that started soon after the merger. This agreement permits passengers to
travel throughout the combined route networks of both carriers. The code share is fully implemented except in a few international markets.
US Airways
US Airways has entered into a number of bilateral and multilateral alliances with other airlines. In May 2004, US Airways joined the Star Alliance, the
world's largest airline alliance, with 16 member airlines serving approximately 790 destinations in 138 countries. Membership in the Star Alliance further
enhances the value of US Airways' domestic and international route network by allowing customers wide access to the global marketplace. Expanded benefits
for customers include network expansion through code share service, Dividend Miles benefits, airport lounge access, convenient single-ticket pricing, one-
stop check-in and coordinated baggage handling. US Airways also has bilateral marketing/code sharing agreements with Lufthansa, Spanair, bmi and other
Star Alliance carriers, as well as several smaller regional carriers in the Caribbean that operate collectively as the "GoCaribbean" network.
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