US Airways 2005 Annual Report Download - page 145

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
12. Commitments and Contingencies
(a) Commitments to purchase flight equipment and maintenance services
Airbus Purchase Commitments
On September 27, 2005, US Airways Group, US Airways and AWA entered into an Airbus A350 Purchase Agreement with Airbus. This agreement
provides for the delivery of 20 A350 aircraft during the period 2011 through 2014. The agreement contains terms and conditions with respect to aircraft price,
escalation, payment terms and pre-delivery payments, inspection and certification, technical acceptance, excusable and inexcusable delays, warranties and
service life policy, patent and copyright indemnity, technical data and training aids, training, supplier product support, indemnities and insurance, assignments
and transfers, and termination events. Airbus also agreed to provide backstop financing with respect to a substantial number of these A350 aircraft.
On September 27, 2005, US Airways Group entered into Amendment 16 to the A319/ A320/ A321 Purchase Agreement dated as of October 31, 1997
among US Airways Group and AVSA, S.A.R.L. The amendment provides for the rescheduling of 19 firm order A320-family aircraft for delivery during the
period 2009 and 2010. The amendment also modifies other provisions of the Purchase Agreement relating to the deletion of certain aircraft cancellation rights
and the rescheduling of aircraft.
On September 27, 2005, US Airways Group entered into Amendment 10 to the A330/340 Purchase Agreement dated as of November 24, 1998 among
US Airways Group and AVSA, S.A.R.L. The amendment provides for the rescheduling of ten firm order A330-200 aircraft for delivery during the period
2009 and 2010 and allows for cancellation in the event that US Airways takes certain deliveries under the A350 Purchase Agreement described above. Other
provisions of the Purchase Agreement which have been modified by the amendment relate to the application of existing pre-delivery payments, adjustments to
various cancellation rights and the cancellation of the right for additional A330 aircraft.
On September 27, 2005, AWA entered into Amendment No. 9 and Amendment No. 10 to the Airbus A320/ A319 Purchase Agreement dated as of
September 12, 1997 between AWA and AVSA, S.A.R.L. Amendment No. 9 provides for the rescheduling of 11 firm order A320 family aircraft for delivery
during 2009. Amendment No. 10 sets forth provisions for restructuring fees and adjustments to escalation provisions and added purchase rights for aircraft.
AWA has an agreement with International Aero Engines ("IAE") which provides for the purchase by AWA of five new V2500-A5 spare engines
scheduled for delivery through 2007 for use on certain of the Airbus A320 fleet. At December 31, 2005, the five engines have an estimated gross cost of
$34 million.
Embraer Purchase Commitments
On February 16, 2006, the Bankruptcy Court approved a settlement and assumption term sheet between the Company and Embraer, executed by the
Company on February 9, 2006, which amends the purchase agreement dated as of May 9, 2003, as amended, between the Company and Embraer and
contemplates an amended and restated financing letter with Embraer. The Bankruptcy Court also authorized the assumption of the purchase agreement, as
amended by the term sheet, and a related maintenance agreement, and disallowed certain proofs of claim filed by Embraer in the bankruptcy proceedings
related to these agreements. The purchase agreement, as amended by the term sheet, provides that Embraer will retain approximately $18 million in non-
refundable progress and deposit payments ("PDPs") previously paid by the Company. The Company has agreed to place an initial firm order for 25 Embraer
190 aircraft and an additional firm order for 32 Embraer 190 aircraft. The outstanding PDPs will be applied to these orders in accordance with the terms of the
amended purchase agreement. In 139