US Airways 2005 Annual Report Download - page 19

Table of Contents
Dividend Miles
US Airways' Dividend Miles frequent flyer program allows participants to earn mileage credits for each paid flight segment on US Airways, US Airways
Shuttle, US Airways Express, Star Alliance carriers, and certain other airlines that participate in the program. Participants flying on first class or Envoy class
tickets receive additional mileage credits. Participants can also receive mileage credits through special promotions periodically offered by US Airways and
may also earn mileage credits by utilizing certain credit cards and purchasing services from various non-airline partners. Mileage credits can be redeemed for
various free, discounted or upgraded travel awards on US Airways, Star Alliance carriers or other participating airlines.
US Airways and the other participating airline partners limit the number of seats allocated per flight for award recipients by using various inventory
management techniques. Award travel for all but the highest-level Dividend Miles participants is generally not permitted on blackout dates, which correspond
to certain holiday periods or peak travel dates. US Airways reserves the right to terminate Dividend Miles or portions of the program at any time. Program
rules, partners, special offers, blackout dates, awards and requisite mileage levels for awards are subject to change.
Combined Post-Merger Dividend Miles Program
Following the merger, the two frequent flyer programs were modified to allow customers of each airline to earn and use miles on the other airline. In
addition, elite members in either program are offered unlimited complimentary upgrades to first class, when available, on either airline. We expect to
complete the combination of the two programs under the "Dividend Miles" name in spring 2006, and plan to merge customer accounts belonging to the same
individual into one Dividend Miles account. We plan to implement an automatic Elite/ Preferred upgrade program for travel to North America, Latin America
and the Caribbean; provide one web site for members to book award travel and service accounts; permit former FlightFund members, as new Dividend Miles
members, the ability to earn and redeem miles on Star Alliance flights, and for Star Alliance partners to earn and redeem miles on AWA-operated flights; and
provide reciprocal Star Alliance Silver and Star Alliance Gold recognition on AWA-operated flights.
Travel Packages
US Airways Vacations ("USV"), a division of the Company that prior to the merger was called America West Vacations, sells individual and group travel
packages to destinations throughout the U.S., Latin America, the Caribbean and Europe. Packages include air transportation on US Airways, US Airways
Express, AWA, America West Express and Hawaiian Airlines, hotel accommodations, car rentals and other travel products, and are marketed directly to
consumers and through retail travel agencies in several countries.
USV is one of the largest tour packagers to Las Vegas in the United States, contracting for volume blocks of rooms with 35 Las Vegas hotels and resorts
in 2005. USV has also expanded its offerings by selling vacation packages to four Hawaiian Islands — Oahu, Maui, Kauai, and the Big Island — in
conjunction with the addition of nonstop service to these destinations from Phoenix and Las Vegas. Although USV has sold Hawaii vacations since fall 2002,
until December 2005, air transportation had been provided exclusively through partner Hawaiian Airlines.
Key recent milestones for USV include the December 2005 launch of a new, more consumer-friendly online booking engine that utilizes AWA's Low Fare
Finder technology, the January 2006 rebranding of America West Vacations as US Airways Vacations, and the concurrent addition of Florida as an internally
marketed and hosted destination. At the same time, USV also began marketing vacations to the Caribbean, Bermuda and Europe, all of which will be fulfilled
by The Mark Travel Corporation until June 2006, when these destinations will be managed in-house by USV.
USV is focused on high-volume leisure travel products that have traditionally provided high profit margins. USV negotiated several strategic partnerships
with hotels, Internet travel sites and media 13