US Airways 2005 Annual Report Download - page 197

Table of Contents
America West Airlines, Inc.
Notes to Consolidated Financial Statements — (Continued)
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.
Engine Purchase Commitments
In August 2004, AWA amended its aircraft purchase contract with AVSA S.A.R.L., an affiliate of Airbus, to acquire 22 Airbus A320 family aircraft
(thirteen A320s and nine A319s), all powered by V2500 engines from International Aero Engines. Of the 22 aircraft, 18 will be purchased directly from the
manufacturer and four have been leased under noncancelable leases from various lessors on aircraft delivered in 2005. In the context of this incremental order,
AWA also secured extensive flexibility from Airbus with respect to its existing A318 order, allowing AWA to better react to market conditions by enabling it
to amend its 15 A318 delivery positions to A319s and A320s, if it so desires, or to take no additional aircraft under certain conditions.
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.
On September 27, 2005, in connection with the merger, AWA amended its A320 family aircraft purchase contract with AVSA, to reschedule 11 aircraft
deliveries from 2006 and 2007 to 2009. As a result, AWA has the contractual right to reschedule the IAE spare engine deliveries referred to above.
The following table reflects estimated net cash payments under the restructured aircraft purchase agreement with AVSA and the IAE engine contract.
Actual payments may vary due to inflation factor adjustments and changes in the delivery schedule of the equipment (in millions).
2006 $ 86
2007 20
2008 48
2009 413
$ 567
Engine Maintenance Commitments
In connection with the merger, US Airways and AWA restructured their rate per engine hour agreements with General Electric Engine Services for
overhaul maintenance services. Under the restructured agreements, the minimum monthly payment on account of accrued engine flight hours for both the
US Airways and AWA agreements together will equal $3 million as long as both agreements remain in effect or through October 2009.
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