US Airways 2005 Annual Report Download - page 34

Table of Contents
2006 2007 2008 2009 2010
US Airways
Firm orders remaining — — — 5 14
Lessor put options — — — — —
Lease terminations:
Scheduled expirations 11 22 42 25 16
Lessor call options 18 18 18 9 —
AWA Flight Equipment
In August 2004, AWA amended its aircraft purchase contract with AVSA S.A.R.L., an affiliate of Airbus Industrie, 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.
On September 27, 2005, in connection with the merger, AWA amended its A320 family aircraft purchase contract with AVSA S.A.R.L., to reschedule 11
aircraft deliveries from 2006 and 2007 to 2009. All other terms remained unchanged.
In 2005, AWA returned two 737-200, two 737-300 and four A320 aircraft. AWA renewed the leases on four 737-300s for four years, one A320 for three
years and one 757 for one year. AWA took delivery of seven A320s, five of which were through the Airbus agreement. Three of these seven aircraft have new
lease terms of five years; the other four have leases of twelve years. AWA also took deliveries of four A319 aircraft per the same Airbus agreement of which
one has a lease term of five years and the other three have twelve-year leases. In 2006, AWA is expected to take deliveries of two more A319 aircraft and
return eight 737-300s, two A320s and one 757. As of December 31, 2005, 48 aircraft have lease expirations prior to the end of 2008.
AWA is a participant in the Civil Reserve Air Fleet, a voluntary program administered by the U.S. Air Force Air Mobility Command. The General
Services Administration of the U.S. Government requires that airlines participate in Civil Reserve Air Fleet, if activated, in order to receive U.S. Government
business. AWA's present commitment to the Civil Reserve Air Fleet is to provide up to eight aircraft. Upon activation, AWA may also be obligated to provide
up to 15% of the total fleet, up to a maximum of 19 aircraft, in support of military missions. AWA is reimbursed at compensatory rates when aircraft are
activated under Civil Reserve Air Fleet. AWA is reimbursed during peacetime proportionally to its commitment.
US Airways Flight Equipment
Prior to the merger, US Airways Group had 19 A320-family aircraft on firm order with Airbus scheduled for delivery in the years 2008 through 2010.
US Airways Group also had ten A330-200 aircraft on firm order with Airbus scheduled for delivery in the years 2008 and 2009. In connection with the
merger, on May 18, 2005, Airbus, US Airways Group, US Airways and AWA executed a Memorandum of Understanding that, in addition to providing for a
$250 million line of credit from Airbus upon the satisfaction of various conditions precedent (including the completion of the merger and the emergence of
US Airways from bankruptcy), provides for the rescheduling of US Airways' A320-family and A330-200 delivery commitments, and an order for 20 A350
aircraft, for which Airbus has agreed to provide backstop financing for a substantial number of aircraft, subject to certain terms and conditions. Under the
Airbus Memorandum of Understanding, US Airways' A320-family aircraft will be rescheduled for delivery in 2009 and 2010, with US Airways' A330-200
aircraft orders rescheduled for delivery in 2009 and 2010. The 28