US Airways 2005 Annual Report Download - page 40

Table of Contents
separately in a third action. The complaints were filed on behalf of a class of airline passengers who originated or terminated their trips at the defendant
carriers' respective hubs. These passengers allege that they paid excessive fares due to the respective airlines' enforcement of ticketing rules that prohibit the
use of a connecting segment coupon that is part of a through-fare ticket where the passenger does not fly or intend to fly the entire ticketed itinerary. Plaintiffs
allege monopolization and restraint of trade in violation of federal antitrust laws. They seek recovery of treble damages from all named defendants in the
amount of $390 million and an injunction prohibiting future enforcement of the rules at issue. On May 16, 2002, the court denied the defendant airlines'
Motion for Summary Judgment and granted the plaintiffs' Motion for Class Certification in each of the cases. On May 31, 2002, US Airways Group and
US Airways filed a petition with the United States Court of Appeals for the Sixth Circuit seeking a discretionary review of the certification order. On
November 21, 2002, the petition for permission to appeal the class certification decision was denied. On December 4, 2002, Delta Air Lines and Northwest
Airlines filed a rehearing petition seeking en banc review of the initial Sixth Circuit denial. On February 24, 2003, Northwest Airlines' and Delta Air Lines'
petition for rehearing en banc was denied. Notwithstanding the district court's denial of summary judgment and the petition, US Airways Group and
US Airways believe the claims are without merit and intend to pursue a vigorous defense. The action was stayed as to US Airways during the 2002
Bankruptcy and again during the 2004 Bankruptcy. On April 29, 2005, Northwest Airlines and Delta Air Lines filed a renewed motion for summary judgment
on all counts. That motion was denied. Delta Air Lines and Northwest Airlines filed two additional motions: one seeking decertification of the class and the
other seeking dismissal of all class members who received ticket refunds. While those motions were pending, Delta Air Lines and Northwest Airlines filed for
bankruptcy. The federal district court has now deactivated the case because of the bankruptcy filings. However, in January 2006, plaintiffs filed a motion for
relief from the stay imposed by the Northwest Airlines bankruptcy filing to pursue litigation against that defendant only. On December 1, 2005, plaintiffs
withdrew the claims filed against US Airways in the 2002 and 2004 Bankruptcies, thus effectively cutting off their right to obtain any relief against
US Airways for damages that might have accrued prior to September 27, 2005.
On September 29, 2000, US Airways intervened in a proceeding that was originally brought on January 26, 1998 by the Pennsylvania Department of
Environment Protection against Allegheny County, Pennsylvania, and the Allegheny County Aviation Administration alleging that a variety of airfield and
aircraft de-icing activities at Pittsburgh International Airport violated the requirements of (a) a 1994 Consent Order and Adjudication issued to Allegheny
County and air carrier tenants at the Pittsburgh International Airport, (b) the Pittsburgh International Airport's National Pollutant Discharge Elimination
System Permit, and (c) the Pennsylvania Clean Streams Law. The action was brought before the Pennsylvania Environmental Hearing Board. During March
2001, the Environmental Hearing Board approved Allegheny County's Motion to Withdraw the Appeal without Prejudice, thereby terminating the appeal.
However, during the course of settlement discussions leading to the termination of the appeal, the Pennsylvania Department of Environment Protection
advised Allegheny County and US Airways that the Department of Environment Protection will require additional measures to be taken to control de-icing
materials at the Pittsburgh International Airport, and will assess a civil penalty against Allegheny County and US Airways for the alleged violations described
above. The Allegheny County Aviation Administration, US Airways and the Pennsylvania Department of Environment Protection have continued to work
together with the goal of fashioning an ultimate resolution to the de-icing issues. US Airways Group does not believe that the settlement of this matter will
have a material adverse effect on its financial condition, results of operations or liquidity.
On October 7, 2005, 240 pilots employed by the MidAtlantic division of US Airways filed a complaint in the federal district court for the Eastern District
of New York against ALPA, US Airways, US Airways Group, Republic Airways Holdings, Inc., Wexford Capital LLC and AWA, alleging that defendants
conspired to deceive plaintiffs into believing that MidAtlantic was a separate entity from US Airways in order to deprive them of the benefits they are due as
US Airways pilots pursuant to the US Airways collective bargaining agreement. Plaintiffs' claims against the airline defendants include breach of collective
bargaining agreement, violation of the Railway Labor Act and racketeering under the
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