US Airways 2005 Annual Report Download - page 7

Table of Contents
PART I
Item 1. Business
Overview
US Airways Group, a Delaware corporation, is a holding company formed in 1982 and whose origins trace back to the formation of All American
Aviation in 1939. US Airways Group's principal executive offices are located at 111 West Rio Salado Parkway, Tempe, Arizona 85281. US Airways Group's
telephone number is [phone], and its internet address is www.usairways.com.
On September 12, 2004, US Airways Group and its domestic subsidiaries US Airways, Piedmont Airlines, Inc. ("Piedmont"), PSA Airlines, Inc. ("PSA")
and Material Services Company, Inc., which at the time accounted for substantially all of the operations of US Airways Group, filed voluntary petitions for
relief under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Eastern District of
Virginia, Alexandria Division (the "Bankruptcy Court"). On May 19, 2005, US Airways Group signed a merger agreement with America West Holdings,
pursuant to which America West Holdings agreed to merge with a wholly owned subsidiary of US Airways Group. Following the merger, America West
Holdings continued as a wholly owned subsidiary of US Airways Group.
The plan of reorganization of US Airways Group and its domestic subsidiaries was confirmed by the Bankruptcy Court on September 16, 2005, and the
plan of reorganization and the merger became effective on September 27, 2005. Critical to US Airways Group's emergence from bankruptcy and the merger
with America West Holdings was additional financing and liquidity to fund operations. The financing and liquidity was provided through a combination of
new equity investments, new and restructured debt instruments and agreements with significant stakeholders. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" for a full description of the equity and debt instruments.
US Airways Group's primary business activity prior to the merger was the operation of a major network air carrier through its ownership of the common
stock of US Airways, Piedmont, PSA, Material Services Company and Airways Assurance Limited. US Airways, along with a network of US Airways
Group's regional airline subsidiaries, affiliated carriers and its MidAtlantic division flying as US Airways Express, was a hub-and-spoke carrier with a
substantial presence in the eastern United States and with service to Canada, the Caribbean, Latin America and Europe. US Airways had approximately
42 million passengers boarding its planes in 2005 and, prior to the merger, was the seventh largest U.S. air carrier based on available seat miles ("ASMs") and
revenue passenger miles ("RPMs"). As of December 31, 2005, US Airways operated 232 jet aircraft and 18 regional jet aircraft. During 2005, US Airways
provided regularly scheduled service or seasonal service at 91 airports in the continental United States, Canada, the Caribbean, Latin America and Europe. As
of December 31, 2005, the US Airways Express network served 130 airports in the United States, Canada and the Bahamas, including approximately 39
airports also served by US Airways. During 2005, US Airways Express air carriers had approximately 18.7 million passengers boarding their planes,
including 1.9 million passengers on US Airways' MidAtlantic division. For the years ended December 31, 2005, 2004 and 2003, passenger revenues
accounted for approximately 90%, 90% and 91%, respectively, of US Airways' operating revenues. Cargo revenues and other sources accounted for 10%,
10% and 9% of US Airways' operating revenues in 2005, 2004 and 2003, respectively.
America West Holdings, a Delaware corporation formed in 1996, is a holding company that owns all of the stock of AWA, a Delaware corporation
formed in 1981. AWA accounted for most of America West Holdings' revenues and expenses prior to the merger in September 2005. Prior to the merger and
based on 2005 ASMs and RPMs, AWA was the eighth largest passenger airline and the second largest low-cost carrier in the United States. AWA was the
largest low-cost carrier operating a hub-and-spoke network before the merger, with hubs in Phoenix, Arizona and Las Vegas, Nevada. As of December 31,
2005, AWA operated a fleet of 141 aircraft and served 64 destinations in North America, including eight in Mexico, two in Hawaii, four in Canada and one in
Costa Rica. For the year ended December 31, 2005, AWA had approximately 22 million passengers boarding its planes and generated mainline revenues of
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