US Airways 2006 Annual Report Download - page 10

Table of Contents
The following table sets forth US Airways Express code share agreements and the number and type of aircraft operated under those
agreements at December 31, 2006.
Number/Type
Carrier
Agreement Type of Aircraft
PSA(1) Capacity Purchase 49 regional jets
Piedmont(1) Capacity Purchase 55 turboprops
Chautauqua Airlines, Inc. Capacity Purchase 30 regional jets
Air Wisconsin Airlines Corporation Capacity Purchase 70 regional jets
Republic Capacity Purchase 28 regional jets
Colgan Airlines, Inc. Prorate 29 turboprops
Air Midwest, Inc. Prorate 14 turboprops
Trans States Airlines, Inc. Prorate 7 regional jets
(1) PSA and Piedmont are wholly owned subsidiaries of US Airways Group.
In April 2004, MidAtlantic, US Airways' former regional jet division, began operating as part of the US Airways Express network.
As of December 31, 2005, MidAtlantic operated 18 Embraer ERJ-170 regional jets with 72 seats. MidAtlantic served approximately
2 million passengers in 2005. On June 23, 2005, US Airways exercised its option under its agreement with Republic and Wexford Capital
LLC to sell certain assets used by MidAtlantic, including the regional jets, a flight simulator and certain commuter slots at Reagan
National and LaGuardia. Under the terms of the agreement, Republic purchased ten regional jets owned by US Airways and leased the
ten purchased aircraft back to US Airways subject to their future transfer to Republic. Republic also assumed the leases of 15 additional
regional jets. Republic entered into a regional jet service agreement that continues the operation of the aircraft as a US Airways Express
carrier under a ten-year capacity purchase agreement. In addition to the aircraft, Republic purchased commuter slots at Reagan National
and LaGuardia and leases the slots back to US Airways. Effective May 27, 2006, the transfer of assets to Republic discussed above was
complete and MidAtlantic ceased to operate. In December 2006, US Airways satisfied the financial terms of the agreement concerning
the LaGuardia slots. Republic and US Airways then modified additional terms of the agreement to conform with subsequent regulatory
changes at LaGuardia, and the slots were returned to US Airways. The need for a subsequent modification was fully contemplated in the
original agreement.
America West Express
AWA has a regional airline code share agreement with Mesa Airlines ("Mesa"). Mesa, operating regional jets and large turboprop
aircraft as America West Express, provides regional feeder service to and from Phoenix, Charlotte and Las Vegas to destinations in the
continental United States, Canada and northern Mexico. AWA collects the revenue and income generated from the services provided by
Mesa, and in return (1) reimburses Mesa for actual non-controllable costs and costs incurred at stations maintained and operated by Mesa,
(2) pays Mesa for actual controllable non-maintenance costs, subject to a cap, and controllable maintenance costs at fixed rates, and
(3) shares with Mesa a percentage of the revenue allocated to the flight segments flown by Mesa. Through this arrangement with Mesa,
AWA offered America West Express service to an additional 31 destinations as of December 31, 2006. As of December 31, 2006, the
America West Express fleet included 62 aircraft comprised of 38 86-seat CRJ 900s, 18 50-seat CRJ 200s and six 37-seat Dash 8
turboprop aircraft.
Marketing and Alliance Agreements with Other Airlines
AWA and US Airways maintain alliance agreements with each other and with several leading domestic and international carriers to
give customers a greater choice of destinations. Airline alliance agreements provide an array of benefits that vary by partner. By code
sharing, each airline is able to offer additional destinations to its customers under its flight designator code without materially increasing
operating expenses and capital expenditures. Frequent flyer arrangements provide members with extended networks for earning and
redeeming miles on partner carriers. Our US Airways Club members also have access to certain partner carriers' airport lounges. We also
benefit from the distribution strengths of each of the partner carriers.
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