US Airways 2006 Annual Report Download - page 116

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
To modernize the Company's international product and improve the efficiency of its international network, the Company was
scheduled to begin accepting deliveries of Airbus A350 aircraft in 2011 pursuant to a purchase agreement that US Airways Group,
US Airways and AWA entered into in September 2005 with Airbus. US Airways Group has been notified that the A350 will be
undergoing significant design changes and will be delivered several years beyond the originally scheduled delivery dates. The Company
is currently evaluating the revised technical and commercial aspects of the A350 program.
In September 2005, the Company amended its A330/340 Purchase Agreement with Airbus dated as of November 24, 1998 to
reschedule the order for ten A330-200 aircraft for delivery during the period 2009 and 2010. The Company has the right to cancel these
A330 orders in the event that US Airways makes certain predelivery payments under the A350 Purchase Agreement.
The future commitments under the purchase agreements with Airbus and US Airways Group totals $3.27 billion as of December 31,
2006.
Embraer Purchase Commitments
On June 13, 2006, the Company executed an Amended and Restated Purchase Agreement and an Amended and Restated Letter
Agreement with Embraer. In accordance with the terms of these agreements, the Company placed an initial firm order for 25 Embraer
190 aircraft and an additional firm order for 32 Embraer 190 aircraft. The progress and deposit payments totaling approximately
$18 million previously paid by the Company to Embraer in accordance with the terms of the Purchase Agreement dated as of May 9,
2003, will be applied to these orders in accordance with the terms of the amended and restated agreements. In addition, the Company has
the option to purchase up to 50 additional Embraer 190 aircraft and to convert certain of the Embraer 190 aircraft to Embraer 170,
Embraer 175 or Embraer 195 aircraft, subject to availability and upon agreed notice. Embraer has agreed to provide financing for certain
of the aircraft. On July 21, 2006, the Company assigned 30 of the purchase options to Republic. On January 12, 2007, the Company
assigned eight additional purchase options to Republic. The Company purchased and took delivery of two Embraer 190 aircraft in
December 2006 and expects to take delivery of nine Embraer 190 aircraft in 2007 and 14 Embraer 190 aircraft in 2008. The future
commitments under the purchase agreement with Embraer and US Airways Group totals $661 million as of December 31, 2006.
Bombardier Purchase Commitments
On December 14, 2006, the Bankruptcy Court approved a Global Settlement Letter between US Airways Group and Bombardier
Inc., which had been executed by the parties on November 10, 2006. The Global Settlement Letter amends the master purchase
agreement dated as of May 9, 2003, as amended, between US Airways Group and Bombardier. The Bankruptcy Court authorized the
assumption of the master purchase agreement, as modified and amended by the Global Settlement Letter. The parties agreed to modify
and amend the master purchase agreement to terminate all obligations of US Airways Group to purchase and take delivery of 42 firm
aircraft remaining undelivered under the agreement, as well as the rights of US Airways Group to purchase and take delivery of 90
additional aircraft and options to take 94 aircraft in the future. All obligations of Bombardier to manufacture and deliver these aircraft
were also terminated. The master purchase agreement was amended to provide US Airways Group with the right to purchase Bombardier
CRJ 200/700/900 series aircraft from time to time during a period of five years. The Global Settlement Letter further provides that all
pre-delivery payments held by Bombardier be returned to US Airways Group. Under the Global Settlement Letter, all claims of
Bombardier asserted against US Airways Group and its subsidiaries in the Chapter 11 cases were resolved and Bombardier was granted a
total aggregate allowed general unsecured claim in the amount of $148 million. As a result of the settlement, the Company recorded an
$11 million gain reflected in special items, net on the 2006 statement of operations. The effects of distributions for general unsecured
claims were reflected in US Airways' financial statements upon emergence and will not have any further impact on the results of
operations.
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