US Airways 2006 Annual Report Download - page 16

Table of Contents
The following table shows annual aircraft fuel consumption and costs for AWA mainline for 2004 through 2006 (gallons and
aircraft fuel expense in millions):
Average Price Aircraft Fuel Percentage of Total
Year Gallons per Gallon(1) Expense(1) Operating Expenses
2006 435 $ 2.09 $ 911 24.8%
2005 449 1.80 812 24.0%
2004 450 1.31 590 21.3%
(1) Includes fuel taxes and excludes the impact of fuel hedges, which is described in Item 7 under "AWA's Results of Operations."
In addition, AWA incurs fuel expense for its regional airline alliance with Mesa. For the years ended December 31, 2006, 2005 and
2004, total fuel expense for the Mesa alliance was $210 million, $182 million and $102 million, respectively.
Prices and availability of all petroleum products are subject to political, economic and market factors that are generally outside of
our control. Accordingly, the price and availability of aviation fuel, as well as other petroleum products, can be unpredictable. Prices may
be affected by many factors, including:
• the impact of global political instability on crude production;
• unexpected changes to the availability of petroleum products due to disruptions in distribution systems or refineries, as evidenced
in the third quarter of 2005 when Hurricane Katrina and Hurricane Rita caused widespread disruption to oil production, refinery
operations and pipeline capacity along certain portions of the U.S. Gulf Coast. As a result of these disruptions, the price of jet
fuel increased significantly and the availability of jet fuel supplies was diminished;
• unpredictable increases to oil demand due to weather or the pace of economic growth;
• inventory levels of crude, refined products and natural gas; and
• other factors, such as the relative fluctuation between the U.S. dollar and other major currencies and the influence of speculative
positions on the futures exchanges.
Insurance
US Airways Group and its subsidiaries maintain insurance of the types and in amounts deemed adequate to protect themselves and
their property. Principal coverage includes:
• liability for injury to members of the public, including passengers;
• damage to property of US Airways Group, its subsidiaries and others;
• loss of or damage to flight equipment, whether on the ground or in flight;
• fire and extended coverage;
• directors' and officers' liability;
• travel agents' errors and omissions;
• advertiser and media liability;
• fiduciary; and
• workers' compensation and employer's liability.
Since September 11, 2001, US Airways Group and other airlines have been unable to obtain coverage for liability to persons other
than employees and passengers for claims resulting from acts of terrorism, war or similar events, which coverage is called war risk
coverage, at reasonable rates from the commercial insurance market. US Airways and AWA therefore purchased their war risk coverage
through a special program administered by the
13