US Airways 2006 Annual Report Download - page 204

Table of Contents
US Airways, Inc.
Notes to the Financial Statements — (Continued)
In September 2005, US Airways Group amended its A330/340 Purchase Agreement with Airbus dated as of November 24, 1998 to
reschedule its order for ten A330-200 aircraft for delivery during the period 2009 and 2010. US Airways Group 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 purchase agreements with Airbus and US Airways Group totals $3.27 billion as of December 31,
2006.
Embraer Purchase Commitments
On June 13, 2006, US Airways Group executed an Amended and Restated Purchase Agreement and an Amended and Restated
Letter Agreement with Embraer. In accordance with the terms of these agreements, US Airways Group 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 US Airways Group 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,
US Airways Group 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, US Airways Group assigned 30 of the purchase options to Republic. On
January 12, 2007, US Airways Group assigned eight additional purchase options to Republic. US Airways Group 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 an 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. The effect of distributions for general unsecured claims
was reflected in US Airways' financial statements upon emergence and will not have any further impact on the results of operations.
Engine Maintenance Commitments
In connection with the merger, US Airways and AWA restructured their rate per engine hour agreements with General Electric
Engine Services for overhaul maintenance services. Under the restructured agreements, the minimum monthly payment on account of
accrued engine flight hours for both the US Airways and AWA agreements together will equal $3 million as long as both agreements
remain in effect or through October 2009.
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