US Airways 2006 Annual Report Download - page 39

Table of Contents
2006 Overview
Merger Integration Update
Since the effective date of the merger on September 27, 2005, our operational accomplishments include the following:
• Optimized our fleet mix to better match aircraft size with passenger demand. As a result, we expect to end 2007 with 359
mainline aircraft (supported by approximately 229 regional jets and approximately 104 turboprops that provide passenger feed
into the mainline system);
• Completed the consolidation of operations at 37 of 38 overlap cities by the end of 2006. The last remaining overlap city was
completed in January 2007;
• Completed over 60% of the transition plan to move to one FAA operating certificate, which we anticipate completing during
2007;
• Painted over 90 aircraft (69%) of the former America West mainline fleet in the new US Airways livery;
• Restructured and increased our Airbus order to 15 A321 aircraft, which includes seven additional A321 aircraft and converts
prior commitments for seven A319 and one A320 aircraft to eight A321 aircraft;
• Amended an agreement with Republic, which will result in adding 30 86-seat EMB 175 aircraft to the US Airways Express fleet
in 2007 and 2008 that will be operated by Republic. These aircraft will offset a reduction of 50-seat EMB 145 aircraft operated
by Chautauqua Airlines;
• Deployed over 6,000 new desktops throughout our airport network and the reservation centers in preparation for the cutover to
one reservations system, which is scheduled to be completed by the end of the first quarter of 2007;
• Added $6.5 million of new ground equipment, 57 new managers and over 200 new full-time ramp employees at our Philadelphia
hub to enhance the operational performance of this hub;
• Launched new international service to Lisbon, Stockholm and Milan and announced new international service to Zurich, Athens
and Brussels to begin during June 2007;
• Achieved ETOPS (extended-range twin-engine operations) certification for Boeing 757 aircraft in long-range over-water service,
which allowed us to begin new service to Hawaii; and
• Ranked second in 2006 among the major US airlines in on-time performance.
In the area of finance, we have:
• Completed a $1.25 billion refinancing, which was used to replace approximately $1.1 billion of outstanding debt at lower interest
rates and with an extended amortization period;
• Redeemed approximately $112 million in principal amount of America West Holding Corporation's 7.5 percent convertible
senior notes due 2009 for approximately 3.9 million shares of common stock, which lowered our annual interest expense by
$8.4 million;
• Redeemed approximately $70 million in principal amount of our 7 percent senior convertible notes due in 2020 for
approximately 2.9 million shares of common stock and a $17 million premium payment;
• Ended 2006 with unrestricted and restricted cash, cash equivalents and short-term investments totaling $3 billion, of which
$2.4 billion was unrestricted;
• Completed the migration of myriad of back office systems including general ledger, accounts payable and revenue accounting,
among others; and
• Migrated all employees to one healthcare provider, which is expected to result in annual savings of over $5 million.
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