US Airways 2007 Annual Report Download - page 136

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements
1. Basis of presentation and summary of significant accounting policies
(a) Nature of Operations and Operating Environment
US Airways, Inc. ("US Airways"), a Delaware corporation, is a certificated air carrier engaged primarily in the business of
transporting passengers, property and mail. US Airways is a wholly owned subsidiary of US Airways Group, Inc. ("US Airways Group").
On September 12, 2004, US Airways Group and its domestic subsidiaries, US Airways, Piedmont Airlines, Inc., PSA Airlines, Inc. and
Material Services Company, Inc. (collectively, the "Debtors"), which at the time accounted for substantially all of the operations of US
Airways Group, filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (the "Bankruptcy Code") in the United
States Bankruptcy Court for the Eastern District of Virginia, Alexandria Division (the "Bankruptcy Court"). On May 19, 2005, US
Airways Group signed a merger agreement with America West Holdings Corporation ("America West Holdings"), the parent company of
America West Airlines, Inc. ("AWA"), pursuant to which America West Holdings merged with a wholly owned subsidiary of US
Airways Group. The merger agreement was amended by a letter agreement on July 7, 2005. The merger became effective upon US
Airways Group's emergence from bankruptcy on September 27, 2005. While the merger was structured such that US Airways Group was
the legal acquirer, the merger has been accounted for as a reverse acquisition such that America West Holdings was treated as the
accounting acquirer.
On September 26, 2007, as part of the integration efforts following the merger of US Airways Group and America West Holdings in
September 2005, AWA surrendered its Federal Aviation Administration ("FAA") operating certificate. As a result, all future mainline
airline operations are being conducted under US Airways' FAA operating certificate. In connection with the combination of all mainline
airline operations under one FAA operating certificate, US Airways Group contributed 100% of its equity interest in America West
Holdings to US Airways. As a result, America West Holdings and its wholly owned subsidiary AWA are now wholly owned subsidiaries
of US Airways. In addition, AWA transferred substantially all of its assets and liabilities to US Airways. All off-balance sheet
commitments of AWA were also transferred to US Airways. This transaction constituted a transfer of assets between entities under
common control and was accounted for at historical cost. Effective January 1, 2008, both America West Holdings and AWA converted
from Delaware corporations to Delaware limited liability corporations.
As part of the transfer of assets and liabilities to US Airways, all of AWA's obligations with respect to certain pass through trusts
and the leases of related aircraft and engines were transferred to US Airways. The pass through trusts had issued pass through trust
certificates (also known as "Enhanced Equipment Trust Certificates" or "EETCs"), of which AWA was the deemed issuer for Securities
and Exchange Commission ("SEC") reporting purposes. Because US Airways has assumed all of AWA's obligations with respect to the
pass through trusts, US Airways is now the deemed issuer of these EETCs. As a result, AWA no longer has an obligation to file separate
financial statements or reports with the SEC and has filed a Form 15 with the SEC terminating its reporting obligations.
Most of US Airways' operations are in competitive markets. Competitors include other air carriers along with other modes of
transportation. US Airways enplaned approximately 58 million passengers in 2007. As of December 31, 2007, US Airways operated 356
jet aircraft. During 2007, US Airways, along with US Airways Express, provided regularly scheduled service or seasonal service at 256
airports in the continental United States, Hawaii, Alaska, Canada, the Caribbean, Latin America and Europe.
As of December 31, 2007, US Airways employed approximately 34,400 active full-time equivalent employees. Approximately 85%
of US Airways' employees are covered by collective bargaining agreements with various labor unions. US Airways pilots, flight
attendants, and ground and maintenance employees are currently working under the terms of their respective US Airways or AWA
collective bargaining agreements, including, in some cases, transition agreements reached in connection with the merger. In 2007, US
Airways reached final single labor
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