US Airways 2007 Annual Report Download - page 22

Table of Contents
• We may have to use our working capital to fund these fixed costs instead of funding general corporate requirements, including
capital expenditures.
• We may not have sufficient liquidity to respond to competitive developments and adverse economic conditions.
Our obligations also impact our ability to obtain additional financing, if needed, and our flexibility in the conduct of our business.
Our existing indebtedness is secured by substantially all of our assets. Moreover, the terms of our Citicorp credit facility require us to
maintain consolidated unrestricted cash and cash equivalents of not less than $1.25 billion, with not less than $750 million (subject to
partial reductions upon certain reductions in the outstanding principal amount of the loan) of that amount held in accounts subject to
control agreements.
Our ability to pay the fixed costs associated with our contractual obligations depends on our operating performance and cash flow,
which in turn depend on general economic and political conditions. A failure to pay our fixed costs or a breach of the contractual
obligations could result in a variety of adverse consequences, including the acceleration of our indebtedness, the withholding of credit
card proceeds by the credit card servicers and the exercise of remedies by our creditors and lessors. In such a situation, it is unlikely that
we would be able to fulfill our contractual obligations, repay the accelerated indebtedness, make required lease payments or otherwise
cover our fixed costs.
Changes in government regulation could increase our operating costs and limit our ability to conduct our business.
Airlines are subject to extensive regulatory requirements. In the last several years, Congress has passed laws, and the DOT, the
FAA, the TSA and the Department of Homeland Security have issued a number of directives and other regulations. These requirements
impose substantial costs on airlines. The FAA has proposed a far-reaching set of rules governing flight operations at New York
LaGuardia Airport. The new rules could result in dramatic changes to the type and number of services that we offer in the future at
LaGuardia. Additional laws, regulations, taxes and airport rates and charges have been proposed or discussed from time to time,
including by the current Congress, including recent discussions about a "passenger bill of rights," and, if adopted, these could
significantly increase the cost of airline operations or reduce revenues. The state of New York has already adopted such a measure, and
other states are contemplating legislation. Also, the ability of U.S. carriers to operate international routes is subject to change because the
applicable arrangements between the U.S. and foreign governments may be amended from time to time, or because appropriate slots or
facilities may not be available. We cannot assure you that laws or regulations enacted in the future will not adversely affect our operating
costs. In addition, increased environmental regulation may increase costs or restrict our operations.
Ongoing data security compliance requirements could increase our costs, and any significant data breach could harm our
business, financial condition or results of operations.
Our business requires the appropriate and secure utilization of customer and other sensitive information. We cannot be certain that
advances in criminal capabilities, discovery of new vulnerabilities, attempts to exploit existing vulnerabilities in our systems, data thefts,
physical system or network break-ins or inappropriate access, or other developments will not compromise or breach the technology
protecting the networks that access and store database information. Furthermore, there has been heightened legislative and regulatory
focus on data security in the U.S., and abroad (particularly in the EU), including requirements for varying levels of customer notification
in the event of a data breach.
Many of our commercial partners, including credit card companies, have imposed certain data security standards that we must meet.
In particular, we were required by the Payment Card Industry Security Standards Council, founded by the credit card companies, to
comply by September 30, 2007 with their highest level of data security standards. While we have made substantial progress, we did not
fully meet these standards as of September 30, 2007, and we are continuing diligently to implement the remaining requirements.
In addition to the Payment Card Industry Standards discussed above, failure to comply with the other privacy and data use and
security requirements of our partners or related laws and regulations to which we are subject may
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