US Airways 2007 Annual Report Download - page 24

Table of Contents
Interruptions or disruptions in service at one of our hub airports could have a material adverse impact on our operations.
We operate principally through primary hubs in Charlotte, Philadelphia and Phoenix and secondary hubs/focus cities in Las Vegas,
New York, Washington, D.C. and Boston. A majority of our flights either originate in or fly into one of these locations. A significant
interruption or disruption in service at one of our hubs could result in the cancellation or delay of a significant portion of our flights and,
as a result, could have a severe impact on our business, operations and financial performance.
We are at risk of losses and adverse publicity stemming from any accident involving any of our aircraft.
If one of our aircraft were to be involved in an accident, we could be exposed to significant tort liability. The insurance we carry to
cover damages arising from any future accidents may be inadequate. In the event that our insurance is not adequate, we may be forced to
bear substantial losses from an accident. In addition, any accident involving an aircraft that we operate could create a public perception
that our aircraft are not safe or reliable, which could harm our reputation, result in air travelers being reluctant to fly on our aircraft and
adversely impact our financial condition and operations.
Our business is subject to weather factors and seasonal variations in airline travel, which cause our results to fluctuate.
Our operations are vulnerable to severe weather conditions in parts of our network that could disrupt service, create air traffic
control problems, decrease revenue, and increase costs, such as during hurricane season in the Caribbean and Southeast United States,
snow and severe winters in the Northeast United States and thunderstorms in the Eastern United States. In addition, the air travel business
historically fluctuates on a seasonal basis. Due to the greater demand for air and leisure travel during the summer months, revenues in the
airline industry in the second and third quarters of the year tend to be greater than revenues in the first and fourth quarters of the year. Our
results of operations will likely reflect weather factors and seasonality, and therefore quarterly results are not necessarily indicative of
those for an entire year, and the prior results of US Airways Group are not necessarily indicative of our future results.
We may be adversely affected by global events that affect travel behavior.
Our revenue and results of operations may be adversely affected by global events beyond our control. Wars or other military
conflicts, including the war in Iraq may depress air travel, particularly on international routes. An outbreak of a contagious disease such
as Severe Acute Respiratory Syndrome ("SARS"), avian flu, or an other influenza-type illness, if it were to persist for an extended period,
could again materially affect the airline industry and us by reducing revenues and impacting travel behavior.
We are exposed to foreign currency exchange rate fluctuations.
As we expand our international operations, we will have significant operating revenues and expenses, as well as assets and
liabilities, denominated in foreign currencies. Fluctuations in foreign currencies can significantly affect our operating performance and
the value of our assets and liabilities located outside of the United States.
The use of US Airways Group's pre-merger NOLs and certain other tax attributes could be limited in the future.
From the time of the merger until the first half of 2007, a significant portion of US Airways Group's common stock was beneficially
owned by a small number of equity investors. Since the merger, some of the equity investors have sold portions of their holdings and
other investors have purchased US Airways Group stock, and, as a result, we believe an "ownership change" as defined in Internal
Revenue Code Section 382 occurred for US Airways Group in February 2007. When a company undergoes such an ownership change,
Section 382 limits the future ability to utilize any net operating losses, or NOL, generated before the ownership change and certain
subsequently recognized "built-in" losses and deductions, if any, existing as of the date of the ownership change. A company's ability to
utilize new NOL arising after the ownership change is not affected. Until US Airways Group has used all
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