US Airways 2007 Annual Report Download - page 39

Table of Contents
We reported the following combined operating statistics to the DOT for mainline operations for the years ended December 31,
2007, 2006 and 2005:
Full Year
2007 2006 2005
On-time performance(a) 68.7 76.9 77.8
Completion factor(b) 98.2 98.9 98.2
Mishandled baggage(c) 8.47 7.88 7.68
Customer complaints(d) 3.16 1.36 1.55
(a) Percentage of reported flight operations arriving on time as defined by the DOT.
(b) Percentage of scheduled flight operations completed.
(c) Rate of mishandled baggage reports per 1,000 passengers.
(d) Rate of customer complaints filed with the DOT per 100,000 passengers.
We faced major operational challenges during the first half of 2007 resulting from adverse weather conditions in the northeast,
heavy air traffic congestion in many of our hubs and difficulties associated with the migration to a single reservation system in early
March 2007. All of these factors contributed to a difficult operating environment. During 2007, we implemented several initiatives to
improve operational performance as follows:
• We hired approximately 1,000 new employees system-wide to boost airport customer service.
• Starting with the June 1, 2007 schedule, we lengthened the operating day at our hubs, lowered utilization, and increased the
number of designated spare aircraft in order to ensure operational reliability.
• We established Passenger Operations Control (POC) centers at our Philadelphia and Charlotte hubs and at Reagan National
airport. These POC centers monitor all inbound flight activity and identify customers who are on flights that for whatever reason
(weather, air traffic congestion, etc.) might miss their connecting flights. The POC center professionals interact closely with the
airline's System Support Center to rebook passengers who may misconnect even before the inbound flight lands.
• We announced in the third quarter of 2007 the appointment of Robert Isom as the new Chief Operating Officer to head up the
airline's operations including flight operations, inflight services, maintenance and engineering, airport customer service,
reservations, and cargo. Mr. Isom has over ten years of airline experience at Northwest Airlines, Inc. and AWA.
The implementation of our initiatives resulted in an improved trend in operational performance since the second quarter of 2007. In
the fourth quarter of 2007, our on-time performance improved to 76.9% as compared to 64.3% in the second quarter of 2007. In the
month of December 2007, our on-time performance was ranked first amongst the ten largest U.S. airlines. Our rate of customer
complaints filed with the DOT per 100,000 passengers improved, decreasing to 2.27 in the fourth quarter of 2007 from 3.64 in the second
quarter of 2007. Our rate of mishandled baggage reports per 1,000 passengers was 7.28 in the fourth quarter of 2007, an improvement
from 8.57 in the second quarter of 2007.
US Airways Group's Results of Operations
The full years 2007 and 2006 include the consolidated results of US Airways Group and its subsidiaries. As noted above, the
2005 statement of operations presented includes the consolidated results of America West Holdings for the 269 days through
September 27, 2005, the effective date of the merger, and the consolidated results of the new US Airways Group for the 96 days from
September 27, 2005 to December 31, 2005.
In 2007, we realized operating income of $533 million and income before income taxes of $434 million. Included in these results is
$245 million of net gains associated with fuel hedging transactions. This includes $187 million of unrealized gains resulting from the
application of mark-to-market accounting for changes in the fair value of fuel hedging instruments as well as $58 million of net realized
gains on settled hedge transactions. We are required to use mark-to-market accounting as our existing fuel hedging instruments do not
meet the requirements
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