US Airways 2007 Annual Report Download - page 76

Table of Contents
US Airways Group, 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 Group, Inc.'s ("US Airways Group" or the "Company") primary business activity is the operation of a major network
air carrier through its ownership of the common stock of US Airways, Inc. ("US Airways"), Piedmont Airlines, Inc. ("Piedmont"), PSA
Airlines, Inc. ("PSA"), Material Services Company, Inc. ("MSC") and Airways Assurance Limited, LLC ("AAL").
On September 12, 2004, US Airways Group and its domestic subsidiaries, US Airways, Piedmont, PSA and MSC (collectively
referred to as 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 United States 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") pursuant to which America West Holdings, the parent
company of America West Airlines, Inc. ("AWA"), merged with a wholly owned subsidiary of US Airways Group. The merger was
amended by a letter of agreement on July 7, 2005. The merger became effective upon US Airways Group's emergence from bankruptcy
on September 27, 2005.
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 companies.
Transfers of assets between entities under common control are accounted for in a manner similar to the pooling of interests method
of accounting. Under this method, the carrying amount of net assets recognized in the balance sheets of each combining entity are carried
forward to the balance sheet of the combined entity, and no other assets or liabilities are recognized as a result of the contribution of
shares. This contribution has no effect on the US Airways Group consolidated financial statements.
Most of the airline operations are in competitive markets. Competitors include other air carriers along with other modes of
transportation. US Airways Group operates the fifth largest airline in the United States as measured by domestic revenue passenger miles
("RPMs") and available seat miles ("ASMs"). US Airways is a certificated air carrier engaged primarily in the business of transporting
passengers, property and mail. US Airways enplaned approximately 58 million passengers in 2007. As of December 31, 2007, US
Airways operated 356 mainline jet aircraft, which were supported by 49 regional jets and 55 turboprops operated by the Company's
wholly owned regional airlines. 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 Group employed approximately 39,600 active full-time equivalent employees.
Approximately 85% of US Airways Group's employees are covered by collective bargaining agreements with various labor unions. The
Company's 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, the Company
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