US Airways 2007 Annual Report Download - page 9

Table of Contents
Express Operations
Certain air carriers have code share arrangements with US Airways to operate under the trade name "US Airways Express."
Typically, under a code share arrangement, one air carrier places its designator code and sells tickets on the flights of another air carrier,
which is referred to generically as its code share partner. US Airways Express carriers are an integral component of our operating
network. US Airways relies heavily on feeder traffic from its US Airways Express partners, which carry passengers to US Airways' hubs
from low-density markets that are uneconomical for US Airways to serve with large jets. In addition, US Airways Express operators offer
complementary service in existing US Airways mainline markets by operating flights during off-peak periods between US Airways
mainline flights. During 2007, the US Airways Express network served 201 airports in the continental United States, Canada, the
Caribbean and Latin America, including 82 airports also served by US Airways. During 2007, approximately 27 million passengers
boarded US Airways Express air carriers' planes, approximately 40% of whom connected to US Airways' flights. Of these 27 million
passengers, approximately 8 million were enplaned by our wholly owned regional airlines Piedmont and PSA, approximately 18 million
were enplaned by third-party carriers operating under capacity purchase agreements and approximately 1 million were enplaned by
carriers operating under prorate agreements, as described below.
The US Airways Express code share arrangements are in the form of either capacity purchase or prorate agreements. The capacity
purchase agreements provide that all revenues, including passenger, mail and freight revenues, go to US Airways. In return, US Airways
agrees to pay predetermined fees to these airlines for operating an agreed-upon number of aircraft, without regard to the number of
passengers on board. In addition, these agreements provide that certain variable costs, such as airport landing fees, will be reimbursed
100% by US Airways. US Airways controls marketing, scheduling, ticketing, pricing and seat inventories. Under the prorate agreements,
the prorate carriers pay certain service fees to US Airways and receive a prorated share of ticket revenue paid for connecting customers.
US Airways is responsible for the pricing and marketing of connecting services to and from the prorate carrier. The prorate carrier is
responsible for pricing and marketing the local, point to point markets, and is responsible for all costs incurred operating the aircraft. All
US Airways Express carriers use US Airways' reservation systems and have logos, service marks, aircraft paint schemes and uniforms
similar to those of US Airways.
The following table sets forth US Airways Express code share agreements and the number and type of aircraft operated under those
agreements at December 31, 2007.
Number/Type
Carrier
Agreement Type of Aircraft
PSA(1) Capacity Purchase 49 regional jets
Piedmont(1) Capacity Purchase 55 turboprops
Air Wisconsin Airlines Corporation Capacity Purchase 70 regional jets
Mesa Airlines Capacity Purchase 51 regional jets and 6 turboprops
Chautauqua Airlines, Inc. Capacity Purchase 9 regional jets
Republic Airways(2) Capacity Purchase 46 regional jets
Colgan Airlines, Inc. Prorate 29 turboprops
Air Midwest, Inc. Prorate 14 turboprops
Trans States Airlines, Inc. Prorate 7 regional jets
(1) PSA and Piedmont are wholly owned subsidiaries of US Airways Group.
(2) We are committed to purchasing capacity from Republic Airways on an additional 11 regional jets in 2008.
Marketing and Alliance Agreements with Other Airlines
US Airways maintains alliance agreements with several leading domestic and international carriers to give customers a greater
choice of destinations. Airline alliance agreements provide an array of benefits that vary by partner. By code sharing, each airline is able
to offer additional destinations to its customers under its flight designator code without materially increasing operating expenses and
capital expenditures. Frequent flyer
7