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US AIRWAYS GROUP INC (LCC)
10-K
Annual report pursuant to section 13 and 15(d)
Filed on 02/18/2009
Filed Period 12/31/2008

Table of contents

  • Page 1
    US AIRWAYS GROUP INC (LCC) 10-K Annual report pursuant to section 13 and 15(d) Filed on 02/18/2009 Filed Period 12/31/2008

  • Page 2
    ... reporting company o No þ No þ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). US Airways Group, Inc. US Airways, Inc. The aggregate market value of common stock held by non-affiliates of US Airways Group, Inc. as of June 30, 2008...

  • Page 3
    US Airways, Inc. Yes þ No o As of February 12, 2009, there were 114,135,100 shares of US Airways Group, Inc. common stock outstanding. As of February 12, 2009, US Airways, Inc. had 1,000 shares of common stock outstanding, all of which were held by US Airways Group, Inc.

  • Page 4
    ...Matters and Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Consolidated Financial Statements and Supplementary Data of US Airways Group, Inc...

  • Page 5
    ... Corporation ("America West Holdings") and US Airways Group, including future financial and operating results, our plans, objectives, expectations and intentions and other statements that are not historical facts. These statements are based upon the current beliefs and expectations of management and...

  • Page 6
    ... and regulations; • costs of ongoing data security compliance requirements and the impact of any data security breach; • interruptions or disruptions in service at one or more of our hub airports; • the impact of any accident involving our aircraft; • delays in scheduled aircraft deliveries...

  • Page 7
    ... upon US Airways Group's emergence from bankruptcy on September 27, 2005. We operate the fifth largest airline in the United States as measured by domestic mainline revenue passenger miles ("RPMs") and available seat miles ("ASMs"). For the years ended December 31, 2008, 2007 and 2006, passenger...

  • Page 8
    ... sales of frequent flyer program miles to affinity card issuers. The then rapid and severe increases in fuel prices, which appeared to have no end as oil hit an all time high of $147 per barrel in July 2008, prompted some airlines to contain costs by increasing their fuel hedge positions. With...

  • Page 9
    ... costs, such as airport landing fees and passenger liability insurance, will be reimbursed 100% by us. We control marketing, scheduling, ticketing, pricing and seat inventories. Under the prorate agreements, the prorate carriers receive a prorated share of ticket revenue and pay certain service fees...

  • Page 10
    ... network expansion through code share service, frequent flyer program benefits, airport lounge access, convenient single-ticket pricing with electronic tickets, one-stop check-in and coordinated baggage handling. We also have bilateral marketing/code sharing agreements with Star Alliance members...

  • Page 11
    ... low cost carriers have lower operating cost structures than US Airways. We also compete on the basis of scheduling (frequency and flight times), availability of nonstop flights, on-time performance, type of equipment, cabin configuration, amenities provided to passengers, frequent flyer programs...

  • Page 12
    ... to result in service disruptions and delays. As a result of competitive pressure, US Airways and other airlines may be unable to recover all of these additional security costs from passengers through increased fares. In addition, we cannot forecast what new security and safety requirements may...

  • Page 13
    ... of services by, and increased operating costs for, individual airlines, including our airline subsidiaries, particularly in light of the increase in the number of airlines operating at these airports. The availability of international routes to domestic air carriers is regulated by agreements...

  • Page 14
    ...the US Airways and AWA labor agreements that remain separate with their major domestic employee groups. Union Class or Craft Contract Employees(1) Amendable Integrated labor agreements: International Association of Machinists & Aerospace Workers ("IAM") Airline Customer Service Employee Association...

  • Page 15
    ...' Results of Operations." In addition, we incur fuel expenses related to our Express operations. For the years ended December 31, 2008, 2007 and 2006, total fuel expenses for US Airways Group's wholly owned regional airlines, affiliate regional airlines operating under capacity purchase agreements...

  • Page 16
    ...focus on excellent customer service in every aspect of our operations, including personnel, flight equipment, inflight and ancillary amenities, on-time performance, flight completion ratios and baggage handling, will strengthen customer loyalty and attract new customers. Throughout 2007 and 2008, we...

  • Page 17
    ... in the Dividend Miles program. Mileage credits can be redeemed for a travel award or first class upgrades on US Airways, Star Alliance carriers or other participating airlines. We and the other participating airline partners limit the number of seats allocated per flight for award recipients by...

  • Page 18
    ... ticket) and city ticket offices ($35 per domestic ticket, $45 per international ticket). Other services provided through these channels remain available with no extra fees. The goals of these service fees are to reduce the cost to us of providing customer service as required by the traveler...

  • Page 19
    ... the number of aircraft in operation compared to a decrease in passenger demand for air travel. Increased costs of financing, a reduction in the availability of financing and fluctuations in interest rates could adversely affect our liquidity, operating expenses and results. Changes in the domestic...

  • Page 20
    ... costs. If our financial condition worsens, provisions in our credit card processing and other commercial agreements may adversely affect our liquidity. We have agreements with companies that process customer credit card transactions for the sale of air travel and other services. These agreements...

  • Page 21
    ...services, resulting from financial hardships or otherwise, could have a material adverse effect on our business, financial condition and results of operations. Our business is dependent on the price and availability of aircraft fuel. Continued periods of high volatility in fuel costs, increased fuel...

  • Page 22
    ... better financial performance and significant numbers of aircraft on order for delivery in the next few years. These low-cost carriers are expected to continue to increase their market share through growth and could continue to have an impact on the overall performance of US Airways Group. Industry...

  • Page 23
    ... the Department of Homeland Security have issued a number of directives and other regulations. These requirements impose substantial costs on airlines. On October 10, 2008, the FAA finalized new rules governing flight operations at the three major New York airports. These rules did not take effect...

  • Page 24
    ... of the air traffic control system to handle traffic in high-density areas where we have a large concentration of flights is critical to our ability to operate our existing schedule. Also, as airports around the world become more congested, we cannot always be sure that our plans for new service can...

  • Page 25
    ... as planned might require us to seek extensions of the terms for some leased aircraft. Such unanticipated extensions may require us to operate existing aircraft beyond the point at which it is economically optimal to retire them, resulting in increased maintenance costs. If new aircraft orders are...

  • Page 26
    ... 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...

  • Page 27
    ...by us or our competitors; • movements in fuel prices; • new regulatory pronouncements and changes in regulatory guidelines; • general and industry-specific economic conditions; • public sales of a substantial number of shares of our common stock; and • general market conditions. Conversion...

  • Page 28
    ... of our outstanding equity securities will be void and of no effect. Item 1B. Unresolved Staff Comments None. Item 2. Properties Flight Equipment We operated a mainline fleet of 354 aircraft at the end of 2008, down from a total of 356 mainline aircraft at the end of 2007. During 2008, we removed...

  • Page 29
    ... current operating requirements. The following table illustrates our committed orders, scheduled lease expirations, and lessor put options at December 31, 2008: 2009 2010 2011 2012 2013 Thereafter Firm orders remaining Scheduled mainline lease expirations Scheduled wholly owned Express subsidiaries...

  • Page 30
    ...330,000 rates and charges program. 122,000 Lease expires May 2018. Lease expired June 2008. Currently, operating month-to-month and a new Las Vegas McCarran International Airport Ronald Reagan Washington National Airport Maintenance facility - Charlotte, NC Maintenance facility - Pittsburgh, PA 19...

  • Page 31
    ... or handling agreement from another airline. Terminal Construction Projects We use public airports for our flight operations under lease arrangements with the government entities that own or control these airports. Airport authorities frequently require airlines to execute long-term leases to...

  • Page 32
    ...of operations, financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Foreign Ownership Restrictions Under current federal law, non-U.S. citizens cannot own or control more than 25% of the outstanding voting securities of a domestic air carrier. We...

  • Page 33
    ... of dividends. The stock performance shown on the graph below represents historical stock performance and is not necessarily indicative of future stock price performance. Stock Performance Graph 9/27/2005 12/31/2005 12/31/2006 12/31/2007 12/31/2008 US Airways Group, Inc. Amex Airline Index...

  • Page 34
    ... financial statements for the respective periods, the related notes and the related reports of US Airways Group's independent registered public accounting firm. 2008 Year Ended December 31, 2007 2006 2005 (In millions except share data) 2004 Consolidated statements of operations data: Operating...

  • Page 35
    ... and management staff. The 2007 period included $187 million of net unrealized gains on fuel hedging instruments, $7 million in tax credits due to an IRS rule change allowing us to recover tax amounts for years 2003-2006 for certain fuel usage, $9 million of insurance settlement proceeds...

  • Page 36
    ...benefit liabilities and other. Selected Consolidated Financial Data of US Airways The selected consolidated financial data presented below under the captions "Consolidated Statements of Operations Data" and "Consolidated Balance Sheet Data" as of and for the years ended December 31, 2008, 2007, 2006...

  • Page 37
    ... with the return of certain leased aircraft and $1 million of severance costs for terminated employees resulting from the merger. (c) The 2008 period included $214 million in non-cash charges to record other than temporary impairments for US Airways' investments in auction rate securities primarily...

  • Page 38
    .... We operate the fifth largest airline in the United States as measured by domestic mainline RPMs and ASMs. We have primary hubs in Charlotte, Philadelphia and Phoenix and secondary hubs/focus cities in New York, Washington, D.C., Boston and Las Vegas. We offer scheduled passenger service on more...

  • Page 39
    ... in 2008 in order to generate additional revenue. These include a first and second checked bag service fee, a new beverage purchase program, processing fees for travel awards issued through our Dividend Miles frequent traveler program, our new Choice Seats program, increases to the cost 37

  • Page 40
    ...year 2008, our 80.1% on-time performance ranked first among the big six hub and spoke carriers and second among the ten largest U.S. airlines as measured by the DOT's Consumer Air Travel Report. See the "Customer Service" section below for further discussion. Liquidity In 2008, we took the following...

  • Page 41
    ... increase in restricted cash, by certain credit card processors for advance ticket sales for which we have not yet provided air transportation. Our long-term investments in marketable securities consist of investments in auction rate securities. During 2008, we recorded a decline in the fair value...

  • Page 42
    ... 31, 2008, 2007 and 2006: 2008 Full Year 2007 2006 On-time performance(a) Completion factor(b) Mishandled baggage(c) Customer complaints(d) (a) (b) (c) (d) Percentage of reported flight operations arriving on time as defined by the DOT. Percentage of scheduled flight operations completed. Rate of...

  • Page 43
    ... an increase to long-term disability obligations for US Airways' pilots as a result of a change in the FAA mandated retirement age for pilots from 60 to 65. • $7 million in tax credits due to an IRS rule change allowing us to recover certain fuel usage tax amounts for years 2003-2006, $9 million...

  • Page 44
    ... operating data: Year Ended December 31, 2008 2007 2006 Percent Change 2008-2007 Percent Change 2007-2006 Revenue passenger miles (millions)(a) Available seat miles (millions)(b) Passenger load factor (percent)(c) Yield (cents)(d) Passenger revenue per available seat mile (cents)(e) Operating cost...

  • Page 45
    ... are the result of the same favorable industry pricing environment discussed in the mainline operations above. Other revenues were $912 million in 2008, an increase of $183 million from 2007 due primarily to our new revenue initiatives, principally our first and second checked bag fees, which were...

  • Page 46
    ... US Airways Group and America West Holdings in September 2005, which contributed 0.84 cents to our mainline CASM for 2008. The remaining period over period increase in CASM was driven principally by increases in aircraft fuel costs ($988 million or 1.41 cents per ASM) and a net loss on fuel hedging...

  • Page 47
    ... for the years ended December 31, 2008 and 2007: Year Ended December 31, 2008 2007 (In cents) Percent Change Mainline CASM: Aircraft fuel and related taxes Loss (gain) on fuel hedging instruments, net Salaries and related costs Aircraft rent Aircraft maintenance Other rent and landing fees Selling...

  • Page 48
    ... balance outstanding as compared to the 2007 period. Other nonoperating expense, net in 2008 included $214 million in other than temporary impairment charges for our investments in auction rate securities primarily due to the length of time and extent to which the fair value has been less than cost...

  • Page 49
    ... pro-rate carriers through MSC. Operating Expenses: 2007 (In millions) 2006 Percent Change Operating expenses: Aircraft fuel and related taxes Loss (gain) on fuel hedging instruments, net: Realized Unrealized Salaries and related costs Aircraft rent Aircraft maintenance Other rent and landing fees...

  • Page 50
    ... by a 4% decrease in gallons consumed as block hours were down 6.2% in the 2007 period due to planned reductions in Express flying. Other Express operating expenses increased as a result of higher rates paid under certain capacity purchase agreements due to contractually scheduled rate changes. 48

  • Page 51
    ...the balance sheet of the combined entity, and no other assets or liabilities are recognized as a result of the contribution of shares. This management's discussion and analysis of financial condition and results of operations is presented as though the transfer had occurred at the time of US Airways...

  • Page 52
    ... charges for US Airways' investments in auction rate securities, all included in nonoperating expense. In 2006, US Airways realized operating income of $557 million and income before income taxes and cumulative effect of change in accounting principle of $446 million. US Airways' results were...

  • Page 53
    ... operating data: Year Ended December 31, 2008 2007 2006 Percent Change 2008-2007 Percent Change 2007-2006 Revenue passenger miles (millions)(a) Available seat miles (millions)(b) Passenger load factor (percent)(c) Yield (cents)(d) Passenger revenue per available seat mile (cents)(e) Aircraft at end...

  • Page 54
    ... the result of the same favorable industry pricing environment discussed in the mainline operations above. Other revenues were $1.04 billion in 2008, an increase of $196 million from 2007 due primarily to US Airways' new revenue initiatives, principally its first and second checked bag fees, which...

  • Page 55
    ... goodwill created by the merger of US Airways Group and America West Holdings in September 2005. The remaining period over period increase in mainline operating expenses was driven principally by increases in aircraft fuel costs ($988 million) and a net loss on fuel hedging instruments ($356 million...

  • Page 56
    ...23 in 2007 to a record high $3.23 in 2008. Other Express operating expenses increased $40 million year-over year as a result of the 5.6% increase in Express capacity in 2008, partially offset by a decrease in amounts paid under capacity purchases with US Airways Group's wholly owned Express carriers...

  • Page 57
    ... million from the 2006 period. Express capacity, as measured by ASMs, decreased 5% in 2007, due primarily to planned reductions in Express flying during 2007. Express RPMs decreased by 2.6% on lower capacity resulting in a 1.8 point increase in load factor to 73%. Passenger yield increased by 1% to...

  • Page 58
    ... its fuel hedging program in 2007 as the price of heating oil exceeded the upper limit on certain of its collar transactions. • Salaries and related costs increased 10.1% due to a $99 million charge for an increase to long-term disability obligations for US Airways' pilots as a result of a change...

  • Page 59
    ... as block hours were down 6.2% in the 2007 period due to planned reductions in Express flying. Other Express operating expenses increased as a result of higher rates paid under certain capacity purchase agreements due to contractually scheduled rate changes. Nonoperating Income (Expense): 2007 (In...

  • Page 60
    ... sell these securities in order to operate our business. We believe that, based on our current unrestricted cash, cash equivalents and short-term marketable securities balances of $1.05 billion as of December 31, 2008, the current lack of liquidity in our investments in auction rate securities will...

  • Page 61
    ...operating cash flow by $461 million as we were required to post collateral in the form of cash deposits and letters of credit we issued in connection with no premium collars entered into as part of our fuel hedging program. This compares to the same period in 2007 when we received the return of fuel...

  • Page 62
    ...190 aircraft, and an increase in equipment purchase deposits of $80 million. The net sales of investments in marketable securities in the 2007 period were primarily certain auction rate securities sold at par value in the third quarter of 2007. The change in the restricted cash balances for the 2007...

  • Page 63
    ...190 aircraft, and an increase in equipment purchase deposits of $80 million. The net sales of investments in marketable securities in the 2007 period were primarily certain auction rate securities sold at par value in the third quarter of 2007. The change in the restricted cash balances for the 2007...

  • Page 64
    ...Embraer 190 aircraft, and an increase in equipment purchase deposits of $80 million. The net sales of investments in marketable securities in the 2007 period were primarily certain auction rate securities sold at par value in the third quarter of 2007. Principal investing activities in 2006 included...

  • Page 65
    ... agreements with companies that process customer credit card transactions for the sale of air travel and other services. Credit card processors have financial risk associated with tickets purchased for travel because, although the processor generally forwards the cash related to the purchase to us...

  • Page 66
    ... pre-purchased miles at any time, from time to time, without penalty. Pursuant to the amendment to the co-branded credit card agreement, the expiration date of the agreement was extended to 2017. On October 20, 2008, US Airways and Airbus entered into amendments to the A320 Family Aircraft Purchase...

  • Page 67
    ...-delivery payments required by US Airways' purchase agreements with Airbus. As of December 31, 2008, the outstanding balance of this credit facility agreement is $73 million. The remaining amounts under this facility will be drawn as pre-delivery payments come due. The loan bears interest at a rate...

  • Page 68
    ... in leasing, hedging or research and development arrangements with us. We have no off-balance sheet arrangements of the types described in the first three categories above that we believe may have a material current or future effect on financial condition, liquidity or results of operations. Certain...

  • Page 69
    ... beneficiary of these variable interest entities, based on cash flow analyses. Additionally, US Airways has analyzed the arrangements with other carriers with which US Airways has long-term capacity purchase agreements and has concluded that it is not required to consolidate any of the entities...

  • Page 70
    ... cash contractual obligations as of December 31, 2008 (in millions): 2009 2010 Payments Due by Period 2011 2012 2013 Thereafter Total US Airways Group(1) Debt(2) Interest obligations(3) US Airways(4) Debt and capital lease obligations(5)(6) Interest obligations(3)(6) Aircraft purchase and operating...

  • Page 71
    ... had changed during the second quarter of 2008 which required us to perform an interim period goodwill impairment test. Subsequent to the first quarter of 2008, we experienced a significant decline in market capitalization due to overall airline industry conditions driven by record high fuel prices...

  • Page 72
    ... unit is based on the present value of estimated future cash flows. The income approach is dependent on a number of significant management assumptions, including estimates of future capacity, passenger yield, traffic, fuel, other operating costs and discount rates. Due to current market conditions...

  • Page 73
    ... of the recovery rates in the event of default for each security. These estimated fair values could change significantly based on future market conditions. We review declines in the fair value of our investments in marketable securities in accordance with Financial Accounting Standards Board ("FASB...

  • Page 74
    ...be redeemed on partner airlines. These estimates are based on past customer behavior. Estimated future travel awards for travel on US Airways are valued at the combined estimated average incremental cost of carrying one additional passenger. Incremental costs include unit costs for fuel, credit card...

  • Page 75
    ... amendment of FASB Statements No. 87, 88, 106, and 132(R)." The measurement date provisions require plan assets and obligations to be measured as of the employer's balance sheet date. We previously measured our other postretirement benefit obligations as of September 30 each year. As a result of the...

  • Page 76
    ... of certain notes to common stock in 2006. We do not believe the adoption of FSP APB 14-1 will materially impact our consolidated financial statements. In October 2008, the FASB issued FSP FAS 157-3, "Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active." FSP...

  • Page 77
    ...fuel costs materially and adversely affect our liquidity, results of operations and financial condition. Our 2009 forecasted mainline and Express fuel consumption is approximately 1.44 billion gallons, and a one cent per gallon increase in aviation fuel price results in a $14 million annual increase...

  • Page 78
    ... sell these securities in order to operate our business. We believe that, based on our current unrestricted cash, cash equivalents and short-term marketable securities balances of $1.05 billion at December 31, 2008, the current lack of liquidity in our investments in auction rate securities will not...

  • Page 79
    ... (COSO) in Internal Control-Integrated Framework. Based on our assessment and those criteria, management concludes that US Airways Group maintained effective internal control over financial reporting as of December 31, 2008. US Airways Group's independent registered public accounting firm has issued...

  • Page 80
    ... of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of US Airways Group and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for each of the years in the...

  • Page 81
    ... consolidated balance sheets of US Airways Group, Inc. and subsidiaries (the Company) as of December 31, 2008 and 2007, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for each of the years in the three-year period ended December 31, 2008. These...

  • Page 82
    ...Statements of Operations For the Years Ended December 31, 2008, 2007 and 2006 2008 2007 2006 (In millions, except share and per share amounts) Operating revenues: Mainline passenger $ 8,183 Express passenger 2,879 Cargo 144 Other 912 Total operating revenues 12,118 Operating expenses: Aircraft fuel...

  • Page 83
    Table of Contents US Airways Group, Inc. Consolidated Balance Sheets December 31, 2008 and 2007 2008 2007 (In millions, except share and per share amounts) ASSETS Current assets Cash and cash equivalents Investments in marketable securities Restricted cash Accounts receivable, net Materials and ...

  • Page 84
    ... and equipment Gain on forgiveness of debt Gain on sale of investments Goodwill impairment Impairment on auction rate securities Impairment on fixed assets Utilization of acquired net operating loss carryforwards Change in fair value of fuel hedging instruments, net Amortization of deferred credits...

  • Page 85
    ... Airways Group, Inc. Consolidated Statements of Stockholders' Equity (Deficit) For the Years Ended December 31, 2008, 2007 and 2006 Accumulated Additional Other Paid-In Accumulated Comprehensive Treasury Capital Deficit Income Stock (In millions, except share amounts) Common Stock Total $ Balance...

  • Page 86
    .... The Company operates the fifth largest airline in the United States as measured by domestic mainline revenue passenger miles ("RPMs") and available seat miles ("ASMs"). US Airways has primary hubs in Charlotte, Philadelphia and Phoenix and secondary hubs/focus cities in New York, Washington...

  • Page 87
    ...in marketable securities classified as noncurrent assets on the Company's balance sheet represent investments expected to be converted to cash after 12 months. Debt securities, other than auction rate securities, are classified as held to maturity in accordance with Statement of Financial Accounting...

  • Page 88
    ... assets. As a result of this impairment analysis, the Company recorded a $13 million impairment charge in 2008 related to Boeing 737 rotable parts included in flight equipment on its consolidated balance sheet. The Company recorded no impairment charges in the years ended December 31, 2007 and 2006...

  • Page 89
    ... unit is based on the present value of estimated future cash flows. The income approach is dependent on a number of significant management assumptions, including estimates of future capacity, passenger yield, traffic, fuel, other operating costs and discount rates. Due to current market conditions...

  • Page 90
    ... 25 years for airport take-off and landing slots and over the term of the lease for airport gate leasehold rights on a straight-line basis and are included in depreciation and amortization on the consolidated statements of operations. For the years ended December 31, 2008, 2007 and 2006, the Company...

  • Page 91
    ...costs in 2008 as a result of its current year financing transactions. (k) Frequent Traveler Program Members of the Dividend Miles program, the US Airways frequent traveler program, can redeem miles on US Airways or other members of the Star Alliance. The estimated cost of providing the travel award...

  • Page 92
    ...31, 2008 and 2007, the Company had open fuel hedging instruments in place, which do not currently qualify for hedge accounting under SFAS No. 133. Accordingly, the derivative hedging instruments are recorded as an asset or liability on the consolidated balance sheets at fair value and any changes in...

  • Page 93
    ... processing fees for travel awards issued through the Dividend Miles frequent traveler program and the marketing component earned from selling mileage credits to partners, as discussed in Note 1(k). (o) Maintenance and Repair Costs Maintenance and repair costs for owned and leased flight equipment...

  • Page 94
    ... Financial Statements - (Continued) Republic was complete, and Republic assumed the operations of the aircraft as a US Airways affiliate Express carrier. Express expenses consist of the following (in millions): Year Ended December 31, 2008 Year Ended December 31, 2007 Year Ended December 31, 2006...

  • Page 95
    ... on the Company's consolidated financial statements. 2. Special items, net Special items, net as shown on the consolidated statements of operations include the following charges (credits) (in millions): 2008 Year Ended December 31, 2007 2006 Merger related transition expenses(a) Asset impairment...

  • Page 96
    ... of the AWA FlightFund and US Airways Dividend Miles frequent traveler programs; $2 million in merger related aircraft lease return expenses and $9 million of other expenses. (b) In 2008, the Company recorded $18 million in non-cash charges related to the decline in fair value of certain spare parts...

  • Page 97
    ...shares include outstanding employee stock options, employee stock appreciation rights, employee restricted stock units and convertible debt. The following table presents the computation of basic and diluted EPS (in millions, except share and per share amounts): Year Ended December 31, 2008 2007 2006...

  • Page 98
    ...2008 and 2007 (in millions). Variable interest rates listed are the rates as of December 31, 2008 unless noted. December 31, December 31, 2008 2007 Secured Citicorp North America loan, variable interest rate of 2.97%, installments due through 2014(a) $ Equipment loans, aircraft pre-delivery payment...

  • Page 99
    ... reductions in the outstanding principal amount of the loan) of that amount held in accounts subject to control agreements, which would become restricted for use by the Company if certain adverse events occur per the terms of the agreement. On October 20, 2008, US Airways Group entered into an...

  • Page 100
    ...-delivery payments required by US Airways' purchase agreements with Airbus. As of December 31, 2008, the outstanding balance of this credit facility agreement is $73 million. The remaining amounts under this facility will be drawn as pre-delivery payments come due. The loan bears interest at a rate...

  • Page 101
    ... and the loan agreement. (g) Effective as of October 20, 2008, US Airways Group entered into an amendment to its co-branded credit card agreement with Barclays Bank Delaware. The amendment provides for, among other things, the pre-purchase of frequent flyer miles in an amount totaling $200 million...

  • Page 102
    Table of Contents US Airways Group, Inc. Notes to Consolidated Financial Statements - (Continued) February 2009, with the unrestricted cash balance in all cases including certain fuel hedge collateral. The reductions addressed the impact on the Company's unrestricted cash of its obligations to post...

  • Page 103
    ...At December 31, 2008, the estimated maturities of long-term debt and capital leases are as follows (in millions): 2009 2010 2011 2012 2013 Thereafter $ 372 254 373 345 208 2,601 4,153 $ Certain of the Company's long-term debt agreements contain minimum cash balance requirements and other covenants...

  • Page 104
    ... the asset and liability method. The Company files a consolidated federal income tax return with its wholly owned subsidiaries. The Company and its wholly owned subsidiaries allocate tax and tax items, such as net operating losses ("NOL") and net tax credits, between members of the group based on...

  • Page 105
    Table of Contents US Airways Group, Inc. Notes to Consolidated Financial Statements - (Continued) The components of the provision for income taxes are as follows (in millions): 2008 Year Ended December 31, 2007 2006 Current provision: Federal State Total current Deferred provision: Federal State ...

  • Page 106
    ...December 31, 2008 and 2007 are as follows (in millions): 2008 2007 Deferred tax assets: Net operating loss carryforwards Property, plant and equipment Investments Financing transactions Employee benefits Dividend Miles awards AMT credit carryforward Other deferred tax assets Valuation allowance Net...

  • Page 107
    ... world. Unfavorable economic conditions may result in decreased passenger demand for air travel, which in turn could have a negative effect on the Company's revenues. Similarly, the airline industry may not be able to sufficiently raise ticket prices to offset increases in aviation jet fuel prices...

  • Page 108
    ...available cash in money market securities and highly liquid debt instruments. As of December 31, 2008, the Company held auction rate securities totaling $411 million at par value, which are classified as available for sale securities and noncurrent assets on the Company's consolidated balance sheets...

  • Page 109
    ... 31, 2008 and 2007, respectively. The fair values were estimated using quoted market prices where available. For long-term debt not actively traded, fair values were estimated using a discounted cash flow analysis, based on the Company's current incremental borrowing rates for similar types of...

  • Page 110
    ... Contents US Airways Group, Inc. Notes to Consolidated Financial Statements - (Continued) (2) Since the Company's fuel hedging derivative instruments are not traded on a market exchange, the fair values are determined using valuation models which include assumptions about commodity prices based on...

  • Page 111
    ... changes in the fair value of plan assets, benefit obligations and the funded status of the plans and the amounts recognized in the Company's consolidated balance sheets as of December 31, 2008 and 2007 (in millions). Defined Benefit Pension Plans(1) Other Postretirement Benefits Year Ended Year...

  • Page 112
    ... net periodic benefit cost were as follows: Defined Benefit Pension Plans Year Ended Year Ended December 31, December 31, 2008 2007 Other Postretirement Benefits Year Ended Year Ended December 31, December 31, 2008 2007 Discount rate Expected return on plan assets Rate of compensation increase...

  • Page 113
    ... 2007 Other Postretirement Benefits Year Ended Year Ended December 31, December 31, 2008 2007 Service cost Interest cost Expected return on plan assets Amortization of actuarial gain Total periodic costs $ $ 1 3 (4) - - $ $ 2 $ 3 (3) - 2 $ 2 9 - (2) 9 $ $ 3 12 - - 15 In 2009, the Company...

  • Page 114
    ...59 million for profit sharing in 2007 and 2006, respectively, which is recorded in salaries and related costs. 9. Commitments and contingencies (a) Commitments to Purchase Flight Equipment and Maintenance Services Aircraft and Engine Purchase Commitments During 2008, the Company took delivery of 14...

  • Page 115
    ... 31, 2008, the Company had 343 aircraft under operating leases, with remaining terms ranging from one month to approximately 15 years. Ground facilities include executive offices, maintenance facilities and ticket and administrative offices. Public airports are utilized for flight operations under...

  • Page 116
    ...that certain variable costs, such as airport landing fees and passenger liability insurance, will be reimbursed 100% by US Airways. US Airways controls marketing, scheduling, ticketing, pricing and seat inventories. The regional jet capacity purchase agreements have expirations from 2012 to 2020 and...

  • Page 117
    ... Group, Inc. Notes to Consolidated Financial Statements - (Continued) (e) Legal Proceedings On September 12, 2004, US Airways Group and its domestic subsidiaries (collectively, the "Reorganized Debtors") filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United...

  • Page 118
    ... US Airways Group, Inc. Notes to Consolidated Financial Statements - (Continued) 10. Other comprehensive income (loss) The Company's other comprehensive income (loss) consisted of the following (in millions): Year Ended December 31, 2008 2007 2006 Net income (loss) Unrealized losses on available...

  • Page 119
    ... of directors until June 2008, is a Vice President and partner of PAR Capital Management, the general partner of PAR. PAR received 10,768,485 shares of US Airways Group common stock, including shares received pursuant to Participation Agreements with America West Holdings, for a total investment of...

  • Page 120
    ... US Airways Group, Inc. Notes to Consolidated Financial Statements - (Continued) Information concerning operating revenues in principal geographic areas is as follows (in millions): Year Ended December 31, 2008 Year Ended December 31, 2007 Year Ended December 31, 2006 United States Foreign Total...

  • Page 121
    ... 31, 2008, the Company has outstanding restricted stock unit awards ("RSUs") with service conditions (vesting periods) and RSUs with service and performance conditions (which the performance condition of obtaining a combined operating certificate for AWA and US Airways was met on September 26, 2007...

  • Page 122
    ...awards. The exercise of SARs will be settled with the issuance of shares of the Company's common stock. Stock option and SARs activity for the years ending December 31, 2008, 2007 and 2006 is as follows (stock options and SARs in thousands): Weighted Average Remaining Contractual Term (years) Stock...

  • Page 123
    Table of Contents US Airways Group, Inc. Notes to Consolidated Financial Statements - (Continued) Weighted Average Remaining Contractual Term (years) Stock Options and SARs Weighted Average Exercise Price Aggregate Intrinsic Value (In millions) 2005 Equity Incentive Plan Balance at December 31,...

  • Page 124
    ...$68 million, respectively. Cash received from stock option and SAR exercises during the years ended December 31, 2008, 2007 and 2006 was $0.1 million, $2 million and $31 million, respectively. Agreements with the Air Line Pilots Association ("ALPA") - US Airways Group and US Airways have a letter of...

  • Page 125
    ... obsolescence: Year ended December 31, 2008 Year ended December 31, 2007 Year ended December 31, 2006 Valuation allowance on deferred tax asset, net: Year ended December 31, 2008 Year ended December 31, 2007 Year ended December 31, 2006 17. Selected quarterly financial information (unaudited...

  • Page 126
    ... Consolidated Financial Statements - (Continued) 18. Subsequent events On January 15, 2009, US Airways flight 1549 was involved in an accident in New York that resulted in the aircraft landing in the Hudson River. The Airbus A320 aircraft was en route to Charlotte from LaGuardia with 150 passengers...

  • Page 127
    .... Based on our assessment and those criteria, management concludes that US Airways maintained effective internal control over financial reporting as of December 31, 2008. US Airways' independent registered public accounting firm has issued an audit report on the effectiveness of US Airways' internal...

  • Page 128
    ... of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of US Airways, Inc. and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of operations, stockholder's equity (deficit) and cash flows for each of the years in the...

  • Page 129
    ... Benefit Pension and Other Postretirement Plans. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), US Airways' internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control...

  • Page 130
    ...Years Ended December 31, 2008, 2007 and 2006 2008 2007 (In millions) 2006 Operating revenues: Mainline passenger Express passenger Cargo Other Total operating revenues Operating expenses: Aircraft fuel and related taxes Loss (gain) on fuel hedging instruments, net Salaries and related costs Express...

  • Page 131
    Table of Contents US Airways, Inc. Consolidated Balance Sheets December 31, 2008 and 2007 2008 2007 (In millions, except share and per share amounts) ASSETS Current assets Cash and cash equivalents Investments in marketable securities Restricted cash Accounts receivable, net Materials and supplies...

  • Page 132
    ... equipment Gain on forgiveness of debt Gain on sale of investments Goodwill impairment Impairment on auction rate securities Impairment on fixed assets Utilization of acquired net operating loss carryforwards Change in the fair value of fuel hedging instruments, net Amortization of deferred credits...

  • Page 133
    ... of Contents US Airways, Inc. Consolidated Statements of Stockholder's Equity (Deficit) For the Years Ended December 31, 2008, 2007 and 2006 Additional Retained Accumulated Other Paid-In Earnings Comprehensive Capital (Deficit) Income (Loss) (In millions) Common Stock Total $ Balance at December...

  • Page 134
    .... US Airways operates the fifth largest airline in the United States as measured by domestic mainline revenue passenger miles ("RPMs") and available seat miles ("ASMs"). US Airways has primary hubs in Charlotte, Philadelphia and Phoenix and secondary hubs/focus cities in New York, Washington...

  • Page 135
    ... Investments in marketable securities classified as noncurrent assets on US Airways' balance sheet represent investments expected to be converted to cash after 12 months. Debt securities, other than auction rate securities, are classified as held to maturity in accordance with Statement of Financial...

  • Page 136
    ... if the asset is leased. Interest capitalized for the years ended December 31, 2008, 2007 and 2006 was $6 million, $4 million and $2 million, respectively. Property and equipment is depreciated and amortized to residual values over the estimated useful lives or the lease term, whichever is...

  • Page 137
    ... assets. As a result of this impairment analysis, US Airways recorded a $13 million impairment charge in 2008 related to Boeing 737 rotable parts included in flight equipment on its consolidated balance sheet. US Airways recorded no impairment charges in the years ended December 31, 2007 and 2006...

  • Page 138
    ... unit is based on the present value of estimated future cash flows. The income approach is dependent on a number of significant management assumptions, including estimates of future capacity, passenger yield, traffic, fuel, other operating costs and discount rates. Due to current market conditions...

  • Page 139
    ... per year in 2009-2013 and $53 million thereafter to aircraft rent expense related to these leasehold interests. (k) Frequent Traveler Program Members of the Dividend Miles program, the US Airways frequent traveler program, can redeem miles on US Airways or other members of the Star Alliance. The...

  • Page 140
    ... 31, 2008 and 2007, US Airways had open fuel hedging instruments in place, which do not currently qualify for hedge accounting under SFAS 133. Accordingly, the derivative hedging instruments are recorded as an asset or liability on the consolidated balance sheets at fair value and any changes in...

  • Page 141
    ... processing fees for travel awards issued through the Dividend Miles frequent traveler program and the marketing component earned from selling mileage credits to partners, as discussed in Note 1(k). (o) Maintenance and Repair Costs Maintenance and repair costs for owned and leased flight equipment...

  • Page 142
    ... units is based on the market price of the underlying shares of common stock on the date of grant. See Note 13 for further discussion of stock-based compensation. (r) Express Expenses Expenses associated with US Airways Group's wholly owned regional airlines, affiliate regional airlines operating...

  • Page 143
    ... on US Airways' consolidated financial statements. 2. Special items, net Special items, net as shown on the consolidated statements of operations include the following charges (credits) (in millions): 2008 Year Ended December 31, 2007 2006 Merger related transition expenses(a) Asset impairment...

  • Page 144
    ... of the AWA FlightFund and US Airways Dividend Miles frequent traveler programs; $2 million in merger related aircraft lease return expenses and $9 million of other expenses. In 2008, US Airways recorded $18 million in non-cash charges related to the decline in fair value of certain spare parts...

  • Page 145
    ...-delivery payments required by US Airways' purchase agreements with Airbus. As of December 31, 2008, the outstanding balance of this credit facility agreement is $73 million. The remaining amounts under this facility will be drawn as pre-delivery payments come due. The loan bears interest at a rate...

  • Page 146
    ...slots at Ronald Reagan Washington National Airport and New York LaGuardia Airport. US Airways continues to hold the right to repurchase the slots anytime after the second anniversary of the slot sale-leaseback transaction. These transactions were accounted for as secured financings. Installments are...

  • Page 147
    ... 2011. The outstanding balance on the note at December 31, 2008 was $39 million at an interest rate of 6.6%. In October 2008, US Airways entered into a promissory note with GE Engine Services, Inc. pursuant to which maintenance payments up to $40 million due from October 2008 through March 2009...

  • Page 148
    ...as follows (in millions): 2009 2010 2011 2012 2013 Thereafter $ 356 221 257 246 192 1,423 2,695 $ Certain of US Airways' long-term debt agreements contain minimum cash balance requirements and other covenants with which US Airways was in compliance at December 31, 2008. Certain of US Airways' long...

  • Page 149
    ... statutory income tax rate as follows (in millions): Year Ended December 31, 2008 2007 2006 Income tax expense (benefit) at the federal statutory income tax rate Book expenses not deductible for tax purposes State income tax expense, net of federal income tax expense (benefit) Change in valuation...

  • Page 150
    ...December 31, 2008 and 2007 are as follows (in millions): 2008 2007 Deferred tax assets: Net operating loss carryforwards Property, plant and equipment Investments Financing transactions Employee benefits Dividend Miles awards AMT credit carryforward Other deferred tax assets Valuation allowance Net...

  • Page 151
    ... performance and liquidity. (a) Fuel Price Risk Because US Airways' operations are dependent upon aviation fuel, significant increases in aviation fuel costs materially and adversely affect its liquidity, results of operations and financial condition. To manage the risk of changes in aviation fuel...

  • Page 152
    ... available cash in money market securities and highly liquid debt instruments. As of December 31, 2008, US Airways held auction rate securities totaling $411 million at par value, which are classified as available for sale securities and noncurrent assets on US Airways' consolidated balance sheets...

  • Page 153
    ...December 31, 2008 and 2007, respectively. The fair values were estimated using quoted market prices where available. For long-term debt not actively traded, fair values were estimated using a discounted cash flow analysis, based on US Airways' current incremental borrowing rates for similar types of...

  • Page 154
    ...Benefits Plan The following table sets forth changes in the fair value of plan assets, benefit obligations and the funded status of the plans and the amounts recognized in US Airways' consolidated balance sheets as of December 31, 2008 and 2007 (in millions). Year Ended December 31, 2008 Year Ended...

  • Page 155
    ... Year Ended December 31, 2007 Year Ended December 31, 2006 Discount rate 5.94% 5.67% 5.3% Components of the net and total periodic cost for other postretirement benefits are as follows (in millions): Year Ended December 31, 2008 Year Ended December 31, 2007 Year Ended December 31, 2006 Service...

  • Page 156
    ...$59 million for profit sharing in 2007 and 2006, respectively, which is recorded in salaries and related costs. 8. Commitments and contingencies (a) Commitments to Purchase Flight Equipment and Maintenance Services Aircraft and Engine Purchase Commitments During 2008, US Airways took delivery of 14...

  • Page 157
    ... 31, 2008, US Airways had 291 mainline aircraft under operating leases, with remaining terms ranging from one month to approximately 15 years. Ground facilities include executive offices, maintenance facilities and ticket and administrative offices. Public airports are utilized for flight operations...

  • Page 158
    ... of Contents US Airways, Inc. Notes to Consolidated Financial Statements - (Continued) As of December 31, 2008, obligations under noncancellable operating leases for future minimum lease payments were as follows (in millions): 2009 2010 2011 2012 2013 Thereafter Total minimum lease payments Less...

  • Page 159
    ...that certain variable costs, such as airport landing fees and passenger liability insurance, will be reimbursed 100% by US Airways. US Airways controls marketing, scheduling, ticketing, pricing and seat inventories. The regional jet capacity purchase agreements have expirations from 2012 to 2020 and...

  • Page 160
    ... of US Airways Group's Citicorp credit facility. 9. Other comprehensive income (loss) US Airways' other comprehensive income (loss) consisted of the following (in millions): Year Ended December 31, 2008 2007 2006 Net income (loss) Unrealized losses on available for sale securities Recognition...

  • Page 161
    ... investing and financing activities were as follows (in millions): Year Ended December 31, 2008 2007 2006 Non-cash transactions: Interest payable converted to debt Maintenance payable converted to debt Forgiveness of intercompany payable to US Airways Group Repayment of Barclays prepaid miles loan...

  • Page 162
    ... primarily from passengers being carried by these affiliated companies. The rate per ASM that US Airways pays is based on estimates of the costs incurred to supply the capacity. US Airways recognized US Airways Express capacity purchase expense for the years ended December 31, 2008, 2007 and 2006 of...

  • Page 163
    ... to new awards or otherwise used to increase the share reserve under the 2008 Plan. The cash proceeds from option exercises will not be used to repurchase shares on the open market for reuse under the 2008 Plan. US Airways' net income (loss) for the years ended December 31, 2008, 2007 and 2006...

  • Page 164
    ... Financial Statements - (Continued) to the market price of the underlying shares of US Airways Group's common stock on the date of grant if vesting is based on a service or a performance condition. The grant-date fair value of RSU awards that are subject to both a service and a performance condition...

  • Page 165
    ... for the years ending December 31, 2008, 2007 and 2006 is as follows (stock options and SARs in thousands): Weighted Average Remaining Contractual Term (Years) Stock Options and SARs Weighted Average Exercise Price Aggregate Intrinsic Value (In millions) 1994 Incentive Equity Plan Balance at...

  • Page 166
    ... several assumptions. The risk-free interest rate is based on the U.S. Treasury yield curve in effect for the expected term of the stock option or SAR at the time of grant. The dividend yield is assumed to be zero since US Airways Group does not pay dividends and has no current plans to do so in the...

  • Page 167
    ... US Airways' plans. The per share fair value of the ALPA pilot stock options and assumptions used for the January 31, 2008, 2007 and 2006 grants were as follows: January 31, 2008 January 31, 2007 January 31, 2006 Per share fair value Risk free interest rate Expected dividend yield Contractual term...

  • Page 168
    ...96) $ On January 15, 2009, US Airways flight 1549 was involved in an accident in New York that resulted in the aircraft landing in the Hudson River. The Airbus A320 aircraft was en route to Charlotte from LaGuardia with 150 passengers and a crew of 5 (2 pilots and 3 flight attendants) onboard. All...

  • Page 169
    ... Financial Statements - (Continued) injuries. US Airways has insurance coverage for this aircraft (which is a total loss) as well as costs resulting from the accident, and there are no applicable deductibles. On January 16, 2009, US Airways exercised its right to obtain new loan commitments...

  • Page 170
    ...' internal control over financial reporting. Management's annual report on internal control over financial reporting and the related attestation report from US Airways Group's and US Airways' independent registered public accounting firm are located in Item 8A. "Consolidated Financial Statements and...

  • Page 171
    ... with the SEC. US Airways Group's stock is listed on the NYSE. As a result, its Chief Executive Officer is required to make and will make a CEO's Annual Certification to the New York Stock Exchange in accordance with Section 303A.12 of the New York Stock Exchange Listed Company Manual stating that...

  • Page 172
    ... Financial Statements The following consolidated financial statements of US Airways, Inc. are included in Part II, Item 8B of this report: - - - - - Consolidated Statements of Operations for the years ended December 31, 2008, 2007 and 2006 Consolidated Balance Sheets as of December 31, 2008 and 2007...

  • Page 173
    ... to US Airways Group's Annual Report on Form 10-K for the year ended December 31, 2007).* 10.4 Amendment No. 1 dated as of January 11, 2008 to the Amended and Restated Airbus A320 Family Aircraft Purchase Agreement dated as of October 2, 2007 between US Airways, Inc. and Airbus S.A.S. (incorporated...

  • Page 174
    ... quarter ended September 30, 2005).* Amendment No. 11 dated as of October 2, 2007 to the Airbus A330/A340 Purchase Agreement dated November 24, 1998 between US Airways Group and AVSA, S.A.R.L. (incorporated by reference to Exhibit 10.18 to US Airways Group's Annual Report on Form 10-K for the year...

  • Page 175
    ... to Exhibit 10.2 to US Airways Group's Quarterly Report on Form 10-Q for the quarter ended September 30, 2007).* 10.28 Amendment No. 4 dated as of March 14, 2008 to Amended and Restated Embraer Aircraft Purchase Agreement dated as of June 13, 2006 between US Airways Group and Embraer - Empresa...

  • Page 176
    ..., US Airways, Chase Alliance Partners, LLC, as successor to Chase Merchant Services, LLC, and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.2 to US Airways Group's Quarterly Report on Form 10-Q for the quarter ended June 30, 2008).* 10.42 America West Co-Branded Card Agreement...

  • Page 177
    ... the agreement from time to time (incorporated by reference to Exhibit 4.1 to US Airways Group's Current Report on Form 8-K dated April 7, 2006, filed on April 10, 2006). 10.55 Stockholders' Agreement, dated as of September 27, 2005, among US Airways Group and ACE Aviation America West Holdings Inc...

  • Page 178
    ... 2006).†10.74 Form of Stock Bonus Award Agreement for Non-Employee Directors under US Airways Group's 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.96 to US Airways Group's Annual Report on Form 10-K for the year ended December 31, 2007).†10.75 US Airways Group, Inc. 2008...

  • Page 179
    ... 10.82 America West Holdings 2002 Incentive Equity Plan as amended through May 23, 2002 (incorporated by reference to Exhibit 10.1 to US Airways Group's Quarterly Report on Form 10-Q for the quarter ended June 30, 2006).†10.83 2007 Performance-Based Award Program under the US Airways Group 2005...

  • Page 180
    ... Securities Exchange Act of 1934, as amended, the registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized. US Airways Group, Inc. By: /s/ W. Douglas Parker W. Douglas Parker Chairman and Chief Executive Officer Date: February 17, 2009 US...

  • Page 181
    ... and Chief Executive February 17, 2009 Officer (Principal Executive Officer) Executive Vice President and Chief February 17, 2009 Financial Officer (Principal Financial and Accounting Officer) Director February 17, 2009 Director February 17, 2009 Director February 17, 2009 Director February...

  • Page 182
    ...US Airways Group 2005 Equity Incentive Plan.†Summary of Director Compensation and Benefits.†Subsidiaries of US Airways Group. Consents of KPMG LLP, Independent Registered Public Accounting Firm of US Airways Group. Powers of Attorney. Certification of US Airways Group's Chief Executive Officer...

  • Page 183
    ... of America, having its principal corporate offices located at 111 West Rio Salado Parkway, Tempe, Arizona 85281, U.S.A.(the "Buyer"); WITNESSETH: WHEREAS, the Buyer and the Seller have entered into an Amended and Restated Airbus A320 Family Purchase Agreement, dated as of October 2, 2007, which...

  • Page 184
    ...terminated in its entirety and replaced by the Amended and Restated Letter No. 3 attached hereto. ** Confidential Treatment Requested. USA - Amendment No. 2 to Amended and Restated Airbus A320 Family Purchase Agreement Execution 081020-CT0803167-AMD2-USA-A320 PRIVILEGED AND CONFIDENTIAL Page 2 of 6

  • Page 185
    ... balance sheets of the Buyer's parent solely in favor of the administrative agent and any lenders ** Confidential Treatment Requested. USA - Amendment No. 2 to Amended and Restated Airbus A320 Family Purchase Agreement Execution 081020-CT0803167-AMD2-USA-A320 PRIVILEGED AND CONFIDENTIAL...

  • Page 186
    ... Loan Agreement remain outstanding, any "Eligible Lender" as defined in the Citi Loan Agreement and (ii) thereafter, (a) a commercial bank having total assets whose Dollar equivalent exceeds $5,000,000,000 (US dollars - five billion), (b) a finance company, insurance company or any other financial...

  • Page 187
    ...the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of Financial Accounting Savings Board approved by a significant segment of the accounting profession in the United States. "Citi Loan Agreement" means the Loan Agreement, dated...

  • Page 188
    ... year first above written. US AIRWAYS, INC. By: Its: /s/ Thomas T. Weir Vice President and Treasurer AIRBUS S.A.S. By: Its: /s/ John J. Leahy Chief Operating Officer Customers USA - Amendment No. 2 to Amended and Restated Airbus A320 Family Purchase Agreement Execution 081020-CT0803167-AMD2-USA-A320...

  • Page 189
    ... NO. 3 TO AMENDED AND RESTATED A320 FAMILY AIRCRAFT PURCHASE AGREEMENT Dated as of October 2, 2007 As of October 20, 2008 US Airways, Inc. 111 West Rio Salado Parkway Tempe, Arizona 85281 Re: ** Ladies and Gentlemen: US Airways, Inc. (the "Buyer") and Airbus S.A.S. (the "Seller") have entered into...

  • Page 190
    ... counterparts shall together constitute one and the same instrument. ** Confidential Treatment Requested. USA - Amended and Restated Letter Agreement No. 3 to Amended and Restated Airbus A320 Family Purchase Agreement Execution 081020-CT0803167-LA3-USA-A320 PRIVILEGED AND CONFIDENTIAL LA 3 - 2 of 3

  • Page 191
    ... below and return one (1) such counterpart to the Seller. US AIRWAYS, INC. By: /s/ Thomas T. Weir Name: Thomas T. Weir Title: Vice President and Treasurer AIRBUS S.A.S. By: /s/ John J. Leahy Name: John J. Leahy Title: Chief Operating Officer Customers USA - Amended and Restated Letter Agreement No...

  • Page 192
    ... NO. 5 TO AMENDED AND RESTATED A320 FAMILY PURCHASE AGREEMENT Dated as of October 2, 2007 As of October 20, 2008 US Airways, Inc. 111 West Rio Salado Parkway Tempe, Arizona 85281 Re: ** Ladies and Gentlemen, US Airways, Inc. (the "Buyer") and Airbus S.A.S. (the "Seller") have entered into an...

  • Page 193
    ...counterparts shall together constitute one and the same instrument. ** Confidential Treatment Requested. USA - Amended and Restated Letter Agreement No. 5 to Amended and Restated Airbus A320 Family Purchase Agreement Execution 081020-CT0803167-LA5-USA-A320 PRIVILEGED AND CONFIDENTIAL LA 5 - 2 of 3

  • Page 194
    ... below and return one (1) such counterpart to the Seller. US AIRWAYS, INC. By: /s/ Thomas T. Weir Name: Thomas T. Weir Title: Vice President and Treasurer AIRBUS S.A.S. By: /s/ John J. Leahy Name: John J. Leahy Title: Chief Operating Officer Customers USA - Amended and Restated Letter Agreement No...

  • Page 195
    AMENDED AND RESTATED LETTER AGREEMENT NO. 9 TO AMENDED AND RESTATED A320 FAMILY AIRCRAFT PURCHASE AGREEMENT Dated as of October 2, 2007 As of October 20, 2008 US Airways, Inc. 111 West Rio Salado Parkway Tempe, Arizona 85281 Re: MISCELLANEOUS TERMS Ladies and Gentlemen, US Airways, Inc. (the "Buyer...

  • Page 196
    ...follows between the "QUOTE" and "UNQUOTE" QUOTE ** UNQUOTE 2.3 ** QUOTE ** UNQUOTE 2.4 ** QUOTE ** UNQUOTE ** Confidential Treatment Requested. USA - Amended and Restated Letter Agreement No. 9 to Amended and Restated Airbus A320 Family Purchase Agreement Execution 081020-CT0803167-LA9-USA-A320...

  • Page 197
    ... and the counterparts will together constitute one same instrument. ** Confidential Treatment Requested. USA - Amended and Restated Letter Agreement No. 9 to Amended and Restated Airbus A320 Family Purchase Agreement Execution 081020-CT0803167-LA9-USA-A320 PRIVILEGED AND CONFIDENTIAL LA 9 - 3 of 4

  • Page 198
    ... below and return one (1) such counterpart to the Seller. US AIRWAYS, INC. By: /s/ Thomas T. Weir Name: Thomas T. Weir Title: Vice President and Treasurer AIRBUS S.A.S. By: /s/ John J. Leahy Name: John J. Leahy Title: Chief Operating Officer Customers USA - Amended and Restated Letter Agreement No...

  • Page 199
    ..., United States of America, having its principal corporate offices located at 111 West Rio Salado Parkway, Tempe, Arizona 85281, U.S.A. (the "Buyer"); WITNESSETH: WHEREAS, the Buyer and the Seller entered into an Airbus A330 Purchase Agreement, dated as of October 2, 2007, which agreement, as...

  • Page 200
    ... assigned to them in the Agreement. The terms "herein," "hereof," and "hereunder" and words of similar import refer to this Amendment. **Confidential Treatment Requested. USA - Airbus A330 Purchase Agreement Amendment 2 - Execution 081020-CT0803167-AMD2-USA-A330 2/7 CONFIDENTIAL AND PRIVILEGED

  • Page 201
    ... TERMS Letter Agreement ...rights and remedies, **. 5. 6. ASSET COVENANTS QUOTE The following is inserted into the Agreement after Clause 22.13: **Confidential Treatment Requested. USA - Airbus A330 Purchase Agreement Amendment 2 - Execution 081020-CT0803167-AMD2-USA-A330 3/7 CONFIDENTIAL...

  • Page 202
    ... time adopted by the board of directors of the Buyer's parent or any committee thereof. "Eligible Lender" means (i) so long as any loans or obligations under the Citi Loan Agreement remain outstanding, any "Eligible Lender" as defined in the Citi Loan **Confidential Treatment Requested. USA - Airbus...

  • Page 203
    ... having total assets whose Dollar equivalent exceeds $5,000,000,000 (US dollars - five billion), (b) a finance company, insurance company or any other financial institution or fund, in each case reasonably acceptable to the Seller and regularly engaged in making, purchase or investing in loans and...

  • Page 204
    ... delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument. **Confidential Treatment Requested. USA - Airbus A330 Purchase Agreement Amendment 2 - Execution 081020-CT0803167-AMD2-USA-A330 6/7 CONFIDENTIAL AND PRIVILEGED

  • Page 205
    ... year first above written. US AIRWAYS, INC. By: /s/ Thomas T. Weir Its: Vice President and Treasurer AIRBUS S.A.S. By: /s/ John J. Leahy Its: Chief Operating Officer Customers **Confidential Treatment Requested. USA - Airbus A330 Purchase Agreement Amendment 2 - Execution 081020-CT0803167-AMD2-USA...

  • Page 206
    .... 5 TO AIRBUS A330 PURCHASE AGREEMENT Dated as of October 2, 2007 October 20, 2008 US Airways, Inc. 111 West Rio Salado Pkwy Tempe, Arizona 85281 Re: ** Ladies and Gentlemen, US Airways, Inc. (the "Buyer") and Airbus S.A.S. (the "Seller") have entered into an Airbus A330 Purchase Agreement dated as...

  • Page 207
    ...This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and ...Confidential Treatment Requested. USA - Amended and Restated Letter Agreement No. 5 to Airbus A330 Purchase Agreement Execution 081020-CT0803167-LA5-USA-A330 PRIVILEGED AND CONFIDENTIAL...

  • Page 208
    ...Weir Title: Vice President and Treasurer AIRBUS S.A.S. By: /s/ John J. Leahy Name: John J. Leahy Title: Chief Operating Officer Customers **Confidential Treatment Requested. USA - Amended and Restated Letter Agreement No. 5 to Airbus A330 Purchase Agreement Execution 081020-CT0803167-LA5-USA-A330 LA...

  • Page 209
    ... AND RESTATED LETTER AGREEMENT NO. 9 TO AIRBUS A330 PURCHASE AGREEMENT Dated as of October 2, 2007 As of October 20, 2008 US Airways, Inc. 111 West Rio Salado Parkway Tempe, Arizona 85281 Re: MISCELLANEOUS Ladies and Gentlemen, US Airways, Inc., (the "Buyer") and Airbus S.A.S. (the "Seller") have...

  • Page 210
    ...This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and ...Confidential Treatment Requested. USA - Amended and Restated Letter Agreement No. 9 to Airbus A330 Purchase Agreement Execution 081020-CT0803167-LA9-USA-A330 PRIVILEGED AND CONFIDENTIAL...

  • Page 211
    .... US AIRWAYS, INC. By: /s/ Thomas T. Weir Name: Thomas T. Weir Title: Vice President and Treasurer AIRBUS S.A.S. By: /s/ John J. Leahy Name: John J. Leahy Title: Chief Operating Officer Customers USA Airbus A330 Purchase Agreement Execution 081020-CT0803167-LA9-USA-A330 PRIVILEGED AND CONFIDENTIAL...

  • Page 212
    ..., United States of America, having its principal corporate offices located at 111 West Rio Salado Parkway, Tempe, Arizona 85281, U.S.A. (the "Buyer"); WITNESSETH: WHEREAS, the Buyer and the Seller entered into an Amended and Restated Airbus A350 XWB Purchase Agreement, dated as of October 2, 2007...

  • Page 213
    ... will have the Aircraft Ready for Delivery at the Delivery Location within the following months (each a "Scheduled Delivery Month"). **Confidential Treatment Requested. USA - Airbus A350 XWB Purchase Agreement Amendment 1 Execution 081020-CT0803167-AMD1-USA-A350 2/8 CONFIDENTIAL AND PRIVILEGED

  • Page 214
    Year CAC ID Number Aircraft Scheduled Delivery Month 2015 2016 2017 2018 TOTAL UNQUOTE 2. ** ** ** ** ** 22 ** ** ** ** ** ** ** ** Letter Agreement No. 3 is terminated in its entirety and replaced by the Amended and Restated Letter No. 3 attached hereto. 3. ** Letter Agreement No. 5 is ...

  • Page 215
    ...QUOTE ** UNQUOTE 8. ** Letter Agreement No. 10 is hereby terminated. **Confidential Treatment Requested. USA - Airbus A350 XWB Purchase Agreement Amendment 1 Execution 081020-CT0803167-AMD1-USA-A350 4/8 In Clause 1.1.1 of Letter Agreement No. 2, the following is deleted: CONFIDENTIAL AND PRIVILEGED

  • Page 216
    ...(i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States government or (b) issued by any agency or instrumentality of the United **Confidential Treatment Requested. USA - Airbus A350 XWB Purchase Agreement Amendment 1 Execution...

  • Page 217
    ...Public Accountants and statements and pronouncements of Financial Accounting Savings Board approved by a significant segment of the accounting profession in the United States. **Confidential Treatment Requested. USA - Airbus A350 XWB Purchase Agreement Amendment 1 Execution 081020-CT0803167-AMD1-USA...

  • Page 218
    "Citi Loan Agreement" means the Loan Agreement, dated as of March 23, 2007, among Buyer's parent, certain subsidiaries of the Buyer's parent, the lenders from time to time party thereto and Citicorp North America, Inc., as administrative agent. UNQUOTE 12. EFFECT OF AMENDMENT 12.1 Upon execution, ...

  • Page 219
    ... day and year first above written. US AIRWAYS, INC. By: /s/ Thomas T. Weir Its: Vice President and Treasurer AIRBUS S.A.S. By: /s/ John J. Leahy Its: Chief Operating Officer Customers **Confidential Treatment Requested. USA - Airbus A350 XWB Purchase Agreement Amendment 1 Execution 081020-CT0803167...

  • Page 220
    ... B TO LETTER AGREEMENT NO. 12 Planning for the delivery of the A350-800/Trent XWB 75,000 lb aircraft: Scheduled Delivery Quarter Year Quantity Total 22 **Confidential Treatment Requested. Amended and Restated Airbus A350 XWB Purchase Agreement Execution PRIVILEGED AND CONFIDENTIAL LA 12...

  • Page 221
    ... NO. 3 TO THE AMENDED AND RESTATED AIRBUS A350 XWB PURCHASE AGREEMENT Dated as of October 2, 2007 As of October 20, 2008 US Airways, Inc. 111 West Rio Salado Parkway Tempe, Arizona 85281 Re: ** Ladies and Gentlemen, US Airways, Inc. (the "Buyer") and Airbus S.A.S. (the "Seller") have entered into an...

  • Page 222
    ... the counterparts will together constitute one and the same instrument. **Confidential Treatment Requested. USA - Amended and Restated Letter Agreement No. 3 to Amended and Restated Airbus A350 XWB Purchase Agreement Execution 081020-CT0803167-LA3-USA-A350 PRIVILEGED AND CONFIDENTIAL LA 3 - 2 of 3

  • Page 223
    ... to the Seller. US AIRWAYS, INC. By: /s/ Thomas T. Weir Name: Thomas T. Weir Title: Vice President and Treasurer AIRBUS S.A.S. By: /s/ John J. Leahy Name: John J. Leahy Title: Chief Operating Officer Customers Confidential Treatment Requested. A - Amended and Restated Letter Agreement No. 3 to...

  • Page 224
    ... NO. 5 TO AMENDED AND RESTATED AIRBUS A350 XWB PURCHASE AGREEMENT Dated as of October 2, 2007 As of October 20, 2008 US Airways, Inc. 111 West Rio Salado Parkway Tempe, Arizona 85281 Re: ** Ladies and Gentlemen, US Airways, Inc. (the "Buyer") and Airbus S.A.S. (the "Seller") have entered into...

  • Page 225
    ... the counterparts will together constitute one and the same instrument. **Confidential Treatment Requested. USA Amended and Restated Letter Agreement No. 5 to Amended and Restated Airbus A350 XWB Purchase Agreement Execution 081020-CT0803167-LA5-USA-A350 PRIVILEGED AND CONFIDENTIAL LA 5 - 2 of 3

  • Page 226
    ... Weir Title: Vice President and Treasurer AIRBUS S.A.S. By: Title: /s/ John J. Leahy Name: John J. Leahy Chief Operating Officer Customers **Confidential Treatment Requested. USA Amended and Restated Letter Agreement No. 5 to Amended and Restated Airbus A350 XWB Purchase Agreement Execution 081020...

  • Page 227
    AMENDED AND RESTATED LETTER AGREEMENT NO. 9 TO AMENDED AND RESTATED AIRBUS A350 XWB AIRCRAFT PURCHASE AGREEMENT Dated as of October 2, 2007 As of October 20, 2008 US Airways, Inc. 111 West Rio Salado Parkway Tempe, Arizona 85281 Re: MISCELLANEOUS Ladies and Gentlemen, US Airways, Inc. (the "Buyer") ...

  • Page 228
    ... the counterparts will together constitute one and the same instrument. **Confidential Treatment Requested. USA - Amended and Restated Letter Agreement No. 9 to PRIVILEGED AND CONFIDENTIAL Amended and Restated Airbus A350 XWB Purchase Agreement Execution 081020-CT0803167-LA9-USA-A350 LA 9 - 2 of 3

  • Page 229
    ... Vice President and Treasurer AIRBUS S.A.S. By: Name: Title: /s/ John J. Leahy John J. Leahy Chief Operating Officer Customers USA - Amended and Restated Letter Agreement No. 9 to Amended and Restated Airbus A350 XWB Purchase Agreement PRIVILEGED AND CONFIDENTIAL Execution 081020-CT0803167-LA9-USA...

  • Page 230
    ... No. 6 and the Purchase Agreement, the terms, conditions and provisions of this Amendment No. 6 shall control. WHEREAS, Embraer and Buyer have agreed to revise the Contractual Delivery Month of the Additional Aircraft and Option Aircraft. NOW, THEREFORE, for good and valuable consideration which is...

  • Page 231
    ... Aircraft delivery schedule: 2.1 Article 2 of Attachment "E" to the Purchase Agreement shall be deleted and replaced by the following: "2. Option Aircraft Delivery Schedule Option Aircraft Option Aircraft # Contractual Delivery Month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 ** Confidential Treatment...

  • Page 232
    ...Yokota Executive Vice President Strategic Planning and Technology Development /s/ Artur Coutinho Artur Coutinho Executive Vice President of Industrial Operations US Airways Group, Inc. By: Name: Title: Date: Place: /s/ Thomas T. Weir Thomas T. Weir Vice President and Treasurer October 28, 2008 Tempe...

  • Page 233
    ..., America West Airlines, Inc. ("America West") and Juniper Bank are parties to that certain America West Co-Branded Card Agreement, dated January 25, 2005 (the "Original Agreement"); WHEREAS, US Airways Group merged with America West's parent company, America West Holdings Corporation, and America...

  • Page 234
    ... Program until such amount is reduced to $850,000,000. "Closing Conditions" as defined in Section 14.1. "Collateral" shall mean the sum of cash posted directly with US Airways Group's fuel hedge counterparties and cash posted to collateralize letters of credit issued for the benefit of US Airways...

  • Page 235
    ... in Section 14.3. EXECUTION COPY "Unrestricted Cash" shall mean the sum of cash, cash equivalents, short-term investments and available for sale securities (in each case unrestricted) maintained by US Airways Group as depicted on its balance sheet." c. Section 4.2.2 of the Agreement is deleted in...

  • Page 236
    ... Base Miles awarded per Net New Purchase Transactions." d. Section 4.6 of the Agreement is deleted in its entirety and replaced with the following: "4.6 Suspension Events. If either of the following (each a "Suspension Event") occurs: (i) US Airways Group fails to maintain a frequent flyer program...

  • Page 237
    ...would be included as a Passenger Enplanement), and (ii) "Active Frequent Flyer" means a US Airways FF Participant who has accrued miles from flights on America West or US Airways in the **period ending**. The "Passenger Enplanements Baseline Year" shall be the Passenger Enplanements for the **period...

  • Page 238
    ...Shop Period." "4.12 Annual Bonus Payment. Commencing in**, Juniper Bank shall pay US Airways Group an annual bonus of **(the "Annual Bonus Payment"). The Annual Bonus Payment shall be paid on **and on each anniversary of that date thereafter for the remaining Term of this Agreement and any extension...

  • Page 239
    ... Group for fees otherwise earned hereunder in the manner and in accordance with the following terms and conditions. In addition, US Airways shall pay interest on the value of the outstanding Pre-Purchased Miles as set forth below. 14.2.1 Payment with Pre-Purchased Miles. Commencing in November, 2008...

  • Page 240
    ... Cash will include Collateral for fuel hedge contracts**. By way of example, if October is being measured for November's Subsequent Purchase, US Airways Group's Unrestricted Cash (including the fuel hedge contracts) will be measured as of October 31st**. If US Airways Group's Unrestricted Cash...

  • Page 241
    CONFIDENTIAL (iii) (iv) (v) (vi) No Early Payment Event has occurred in the month being measured. EXECUTION COPY No material change shall have occurred to the **card benefits as set forth in Exhibit E, except as permitted pursuant to such Exhibit E. No merger of US Airways Group has occurred ...

  • Page 242
    ...of the Agreement is deleted in its entirety and replaced with the following: "17. REPORTING EXECUTION COPY US Airways Group shall make available to Juniper Bank the following reports: (i) annual audited financials statements within 105 days after the end of each fiscal year and unaudited quarterly...

  • Page 243
    CONFIDENTIAL EXECUTION COPY of the terms and provisions of the Agreement. If any conflict exists between the terms and provisions of the Agreement and this Amendment No. 6, the terms and provisions of this Amendment No. 6 will govern and control. 5. Entire Agreement. The Agreement, as amended by ...

  • Page 244
    ... Group have executed and delivered this Amendment No. 6 as of the date first written above. US AIRWAYS GROUP, INC. BARCLAYS BANK DELAWARE Formerly known as JUNIPER BANK /s/ Lloyd Wirshba By: Lloyd Wirshba By: Title: CEO /s/ J. Scott Kirby By: J. Scott Kirby By: Title: President ** Confidential...

  • Page 245
    CONFIDENTIAL EXHIBIT E **CARDHOLDER BENEFITS US Airways provided benefits** EXECUTION COPY Consumer cards** Consumer cards** Consumer cards** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** Confidential Treatment Requested.

  • Page 246
    CONFIDENTIAL EXHIBIT F ** Marketing Channel Start Date EXECUTION COPY Frequency Confidential Treatment Requested.

  • Page 247
    Exhibit 10.49 Execution Version LOAN AGREEMENT [SPARE PARTS] DATED AS OF OCTOBER 20, 2008 AMONG US AIRWAYS, INC., GENERAL ELECTRIC CAPITAL CORPORATION, AS ADMINISTRATIVE AGENT GENERAL ELECTRIC CAPITAL CORPORATION, AS COLLATERAL AGENT, GENERAL ELECTRIC CAPITAL CORPORATION AS ORIGINAL LENDER ...

  • Page 248
    ... Governmental Approvals (e) Litigation (f) Financial Condition (g) No Default (h) Investment and Holding Company Status (i) Use of Proceeds (j) Licenses, Permits, etc. (k) Compliance with Laws (l) Tax Returns (m) Information (n) ERISA Section 3.2. The Pledged Spare Parts (a) Good Title (b) Filings...

  • Page 249
    ... Statements and Other Information (b) Existence; Conduct of Business (c) Mergers and Consolidations (d) Delivery of Post-Recording FAA Opinion (e) Software (f) Compliance with Mortgage (g) ERISA (h) Minimum Unrestricted Cash Amount (i) Records (i) Operations of Affiliates ARTICLE V INCREASED COSTS...

  • Page 250
    ... Transaction Agents and Affiliates Section 8.8. Indemnification Section 8.9. Successor Transaction Agents ARTICLE IX MISCELLANEOUS Section 9.1. Amendments Section 9.2. Notices Section 9.3. Costs and Expenses Section 9.4. Certain Agreements Section 9.5. Entire Agreement Section 9.6. Cumulative Rights...

  • Page 251
    ... (CONTINUED) Schedule 1 Schedule 2 Schedule 3 Schedule 4 Schedule 5 EXHIBIT A EXHIBIT B EXHIBIT C EXHIBIT D EXHIBIT E EXHIBIT F EXHIBIT G EXHIBIT H EXHIBIT I EXHIBIT J EXHIBIT K EXHIBIT L EXHIBIT M EXHIBIT N EXHIBIT O Definitions Amortization of the Loan Certain Information ERISA Plans Certain...

  • Page 252
    ...herein. The parties hereto agree as follows: ARTICLE I THE LOAN Section 1.1. The Loan. (a) Commitments. Subject to the terms and conditions of this Loan Agreement, on the Funding Date, each Lender shall advance funds in an amount equal to its Percentage Share of the Maximum Facility Amount; provided...

  • Page 253
    ...event that the Borrower receives notice from any Lender of any costs that the Borrower is required to pay to such Lender pursuant to any of Sections 5.1, 5.2 or 5.3 and the Lender is not able to mitigate the relevant costs by changing its Lending Office...the remaining outstanding balance of the Loan ...

  • Page 254
    (e) ** In the event that the Borrower makes the prepayment contemplated by this Section 1.1(e), then the schedule for the payment of the remaining outstanding principal balance of the Loan shall be as set forth in Part 2 of Schedule 2. In order to raise the funds for such prepayment, the Borrower ...

  • Page 255
    ... given by 5:00 p.m., New York City time on the scheduled Funding Date, designate a delayed Funding Date for such Closing, in which case the Administrative Agent shall hold the funds provided by the Lenders until such delayed Funding Date and use reasonable efforts to invest such funds in Permitted...

  • Page 256
    ... outstanding Loan Amount has become unlawful as a result of compliance by such Lender in good faith with any change that becomes effective after the date hereof in any law, treaty, governmental rule, regulation, guideline or order (whether or not having the force of law), then, and in any such event...

  • Page 257
    ...negotiate in good faith in order to arrive at a mutually acceptable alternative basis for determining the interest rate from time to time applicable to the Affected Loan Amount (or, in the case of Section 1.7(g), the Loan) (the "Substitute Basis"); such interest rate to be based on an agreed cost-of...

  • Page 258
    ...Lenders for the account of their respective Lending Offices, in each case to be applied in accordance with the terms of this Agreement. If the payment by the Borrower is received by the Administrative Agent after 12:30 p.m., New York time, at the place of payment, the Administrative Agent shall make...

  • Page 259
    ... (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Loan owing to it in excess of its **of payments on account of the Obligations, such Lender shall forthwith purchase from the other Lenders such participation in the applicable Obligations...

  • Page 260
    ... Section 2.1, the Borrower shall pay the Administrative Agent for the account of the Lenders and the Transaction Agents on demand interest on any principal, interest, fee or other amount not paid hereunder, under any Note or under any other Transaction Document when due at a rate per annum that is...

  • Page 261
    ..., is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required. (b) Authorization; Enforceability. The execution and delivery of the Transaction Documents by the Borrower and the performance by the Borrower of its obligations thereunder (i) are...

  • Page 262
    ... of such balance sheet there has been no Material Adverse Change in such financial condition or operations of the Borrower, except for matters disclosed in (a) the financial statements referred to above or (b) any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K filed by the...

  • Page 263
    ... the books of the Borrower and its Subsidiaries in respect of taxes and other governmental charges are, in the opinion of the Borrower, adequate. (m) Information. Each of the Borrower's Annual Report on Form 10-K for 2007 filed with the SEC, the Borrower's Quarterly Reports on Form 10-Q and Current...

  • Page 264
    ... and pro forma financial information previously delivered to Lenders, could not reasonably be expected to have a Material Adverse Effect. (v) No Plan maintained by the Borrower or any ERISA Affiliate is underfunded (based on the present value of all accumulated benefit obligations thereunder) except...

  • Page 265
    ... 49 of the United States Code. (j) Certain Matters Concerning Affiliates. (i) The only Affiliates of the Borrower engaged in the business of operating aircraft, whether for scheduled passenger service, charter service or freight service, are Piedmont Airlines, Inc. and PSA Airlines, Inc., (ii) none...

  • Page 266
    ...at such web site address), or, if no such Form 10-K was so filed, its audited consolidated balance sheet and related statements of operations, stockholders' equity and cash flows as of the end of and for such year, setting forth in each case in comparative ** Confidential Treatment Requested. - 15 -

  • Page 267
    ... Form 10-Q was so filed, its consolidated balance sheet and related statements of operations and cash flows as of the end of and for such fiscal quarter (in the case of the statement of operations) and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the...

  • Page 268
    ... of the ability of the Borrower to perform, or the Transaction Agents or the Lenders to enforce, the obligations of the Borrower under the Transaction Documents. (ii) comply with the requirements of all applicable laws, rules, regulations and orders of governmental or regulatory authorities if...

  • Page 269
    ... hereby agrees that (i) it shall **at all times prior to the Maturity Date of the Loan, (ii) upon written request by the Collateral Agent at any time following the occurrence of an Event of Default, Borrower shall use the **and provide the resulting output regarding the Pledged Spare Parts to the...

  • Page 270
    ... (2) ("Capital Adequacy Change"), has the effect of **. Section 5.3. Withholding of Taxes. (a) Payments to Be Free and Clear. All sums payable by the Borrower under this Agreement and the other Transaction Documents to each Lender and each Transaction Agent shall (except to the extent required by...

  • Page 271
    ...with two original copies of Internal Revenue Service Form W-8BEN (or any successor form), properly completed and duly executed by such Lender, together with any other certificate or statement of exemption required under the Internal Revenue Code or the regulations issued thereunder to establish that...

  • Page 272
    ... any payment to such ** under Section 5.3 or 5.4. Section 5.5. Indemnity. (a) Indemnity Obligation. The Borrower agrees to indemnify and hold harmless each Lender, the Collateral Agent, the Administrative Agent, and their respective successors, assigns, directors, officers, employees and agents...

  • Page 273
    ...have delivered to the Administrative Agent the following: (i) an executed counterpart of this Agreement; (ii) an executed counterpart of the **(iii) an executed counterpart of the Related Loan Agreement; and (iv) an executed counterpart of the ** Section 6.2. Conditions to Funding. The obligation of...

  • Page 274
    ... and authenticated by the Collateral Agent) shall have been issued to each Lender in an original principal amount equal to such Lender's Percentage Share of the Loan; (ii) an executed counterpart of the Mortgage; (iii) the broker's report and insurance certificate required by Appendix B of the...

  • Page 275
    ...to the benefits of **(determined on the basis of Current Market Value as of the Funding Date) of the Pledged Spare Parts as provided in the Mortgage in the event of a case under Chapter 11 of the Bankruptcy Code in which the Borrower is a debtor. (h) The Collateral Agent shall have received evidence...

  • Page 276
    ... Other GE Agreements. (m) No payment default by the Borrower currently exists with respect to any financing facility of ** or more and the Collateral Agent and the Lenders shall have received a certification from the Borrower to such effect. (n) All conditions to the funding of the loan contemplated...

  • Page 277
    ... is at least equal to the Minimum QDL Rotables and Key Repairables Percentage, and the Lenders shall have received an Officer's Certificate from the Borrower certifying the same, which certification may be based upon the Current Market Value of the Pledged Spare Parts as set forth in the Appraisal...

  • Page 278
    ... Loan Agreement, and no material disruption of, or material adverse change in, financial, banking or capital markets that would have a material adverse effect on the**, as determined by Original Lender in its good faith judgment (in each case, as compared to the situation as of October 15, 2008...

  • Page 279
    ... following the filing of the Subordinated Aircraft Mortgage, the **, the **, and the Subordinated Lease Assignments, and (iii) immediately following the funding of the Loan and the Related Loan, FAA Counsel is prepared to (1) effect the registration at the International Registry of the International...

  • Page 280
    .... Each of the following events shall constitute an "Event of Default," whether any such event shall be voluntary or involuntary or come about or be effected by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any...

  • Page 281
    ...be a Certificated Air Carrier; or (i) The Mortgage shall for any reason cease to be a valid **(subject to Permitted Liens) in favor of the Collateral Agent in the Borrower's right, title and interest in and to the Pledged Spare Parts under the laws of the United States of America; or (j) An event of...

  • Page 282
    ... other statements made by the Borrower or any of its Affiliates, (b) the value, validity, effectiveness, genuineness, enforceability or sufficiency of any Transaction Document, (c) any failure of the Borrower or any of its Affiliates to perform any obligation or (d) the satisfaction of any condition...

  • Page 283
    ... required to be delivered hereunder, no Transaction Agent shall have any duty or responsibility to provide any Lender with any information concerning the Borrower or any of its Affiliates that comes into the possession of such Transaction Agent or any of its officers, directors, employees, agents...

  • Page 284
    ... in writing signed by the Borrower and the Required Lenders, provided that no such change, waiver, discharge or termination shall, without the consent of each Lender affected thereby, (i) extend the final scheduled maturity of the Loan or any Note, or reduce the rate or extend the time of payment of...

  • Page 285
    ...Collateral Agent is required to forward such notice. Section 9.3. Costs and Expenses. The Borrower agrees to pay at or prior to Closing, after receipt of reasonably detailed invoices, all **of the initial Lender and each Transaction Agent in connection with the preparation, execution and delivery of...

  • Page 286
    ...until recorded by the Collateral Agent on the Register pursuant to Section 9.8(d) hereof; provided that no such transfer or assignment will increase the Borrower's obligations under Article V hereof, based on the applicable laws in effect (or scheduled to take effect) at the time of such transfer or...

  • Page 287
    ...assignment. Such new Notes shall be authenticated by the Collateral Agent. By execution and delivery hereof, the Borrower request and directs the Collateral Agent to authenticate and deliver the Notes to be issued hereunder and the Collateral Agent agrees to do so. Section 9.9. Confidentiality. None...

  • Page 288
    ... may be brought in the courts of the State of New York or the United States for the Southern District of New York located in the Borough of Manhattan, and, by execution and delivery of this Agreement or a Transfer Supplement, each party hereto hereby irrevocably accepts for itself and in respect...

  • Page 289
    ... in connection with, any Transaction Document or any matter arising thereunder. Section9.13. Effective Date. Although this Agreement is dated as of October 20, 2008, it shall not be effective unless and until executed by the parties listed on the signature pages hereto. [Remainder of this page blank...

  • Page 290
    ... this Agreement to be executed and delivered by their duly authorized officers as of the date hereof. GENERAL ELECTRIC CAPITAL CORPORATION as the Administrative Agent By: Name: David L. Lloyd, Jr. Title: Vice President Address: General Electric Capital Corporation c/o GE Commercial Aviation Services...

  • Page 291
    ... CORPORATION as the Collateral Agent By: Name: David L. Lloyd, Jr. Title: Vice President Address: General Electric Capital Corporation c/o GE Commercial Aviation Services LLC 201 High Ridge Road Stamford, Connecticut 06927 Attention: Customer Services Facsimile: ** email: ** /s/ David L. Lloyd...

  • Page 292
    US AIRWAYS, INC. By: Name: Thomas T. Weir Title: Vice President and Treasurer Address: US Airways, Inc. 4000 E. Sky Harbor Blvd. Phoenix, Arizona 85034 Attention: Vice President and Treasurer Telephone: ** Telecopy: ** email: ** With a copy to: General Counsel Telecopy: ** /s/ Thomas T. Weir

  • Page 293
    ... Lender By: Name: David L. Lloyd, Jr. Title: Vice President Notice Address and Lending Office: General Electric Capital Corporation c/o GE Commercial Aviation Services LLC 201 High Ridge Road Stamford, Connecticut 06927 Attention: Customer Services Facsimile: ** email: ** Commitment: $270,000,000...

  • Page 294
    ... first paragraph of this Agreement. "Administrative Agent's Account" means the Administrative Agent's account number**, reference US Airways Spare Parts Loan, at Deutsche Bank Trust Company Americas, New York branch, **or such other account at a bank in the United States designated to the Borrower...

  • Page 295
    ...Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (the "Protocol"), both signed in Cape Town, South Africa on November 16, 2001, together with any protocols, regulations, rules, orders, agreements, instruments, amendments, supplements...

  • Page 296
    ...annexed hereto. "Certificated Air Carrier" is defined in the Mortgage. "Closing" means the time at which the Loan has been advanced to the Borrower. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Collateral" is defined in the Mortgage. "Collateral Agent" is defined in...

  • Page 297
    ... an airline that is a competitor of the Borrower in scheduled passenger service (or an Affiliate thereof). "Engine" means an engine used, or intended to be used, to propel an aircraft, including a part, appurtenance, and accessory of the Engine. "ERISA" means the Employee Retirement Income Security...

  • Page 298
    ... of the maximum available amount under the secured letters of credit; (v) subject to Liens securing reimbursement or other margin requirements in connection with, in the case of Liens contemplated in this clause (v), (x) transactions designed to hedge against fluctuations in fuel costs, entered into...

  • Page 299
    ... to purchase goods and services) and other similar obligations (exclusive of obligations for the payment of borrowed money); (viii) ** (ix) subject to Liens securing reimbursement obligations in respect of letters of credit issued for the account of the Borrower for the benefit of any credit card...

  • Page 300
    ... as may be disclosed in such Person's financial statements. For purposes of determining the Borrower's Unrestricted Cash (including the application of any defined terms in this Agreement that reference GAAP) at any time that the Term Loan Agreement remains in ** Confidential Treatment Requested. 7

  • Page 301
    ... funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise), (ii...

  • Page 302
    ...; and (xii) all prepaid forward sales in bulk of dividend miles or available seat miles or like transactions other than in the ordinary course of business. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described...

  • Page 303
    ...the outstanding principal amount of the Loan and for a maturity of three months are offered by the principal London offices of the Reference Banks, in each case offered to prime banks in the London interbank market, in each case at or about 11:00 a.m., London time, on the Interest Rate Determination...

  • Page 304
    ... Rotables and Key Repairables Percentage" has the meaning set forth on Schedule 3 to this Agreement. "Minimum Unrestricted Cash Amount" is defined in Section 4.1(h). "Moody's" means Moody's Investors Service, Inc. "Mortgage" means the Spare Parts Mortgage and Security Agreement in substantially the...

  • Page 305
    ...through trust arrangements) acquired by assignment or purchased on the secondary market structured as pass-through trust arrangements), **without limitation, each agreement set forth on Schedule I of the **(and all documents and agreements defined in each such agreement as an "operative document" or...

  • Page 306
    ... US Airways, Inc., as Grantor, and **as Collateral Agent, as Mortgagee.. "PK Mortgage Amendment" means that certain Aircraft and Engine Mortgage and Security Agreement Amendment No. 1 substantially in the form of Exhibit N hereto between the Borrower and ** "Plan" means an "employee benefit plan...

  • Page 307
    ... Date in order to release the Collateral from the Lien in favor of the Term Loan Agent for the benefit of the secured parties under or in respect of the Term Loan Agreement. "Required Collateral Amount" has the meaning set forth on Schedule 3 to this Agreement. "Required Collateral Amount Test...

  • Page 308
    ... of the United States, or any Governmental Authority succeeding to the functions of such Securities and Exchange Commission. "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto that is a nationally recognized rating agency. "Senior...

  • Page 309
    ... (whether international, foreign or domestic). "Term Loan Agent" is defined in the definition of "Term Loan Agreement" below. "Term Loan Agreement" means that certain $1,600,000,000 Loan Agreement dated as of March 23, 2007, as the same may have been amended from time to time among US Airways Group...

  • Page 310
    ... and 4271 of the Internal Revenue Code; (iv) federal security charges, as described in Title 49 of the Code of Federal Regulations of 2002 (referred to in this definition as the "CFR"), Chapter XII, Part 1510; (v) federal Animal and Plant Health Inspection Service of the United States Department of...

  • Page 311
    ... balance sheets of the Borrower and its Subsidiaries solely in favor of the Term Loan Agent for the benefit of the secured parties under and in respect of the Term Loan Agreement; provided, however, that Unrestricted Cash shall not include (a) **held in the Collateral Account (as such terms...

  • Page 312
    ... and all such certificates and other documents, unless the context otherwise requires: (i) accounting terms not otherwise defined in this Agreement, and accounting terms partly defined in this Agreement to the extent not defined, shall have the respective meanings given to them under GAAP; (ii...

  • Page 313
    SCHEDULE 2 Amortization of the Loan Part 1 ** ** Confidential Treatment Requested. 1

  • Page 314
    Part 2 ** ** Confidential Treatment Requested. 2

  • Page 315
    ... Insurance Amount"** "Maximum Rotables and Key Repairables Ratio" means, as of any date of determination,**). "Minimum 1110 Percentage" means**. "Minimum Liability Amount" means**. "Minimum QDL Collateral Percentage" means**. "Minimum QDL Rotables and Key Repairables Percentage" means**. "Required...

  • Page 316
    ...Required Collateral Amount D Maximum Collateral Ratio E Assumes** Maximum Rotable & Key Repairable Ratio F Required Collateral Amount Payment... ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** Confidential Treatment Requested. 2

  • Page 317
    SCHEDULE 4 ERISA Plans ** ** Confidential Treatment Requested. 1

  • Page 318
    SCHEDULE 5 Certain Rotables and Key Repairables ** Confidential Treatment Requested. 2

  • Page 319
    EXHIBIT A [Insert Form of Mortgage]

  • Page 320
    ... RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 9.8 OF THE LOAN AGREEMENT REFERRED TO BELOW. SECURED PROMISSORY NOTE [SPARE PARTS] [_____], 2014 DUE No. [*] - New York, New York , 200[ ] $ FOR VALUE RECEIVED, the undersigned, US AIRWAYS, INC., a Delaware corporation (together with its successors and...

  • Page 321
    ... upon the terms and conditions therein specified. The obligations of the Borrower under this Note and the Loan Agreement are secured by collateral as provided in the Spare Parts Mortgage and Security Agreement (as amended or supplemented from time to time) dated as of ___, 2008, executed by the...

  • Page 322
    THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. US AIRWAYS, INC. By: Name: Title:

  • Page 323
    COLLATERAL AGENT'S CERTIFICATE OF AUTHENTICATION This is one of the Notes referred to in the within-mentioned Loan Agreement and Mortgage. [ By: Name: Title: ]

  • Page 324
    ... the Loan Agreement [Spare Parts] dated as of ___, 2008, among US Airways, Inc., General Electric Capital Corporation, as Administrative Agent, General Electric Capital Corporation, as Collateral Agent, General Electric Capital Corporation, as Original Lender and the Lenders from time to time party...

  • Page 325
    EXHIBIT D [Insert Form of Opinion of Special Counsel to Borrower]

  • Page 326
    EXHIBIT E [Insert Form of Opinion of Borrower's Legal Department]

  • Page 327
    ... 3. The Assignee (i) confirms that it has received a copy of the Loan Agreement and the other Transaction Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision...

  • Page 328
    ...the terms of the Loan Agreement are required to be performed by it as a Lender; (vii) makes the representations and warranties contained in Section 3.4 of the Loan Agreement[; and (viii) attaches the forms described in Sections 5.3(c) and 9.8(c) of the Loan Agreement.]1 4. Following the execution of...

  • Page 329
    ... this Transfer Supplement, as of the date first above written, such execution also being made on Annex I hereto. [NAME OF ASSIGNOR], as Assignor By Title: [NAME OF ASSIGNEE], as Assignee By Title: Acknowledged and Agreed: GENERAL ELECTRIC CAPITAL CORPORATION as Collateral Agent By Name: Title: -3-

  • Page 330
    ..., as Collateral Agent, General Electric Capital Corporation, as Original Lender, and the Lenders from time to time party thereto. 3. Date of Assignment Agreement: 4. Amounts (as of date of Item 3 above): Principal Amount of Outstanding Notes (or Commitment) Percentage Holding (Expressed as % of...

  • Page 331
    ...: * The Borrower and the Administrative Agent shall direct the entire amount of the interest to the Assignee at the rate set forth in Section 2.1 of the Loan Agreement, with the Assignor and Assignee effecting the agreed upon sharing of the interest through payments by the Assignee to the Assignor...

  • Page 332
    Attention: Reference: 9. Other Documents or Fees for Closing (if any): Acknowledged and Agreed: [NAME OF ASSIGNEE] By (Print Name and Title) [NAME OF ASSIGNOR] By (Print Name and Title) -3-

  • Page 333
    ...to the Loan Agreement [Spare Parts], dated as of , 2008, among US Airways, Inc., General Electric Capital Corporation, as Administrative Agent, General Electric Capital Corporation, as Collateral Agent, General Electric Capital Corporation, as Original Lender, and the Lenders from time to time party...

  • Page 334
    EXHIBIT H [Insert Form of FAA Counsel's Opinion]

  • Page 335
    EXHIBIT I [Insert Form of Subordinated Parts Mortgage]

  • Page 336
    EXHIBIT J [Insert Form of Subordinated Engine Mortgage]

  • Page 337
    EXHIBIT K [Insert Form of Subordinated Aircraft Mortgage]

  • Page 338
    EXHIBIT L [Insert Form of Omnibus Intercreditor Agreement]

  • Page 339
    ... heretofore executed and delivered a Loan Agreement [Spare Parts], dated as of October 20, 2008 prior to the effectiveness of this Amendment (the "Original Loan Agreement"), pursuant to which Lenders agreed to make loans to the Borrower to be secured by a Lien (such term and other capitalized terms...

  • Page 340
    ... Borrower nor any Affiliate of the Borrower shall be, or shall be permitted to be, a New Lender. **. A New Lender shall have rights under this Agreement, and may advance a New Loan under this Agreement, only after executing and delivering to the Administrative Agent an agreement in a form reasonably...

  • Page 341
    ... or the International Registry, or making any other filings to evidence or perfect the Collateral Agent's security interest in the Collateral) (collectively, the "New Lender Requests"), in connection with (or as condition to) the making of such New Lender's New Loans, the Transaction Agents and the...

  • Page 342
    ...event that the Borrower receives notice from any Lender of any costs that the Borrower is required to pay to such Lender pursuant to any of Sections 5.1, 5.2 or 5.3, and the Lender is not able to mitigate the relevant costs by changing its Lending Office...the remaining outstanding balance of the Loan ...

  • Page 343
    ...the Collateral Value Tests, in each case as measured as of the date when the**, but based on the Current Market Value of such Pledged Spare Parts as of the most recent Valuation Date. In the event that the Borrower no longer has the right to incur New Loans (including, in the event that the Borrower...

  • Page 344
    ... account of its Lending Office to the Administrative Agent's Account, in immediately available funds, the amount of its New Loan Commitment. After the Administrative Agent's receipt of such funds and upon fulfillment of the applicable conditions set forth in Article VI as confirmed during a closing...

  • Page 345
    ... Agent) issued to each Lender in an original principal amount equal to such Lender's Percentage Share of the Loan and reflecting the revised amortization schedule applicable to each such Note. (b) On the New Loan Date, no event shall have occurred and be continuing, or would result from the New Loan...

  • Page 346
    ... with the enforcement of their rights under the Transaction Documents)." H. Schedule 1 to the Original Loan Agreement is amended by adding the following terms, to read as follows: ""Expendables Release" is defined in Section 1.1(g) of this Agreement." ""Maximum New Loan Commitment" is defined in...

  • Page 347
    ...." L. Schedule 2 (Amortization of the Loan) to the Original Loan Agreement is amended by adding a new "Part 3" to read in full as follows: "Part 3 Quarterly principal payments due on the Original Loan, assuming the Borrower makes the Special Prepayment and obtains New Loans shall be: ** Confidential...

  • Page 348
    ... Agreement." N. Schedule 2 (Amortization of the Loan) to the Original Loan Agreement is amended by adding a new "Part 5" to read in full as follows: "Part 5 Quarterly principal payments due in respect of New Loans (in the aggregate) in the first twelve Periods shall, at no time, be no less than the...

  • Page 349
    That certain Spare Parts Mortgage and Security Agreement dated as of October 20, 2008 between the Borrower and the Collateral Agent (the "Senior Mortgage") shall be deemed amended upon this Amendment becoming effective pursuant to Section 4 below as follows: A. The first sentence of Section 7.01(c) ...

  • Page 350
    .... C. Limitation on Amendment: Except as expressly amended hereby, all terms and provisions of the Loan Agreement remain in full force and effect and are hereby ratified and confirmed. D. Counterparts. This Amendment may be executed in any number of counterparts and by the parties hereto on separate...

  • Page 351
    ...No. 1 to Loan Agreement [Spare Parts] has been duly executed and delivered all as of the date first above written. US AIRWAYS, INC. By: /s/ Thomas T. Weir Name: Title: Thomas T. Weir Vice President and Treasurer GENERAL ELECTRIC CAPITAL CORPORATION as the Administrative Agent, Collateral Agent and...

  • Page 352
    Exhibit 10.53 EXECUTION COUNTERPART AMENDMENT TO LOAN AGREEMENT, SECURITY AGREEMENT AND AIRCRAFT MORTGAGE dated as of October 20, 2008, between US AIRWAYS GROUP, INC., as Borrower, certain subsidiaries of the Borrower and CITICORP NORTH AMERICA, INC., as Administrative Agent

  • Page 353
    AMENDMENT TO LOAN AGREEMENT, SECURITY AGREEMENT AND AIRCRAFT MORTGAGE AMENDMENT NO. 3 TO LOAN AGREEMENT, dated as of October 20, 2008, between US AIRWAYS GROUP, INC., a Delaware corporation (the "Borrower"), certain Subsidiaries of the Borrower signatory hereto and CITICORP NORTH AMERICA, INC. ("...

  • Page 354
    ..., 2008, among US Airways and Airbus S.A.S., or any financing pursuant thereto, as amended, restated, supplemented or modified from time to time." (b) Asset Sale. The definition of Asset Sale is hereby amended by (i) deleting the parenthetical "(including available seat miles and frequent flier miles...

  • Page 355
    ... period at the end of clause (viii) thereof with "; or" and (iii) adding the following new clauses (ix), (x) and (xi): "(ix) subject to Liens securing reimbursement obligations in respect of letters of credit issued for the account of any Obligor for the benefit of any credit card processor, so long...

  • Page 356
    ... holdroom seating and boarding space and related aircraft parking positions to enplane and deplane passengers at any airport or terminal in the United States or in any foreign country, at which such Obligor, or any sublessee of such Obligor, as the case may be, conducts scheduled operations, arising...

  • Page 357
    ... counters, office space, terminals, maintenance facilities and baggage claim areas at each airport which are necessary to operate a Route held by the Borrower or any other Obligor, whether now held or hereafter acquired." Section 2.2 New Definitions. The following new definitions are hereby added to...

  • Page 358
    ...a loan agreement, note purchase agreement, credit facility, indenture, mortgage, sale and leaseback transaction or otherwise) so long as, in each case, such transaction is consummated on or after the Third Amendment Effective Date and on or before September 30, 2009 and at the time of the closing of...

  • Page 359
    ...ii) in the case of any Other Specified Transaction, the Other Specified Transaction Prepayment Condition. (j) Third Amendment. "Third Amendment" means the Amendment to Loan Agreement, Security Agreement and Aircraft Mortgage, dated as of October 20, 2008, among the Administrative Agent, the Borrower...

  • Page 360
    ...entirety as follows: "Liens on any insurance and requisition proceeds received with respect to any aircraft, engine, Flight Simulator or other Aircraft Related Equipment and the benefit of all standard warranties related thereto, in each case to the extent that the aircraft, engine, Flight Simulator...

  • Page 361
    ... in clause (a) thereof and (ii) adding the following immediately after the words "Airbus Financing Letter Agreement" in clause (c) thereof: ", the GECAS Financing". (m) Asset Sales. Section 6.13 is hereby amended by adding the following sentence at the end thereof: "Notwithstanding the foregoing, to...

  • Page 362
    ... set forth in Section 6.4(a), except that, in the case of any such failure to perform or comply arising by reason of a fluctuation in the value of all cash and other investments in accounts subject to the Control Agreements referred to therein, no Event of Default shall occur unless such failure to...

  • Page 363
    ... the following new clauses (xiii) through (xviii) are added to the definition of Excluded Assets: (xiii) the Tempe Property and any Investments permitted under Section 6.2(xiii) of the Loan Agreement; (xiv) 35% of the Voting Stock of Subsidiaries of the Grantors that are CFCs; (xv) aircraft purchase...

  • Page 364
    ..., Released Engines identified as being owned on Schedule V hereto by US Airways (or formerly owned by America West Airlines, LLC) or any Contract Rights, Records, insurance proceeds, condemnation proceeds or monies or securities related thereto, (y) PSA in Released Engines identified as being owned...

  • Page 365
    ... and the amendments to the Loan Agreement contained herein, including the terms, conditions, and forms of the exhibits hereto, (b) the amendments to the Security Agreement and Aircraft Mortgage contained herein, including the terms, conditions and forms of the exhibits and schedules thereto, (c) the...

  • Page 366
    ... connection with this Amendment, (ii) for the account of each Lender that provides a Lender Consent Letter on or before midnight New York time on October 17, 2008, an amendment fee equal to 1.5% of such Lender's outstanding Loans as at 9:00 a.m. New York time on the Effective Date (and prior to any...

  • Page 367
    ... with, the law of the State of New York. Each reference to the Loan Agreement, the Security Agreement and the Aircraft Mortgage in the Loan Documents shall be deemed to be a reference to the Loan Agreement, Security Agreement or Aircraft Mortgage (as applicable) as amended hereby. [Remainder...

  • Page 368
    ... of the day and year first above written. US AIRWAYS GROUP, INC., as Borrower By: Name: Title: US AIRWAYS, INC. By: Name: Title: /s/ Thomas T. Weir Thomas T. Weir Vice President and Treasurer /s/ Thomas T. Weir Thomas T. Weir Vice President and Treasurer AMERICA WEST AIRLINES, LLC (as successor to...

  • Page 369
    ...Thomas T. Weir Vice President and Treasurer MATERIAL SERVICES COMPANY, INC. By: Name: Title: PSA AIRLINES, INC. By: Name: Title: PIEDMONT AIRLINES, INC. By: Name: Title: /s/ Caroline B. Ray Caroline B. Ray Secretary /s/ Keith Houk Keith Houk President and Chief Executive Officer /s/ Caroline B. Ray...

  • Page 370
    CITICORP NORTH AMERICA, INC., as Administrative Agent By: Name: Title: /s/ James J. McCarthy James J. McCarthy Managing Director and Vice President

  • Page 371
    ...October ___, 2008 Reference is hereby made to the $1,600,000,000 Loan Agreement dated as of March 23, 2007 (as amended, modified and supplemented and in effect from time to time, the "Loan Agreement"), by and among US Airways Group, Inc., as borrower, its subsidiaries from time to time party thereto...

  • Page 372
    EXHIBIT A TO CONSENT [see attached]

  • Page 373
    ... to such proceeds); the Junior Lienholders shall retain the same rights as any unsecured creditor; (vi) (vii) the Lenders and the Junior Lienholders shall have separate grants of security and vote as separate classes on any plan of reorganization in connection with any bankruptcy proceeding; (viii...

  • Page 374
    Exhibit C SCHEDULE V RELEASED ENGINES SCHEDULE OF RELEASED ENGINES - PSA Airlines Manufacturer Model Serial Number General Electric General Electric CF34-3B1 CF34-8C1 SCHEDULE OF RELEASED ENGINES - US Airways E950494 E965668 Manufacturer Model Serial Number Pratt & Whitney Pratt & Whitney ...

  • Page 375
    Manufacturer Model Serial Number IAE IAE IAE IAE IAE IAE IAE V2527-A5 V2527-A5 V2527-A5 V2527-A5 V2527-A5 V2524-A5 V2527-A5 V10335* V10516* V10549* V10642* V10676* V10783* V10817* * Formerly assets of America West Airlines, LLC (as successor to America West Airlines, Inc.)

  • Page 376
    ... ANNUAL GRANT AGREEMENT US AIRWAYS GROUP, INC. 2008 EQUITY INCENTIVE PLAN DIRECTOR VESTED SHARE AWARD AGREEMENT Pursuant to the Director Vested Share Award Grant Notice ("Grant Notice") and this Director Vested Share Award Agreement ("Award Agreement"), US Airways Group, Inc. (the "Company") grants...

  • Page 377
    ...laws, rules, and regulations, and to any required governmental agency or national securities exchange approvals. (e) The Company's obligations under the Plan will be binding on any successor to the Company, whether the existence of the successor is the result of a direct or indirect purchase, merger...

  • Page 378
    ...which are made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may be promulgated and adopted under the Plan. If there is a conflict between the provisions of your Award and those of the Plan, then the provisions of the Plan shall control.

  • Page 379
    .... The Program sets forth the terms and conditions for performance cash awards to be paid to eligible officers under the US Airways Group, Inc. 2005 Equity Incentive Plan (the "Plan"). SECTION II. ELIGIBILITY CRITERIA Officers of US Airways Group, Inc. (the "Company") or an Affiliate (as that term is...

  • Page 380
    ... the Plan. SECTION IV. AWARD CALCULATION Awards are calculated based on Total Stockholder Return ("TSR") of the Company over the performance cycle (as such term is defined in this section) relative to the TSRs of a pre-defined competitive peer group. TSR, for purposes of this Program, is the rate of...

  • Page 381
    ... 1, 2011. Payments will be subject to all required federal, state, and local tax withholding. In the event of the termination of a Participant's employment with the Company (or an Affiliate) on account of retirement (as defined below), total disability (as defined in the long term disability plan...

  • Page 382
    ... completion of ten (10) years of service with the Company (or an Affiliate). Awards for any other Performance Cycles will not be earned or paid. If the Participant's employment with the Company (or an Affiliate) is terminated for any reason other than retirement, total disability or death (whether...

  • Page 383
    ...affects the Company or its subsidiaries or other affiliates, the Committee, in its sole discretion, may (i) terminate or (ii) suspend, delay, defer (for such period of time as the Committee may deem necessary), or substitute any awards due currently or in the future under the Program, including, but...

  • Page 384
    ... incumbent non-employee director is required to retain, until his or her completion of service on the Board, a number of shares equal to at least 50% of the cumulative shares of common stock granted to that director pursuant each annual equity award granted in the three years following the effective...

  • Page 385
    ... Group, Inc: Airways Assurance Limited LLC Organized under the laws of Bermuda Material Services Company, Inc. Incorporated under the laws of the State of Delaware Piedmont Airlines, Inc. (operates under the trade name "US Airways Express") Incorporated under the laws of the State of Maryland PSA...

  • Page 386
    ... 17, 2009, with respect to the consolidated balance sheets of US Airways Group, Inc. and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for each of the years in the three-year period ended December...

  • Page 387
    .... and subsidiaries (US Airways) of our reports dated February 17, 2009, with respect to the consolidated balance sheets of US Airways as of December 31, 2008 and 2007, and the related consolidated statements of operations, cash flows, and stockholder's equity (deficit) for each of the years in the...

  • Page 388
    ...of them to act alone), attorney and agent for me and in my name and on my behalf to sign any Annual Report on Form 10-K of the Company and Airways for the year ended December 31, 2008 and any amendments or supplements thereto which shall be filed with the Securities and Exchange Commission under the...

  • Page 389
    ...of them to act alone), attorney and agent for me and in my name and on my behalf to sign any Annual Report on Form 10-K of the Company and Airways for the year ended December 31, 2008 and any amendments or supplements thereto which shall be filed with the Securities and Exchange Commission under the...

  • Page 390
    ...of them to act alone), attorney and agent for me and in my name and on my behalf to sign any Annual Report on Form 10-K of the Company and Airways for the year ended December 31, 2008 and any amendments or supplements thereto which shall be filed with the Securities and Exchange Commission under the...

  • Page 391
    ...of them to act alone), attorney and agent for me and in my name and on my behalf to sign any Annual Report on Form 10-K of the Company and Airways for the year ended December 31, 2008 and any amendments or supplements thereto which shall be filed with the Securities and Exchange Commission under the...

  • Page 392
    ...of them to act alone), attorney and agent for me and in my name and on my behalf to sign any Annual Report on Form 10-K of the Company and Airways for the year ended December 31, 2008 and any amendments or supplements thereto which shall be filed with the Securities and Exchange Commission under the...

  • Page 393
    ...of them to act alone), attorney and agent for me and in my name and on my behalf to sign any Annual Report on Form 10-K of the Company and Airways for the year ended December 31, 2008 and any amendments or supplements thereto which shall be filed with the Securities and Exchange Commission under the...

  • Page 394
    ...of them to act alone), attorney and agent for me and in my name and on my behalf to sign any Annual Report on Form 10-K of the Company and Airways for the year ended December 31, 2008 and any amendments or supplements thereto which shall be filed with the Securities and Exchange Commission under the...

  • Page 395
    ...of them to act alone), attorney and agent for me and in my name and on my behalf to sign any Annual Report on Form 10-K of the Company and Airways for the year ended December 31, 2008 and any amendments or supplements thereto which shall be filed with the Securities and Exchange Commission under the...

  • Page 396
    ... information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 17, 2009 /s/ W. Douglas Parker Name: Title: W. Douglas Parker Chief Executive Officer

  • Page 397
    ...(the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most...

  • Page 398
    ... information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 17, 2009 /s/ W. Douglas Parker Name: Title: W. Douglas Parker Chief Executive Officer

  • Page 399
    ...(the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most...

  • Page 400
    ... Annual Report on Form 10-K of US Airways Group, Inc. (the Company) for the year ended December 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the Report), W. Douglas Parker, as Chief Executive Officer of the Company, and Derek J. Kerr, as Chief Financial Officer...

  • Page 401
    ... the Annual Report on Form 10-K of US Airways, Inc. (the Company) for the year ended December 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the Report), W. Douglas Parker, as Chief Executive Officer of the Company, and Derek J. Kerr, as Chief Financial Officer of...