US Airways 2008 Annual Report Download - page 13

Table of Contents
On October 10, 2008, the FAA finalized new rules governing flight operations at the three major New York airports. The new rules
were scheduled to take effect in December 2008. However, on December 8, 2008, at the request of the Air Transport Association
("ATA") and others, the U.S. Court of Appeals for the Washington D.C. Circuit issued a stay order prohibiting the new rules from taking
effect. The litigation surrounding the legality of the final rules will continue forward in 2009. If the new rules are upheld, the FAA will
withdraw approximately 15% of the industry slots at LaGuardia. If deemed legal, the rules will reduce the number of flights US Airways
can offer at LaGuardia over a five year period. Additionally, the DOT recently finalized a policy change that will permit airports to
charge differentiated landing fees during congested periods, which could impact our ability to serve certain markets in the future. This
policy change is also the source of pending litigation.
The FAA is now pursuing a voluntary return of slots at LaGuardia in an effort to reduce the current number of scheduled operations
from 75 per hour to 71 per hour in order to reduce congestion. In addition, the government capped operations at both Kennedy and
Newark starting during the first quarter of 2008. Thus, airlines will not be able to add flights at LaGuardia, Kennedy or Newark without
acquiring operating rights from another carrier. In the future, takeoff and landing time restrictions and other restrictions on the use of
various airports and their facilities may result in further curtailment 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 between the U.S. and foreign
governments. Changes in U.S. or foreign government aviation policy could result in the alteration or termination of these agreements and
affect our international operations. We could continue to see significant changes in terms of air service between the United States and
Europe as a result of the implementation of the U.S. and the EU Air Transport Agreement, generally referred to as the Open Skies
Agreement, which took effect in March 2008. The Open Skies Agreement removes bilateral restrictions on the number of flights between
the U.S. and EU. One result of the Open Skies Agreement has been the application before the DOT for antitrust immunity between Star
Alliance members and Continental, and oneworld members and American Airlines. If granted, antitrust immunity permits carriers to
coordinate schedules, pricing and other competitive aspects on international routes to/from the United States. It is possible that the grant
of these immunities could have an impact on our international operations.
The DOT has proposed several new initiatives concerning airline obligations toward passengers. During 2008, the DOT finalized
rules pertaining to denied boarding compensation requiring additional consumer disclosure and higher payments to passengers. In
addition, the DOT established a task force on long on-board delays that resulted in the issuance of a final report suggesting model
contingency plans for long on-board delays. Contemporaneous with the end of the task force, the DOT issued additional proposed rules
that would place additional requirements on airlines concerning service irregularities, consumer rights and contract of carriage
obligations.
The New York State Passenger Bill of Rights law, which requires airlines to provide certain services to passengers on flights within
the state that undergo extended on-board ground delays, was overturned in the U.S. Court of Appeals for the 2nd Circuit, but new
passenger bill of rights legislation has been introduced in the current session of Congress.
Employees and Labor Relations
Our businesses are labor intensive. In 2008, wages, salaries and benefits represented approximately 18% of our operating expenses.
As of December 31, 2008, we employed approximately 37,500 active full-time equivalent employees. Of this amount, US Airways
employed approximately 32,700 active full-time equivalent employees including approximately 4,200 pilots, 7,100 flight attendants,
6,800 passenger service personnel, 6,600 fleet service personnel, 3,100 maintenance personnel and 4,900 personnel in administrative and
various other job categories. US Airways Group's remaining subsidiaries employed approximately 4,800 active full-time equivalent
employees including approximately 800 pilots, 500 flight attendants, 2,600 passenger service personnel, 500 maintenance personnel and
400 personnel in administrative and various other job categories.
A large majority of the employees of the major airlines in the United States are represented by labor unions. As of December 31,
2008, approximately 87% of our active employees were represented by various labor unions.
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