US Airways 2008 Annual Report Download - page 134

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements
1. Basis of presentation and summary of significant accounting policies
(a) Nature of Operations and Operating Environment
US Airways, Inc. ("US Airways") is a Delaware corporation whose primary business activity is the operation of a major network air
carrier. US Airways is a wholly owned subsidiary of US Airways Group, Inc. ("US Airways Group"), which owns all of US Airways'
outstanding common stock, par value $1 per share. On May 19, 2005, US Airways Group signed a merger agreement with America West
Holdings Corporation ("America West Holdings") pursuant to which America West Holdings merged with a wholly owned subsidiary of
US Airways Group. The merger agreement was amended by a letter of agreement on July 7, 2005. The merger became effective upon US
Airways Group's emergence from bankruptcy on September 27, 2005.
On September 26, 2007, as part of the integration efforts following the merger, America West Airlines ("AWA") surrendered its
Federal Aviation Administration ("FAA") operating certificate. As a result, all mainline airline operations are now being conducted under
US Airways' FAA operating certificate. In connection with the combination of all mainline airline operations under one FAA operating
certificate, US Airways Group contributed 100% of its equity interest in America West Holdings, the parent company of AWA, to US
Airways. As a result, America West Holdings and AWA are now wholly owned subsidiaries of US Airways. In addition, AWA
transferred substantially all of its assets and liabilities to US Airways. All off-balance sheet commitments of AWA were also transferred
to US Airways.
Most of US Airways' operations are in competitive markets. Competitors include other air carriers along with other modes of
transportation. 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, D.C., Boston and Las Vegas. US Airways offers scheduled passenger service on more than
3,100 flights daily to 200 communities in the United States, Canada, Europe, the Caribbean and Latin America. US Airways also has an
established East Coast route network, including the US Airways Shuttle service, with a substantial presence at capacity constrained
airports including New York's LaGuardia Airport and the Washington, D.C. area's Ronald Reagan Washington National Airport. US
Airways had approximately 55 million passengers boarding its mainline flights in 2008. During 2008, US Airways' mainline operation
provided regularly scheduled service or seasonal service at 135 airports. During 2008, the US Airways Express network served 187
airports in the United States, Canada and Latin America, including 77 airports also served by the mainline operation. During 2008, US
Airways Express air carriers had approximately 27 million passengers boarding their planes. As of December 31, 2008, US Airways
operated 354 mainline jets and is supported by US Airways Group's regional airline subsidiaries and affiliates operating as US Airways
Express either under capacity purchase or prorate agreements, which operate approximately 238 regional jets and 74 turboprops.
As of December 31, 2008, US Airways employed approximately 32,700 active full-time equivalent employees. Approximately 86%
of US Airways' employees are covered by collective bargaining agreements with various labor unions. US Airways' pilots and flight
attendants are currently working under the terms of their respective US Airways or AWA collective bargaining agreements, as modified
by transition agreements reached in connection with the merger. In 2008, US Airways reached final single labor agreements covering
fleet service employees, maintenance and related employees and maintenance training instructors, each represented by the International
Association of Machinists & Aerospace Workers.
(b) Basis of Presentation
The transfer of assets between US Airways and AWA described above constitutes a transfer of assets between entities under
common control and was accounted for in a manner similar to the pooling of interests method of accounting. Under this method, the
carrying amount of net assets recognized in the balance sheets of each combining entity are carried forward to the balance sheet of the
combined entity, and no other assets or liabilities are
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