US Airways 2008 Annual Report Download - page 157

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
notification to Embraer. In 2008, US Airways amended the Amended and Restated Purchase Agreement to revise the delivery schedule
for these 32 additional Embraer 190 aircraft.
In 2007, US Airways and Airbus executed definitive purchase agreements for the acquisition of 97 aircraft, including 60 single-aisle
A320 family aircraft and 37 widebody aircraft (comprised of 22 A350 XWB aircraft and 15 A330-200 aircraft). These were in addition to
orders for 37 single-aisle A320 family aircraft from the previous Airbus purchase agreement. In 2008, US Airways and Airbus entered
into Amendment No. 1 to the Amended and Restated Airbus A320 Family Aircraft Purchase Agreement. The amendment provides for
the conversion of 13 A319 aircraft to A320 aircraft, one A319 aircraft to an A321 aircraft and 11 A320 aircraft to A321 aircraft for
deliveries during 2009 and 2010.
Deliveries of the A320 family aircraft commenced during 2008 with the delivery of five A321 aircraft, which were financed through
an existing facility agreement. Deliveries of the A320 family aircraft will continue in 2009 through 2012. Deliveries of the A330-200
aircraft will begin in 2009. In 2008, US Airways amended the terms of the A350 XWB Purchase Agreement for deliveries of the 22 firm
order A350 XWB aircraft to begin in 2015, rather than 2014, and extending through 2018.
In 2007, US Airways agreed to terms with an aircraft lessor to lease two used A330-200 aircraft. In 2008, US Airways terminated
the two leases and did not take delivery of the two used A330-200 aircraft. Related to this termination, US Airways recorded a $2 million
lease cancellation charge.
In 2008, US Airways executed purchase agreements for the purchase of eight new IAE V2500-A5 spare engines scheduled for
delivery through 2014 for use on the Airbus A320 family fleet, three new Trent 700 spare engines scheduled for delivery through 2011
for use on the Airbus A330-200 fleet and three new Trent XWB spare engines scheduled for delivery in 2015 through 2017 for use on the
Airbus A350 XWB aircraft.
Under all of US Airways' aircraft and engine purchase agreements, US Airways' total future commitments as of December 31, 2008
are expected to be approximately $6.83 billion through 2018 as follows: $1.31 billion in 2009, $1.34 billion in 2010, $1.29 billion in
2011, $768 million in 2012, $36 million in 2013 and $2.09 billion thereafter, which includes predelivery deposits and payments. US
Airways expects to fund these payments through future financings.
Engine Maintenance Commitments
In connection with the merger, US Airways and AWA restructured their rate per engine hour agreements with General Electric
Engine Services for overhaul maintenance services. Under the restructured agreements, the minimum monthly payment on account of
accrued engine flight hours for both of the agreements together will equal $3 million as long as both agreements remain in effect through
October 2009. In September 2007, all engines covered under the AWA agreement were transferred to the US Airways agreement, and the
AWA agreement was terminated. The minimum monthly payment of $3 million remains unchanged.
(b) Leases
US Airways leases certain aircraft, engines, and ground equipment, in addition to the majority of its ground facilities and terminal
space. As of December 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 under lease arrangements with the municipalities or agencies owning or controlling such
airports. Substantially all leases provide that the lessee must pay taxes, maintenance, insurance and certain other operating expenses
applicable to the leased property. Some leases also include renewal and purchase options.
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