US Airways 2008 Annual Report Download - page 16

Table of Contents
widespread disruption to oil production, refinery operations and pipeline capacity along certain portions of the U.S. Gulf Coast.
As a result of these disruptions, the price of jet fuel increased significantly and the availability of jet fuel supplies was
diminished;
• unpredictable increases to oil demand due to weather or the pace of economic growth;
• inventory levels of crude, refined products and natural gas; and
• other factors, such as the relative fluctuation in value between the U.S. dollar and other major currencies and the influence of
speculative positions on the futures exchanges.
Insurance
US Airways Group and its subsidiaries maintain insurance of the types and in amounts deemed adequate to protect themselves and
their property. Principal coverage includes:
• liability for injury to members of the public, including passengers;
• damage to property of US Airways Group, its subsidiaries and others;
• loss of or damage to flight equipment, whether on the ground or in flight;
• fire and extended coverage;
• directors' and officers' liability;
• travel agents' errors and omissions;
• advertiser and media liability;
• cyber risk liability;
• fiduciary; and
• workers' compensation and employer's liability.
Since September 11, 2001, US Airways Group and other airlines have been unable to obtain coverage for liability to persons other
than employees and passengers for claims resulting from acts of terrorism, war or similar events, which coverage is called war risk
coverage, at reasonable rates from the commercial insurance market. US Airways, therefore, purchased its war risk coverage through a
special program administered by the FAA, as have most other U.S. airlines. The Emergency Wartime Supplemental Appropriations Act
extended this insurance protection until August 2005. The program was subsequently extended, with the same conditions and premiums,
until March 31, 2009. If the federal insurance program terminates, we would likely face a material increase in the cost of war risk
coverage, and because of competitive pressures in the industry, our ability to pass this additional cost to passengers may be limited.
Customer Service
We are committed to running a successful airline. One of the important ways we do this is by taking care of our customers. We
believe that our 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 implemented several ongoing initiatives to improve operational performance, including lengthening
the operating day at our hubs, lowering utilization, increasing the number of designated spare aircraft and implementing new baggage
handling software and handheld baggage scanners in order to ensure operational reliability. The implementation of these initiatives along
with other performance improvement initiatives resulted in an improved trend in operational performance.
For the 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. In addition, our mishandled baggage ratio per 1,000
passengers improved dramatically to 4.77, representing more than a 40%
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