US Airways 2008 Annual Report Download - page 25

Table of Contents
existing vulnerabilities in our systems, data thefts, physical system or network break-ins or inappropriate access, or other developments
will not compromise or breach the technology protecting the networks that access and store database information. Furthermore, there has
been heightened legislative and regulatory focus on data security in the U.S. and abroad (particularly in the EU), including requirements
for varying levels of customer notification in the event of a data breach.
Many of our commercial partners, including credit card companies, have imposed certain data security standards that we must meet.
In particular, we were required by the Payment Card Industry Security Standards Council, founded by the credit card companies, to
comply with their highest level of data security standards. While we currently meet these standards, new and revised standards may be
imposed that may be difficult for us to meet.
In addition to the Payment Card Industry Standards discussed above, failure to comply with the other privacy and data use and
security requirements of our partners or related laws and regulations to which we are subject may expose us to fines, sanctions or other
penalties, which could materially and adversely affect our results of operations and overall business. In addition, failure to address
appropriately these issues could also give rise to additional legal risks, which, in turn, could increase the size and number of litigation
claims and damages asserted or subject us to enforcement actions, fines and penalties and cause us to incur further related costs and
expenses.
Interruptions or disruptions in service at one of our hub airports could have a material adverse impact on our operations.
We operate principally through primary hubs in Charlotte, Philadelphia and Phoenix and secondary hubs/focus cities in New York,
Washington, D.C., Boston and Las Vegas. A majority of our flights either originate in or fly into one of these locations. A significant
interruption or disruption in service at one of our hubs could result in the cancellation or delay of a significant portion of our flights and,
as a result, could have a severe impact on our business, operations and financial performance.
We are at risk of losses and adverse publicity stemming from any accident involving any of our aircraft.
If one of our aircraft were to be involved in an accident, we could be exposed to significant tort liability. The insurance we carry to
cover damages arising from any future accidents may be inadequate. In the event that our insurance is not adequate, we may be forced to
bear substantial losses from an accident. In addition, any accident involving an aircraft that we operate could create a public perception
that our aircraft are not safe or reliable, which could harm our reputation, result in air travelers being reluctant to fly on our aircraft and
adversely impact our financial condition and operations.
Delays in scheduled aircraft deliveries or other loss of anticipated fleet capacity may adversely impact our operations and financial
results.
The success of our business depends on, among other things, the ability to operate a certain number and type of aircraft. In many
cases, the aircraft we intend to operate are not yet in our fleet, but we have contractual commitments to purchase or lease them. If for any
reason we were unable to secure deliveries of new aircraft on contractually scheduled delivery dates, this could have a negative impact on
our business, operations and financial performance. Our failure to integrate newly purchased aircraft into our fleet 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 not filled on a timely basis, we could face higher monthly rental rates.
Increases in insurance costs or reductions in insurance coverage may adversely impact our operations and financial results.
The terrorist attacks of September 11, 2001 led to a significant increase in insurance premiums and a decrease in the insurance
coverage available to commercial air carriers. Accordingly, our insurance costs increased significantly and our ability to continue to
obtain insurance even at current prices remains uncertain. In addition, we have obtained third party war risk (terrorism) insurance through
a special program administered by the FAA, resulting in lower premiums than if we had obtained this insurance in the commercial
insurance market. The
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