US Airways 2008 Annual Report Download - page 26

Table of Contents
program has been 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 insurance. The failure of one or more of our insurers could result in a lack
of coverage for a period of time. Additionally, severe disruptions in the domestic and global financial markets could adversely impact the
ratings and survival of some insurers. Future downgrades in the ratings of enough insurers could adversely impact both the availability of
appropriate insurance coverage and its cost. Because of competitive pressures in our industry, our ability to pass additional insurance
costs to passengers is limited. As a result, further increases in insurance costs or reductions in available insurance coverage could have an
adverse impact on our financial results.
Our business is subject to weather factors and seasonal variations in airline travel, which cause our results to fluctuate.
Our operations are vulnerable to severe weather conditions in parts of our network that could disrupt service, create air traffic
control problems, decrease revenue and increase costs, such as during hurricane season in the Caribbean and Southeast United States,
snow and severe winters in the Northeast United States and thunderstorms in the Eastern United States. In addition, the air travel business
historically fluctuates on a seasonal basis. Due to the greater demand for air and leisure travel during the summer months, revenues in the
airline industry in the second and third quarters of the year tend to be greater than revenues in the first and fourth quarters of the year. Our
results of operations will likely reflect weather factors and seasonality, and therefore quarterly results are not necessarily indicative of
those for an entire year, and our prior results are not necessarily indicative of our future results.
We may be adversely affected by global events that affect travel behavior.
Our revenue and results of operations may be adversely affected by global events beyond our control. Acts of terrorism, wars or
other military conflicts, including the war in Iraq, may depress air travel, particularly on international routes. An outbreak of a contagious
disease such as Severe Acute Respiratory Syndrome ("SARS"), avian flu, or any other influenza-type illness, if it were to persist for an
extended period, could again materially affect the airline industry and us by reducing revenues and impacting travel behavior.
We are exposed to foreign currency exchange rate fluctuations.
As we expand our international operations, we will have significant operating revenues and expenses, as well as assets and
liabilities, denominated in foreign currencies. Fluctuations in foreign currencies can significantly affect our operating performance and
the value of our assets and liabilities located outside of the United States.
The use of US Airways Group's pre-merger NOLs and certain other tax attributes could be limited in the future.
From the time of the merger until the first half of 2007, a significant portion of US Airways Group's common stock was beneficially
owned by a small number of equity investors. Since the merger, some of the equity investors have sold portions of their holdings and
other investors have purchased US Airways Group stock, and, as a result, we believe an "ownership change" as defined in Internal
Revenue Code Section 382 occurred for US Airways Group in February 2007. When a company undergoes such an ownership change,
Section 382 limits the future ability to utilize any net operating losses, or NOL, generated before the ownership change and certain
subsequently recognized "built-in" losses and deductions, if any, existing as of the date of the ownership change. A company's ability to
utilize new NOL arising after the ownership change is not affected. Until US Airways Group has used all of its existing NOL, future
significant shifts in ownership of US Airways Group's common stock could result in a new Section 382 limit on our NOL as of the date
of an additional ownership change.
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