US Airways 2008 Annual Report Download - page 67

Table of Contents
Other 2008 Financing Transactions
On February 1, 2008, US Airways entered into a loan agreement for $145 million, secured by six Bombardier CRJ-700 aircraft,
three Boeing 757 aircraft and one spare engine. The loan bears interest at a rate of LIBOR plus an applicable margin and is amortized
over ten years. The proceeds of the loan were used to repay $97 million of the equipment notes previously secured by the six Bombardier
CRJ-700 aircraft and three Boeing 757 aircraft.
On February 29, 2008, US Airways entered into a credit facility agreement for $88 million to finance certain pre-delivery payments
required by US Airways' purchase agreements with Airbus. As of December 31, 2008, the outstanding balance of this credit facility
agreement is $73 million. The remaining amounts under this facility will be drawn as pre-delivery payments come due. The loan bears
interest at a rate of LIBOR plus an applicable margin and is repaid as the related aircraft are delivered with a final maturity date of the
loan in November 2010.
In the second quarter of 2008, US Airways entered into facility agreements with three lenders in the amounts of $199 million,
$198 million, and $119 million to finance the acquisition of certain Airbus A320 family aircraft deliveries starting in the second half of
2008. The loans bear interest at a rate of LIBOR plus an applicable margin, contain default and other covenants that are typical in the
industry for similar financings, and are amortized over twelve years with balloon payments at maturity.
Aircraft and Engine Purchase Commitments
During 2008, we took delivery of 14 Embraer 190 aircraft under our Amended and Restated Purchase Agreement with Embraer,
which we financed through an existing facility agreement. As of December 31, 2008, we have no remaining firm orders with Embraer.
Under the terms of the Amended and Restated Purchase Agreement, we have 32 additional Embraer 190 aircraft on order, which are
conditional and subject to our notification to Embraer. In 2008, we 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 a 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 our aircraft and engine purchase agreements, our total future commitments as of December 31, 2008 are expected to be
approximately $6.83 billion through 2018, which includes predelivery deposits and payments. We expect to fund these payments through
future financings.
65