US Airways 2008 Annual Report Download - page 86

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements
1. Basis of presentation and summary of significant accounting policies
(a) Nature of Operations and Operating Environment
US Airways Group, Inc. ("US Airways Group" or the "Company") is a Delaware corporation whose primary business activity is the
operation of a major network air carrier through its ownership of the common stock of US Airways, Inc. ("US Airways"), Piedmont
Airlines, Inc. ("Piedmont"), PSA Airlines, Inc. ("PSA"), Material Services Company, Inc. ("MSC") and Airways Assurance Limited,
LLC ("AAL"). On May 19, 2005, US Airways Group signed a merger agreement with America West Holdings Corporation ("America
West Holdings") pursuant to which America West Holdings merged with a wholly owned subsidiary of US Airways Group. The merger
agreement was amended by a letter of agreement on July 7, 2005. The merger became effective upon US Airways Group's emergence
from bankruptcy on September 27, 2005.
Most of the airline operations are in competitive markets. Competitors include other air carriers along with other modes of
transportation. The Company operates the fifth largest airline in the United States as measured by domestic mainline revenue passenger
miles ("RPMs") and available seat miles ("ASMs"). US Airways has primary hubs in Charlotte, Philadelphia and Phoenix and secondary
hubs/focus cities in New York, Washington, D.C., Boston and Las Vegas. US Airways offers scheduled passenger service on more than
3,100 flights daily to 200 communities in the United States, Canada, Europe, the Caribbean and Latin America. US Airways also has an
established East Coast route network, including the US Airways Shuttle service, with a substantial presence at capacity constrained
airports including New York's LaGuardia Airport and the Washington, D.C. area's Ronald Reagan Washington National Airport. US
Airways had approximately 55 million passengers boarding its mainline flights in 2008. During 2008, US Airways' mainline operation
provided regularly scheduled service or seasonal service at 135 airports. During 2008, the US Airways Express network served 187
airports in the United States, Canada and Latin America, including 77 airports also served by the mainline operation. During 2008, US
Airways Express air carriers had approximately 27 million passengers boarding their planes. As of December 31, 2008, US Airways
operated 354 mainline jets and is supported by the Company's regional airline subsidiaries and affiliates operating as US Airways Express
either under capacity purchase or prorate agreements, which operate approximately 238 regional jets and 74 turboprops.
As of December 31, 2008, the Company employed approximately 37,500 active full-time equivalent employees. Approximately
87% of the Company's employees are covered by collective bargaining agreements with various labor unions. The Company's pilots and
flight attendants are currently working under the terms of their respective US Airways or America West Airlines ("AWA") collective
bargaining agreements, as modified by transition agreements reached in connection with the merger. In 2008, the Company reached final
single labor agreements covering fleet service employees, maintenance and related employees and maintenance training instructors, each
represented by the International Association of Machinists & Aerospace Workers.
(b) Basis of Presentation
The accompanying consolidated financial statements include the accounts of US Airways Group and its wholly owned subsidiaries.
The Company has the ability to move funds freely between its operating subsidiaries to support operations. These transfers are recognized
as intercompany transactions. All significant intercompany accounts and transactions have been eliminated.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The principal areas of judgment relate to passenger revenue
recognition, impairment of goodwill, impairment of long-lived and intangible assets, valuation of investments in marketable securities,
the frequent traveler program and the deferred tax valuation allowance.
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