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US AIRWAYS GROUP INC (LCC)
10-K
Annual report pursuant to section 13 and 15(d)
Filed on 02/17/2010
Filed Period 12/31/2009

Table of contents

  • Page 1
    US AIRWAYS GROUP INC (LCC) 10-K Annual report pursuant to section 13 and 15(d) Filed on 02/17/2010 Filed Period 12/31/2009

  • Page 2
    ...) 54-1194634 (IRS Employer Identification No.) (Address of principal executive offices, including zip code) 111 West Rio Salado Parkway, Tempe, Arizona 85281 (480) 693-0800 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of...

  • Page 3
    ...to US Airways Group, Inc.'s 2010 Annual Meeting of Stockholders, which proxy statement will be filed under the Securities Exchange Act of 1934 within 120 days of the end of US Airways Group, Inc.'s fiscal year ended December 31, 2009, are incorporated by reference into Part III of this Annual Report...

  • Page 4
    ... Group, Inc. Item 8B. Consolidated Financial Statements and Supplementary Data of US Airways, Inc. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Item 9A. Controls and Procedures Item 9B. Other Information PART III Item 10. Directors, Executive Officers...

  • Page 5
    ...the impact of the price and availability of fuel and significant disruptions in the supply of aircraft fuel; provisions in our credit card processing and other commercial agreements that may affect our liquidity; the impact of union disputes, employee strikes and other labor-related disruptions; our...

  • Page 6
    ... of foreign currency exchange rate fluctuations; our ability to use NOLs and certain other tax attributes; and other risks and uncertainties listed from time to time in our reports to and filings with the Securities and Exchange Commission. All of the forward-looking statements are qualified in...

  • Page 7
    ... Overview US Airways Group, a Delaware corporation, is a holding company whose primary business activity is the operation of a major network air carrier through its wholly owned subsidiaries US Airways, Piedmont Airlines, Inc. ("Piedmont"), PSA Airlines, Inc. ("PSA"), Material Services Company, Inc...

  • Page 8
    ...in the United States as measured by domestic revenue passenger miles ("RPMs") and available seat miles ("ASMs"). We have hubs in Charlotte, Philadelphia and Phoenix and a focus city at Ronald Reagan Washington National Airport. We offer scheduled passenger service on more than 3,000 flights daily to...

  • Page 9
    ...-time performance and fewer mishandled bags contributed to 34.8% fewer reported customer complaints to the DOT in 2009 as compared to 2008. Express Operations Certain air carriers have code share arrangements with us to operate under the trade name "US Airways Express." Typically, under a code share...

  • Page 10
    ... for customers include network expansion, frequent flyer program benefits, airport lounge access, convenient single-ticket pricing with electronic tickets, onestop check-in and coordinated baggage handling. We also have bilateral marketing/code sharing agreements with Star Alliance members United...

  • Page 11
    ... flights, on-time performance, type of equipment, cabin configuration, amenities provided to passengers, frequent flyer programs, the automation of travel agent reservation systems, on-board products, markets served and other services. We compete with both major full service airlines and low-cost...

  • Page 12
    ... airline subsidiaries to expand their operations at the affected airports. Authorities at other airports may adopt similar noise regulations. International The availability of international routes to domestic air carriers is regulated by agreements between the U.S. and foreign governments. Changes...

  • Page 13
    ... prepare and file certain emission reports. Some of our facilities may be covered by this rule. On February 3, 2009, the EPA adopted regulations implementing changes to the renewable fuel standard program, which require an increasing amount of renewable fuels in the nation's transportation fuel mix...

  • Page 14
    ... of the US Airways and AWA labor agreements that remain separate with their major domestic employee groups. Union Class or Craft Contract Employees (1) Amendable Date Integrated labor agreements: International Association of Machinists & Aerospace Workers ("IAM") Airline Customer Service Employee...

  • Page 15
    ... for US Airways Group's wholly owned regional airlines and affiliate regional airlines operating under capacity purchase agreements as US Airways Express for the years ended December 31, 2009, 2008 and 2007 were $609 million, $1.14 billion and $765 million, respectively. Prices and availability of...

  • Page 16
    ... All major United States airlines offer frequent flyer programs to encourage travel on their respective airlines and customer loyalty. Our Dividend Miles frequent flyer program allows participants to earn mileage credits for each paid flight segment on US Airways, Star Alliance carriers and certain...

  • Page 17
    ... in the Dividend Miles program. Mileage credits can be redeemed for travel awards on US Airways, Star Alliance carriers or other participating airlines. We and the other participating airline partners limit the number of seats per flight that are available for redemption by award recipients by...

  • Page 18
    ... the number of aircraft in operation in response to a decrease in passenger demand for air travel. Increased costs of financing, a reduction in the availability of financing and fluctuations in interest rates could adversely affect our liquidity, operating expenses and results. Recent global market...

  • Page 19
    ...and financings, aircraft purchase commitments, leases and developments of airport and other facilities and other cash obligations. We also have certain guaranteed costs associated with our regional alliances. Our existing indebtedness is secured by substantially all of our assets. As a result of the...

  • Page 20
    ... About Market Risk." If our financial condition worsens, provisions in our credit card processing and other commercial agreements may adversely affect our liquidity. We have agreements with companies that process customer credit card transactions for the sale of air travel and other services. These...

  • Page 21
    ... various facilities and services required for our operations, including Express flight operations, aircraft maintenance, ground services and facilities, reservations and baggage handling. Similar agreements may be entered into in any new markets we decide to serve. These agreements are generally...

  • Page 22
    ... ours, have better financial performance and significant numbers of aircraft on order for delivery in the next few years. These low-cost carriers are expected to continue to increase their market share through growth and could continue to have an impact on the overall performance of US Airways Group...

  • Page 23
    ...requirements. In the last several years, Congress has passed laws, and the DOT, the FAA, the TSA and the Department of Homeland Security have issued a number of directives and other regulations. These requirements impose substantial costs on airlines. On October 10, 2008, the FAA finalized new rules...

  • Page 24
    ...routes, we must be able to obtain adequate gates, ticketing facilities, operations areas, slots (where applicable) and office space. For example, at our largest hub airport, we are seeking to increase international service despite challenging airport space constraints. The nation's aging air traffic...

  • Page 25
    ... and Phoenix and a focus city at Washington National Airport. Substantially all 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 resulting from air traffic control delays, weather conditions, natural...

  • Page 26
    ... 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. Our business is subject to weather factors and seasonal variations in airline travel, which...

  • Page 27
    ... announcements by us or our competitors; movements in fuel prices; new regulatory pronouncements and changes in regulatory guidelines; general and industry-specific economic conditions; public sales of a substantial number of shares of our common stock; and general market conditions. Conversion of...

  • Page 28
    ... at the time of the merger, whose acquisition of US Airways Group's securities is approved by the board of directors prior to the investment under Section 203. Our charter documents include provisions limiting voting and ownership of our equity interests, which includes our common stock and our...

  • Page 29
    ... 2009, US Airways amended its purchase agreements with Airbus to defer 54 aircraft originally scheduled for delivery between 2010 and 2012 to 2013 and beyond. US Airways now plans to take delivery of 28 Airbus aircraft between 2010 and 2012, consisting of four aircraft in 2010 (two A320 aircraft...

  • Page 30
    ... requirements for new or improved airport facilities and passenger terminals at airports in which our airline subsidiaries operate could result in additional occupancy costs and long-term commitments. Item 3. Legal Proceedings On September 12, 2004, US Airways Group and its domestic subsidiaries...

  • Page 31
    ...of operations, financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Foreign Ownership Restrictions Under current federal law, non-U.S. citizens cannot own or control more than 25% of the outstanding voting securities of a domestic air carrier. We...

  • Page 32
    ... reinvestment of dividends. The stock performance shown on the graph below represents historical stock performance and is not necessarily indicative of future stock price performance. 9/27/2005 12/31/2005 12/31/2006 12/31/2007 12/31/2008 12/31/2009 US Airways Group, Inc. Amex Airline Index...

  • Page 33
    ... LLP, an independent registered public accounting firm. The full years 2009, 2008, 2007 and 2006 are comprised of the consolidated financial data of US Airways Group. The 2005 consolidated financial data presented includes the consolidated results of America West Holdings for the 269 days through...

  • Page 34
    ... 2009 period included $49 million in non-cash charges associated with the sale of 10 E190 aircraft and write off of related debt discount and issuance costs, $10 million in other-than-temporary non-cash impairment charges for our investments in auction rate securities and a $2 million non-cash asset...

  • Page 35
    ... from the consolidated financial statements of US Airways, which have been audited by KPMG LLP, an independent registered public accounting firm. In 2007, US Airways Group contributed 100% of its equity interest in America West Holdings, the parent company of AWA, to US Airways in connection with...

  • Page 36
    ... resulting from the merger. (c) The 2009 period included $49 million in non-cash charges associated with the sale of 10 E190 aircraft and write off of related debt discount and issuance costs, $10 million in other-than-temporary non-cash impairment charges for US Airways' investments in auction rate...

  • Page 37
    ... merged with America West Holdings, with US Airways Group as the surviving corporation. We operate the fifth largest airline in the United States as measured by domestic RPMs and ASMs. We have hubs in Charlotte, Philadelphia and Phoenix and a focus city at Ronald Reagan Washington National Airport...

  • Page 38
    ... second checked bag service fees, processing fees for travel awards issued through our Dividend Miles frequent traveler program, our new Choice Seats program, and call center/airport ticketing fees. As a result of new ancillary revenues, while our mainline and Express PRASM was 10.88 cents in 2009...

  • Page 39
    ... available seat mile ("CASM"). Excluding the effects of fuel and fuel hedging transactions as well as the $622 million non-cash charge recorded in 2008 to write off all of the goodwill created by the merger of US Airways Group and America West Holdings, our mainline CASM was relatively constant year...

  • Page 40
    ... assets on our consolidated balance sheets. December 31, December 31, 2009 2008 (In millions) Cash, cash equivalents and short-term investments in marketable securities Short and long-term restricted cash Long-term investments in marketable securities Total cash, cash equivalents, investments...

  • Page 41
    ... Shuttle service between LaGuardia, Boston and Washington National airports, will serve as the cornerstone of our network and by the end of 2010 are expected to represent 99% of our ASMs versus approximately 93% in 2009. Changes to facilitate this strategy include reducing daily departures from...

  • Page 42
    ... merger of US Airways Group and America West Holdings in September 2005. Our 2008 results were also impacted by recognition of the following items: • • $496 million of net unrealized losses resulting from the application of mark-to-market accounting for changes in the fair value of fuel hedging...

  • Page 43
    ... of non-cash state income tax expense for the year ended December 31, 2007, as we utilized NOLs that were generated by US Airways prior to the merger. As these were acquired NOLs, the accounting rules in place at that time required that the decrease in the valuation allowance associated with these...

  • Page 44
    ...every route. Average passenger journey - The average one-way trip measured in miles for one passenger origination. Express statistics include Piedmont and PSA, as well as operating and financial results from capacity purchase agreements with Air Wisconsin Airlines Corporation, Republic Airways, Mesa...

  • Page 45
    ...and second checked bag fees, which were implemented in the second and third quarters of 2008. This increase was offset in part by a decline in the volume of passenger ticketing change fees and declines in fuel sales to our pro-rate carriers through our MSC subsidiary due to lower fuel prices in 2009...

  • Page 46
    ... on certain open fuel hedge transactions as the price of heating oil fell below the lower limit of our collar transactions. Aircraft maintenance expense per ASM decreased 6.2% due principally to decreases in the number of engine overhauls performed in 2009 as compared to 2008 as a result of the...

  • Page 47
    ...non-cash charges associated with the sale of 10 Embraer 190 aircraft and write off of related debt discount and issuance costs, a $14 million loss on the sale of certain aircraft equipment, $10 million in other-than-temporary non-cash impairment charges for our investments in auction rate securities...

  • Page 48
    ...cash charge to write off all of the goodwill created by the merger of US Airways Group and America West Holdings in September 2005, which contributed 0.84 cents to our mainline CASM for 2008. The remaining period-over-period increase in CASM was driven principally by increases in aircraft fuel costs...

  • Page 49
    ... losses on certain open fuel hedge transactions as the price of heating oil fell below the lower limit of those collar transactions. Aircraft maintenance expense per ASM increased 25.4% due principally to increases in the number of engine and landing gear overhauls performed in 2008 as compared to...

  • Page 50
    ... interest in America West Holdings, the parent company of AWA, to US Airways. As a result, America West Holdings and AWA became wholly owned subsidiaries of US Airways. In addition, AWA transferred substantially all of its assets and liabilities to US Airways. All off-balance sheet commitments of...

  • Page 51
    ... merger of US Airways Group and America West Holdings in September 2005. US Airways' 2008 results were also impacted by recognition of the following items: • • $496 million of net unrealized losses resulting from the application of mark-to-market accounting for changes in the fair value of fuel...

  • Page 52
    ... accounting rules in place at that time required that the decrease in the valuation allowance associated with these NOLs reduce goodwill instead of the provision for income taxes. The table below sets forth US Airways' selected mainline and Express operating data: Year Ended December 31, 2009 2008...

  • Page 53
    ... per mile. Passenger revenue per available seat mile ("PRASM") - Passenger revenues divided by ASMs. Express statistics include Piedmont and PSA, as well as operating and financial results from capacity purchase agreements with Air Wisconsin Airlines Corporation, Republic Airways, Mesa Airlines, Inc...

  • Page 54
    ..., the 2008 period included a $622 million non-cash charge to write off all of the goodwill created by the merger of US Airways Group and America West Holdings in September 2005. The 2009 period included $55 million of net special charges consisting of $22 million in aircraft costs as a result of US...

  • Page 55
    ... A320 family aircraft and two Airbus A330 aircraft in 2009, which increased depreciation expense on owned aircraft. Total Express expenses decreased $511 million or 16.3% in 2009 to $2.63 billion from $3.14 billion in 2008. The year-over-year decrease was primarily driven by decreases in fuel costs...

  • Page 56
    ..., as measured by ASMs, increased 5.6% in 2008 due principally to the year-over-year increase in capacity purchased from an affiliate Express carrier. Express RPMs increased by 5.1% on this higher capacity resulting in a 0.4 point decrease in load factor to 72.6%. Express passenger yield increased by...

  • Page 57
    ...by the merger of US Airways Group and America West Holdings in September 2005. The remaining period-over-period increase in mainline operating expenses was driven principally by increases in aircraft fuel costs ($988 million) and a net loss on fuel hedging instruments ($356 million) in 2008 compared...

  • Page 58
    ... increased $40 million year over year as a result of the 5.6% increase in Express capacity in 2008, partially offset by a decrease in amounts paid under capacity purchases with US Airways Group's wholly owned Express carriers. Nonoperating Income (Expense): 2008 (In millions) 2007 Percent Change...

  • Page 59
    ...million net increase in equipment purchase deposits for aircraft on order, as well as a $74 million increase in restricted cash, all of which were offset in part by net sales of investments in marketable securities of $206 million. The change in the 2008 restricted cash balance was due to changes in...

  • Page 60
    ... nine Embraer aircraft and a net increase in equipment purchase deposits of $80 million. The net sales of investments in marketable securities in 2007 were primarily certain auction rate securities sold at par value in the third quarter of 2007. The change in the 2007 restricted cash balance was due...

  • Page 61
    ... cash decreased during 2009 due to changes in the amount of holdback held by certain credit card processors for advance ticket sales for which US Airways had not yet provided air transportation. Principal investing activities in 2008 included expenditures for property and equipment totaling...

  • Page 62
    ... nine Embraer aircraft and a net increase in equipment purchase deposits of $80 million. The net sales of investments in marketable securities in 2007 were primarily certain auction rate securities sold at par value in the third quarter of 2007. The change in the 2007 restricted cash balance was due...

  • Page 63
    ...any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date for the 7.25% notes. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination thereof at our election. The initial conversion rate...

  • Page 64
    ... agreements with companies that process customer credit card transactions for the sale of air travel and other services. Credit card processors have financial risk associated with tickets purchased for travel because, although the processor generally forwards the cash related to the purchase to us...

  • Page 65
    ... adverse effect on our business, financial condition and results of operations." As of December 31, 2009, we and our subsidiaries were in compliance with the covenants in our long-term debt agreements. Our credit ratings, like those of most airlines, are relatively low. The following table details...

  • Page 66
    ...are off-balance sheet entities, the primary purpose of which is to finance the acquisition of flight equipment. Rather than finance each aircraft separately when such aircraft is purchased or delivered, these trusts allowed US Airways to raise the financing for several aircraft at one time and place...

  • Page 67
    ... financial statements in Item 8A and 8B of this report, respectively. (8) Represents minimum payments under capacity purchase agreements with third-party Express carriers. (9) Represents operating lease commitments entered into by US Airways Group's other airline subsidiaries Piedmont and PSA...

  • Page 68
    ... credit rating or a general increase in interest rates or due to an increase in the cost of fuel, maintenance, aircraft and aircraft engines and parts, could decrease the amount of cash available to cover the cash obligations. Moreover, the Citicorp credit facility, our amended credit card agreement...

  • Page 69
    ... to market rates and transactions. Changes in industry capacity and demand for air transportation can significantly impact the fair value of aircraft and related assets. We performed the annual impairment test on our international route authorities and trademarks during the fourth quarter of 2009...

  • Page 70
    ... of our investments in marketable securities. Frequent Traveler Program The Dividend Miles frequent traveler program awards mileage credits to passengers who fly on US Airways and Star Alliance carriers and certain other partner airlines that participate in our program. Mileage credits can be...

  • Page 71
    ... or all of the deferred tax assets will be realized. NOLs generated in 2009 were also fully reserved by a valuation allowance. Recent Accounting Pronouncements In June 2009, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 168, "The...

  • Page 72
    ... fuel price results in a $14 million annual increase in expense. Since the third quarter of 2008, we have not entered into any new fuel hedging transactions and, as of December 31, 2009, we had no remaining outstanding fuel hedging contracts. Interest Rate Risk Our exposure to interest rate risk...

  • Page 73
    ...debt agreements. Changes in interest rates will impact the cost of such financings. At December 31, 2009, included within our investment portfolio are $347 million par value of investments in auction rate securities. With the liquidity issues experienced in the global credit and capital markets, all...

  • Page 74
    ... Financial Statements and Supplementary Data of US Airways Group, Inc. Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders US Airways Group, Inc.: We have audited the accompanying consolidated balance sheets of US Airways Group, Inc. and subsidiaries...

  • Page 75
    ...the Years Ended December 31, 2009, 2008 and 2007 2009 2008 2007 (In millions, except share and per share amounts) Operating revenues: Mainline passenger Express passenger Cargo Other Total operating revenues Operating expenses: Aircraft fuel and related taxes Loss (gain) on fuel hedging instruments...

  • Page 76
    Table of Contents US Airways Group, Inc. Consolidated Balance Sheets December 31, 2009 and 2008 2009 2008 (In millions, except share and per share amounts) ASSETS Current assets Cash and cash equivalents Investments in marketable securities Restricted cash Accounts receivable, net Materials and ...

  • Page 77
    ... of debt Gain on sale of investments Goodwill impairment Auction rate security impairment Asset impairment Non-cash tax benefits Utilization of acquired net operating loss carryforwards Change in fair value of fuel hedging instruments, net Amortization of deferred credits and rent Amortization of...

  • Page 78
    ...US Airways Group, Inc. Consolidated Statements of Stockholders' Equity (Deficit) For the Years Ended December 31, 2009, 2008 and 2007 Accumulated Additional Other Common Paid-In Accumulated Comprehensive Treasury Stock Capital Deficit Income Stock (In millions, except share amounts) Total Balance...

  • Page 79
    ... largest airline in the United States as measured by domestic revenue passenger miles ("RPMs") and available seat miles ("ASMs"). US Airways has hubs in Charlotte, Philadelphia and Phoenix and a focus city at Ronald Reagan Washington National Airport. US Airways offers scheduled passenger service on...

  • Page 80
    ... noncurrent assets on the Company's balance sheet represent investments expected to be converted to cash after 12 months. Debt securities, other than auction rate securities, are classified as held to maturity. Held-to-maturity investments are carried at amortized cost, which approximates fair value...

  • Page 81
    ... goodwill created by the merger of US Airways Group and America West Holdings in September 2005. The Company performed an interim goodwill impairment test during 2008 as a result of a significant increase in fuel prices, declines in the Company's stock price and mainline capacity reductions, which...

  • Page 82
    ... awards mileage credits to passengers who fly on US Airways and Star Alliance carriers and certain other partner airlines that participate in the Company's program. Mileage credits can be redeemed for travel on US Airways or other participating partner airlines, in which case the Company pays a fee...

  • Page 83
    ...jet fuel price increases. These instruments consisted of no premium collars. All derivatives were marked to fair value on the balance sheet with adjustments to fair value recorded in the income statement. The Company does not purchase or hold any derivative financial instruments for trading purposes...

  • Page 84
    ...tickets sold for flights on other airlines and sales of tour packages by the US Airways Vacations division, which are recognized when the services are provided. Other revenues also include processing fees for travel awards issued through the Dividend Miles frequent traveler program and the marketing...

  • Page 85
    .... Express expenses consist of the following (in millions): Year Ended December 31, 2009 Year Ended December 31, 2008 Year Ended December 31, 2007 Aircraft fuel and related taxes Salaries and related costs Capacity purchases Aircraft rent Aircraft maintenance Other rent and landing fees Selling...

  • Page 86
    ..., respectively, in aircraft costs as a result of its previously announced capacity reductions. In 2009, the Company recorded $16 million in non-cash impairment charges due to the decline in fair value of certain indefinite lived intangible assets associated with its international routes. See Note...

  • Page 87
    ... shares include outstanding employee stock options, employee stock appreciation rights, employee restricted stock units and convertible debt. The following table presents the computation of basic and diluted EPS (in millions, except share and per share amounts): Year Ended December 31, 2009 2008...

  • Page 88
    ... Airways Group entered into a term loan credit facility with Citicorp North America, Inc., as administrative agent, and a syndicate of lenders pursuant to which US Airways Group borrowed an aggregate principal amount of $1.6 billion. US Airways, AWA and certain other subsidiaries of US Airways Group...

  • Page 89
    ... of 19 aircraft. See Note 9(c) for further discussion. In September 2005, US Airways entered into an agreement with Republic to sell and leaseback certain of its commuter slots at Ronald Reagan Washington National Airport and New York LaGuardia Airport. US Airways continues to hold the right to...

  • Page 90
    ...unused miles then outstanding. Commencing in January 2012, the $200 million will be reduced over a period of up to approximately two years. Among the conditions to this monthly purchase of miles is a requirement that US Airways Group maintain an unrestricted cash balance, as defined in the agreement...

  • Page 91
    ...purchase agreements. Under the terms of each of the amendments, US Airways has agreed to maintain a level of unrestricted cash in the same amount required by the Citicorp credit facility. This transaction was treated as a financing transaction for accounting purposes using an effective interest rate...

  • Page 92
    ... at their option at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date for the 7.25% notes. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of US Airways Group common stock or a combination thereof at...

  • Page 93
    ... significant minimum cash balance requirements and other covenants with which the Company was in compliance at December 31, 2009. Certain of the Company's long-term debt agreements contain cross-default provisions, which may be triggered by defaults by US Airways or US Airways Group under other...

  • Page 94
    ...of non-cash state income tax expense for the year ended December 31, 2007, as the Company utilized NOLs that were generated by US Airways prior to the merger. As these were acquired NOLs, the accounting rules in place at that time required that the decrease in the valuation allowance associated with...

  • Page 95
    ... millions): 2009 2008 Deferred tax assets: Net operating loss carryforwards Property, plant and equipment Investments Financing transactions Employee benefits Dividend Miles awards AMT credit carryforward Other deferred tax assets Valuation allowance Net deferred tax assets Deferred tax liabilities...

  • Page 96
    ...available cash in money market securities and highly liquid debt instruments. As of December 31, 2009, the Company held auction rate securities totaling $347 million at par value, which are classified as available-for-sale securities and noncurrent assets on the Company's consolidated balance sheets...

  • Page 97
    ... market prices where available. For long-term debt not actively traded, fair values were estimated using a discounted cash flow analysis, based on the Company's current incremental borrowing rates for similar types of borrowing arrangements. 7. Fair Value Measurements On January 1, 2008, the Company...

  • Page 98
    ... balance sheets. Refer to Note 6(a) for further discussion of the Company's fuel hedging derivatives. Assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) are as follows (in millions): Investments in Marketable Securities (Noncurrent) Balance...

  • Page 99
    ... quarter of 2009. The fair values of international route authorities were assessed using the market approach. The market approach took into consideration relevant supply and demand factors at the related airport locations as well as available market sale and lease data. As a result of the Company...

  • Page 100
    ... unified agreements that moved all of US Airways' fleet services and maintenance and related employees to one labor contract, the Company's postretirement benefit plans were amended effective as of January 1, 2009 to include all pre-merger AWA fleet service and maintenance and related employees. The...

  • Page 101
    ... compensation benefits for certain employees. The Company accrues for the cost of such benefit expenses once an appropriate triggering event has occurred. In 2007, the Company recorded a $99 million charge to increase long-term disability obligations for US Airways' pilots as a result of a change in...

  • Page 102
    ...related costs. 9. Commitments and Contingencies (a) Commitments to Purchase Flight Equipment and Maintenance Services Aircraft and Engine Purchase Commitments US Airways has definitive purchase agreements with Airbus for the acquisition of 134 aircraft, including 97 single-aisle A320 family aircraft...

  • Page 103
    ...are off-balance sheet entities, the primary purpose of which is to finance the acquisition of flight equipment. Rather than finance each aircraft separately when such aircraft is purchased or delivered, these trusts allowed US Airways to raise the financing for several aircraft at one time and place...

  • Page 104
    ...has long-term capacity purchase agreements and has concluded it is not required to consolidate any of the entities. (e) Legal Proceedings On September 12, 2004, US Airways Group and its domestic subsidiaries (collectively, the "Reorganized Debtors") filed voluntary petitions for relief under Chapter...

  • Page 105
    ... service under a US Airways Express code share arrangement. On April 8, 2005, Air Wisconsin notified the Company of its intention to deploy 70 regional jets, the maximum number provided for in the agreement, into the US Airways Express network. Mr. Bartlett became a member of the board of directors...

  • Page 106
    ... air transportation for passengers and cargo. This allows it to benefit from an integrated revenue pricing and route network that includes US Airways, Piedmont, PSA and third-party carriers that fly under capacity purchase or prorate agreements as part of the Company's Express operations. The flight...

  • Page 107
    ...to cash settled awards. Restricted Stock Unit Awards - As of December 31, 2009, the Company has outstanding restricted stock unit awards ("RSUs") with service conditions, which are classified as equity awards. The grant-date fair value of RSUs is equal to the market price of the underlying shares of...

  • Page 108
    ... in the issuance of shares of the Company's common stock. Cash-settled stock appreciation rights ("CSARs") are classified as liability awards as the exercise results in payment of cash by the Company. Stock option and SARs activity for the years ending December 31, 2009, 2008 and 2007 is as follows...

  • Page 109
    ... Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (In millions) Balance at December 31, 2009 Vested or expected to vest at December 31, 2009 Exercisable at December 31, 2009 2005 Equity Incentive Plan Balance at December 31, 2006 Granted Exercised...

  • Page 110
    ... 1.3 years. Agreements with the Pilot Union - US Airways Group and US Airways have a letter of agreement with the US Airways' pilot union through April 18, 2008, that provides that US Airways' pilots designated by the union receive stock options to purchase 1.1 million shares of the Company's common...

  • Page 111
    ...: January 31, 2008 January 31, 2007 Per share fair value Risk free interest rate Expected dividend yield Expected life Volatility $ 3.02 2.2% - 2.0 years 55% $ 18.02 4.9% - 2.0 years 53% As of December 31, 2009, there were no unrecognized compensation costs related to stock options granted to...

  • Page 112
    ...mutual asset purchase and sale agreement with Delta Air Lines, Inc. ("Delta"). Pursuant to the agreement, US Airways would transfer to Delta certain assets related to flight operations at LaGuardia Airport in New York, including 125 pairs of slots currently used to provide US Airways Express service...

  • Page 113
    ...Fourth quarter 2009 operating expenses included $33 million of net special charges consisting of $16 million in non-cash impairment charges due to the decline in fair value of certain indefinite lived intangible assets associated with international routes, $5 million in aircraft costs as a result of...

  • Page 114
    ... ASC Topic 960, Plan Accounting - Defined Benefit Pension Plans), as of January 1, 2008. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), US Airways' internal control over financial reporting as of December 31, 2009, based on...

  • Page 115
    ...of Operations For the Years Ended December 31, 2009, 2008 and 2007 2009 2008 (In millions) 2007 Operating revenues: Mainline passenger Express passenger Cargo Other Total operating revenues Operating expenses: Aircraft fuel and related taxes Loss (gain) on fuel hedging instruments, net Salaries and...

  • Page 116
    Table of Contents US Airways, Inc. Consolidated Balance Sheets December 31, 2009 and 2008 2009 2008 (In millions, except share and per share amounts) ASSETS Current assets Cash and cash equivalents Investments in marketable securities Restricted cash Accounts receivable, net Materials and supplies...

  • Page 117
    ... of debt Gain on sale of investments Goodwill impairment Auction rate security impairment Asset impairment Non-cash tax benefits Utilization of acquired net operating loss carryforwards Change in fair value of fuel hedging instruments, net Amortization of deferred credits and rent Amortization of...

  • Page 118
    ... the Years Ended December 31, 2009, 2008 and 2007 Additional Retained Accumulated Other Paid-In Earnings Comprehensive Capital (Deficit) Income (Loss) (In millions) Common Stock Total Balance at December 31, 2006 Net income Forgiveness of intercompany payable to US Airways Group Unrealized loss...

  • Page 119
    ... largest airline in the United States as measured by domestic revenue passenger miles ("RPMs") and available seat miles ("ASMs"). US Airways has hubs in Charlotte, Philadelphia and Phoenix and a focus city at Ronald Reagan Washington National Airport. US Airways offers scheduled passenger service on...

  • Page 120
    ... assets on US Airways' balance sheet represent investments expected to be converted to cash after 12 months. Debt securities, other than auction rate securities, are classified as held to maturity. Held-to-maturity investments are carried at amortized cost, which approximates fair value. Investments...

  • Page 121
    ... the goodwill created by the merger of US Airways Group and America West Holdings in September 2005. US Airways performed an interim goodwill impairment test during 2008 as a result of a significant increase in fuel prices, declines in US Airways Group's stock price and mainline capacity reductions...

  • Page 122
    ..., 2009 and 2008, US Airways had $30 million of trademarks on its balance sheets. US Airways performed the annual impairment test on its international route authorities and trademarks during the fourth quarter of 2009. The fair values of international route authorities were assessed using the market...

  • Page 123
    ... cost of carrying one additional passenger. Incremental cost includes unit costs incurred by US Airways for fuel, credit card fees, insurance, denied boarding compensation, food and beverages as well as fees incurred when travel awards are redeemed on partner airlines. In addition, US Airways...

  • Page 124
    ...tickets sold for flights on other airlines and sales of tour packages by the US Airways Vacations division, which are recognized when the services are provided. Other revenues also include processing fees for travel awards issued through the Dividend Miles frequent traveler program and the marketing...

  • Page 125
    ... Ended December 31, 2009 Year Ended December 31, 2008 Year Ended December 31, 2007 Aircraft fuel and related taxes Salaries and related costs Capacity purchases Other rent and landing fees Selling expenses Other expenses Express expenses (s) Recent Accounting Pronouncements $ $ 609 $ 23 1,652...

  • Page 126
    ..., respectively, in aircraft costs as a result of its previously announced capacity reductions. In 2009, US Airways recorded $16 million in non-cash impairment charges due to the decline in fair value of certain indefinite lived intangible assets associated with its international routes. See Note...

  • Page 127
    ... of other expenses. 3. Debt The following table details US Airways' debt (in millions). Variable interest rates listed are the rates as of December 31, 2009. December 31, December 31, 2009 2008 Secured Equipment loans, aircraft pre-delivery payment financings and other notes payable, fixed and...

  • Page 128
    ... of 19 aircraft. See Note 8(c) for further discussion. In September 2005, US Airways entered into an agreement with Republic to sell and leaseback certain of its commuter slots at Ronald Reagan Washington National Airport and New York LaGuardia Airport. US Airways continues to hold the right to...

  • Page 129
    ... aircraft parts and hangar and maintenance facilities. At December 31, 2009, the estimated maturities of long-term debt and capital leases are as follows (in millions): 2010 2011 2012 2013 2014 Thereafter $ 421 334 305 255 265 1,599 3,179 $ Certain of US Airways' long-term debt agreements contain...

  • Page 130
    ... million of non-cash state income tax expense for the year ended December 31, 2007, as US Airways utilized NOLs that were generated prior to the merger. As these were acquired NOLs, the accounting rules in place at that time required that the decrease in the valuation allowance associated with these...

  • Page 131
    ... millions): 2009 2008 Deferred tax assets: Net operating loss carryforwards Property, plant and equipment Investments Financing transactions Employee benefits Dividend Miles awards AMT credit carryforward Other deferred tax assets Valuation allowance Net deferred tax assets Deferred tax liabilities...

  • Page 132
    ... in 2009. (b) Credit Risk Cash, Cash Equivalents and Investments in Marketable Securities US Airways invests available cash in money market securities and highly liquid debt instruments. As of December 31, 2009, US Airways held auction rate securities totaling $347 million at par value, which...

  • Page 133
    ... market prices where available. For long-term debt not actively traded, fair values were estimated using a discounted cash flow analysis, based on US Airways' current incremental borrowing rates for similar types of borrowing arrangements. 6. Fair Value Measurements On January 1, 2008, US Airways...

  • Page 134
    ... consolidated balance sheets. Refer to Note 5(a) for further discussion of US Airways' fuel hedging derivatives. Assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) are as follows (in millions): Investments in Marketable Securities (Noncurrent) Balance...

  • Page 135
    ...merger AWA fleet service and maintenance and related employees. The following table presents the weighted average assumptions used to determine benefit obligations: Year Ended December 31, 2009 Year Ended December 31, 2008 Discount rate 5.51% 5.98% US Airways assumed discount rates for measuring...

  • Page 136
    ... on amounts reported for retiree health care plans. A one-percentage point change in the health care cost trend rates would have the following effects on other postretirement benefits as of December 31, 2009 (in millions): 1% Increase 1% Decrease Effect on total service and interest costs Effect on...

  • Page 137
    ...related costs. 8. Commitments and Contingencies (a) Commitments to Purchase Flight Equipment and Maintenance Services Aircraft and Engine Purchase Commitments US Airways has definitive purchase agreements with Airbus for the acquisition of 134 aircraft, including 97 single-aisle A320 family aircraft...

  • Page 138
    ...are off-balance sheet entities, the primary purpose of which is to finance the acquisition of flight equipment. Rather than finance each aircraft separately when such aircraft is purchased or delivered, these trusts allowed US Airways to raise the financing for several aircraft at one time and place...

  • Page 139
    ... that certain variable costs, such as airport landing fees and passenger liability insurance, will be reimbursed 100% by US Airways. US Airways controls marketing, scheduling, ticketing, pricing and seat inventories. The regional jet capacity purchase agreements have expirations from 2012 to 2020...

  • Page 140
    ... of US Airways Group's Citicorp credit facility. 9. Other Comprehensive Income (Loss) US Airways' other comprehensive income (loss) consisted of the following (in millions): Year Ended December 31, 2009 2008 2007 Net income (loss) Net unrealized gains (losses) on available-for-sale securities, net...

  • Page 141
    ... that result primarily from passengers being carried by these affiliated companies. The rate per ASM that US Airways pays is based on estimates of the costs incurred to supply the capacity. US Airways recognized US Airways Express capacity purchase expense for the years ended December 31, 2009, 2008...

  • Page 142
    ... air transportation for passengers and cargo. This allows it to benefit from an integrated revenue pricing and route network that includes US Airways, Piedmont, PSA and third-party carriers that fly under capacity purchase or prorate agreements as part of US Airways' Express operations. The flight...

  • Page 143
    ...awards. Restricted Stock Unit Awards - As of December 31, 2009, US Airways Group has outstanding restricted stock unit awards ("RSUs") with service conditions, which are classified as equity awards. The grant-date fair value of RSUs is equal to the market price of the underlying shares of US Airways...

  • Page 144
    ...December 31, 2009, 2008 and 2007 is as follows (stock options and SARs in thousands): Weighted Average Remaining Contractual Term (years) Stock Options and SARs Weighted Average Exercise Price Aggregate Intrinsic Value (In millions) 1994 Incentive Equity Plan Balance at December 31, 2006 Granted...

  • Page 145
    ... pricing model, which requires several assumptions. The risk-free interest rate is based on the U.S. Treasury yield curve in effect for the expected term of the award at the time of grant. The dividend yield is assumed to be zero as US Airways Group does not pay dividends and has no current plans...

  • Page 146
    ...US Airways' pilot union through April 18, 2008, that provides that US Airways' pilots designated by the union receive stock options to purchase 1.1 million shares of US Airways Group's common stock. The first tranche of 0.5 million stock options was granted on January 31, 2006 with an exercise price...

  • Page 147
    .... 16. Slot Transaction In August 2009, US Airways Group and US Airways entered into a mutual asset purchase and sale agreement with Delta Air Lines, Inc. ("Delta"). Pursuant to the agreement, US Airways would transfer to Delta certain assets related to flight operations at LaGuardia Airport in New...

  • Page 148
    ... outstanding under the Republic loan was applied to the purchase price of the 10 aircraft. US Airways incurred non-cash charges of $49 million from the loss on sale of the 10 aircraft and write off of related debt discount and issuance costs in the fourth quarter of 2009. 18. Selected Quarterly...

  • Page 149
    ...procedures were effective as of December 31, 2009. Changes in Internal Control over Financial Reporting There has been no change to US Airways Group's or US Airways' internal control over financial reporting that occurred during the quarter ended December 31, 2009 that has materially affected, or is...

  • Page 150
    ...to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of US Airways Group's internal control over financial reporting as of December 31, 2009. In making...

  • Page 151
    ... of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of US Airways Group and subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for each of the years in the...

  • Page 152
    ... to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of US Airways' internal control over financial reporting as of December 31, 2009. In making...

  • Page 153
    ... the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of US Airways, Inc. and subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholder's equity (deficit) and cash flows for each of the...

  • Page 154
    Table of Contents Item 9B. Other Information None. 152

  • Page 155
    ..., 111 West Rio Salado Parkway, Tempe, Arizona 85281. If US Airways Group makes substantive amendments to the Code or grants any waiver, including any implicit waiver, to its principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing...

  • Page 156
    ... of filing such as an exhibit, the Company hereby agrees to furnish to the Commission upon request a copy of any agreement with respect to such long-term debt. Exhibit Number Description 2.1 Agreement and Plan of Merger, dated May 19, 2005, by and among US Airways Group and America West Holdings...

  • Page 157
    ... Airways Group's Current Report on Form 8-K filed on September 22, 2005). 2.5 Mutual Asset Purchase and Sale Agreement dated as of August 11, 2009 among Delta Air Lines, Inc., US Airways, Inc. and US Airways Group, Inc. (incorporated by reference to Exhibit 2.1 to US Airways Group's Quarterly Report...

  • Page 158
    ... to US Airways Group's Annual Report on Form 10-K for the year ended December 31, 2007).* 10.4 Amendment No. 1 dated as of January 11, 2008 to the Amended and Restated Airbus A320 Family Aircraft Purchase Agreement dated as of October 2, 2007 between US Airways, Inc. and Airbus S.A.S. (incorporated...

  • Page 159
    ... Letter Agreement No. 9 to the Purchase Agreement (incorporated by reference to Exhibit 10.23 to US Airways Group's Annual Report on Form 10-K for the year ended December 31, 2008).* 10.24 Amended and Restated Embraer Aircraft Purchase Agreement dated as of June 13, 2006 between US Airways Group and...

  • Page 160
    ... Annual Report on Form 10-K for the year ended December 31, 2006).* 10.38 Letter Agreement dated September 16, 2005 by and among US Airways Group, America West Holdings Corporation, Barbell Acquisition Corp., ACE Aviation America West Holdings, Inc., Eastshore Aviation, LLC, Par Investment Partners...

  • Page 161
    ... Airways Group's Annual Report on Form 10-K for the year ended December 31, 2008).* 10.44 Loan Agreement, dated March 23, 2007, among US Airways Group as Borrower, certain subsidiaries of US Airways Group party to the agreement from time to time, Citicorp North America, Inc., as Administrative Agent...

  • Page 162
    ....5 to US Airways Group's Quarterly Report on Form 10-Q for the quarter ended March 31, 2006).†10.63 Form of Stock Bonus Award Agreement for Non-Employee Directors under US Airways Group's 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.96 to US Airways Group's Annual Report on...

  • Page 163
    ... US Airways Group's Current Report on Form 8-K filed on January 23, 2006).†10.81 2009 Long Term Incentive Program under the US Airways Group 2008 Equity Incentive Plan. †10.82 Amendment No. 4 dated as of August 11, 2009 to the Amended and Restated Airbus A320 Family Aircraft Purchase Agreement...

  • Page 164
    ... Stock Appreciation Right (Cash-Settled) Award Agreement under the US Airways Group, Inc. 2008 Equity Incentive Plan (incorporated by reference to Exhibit 10.8 to US Airways Group's Quarterly Report on Form 10-Q for the quarter ended March 31, 2009).†10.92 Form of Stock Appreciation Right (Stock...

  • Page 165
    ... registrants have duly caused this report to be signed on their behalf by the undersigned, hereunto duly authorized. US Airways Group, Inc. By: /s/ W. Douglas Parker W. Douglas Parker Chairman and Chief Executive Officer Date: February 16, 2010 US Airways, Inc. By: /s/ W. Douglas Parker W. Douglas...

  • Page 166
    ... Cheryl G. Krongard Cheryl G. Krongard /s/ Denise M. O'Leary Denise M. O'Leary /s/ George M. Philip George M. Philip /s/ J. Steven Whisler J. Steven Whisler 164 Director February 16, 2010 Director February 16, 2010 Director February 16, 2010 Director February 16, 2010 Director February 16, 2010

  • Page 167
    ... Number Description 10.81 2009 Long Term Incentive Program under the US Airways Group 2008 Equity Incentive Plan. †10.93 Amendment No. 5 dated as of October 2, 2009 to the Amended and Restated Airbus A320 Family Aircraft Purchase Agreement dated as of October 2, 2007 between Airbus S.A.S. and US...

  • Page 168
    ... value, and Encourage strategic decision-making by providing rewards for the long-term achievement of Company goals. The Program sets forth the terms and conditions for cash Performance Grant Awards to be paid to eligible officers under the US Airways Group, Inc. 2008 Equity Incentive Plan...

  • Page 169
    ... Peer Group and Award Payout Percentages The competitive peer group consists of the following ten companies: AirTran Holdings, Inc., Alaska Air Group, Inc., AMR Corporation, Continental Airlines, Inc., Delta Air Lines, Inc., Frontier Airlines Holdings, Inc., Hawaiian Holdings, Inc., JetBlue Airways...

  • Page 170
    ... from January 1, 2009, through December 31, 2011 will be paid no later than February 29, 2012. Payments will be subject to all required federal, state, and local tax withholding. In the event a Participant separates from service with the Company (and all Related Companies) on account of retirement...

  • Page 171
    ... will be administered by the Committee in accordance with the Plan and in a manner that satisfies the requirements of Section 162(m) of the Internal Revenue Code for qualified "performance-based" compensation. Awards generally are calculated and distributed as provided in Sections IV and V; provided...

  • Page 172
    ... Plan shall govern in all cases. The laws of the State of Delaware shall govern all questions concerning the construction, validity and interpretation of the Program, without regard to such state's conflict of laws rules. The Committee reserves the right to amend or terminate the Program at any time...

  • Page 173
    ... office located at 1, rond-point Maurice Bellonte, 31700 Blagnac, France (the "Seller"), and US Airways, Inc., a corporation organized and existing under the laws of the State of Delaware, United States of America, having its principal corporate offices located at 111 West Rio Salado Parkway...

  • Page 174
    ... Original A320 Aircraft 2008 2008 2008 2008 2008 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2010 2010 2010 2010 2010 2010 ***** Confidential portions of the material have been omitted and filed separately with the Securities and...

  • Page 175
    ... 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. 090924-CT0803167-AMD5-USA-A320

  • Page 176
    ... A320 Aircraft Converted Original A320 Aircraft Converted Original A320 Aircraft 2009 2009 2009 2009 2009 2009 2009 2010 2010 2010 2010 2010 ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. 090924-CT0803167-AMD5-USA...

  • Page 177
    ... delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument. ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. 090924-CT0803167-AMD5-USA-A320

  • Page 178
    ... and year first above written. US AIRWAYS, INC. By: Its: /s/ Thomas T. Weir Vice President and Treasurer AIRBUS S.A.S. By: Its: /s/ Christophe Mourey Senior Vice President Contracts ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange...

  • Page 179
    Confidential Treatment Requested Exhibit B Conversion Schedule Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. 090924-CT0803167-AMD5-USA-A320 PRIVILEGED AND CONFIDENTIAL

  • Page 180
    ... office located at 1, rond-point Maurice Bellonte, 31700 Blagnac, France (the "Seller"), and US Airways, Inc., a corporation organized and existing under the laws of the State of Delaware, United States of America, having its principal corporate offices located at 111 West Rio Salado Parkway...

  • Page 181
    ... Aircraft Original A321 Aircraft Original A321 Aircraft Original A321 Aircraft 2008 2008 2008 2008 2008 2009 2009 2009 2009 2009 2009 2009 ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. CT0803167-AMD6-USA-A320...

  • Page 182
    ... New A320 Aircraft New A320 Aircraft Converted New A320 Aircraft 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2010 2010 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2013 ***** Confidential...

  • Page 183
    ...A320 Aircraft 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2015 2015 2015 2015 2015 2015 2015 2015 ***** Confidential portions of the material have been omitted and filed...

  • Page 184
    Confidential Treatment Requested Rank ***** Aircraft Year 94 95 96 97 UNQUOTE 4. ***** New A320 Aircraft New A320 Aircraft New A320 Aircraft New A321 Aircraft 2015 2015 2015 2015 The table set forth in Paragraph 4.2 of Letter Agreement No. 7 to the Agreement is deleted in its ...

  • Page 185
    ...2 to the Agreement is hereby amended by adding the following immediately prior to the word "*****": , on the last Working Day of such month, UNQUOTE ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. CT0803167-AMD6-USA-A320...

  • Page 186
    ... CHANGE NOTICES In Paragraph 2.4 of Letter Agreement No. 6, the words "*****" are deleted and replaced with "*****". 15 Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. CT0803167-AMD6-USA-A320 PRIVILEGED AND CONFIDENTIAL...

  • Page 187
    ... transmission), will be an original, and the counterparts will together constitute one and the same instrument. ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. CT0803167-AMD6-USA-A320 PRIVILEGED AND CONFIDENTIAL 8/10

  • Page 188
    ... and year first above written. US AIRWAYS, INC. By: Its: /s/ Thomas T. Weir Vice President and Treasurer AIRBUS S.A.S. By: Its: /s/ Christophe Mourey Senior Vice President Contracts ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange...

  • Page 189
    Confidential Treatment Requested Exhibit B Conversion Schedule Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. CT0803167-AMD6-USA-A320 PRIVILEGED AND CONFIDENTIAL.

  • Page 190
    ... office located at 1, rond-point Maurice Bellonte, 31700 Blagnac, France (the "Seller"), and US Airways, Inc., a corporation organized and existing under the laws of the State of Delaware, United States of America, having its principal corporate offices located at 111 West Rio Salado Parkway...

  • Page 191
    ... the provisions of this Paragraph 2, the *****. 3. 3.1 ***** ***** ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. USA - Airbus A330 Purchase Agreement Amendment 5 CT0803167-AMD5-USA-A330 2/5 CONFIDENTIAL AND PRIVILEGED

  • Page 192
    ...and replaced with the words "*****". 9. EFFECT OF AMENDMENT QUOTE ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. USA - Airbus A330 Purchase Agreement Amendment 5 CT0803167-AMD5-USA-A330 3/5 CONFIDENTIAL AND PRIVILEGED

  • Page 193
    ... will together constitute one and the same instrument. ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. USA - Airbus A330 Purchase Agreement Amendment 5 CT0803167-AMD5-USA-A330 4/5 CONFIDENTIAL AND PRIVILEGED 9.2 10.

  • Page 194
    ... Weir Vice President and Treasurer AIRBUS S.A.S. By: Its: /s/ Christophe Mourey Senior Vice President Contracts ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. USA - Airbus A330 Purchase Agreement Amendment 5 CT0803167...

  • Page 195
    ... office located at 1, rond-point Maurice Bellonte, 31700 Blagnac, France (the "Seller"), and US Airways, Inc., a corporation organized and existing under the laws of the State of Delaware, United States of America, having its principal corporate offices located at 111 West Rio Salado Parkway...

  • Page 196
    ... in ***** as well as on the date that is *****. UNQUOTE ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. USA - Airbus A350 XWB Purchase Agreement Amendment 4 CT0803167-AMD3-USA-A350 2/5 CONFIDENTIAL AND PRIVILEGED

  • Page 197
    ... provisions contained in this Amendment will govern. 9.2 ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. USA - Airbus A350 XWB Purchase Agreement Amendment 4 CT0803167-AMD3-USA-A350 3/5 CONFIDENTIAL AND PRIVILEGED

  • Page 198
    ... will together constitute one and the same instrument. ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. USA - Airbus A350 XWB Purchase Agreement Amendment 4 CT0803167-AMD3-USA-A350 4/5 CONFIDENTIAL AND PRIVILEGED

  • Page 199
    ...Thomas T. Weir Vice President and Treasurer AIRBUS S.A.S. By: Its: /s/ Christophe Mourey Senior Vice President Contracts ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. USA - Airbus A350 XWB Purchase Agreement Amendment...

  • Page 200
    Exhibit 10.97 Confidential Treatment Requested SECOND AMENDED AND RESTATED LETTER AGREEMENT NO. 5 TO AMENDED AND RESTATED AIRBUS A350 XWB PURCHASE AGREEMENT Dated as of October 2, 2007 As of November 20, 2009 US Airways, Inc. 111 West Rio Salado Parkway Tempe, Arizona 85281 Re: ***** Ladies and ...

  • Page 201
    ...the same instrument. ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. USA Second Amended and Restated Letter Agreement No. 5 to Amended and Restated Airbus A350 XWB Purchase Agreement CT0803167-LA5-USA-A350 PRIVILEGED AND...

  • Page 202
    ...the Seller. US AIRWAYS, INC. By: Name: Title: /s/ Thomas T. Weir Thomas T. Weir Vice President and Treasurer AIRBUS S.A.S. By: Name: Title: /s/ Christophe Mourey Christophe Mourey Senior Vice President Contracts ***** Confidential portions of the material have been omitted and filed separately with...

  • Page 203
    ... Airways Group, Inc. and US Airways, Inc. 100% owned by US Airways Group, Inc: Airways Assurance Limited Organized under the laws of Bermuda Material Services Company, Inc. Incorporated under the laws of the State of Delaware Piedmont Airlines, Inc. (operates under the trade name "US Airways Express...

  • Page 204
    ... balance sheets of the Company as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for each of the years in the three-year period ended December 31, 2009, and the effectiveness of internal control over financial...

  • Page 205
    ... balance sheets of US Airways as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholder's equity (deficit), and cash flows for each of the years in the three-year period ended December 31, 2009, and the effectiveness of internal control over financial...

  • Page 206
    ... information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 16, 2010 /s/ W. Douglas Parker Name: Title: W. Douglas Parker Chief Executive Officer

  • Page 207
    ... financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer...

  • Page 208
    ... information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 16, 2010 /s/ W. Douglas Parker Name: W. Douglas Parker Title: Chief Executive Officer

  • Page 209
    ... financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer...

  • Page 210
    ... Annual Report on Form 10-K of US Airways Group, Inc. (the Company) for the year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the Report), W. Douglas Parker, as Chief Executive Officer of the Company, and Derek J. Kerr, as Chief Financial Officer...

  • Page 211
    ... the Annual Report on Form 10-K of US Airways, Inc. (the Company) for the year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the Report), W. Douglas Parker, as Chief Executive Officer of the Company, and Derek J. Kerr, as Chief Financial Officer of...