US Airways 2009 Annual Report Download - page 10

Table of Contents
The following table sets forth our US Airways Express code share agreements and the number and type of aircraft operated under
those agreements at December 31, 2009.
Number and Type
Carrier Agreement Type of Aircraft
PSA (1) Capacity Purchase 49 regional jets
Piedmont (1) Capacity Purchase 44 turboprops
Air Wisconsin Airlines Corporation Capacity Purchase 70 regional jets
Mesa Airlines, Inc. Capacity Purchase 47 regional jets and 6 turboprops
Chautauqua Airlines, Inc. Capacity Purchase 9 regional jets
Republic Airways Capacity Purchase 58 regional jets
Colgan Airlines, Inc. Prorate 10 turboprops
Trans States Airlines, Inc. Prorate 3 regional jets
(1) PSA and Piedmont are wholly owned subsidiaries of US Airways Group.
Marketing and Alliance Agreements with Other Airlines
We maintain alliance agreements with several leading domestic and international carriers to give customers a greater choice of
destinations. Airline alliance agreements provide an array of benefits that vary by partner. By code sharing, each airline is able to offer
additional destinations to its customers under its flight designator code without materially increasing operating expenses and capital
expenditures. Through frequent flyer arrangements, members are provided with extended networks for earning and redeeming miles on
partner carriers. US Airways Club members also have access to certain partner carriers' airport lounges. We also benefit from the
distribution strengths of each of our partner carriers.
US Airways is a member of the Star Alliance, the world's largest airline alliance, which now has 26 member airlines serving
approximately 1,077 destinations in 175 countries. Membership in the Star Alliance further enhances the value of our domestic and
international route network by allowing customers wide access to the global marketplace. Expanded benefits for customers include
network expansion, frequent flyer program benefits, airport lounge access, convenient single-ticket pricing with electronic tickets, one-
stop check-in and coordinated baggage handling. We also have bilateral marketing/code sharing agreements with Star Alliance members
United, Lufthansa, Spanair, bmi, TAP Portugal, Swiss International, Asiana, Air New Zealand, Air China, Japan's ANA, Singapore
Airlines and TACA. Other international code sharing partners include Royal Jordanian Airlines, EVA Airways, Qatar Airways and
Virgin Atlantic Airways. Marketing/code sharing agreements are maintained with two smaller regional carriers in the Caribbean that
operate collectively as the "GoCaribbean" network. Each of these code share agreements funnel international traffic onto our domestic
flights or support specific European and Caribbean markets in which we operate. Domestically, we code share with Hawaiian Airlines on
intra-Hawaii flights.
Competition in the Airline Industry
The markets in which we operate are highly competitive. Price competition occurs on a market-by-market basis through price
discounts, changes in pricing structures, fare matching, target promotions and frequent flyer initiatives. Airlines typically use discount
fares and other promotions to stimulate traffic during normally slack travel periods, or when they begin service to new cities or have
excess capacity, to generate cash flow and maximize revenue per ASM and to establish, increase or preserve market share. Discount and
promotional fares are generally non-refundable and may be subject to various restrictions such as minimum stay requirements, advance
ticketing, limited seating and change fees. We have often elected to match discount or promotional fares initiated by other air carriers in
certain markets in order to compete in those markets. Most airlines will quickly match price reductions in a particular market. Our ability
to compete on the basis of price is limited by our fixed costs and depends on our ability to maintain our operating costs. Some of our
competitors have greater financial resources and/or lower cost structures than we do. In addition, recent years have seen the entrance and
growth of low-fare, low-cost competitors in many of the markets in which we operate. These competitors include Southwest, AirTran,
JetBlue, Allegiant, Frontier and Virgin America. These low cost carriers generally have lower cost structures than US Airways.
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