US Airways 2009 Annual Report Download - page 112

Table of Contents
18. Slot Transaction
In August 2009, the Company 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 York, including 125 pairs of slots currently used to provide US Airways Express service at LaGuardia. Delta would transfer to
US Airways certain assets related to flight operations at Washington National Airport, including 42 pairs of slots, and the authority to
serve Sao Paulo, Brazil and Tokyo, Japan. One slot equals one take-off or landing, and each pair of slots equals one roundtrip flight. The
agreement is structured as two simultaneous asset sales and is expected to be cash neutral to US Airways. The closing of the transactions
under the agreement is subject to certain closing conditions, including approvals from a number of government agencies, including the
U.S. Department of Justice, the U.S. Department of Transportation ("DOT"), the FAA and The Port Authority of New York and New
Jersey.
On February 9, 2010, the DOT issued a proposed order conditionally approving the transaction. The proposed order, which is subject
to a 30-day comment period, would require the airlines to divest 20 of the 125 slot pairs involved at LaGuardia and 14 of the 42 slot pairs
at Washington National. Delta and the Company are currently reviewing the DOT's proposed order to determine next steps. However, the
Company expects that if this order is implemented as proposed the transaction will not go forward.
19. Embraer 190 Sale
US Airways sold 10 of its Embraer 190 aircraft to Republic during the fourth quarter of 2009. US Airways is currently leasing back
four of the 10 aircraft from Republic for periods ranging from one to five months. Debt outstanding on the 10 Embraer aircraft was
$216 million prior to the sale. In connection with this transaction, Republic agreed to assume the full amount of this debt and US Airways
was released from its obligations under the assumed debt. Additionally, at the time of sale, US Airways had $35 million outstanding
under a loan from Republic (the "Republic loan"). The Republic loan was scheduled to be repaid starting in January 2010 and fully repaid
in October 2011. The full amount 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.
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