US Airways 2009 Annual Report Download - page 17

Table of Contents
certain credit cards and purchasing services from non-airline partners such as hotels and rental car agencies. We sell mileage credits to
credit card companies, telephone companies, hotels, car rental agencies and others that participate 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 using various inventory management techniques. Award travel for all but the highest-level Dividend Miles participants is generally not
permitted on blackout dates, which correspond to certain holiday periods or peak travel dates. We charge various fees for issuing awards
dependent upon destination and booking method and for issuing awards within 14 days of the travel date. We reserve the right to
terminate Dividend Miles or portions of the program at any time. Program rules, partners, special offers, blackout dates, awards and
requisite mileage levels for awards are subject to change.
In 2009, we launched the new Dividend Miles Select program in conjunction with certain of our co-branded credit cards. Participants
in this program are eligible to receive discounted award travel and award processing fee waivers.
Ticket Distribution
Passengers can book tickets for travel on US Airways through several distribution channels including our direct website
(www.usairways.com), online travel agent sites (e.g., Orbitz, Travelocity, Expedia and others), traditional travel agents, reservations
centers and airline ticket offices. Traditional travel agencies use Global Distribution Systems ("GDSs"), such as Sabre Travel Network®,
to obtain their fare and inventory data from airlines. Bookings made through these agencies result in a fee, referred to as a "GDS fee,"
that is charged to the airline. Bookings made directly with an airline, through its reservation call centers or website, do not generate a
GDS fee. Travel agent sites that connect directly to airline host systems, effectively by-passing the traditional connection via GDSs, help
us reduce distribution costs. In 2009, we received 63% of our sales from internet sites. Our website accounted for 27% of our sales, while
other internet sites accounted for 36% of our sales. Internal channels of distribution account for 32% of our sales.
Seasonality
Our results are seasonal. Due to the greater demand for air and leisure travel during the summer months, revenues in the airline
industry in the second and third quarters of the year tend to be greater than revenues in the first and fourth quarters of the year.
Pre-merger US Airways Group's Chapter 11 Bankruptcy Proceedings
On September 12, 2004, US Airways Group and its domestic subsidiaries, US Airways, Piedmont, PSA and MSC (collectively, the
"Debtors"), filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (the "Bankruptcy Code") in the United
States Bankruptcy Court for the Eastern District of Virginia, Alexandria Division (the "Bankruptcy Court"). On September 16, 2005, the
Bankruptcy Court confirmed the Debtors' plan of reorganization. Substantially all of the claims in the 2004 bankruptcy have been settled
and the remaining claims, if paid at all, will be paid out in common stock of the post-bankruptcy US Airways Group at a small fraction of
the actual claim amount. However, the effects of these common stock distributions were already reflected in our financial statements
upon emergence from bankruptcy and will not have any further impact on our financial position or results of operations. We presently
expect the bankruptcy case to be closed during 2010.
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