US Airways 2010 Annual Report Download - page 135

Table of Contents
11. Related Party Transactions
The following represents net payable balances to related parties (in millions):
December 31,
2010 2009
US Airways Group $ 571 $ 607
US Airways Group's wholly owned subsidiaries 55 35
$ 626 $ 642
(a) Parent Company
US Airways Group has the ability to move funds freely between its operating subsidiaries to support operations. These transfers are
recognized as intercompany transactions. In September 2009, US Airways Group contributed $600 million in net intercompany
receivables due from US Airways to the capital of US Airways.
US Airways recorded interest expense for the years ended December 31, 2010, 2009 and 2008 of $9 million, $27 million and
$61 million, respectively, related to its intercompany payable balance to US Airways Group. Interest is calculated at market rates, which
are reset quarterly.
(b) Subsidiaries of US Airways Group
The net payable to US Airways Group's wholly owned subsidiaries consists of amounts due under regional capacity agreements with
the other airline subsidiaries and fuel purchase arrangements with a non-airline subsidiary.
US Airways purchases all of the capacity generated by US Airways Group's wholly owned regional airline subsidiaries at a rate per
ASM that is periodically determined by US Airways and, concurrently, recognizes revenues 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 Express capacity purchase expense for the years ended December 31, 2010, 2009 and 2008 of
$460 million, $451 million and $417 million, respectively, related to this program.
US Airways provides various services to these regional airlines, including passenger handling, maintenance and catering. US Airways
recognized other operating revenues for the years ended December 31, 2010, 2009 and 2008 of $89 million, $87 million and $89 million,
respectively, related to these services. These regional airlines also perform passenger and ground handling services for US Airways at
certain airports, for which US Airways recognized other operating expenses for the years ended December 31, 2010, 2009 and 2008 of
$158 million, $142 million and $154 million, respectively. US Airways also leases or subleases certain aircraft to these regional airline
subsidiaries. US Airways recognized other operating revenues of $78 million related to these arrangements for each of the years ended
December 31, 2010, 2009 and 2008, respectively.
US Airways purchases a portion of its aviation fuel from US Airways Group's wholly owned subsidiary, MSC, which acts as a fuel
wholesaler to US Airways in certain circumstances. For the years ended December 31, 2010, 2009 and 2008, MSC sold fuel totaling
$879 million, $677 million and $1.33 billion, respectively, used by US Airways' mainline and Express flights.
12. Operating Segments and Related Disclosures
US Airways is managed as a single business unit that provides air transportation for passengers and cargo. This allows it to benefit
from an integrated revenue pricing and route network that includes US Airways, US Airways Group's wholly owned regional air carriers
and third-party carriers that fly under capacity purchase or prorate agreements as part of US Airways' Express operations. The flight
equipment of all these carriers is combined to form one fleet that is deployed through a single route scheduling system. When making
resource allocation decisions, the chief operating decision maker evaluates flight profitability data, which considers aircraft type and
route economics, but gives no weight to the financial impact of the resource allocation decision on an individual
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