US Airways 2011 Annual Report Download - page 10

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Table of Contents
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
arrangement, one air carrier places its designator code and sells tickets on the flights of another air carrier, which is referred to generically as its code share
partner. US Airways Express carriers are an integral component of our operating network. We rely heavily on feeder traffic from our US Airways Express
partners, which carry passengers to our hubs from low-density markets that are uneconomical for us to serve with large jets. In addition, US Airways Express
operators offer complementary service in our existing mainline markets by operating flights during off-peak periods between mainline flights. During 2011,
the US Airways Express network served 156 airports in the continental United States, Canada and Mexico, including 78 airports also served by our mainline
operation. During 2011, approximately 28 million passengers boarded US Airways Express air carriers' planes, approximately 44% of whom connected to or
from our mainline flights. Of these 28 million passengers, approximately 8 million were enplaned by our wholly owned regional airlines Piedmont and PSA,
approximately 20 million were enplaned by third-party carriers operating under capacity purchase agreements and less than 1 million were enplaned by
carriers operating under prorate agreements, as described below.
The US Airways Express code share arrangements are in the form of either capacity purchase or prorate agreements. The capacity purchase agreements
provide that all revenues, including passenger, mail and freight revenues, go to us. In return, we agree to pay predetermined fees to these airlines for operating
an agreed-upon number of aircraft, without regard to the number of passengers on board. In addition, these agreements provide that certain variable costs,
such as airport landing fees and passenger liability insurance, will be reimbursed 100% by us. We control marketing, scheduling, ticketing, pricing and seat
inventories. Under the prorate agreements, the prorate carriers receive a prorated share of ticket revenue and pay certain service fees to us. The prorate carrier
is responsible for pricing the local, point to point markets to the extent that we do not have competing existing service in that market. We are responsible for
pricing all other prorate carrier tickets. The prorate carrier is also responsible for all costs incurred operating the aircraft. Our prorate carriers, Colgan Air, Inc.
and Trans States Airlines, Inc., operated seven turboprops and seven regional jets, respectively, at December 31, 2011. All US Airways Express carriers have
logos, service marks, aircraft paint schemes and uniforms similar to our mainline operation.
In December 2011, SkyWest Airlines, Inc. ("SkyWest") became a US Airways Express partner operating six daily Express flights from our hub in
Phoenix. By spring 2012, SkyWest will serve the US Airways Express operation with 14 CRJ-200 regional jets, replacing the CRJ-200 and Dash 8 Express
service previously operated by Mesa Airlines, and will operate approximately 49 flights to 19 destinations. Also in December 2011, we completed the
installation of first class cabins on 110 US Airways Express regional jets including the ERJ-175 and ERJ-170 fleets operated by Republic Airlines, the
CRJ-700 fleet operated by PSA and the CRJ-900 fleet operated by Mesa Airlines.
The following table sets forth our US Airways Express capacity purchase agreements and the number and type of aircraft operated under those
agreements at December 31, 2011.
Number and Type
Carrier of Aircraft
PSA (1) 49 regional jets
Piedmont (1) 44 turboprops
Air Wisconsin Airlines Corporation 70 regional jets
Republic Airline Inc. 58 regional jets
Mesa Airlines, Inc. 45 regional jets and 6 turboprops
Chautauqua Airlines, Inc. 9 regional jets
SkyWest Airlines, Inc. 2 regional jets
(1) PSA and Piedmont are wholly owned subsidiaries of US Airways Group.
7