US Airways 2011 Annual Report Download - page 117

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements
1. Basis of Presentation and Summary of Significant Accounting Policies
(a) Nature of Operations and Operating Environment
US Airways, Inc. ("US Airways") is a Delaware corporation whose primary business activity is the operation of a major network air carrier. US
Airways is a wholly owned subsidiary of US Airways Group, Inc. ("US Airways Group"), which owns all of US Airways' outstanding common stock, par
value $1 per share. The accompanying consolidated financial statements include the accounts of US Airways and its wholly owned subsidiary, FTCHP LLC.
US Airways operates the fifth largest airline in the United States as measured by domestic revenue passenger miles ("RPMs") and available seat miles
("ASMs"). US Airways has hubs in Charlotte, Philadelphia and Phoenix and a focus city in Washington, D.C. at Ronald Reagan Washington National Airport
("Washington National"). US Airways offers scheduled passenger service on more than 3,100 flights daily to more than 200 communities in the United States,
Canada, Mexico, Europe, the Middle East, the Caribbean, and Central and South America. US Airways also has an established East Coast route network,
including the US Airways Shuttle service. US Airways had approximately 53 million passengers boarding its mainline flights in 2011. During 2011, US
Airways' mainline operation provided regularly scheduled service or seasonal service at 133 airports, while the US Airways Express network served 156
airports in the United States, Canada and Mexico, including 78 airports also served by the mainline operation. US Airways Express air carriers had
approximately 28 million passengers boarding their planes in 2011. As of December 31, 2011, US Airways operated 340 mainline jets and is supported by US
Airways Group's regional airline subsidiaries and affiliates operating as US Airways Express under capacity purchase agreements, which operated 233
regional jets and 50 turboprops. US Airways' prorate carriers operated seven turboprops and seven regional jets at December 31, 2011.
As of December 31, 2011, US Airways employed approximately 31,500 active full-time equivalent employees. Approximately 84% of employees are
covered by collective bargaining agreements with various labor unions. US Airways' pilots and flight attendants are currently working under the terms of their
respective US Airways or America West Airlines, Inc. ("AWA") collective bargaining agreements, as modified by transition agreements reached in
connection with the merger. In January 2012, US Airways reached a tentative agreement with the Association of Flight Attendants ("AFA") for a single labor
agreement applicable to both US Airways and AWA. This tentative agreement is subject to ratification by the AFA membership and if ratified, would become
amendable five years from the date it is signed.
(b) Basis of Presentation
The accompanying consolidated financial statements include the accounts of US Airways and its wholly owned subsidiary. 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 the
accompanying consolidated statements of cash flows, these intercompany transactions are designated as payables to related parties, net and are classified as
operating or financing activities depending upon the nature of the transaction. All significant intercompany accounts and transactions between US Airways
and its wholly owned subsidiary have been eliminated.
The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make
certain estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent assets and
liabilities at the date of the financial statements. Actual results could differ from those estimates. The most significant areas of judgment relate to passenger
revenue recognition, impairment of long-lived and intangible assets, the frequent traveler program and the deferred tax asset valuation allowance.
(c) Cash and Cash Equivalents
Cash equivalents consist of cash in money market securities. All highly liquid investments purchased within three months of maturity are classified as
cash equivalents. Cash equivalents are stated at cost, which approximates fair value due to the highly liquid nature and short-term maturities of the underlying
securities.
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