US Airways 2011 Annual Report Download - page 28

Table of Contents
In addition, many of our commercial partners, including credit card companies, have imposed data security standards that we must meet. In particular,
we are required by the Payment Card Industry Security Standards Council, founded by the credit card companies, to comply with their highest level of data
security standards. While we continue our efforts to meet these standards, new and revised standards may be imposed that may be difficult for us to meet and
could increase our costs.
Failure to comply with the Payment Card Industry Standards discussed above or other privacy and data use and security requirements of our partners or
related laws, rules and regulations to which we are subject may expose us to claims for contract breach, fines, sanctions or other penalties, which could
materially and adversely affect our results of operations and overall business. In addition, failure to address appropriately these issues could also give rise to
additional legal risks, which, in turn, could increase the size and number of litigation claims and damages asserted or subject us to enforcement actions, fines
and penalties and cause us to incur further related costs and expenses.
We are at risk of losses and adverse publicity stemming from any accident involving any of our aircraft or the aircraft of our regional operators.
If one of our aircraft, an aircraft that is operated under our brand by one of our regional operators or an aircraft that is operated by an airline that is one
of our codeshare partners were to be involved in an accident, we could be exposed to significant tort liability. The insurance we carry to cover damages
arising from any future accidents may be inadequate. In the event that our insurance is not adequate, we may be forced to bear substantial losses from an
accident. In addition, any accident involving an aircraft that we operate, an aircraft that is operated under our brand by one of our regional operators or an
aircraft that is operated by an airline that is one of our codeshare partners could create a public perception that our aircraft or those of our regional operators or
codeshare partners are not safe or reliable, which could harm our reputation, result in air travelers being reluctant to fly on our aircraft or those of our regional
operators or codeshare partners and adversely impact our financial condition and operations.
Delays in scheduled aircraft deliveries or other loss of anticipated fleet capacity may adversely impact our operations and financial results.
The success of our business depends on, among other things, the ability to operate an optimum number and type of aircraft. In many cases, the aircraft
we intend to operate are not yet in our fleet, but we have contractual commitments to purchase or lease them. If for any reason we were unable to accept or
secure deliveries of new aircraft on contractually scheduled delivery dates, this could have a negative impact on our business, operations and financial
performance. Our failure to integrate newly purchased aircraft into our fleet as planned might require us to seek extensions of the terms for some leased
aircraft. Such unanticipated extensions may require us to operate existing aircraft beyond the point at which it is economically optimal to retire them, resulting
in increased maintenance costs. If new aircraft orders are not filled on a timely basis, we could face higher monthly rental rates.
We are dependent on a limited number of suppliers for aircraft, aircraft engines and parts.
We are dependent on a limited number of suppliers for aircraft, aircraft engines and many aircraft and engine parts. As a result, we are vulnerable to any
problems associated with the supply of those aircraft, parts and engines, including design defects, mechanical problems, contractual performance by the
suppliers, or adverse perception by the public that would result in customer avoidance or in actions by the FAA resulting in an inability to operate our aircraft.
Our inability to operate profitably out of Philadelphia International Airport, which is one of our hubs, could harm our business, financial condition
and results of operations.
Markets served from Philadelphia International Airport ("PHL"), which is one of our hubs and our international gateway, are important to our
operations. In fiscal 2011, more than a third of our daily ASMs and more than half of our international ASMs were flown through PHL. PHL plans to embark
on a multi-billion dollar runway and terminal expansion project called the Capacity Enhancement Program that will, if undertaken as planned, result in huge
cost increases for airlines serving PHL, including US Airways. The project has been approved by the FAA, and expenditures have already begun. We cannot
guarantee that the fees and other costs related to operating out of PHL will not increase should this or other significant expansion projects be implemented by
the airport authority. In addition, if we are unable to operate profitably from PHL, we may need to significantly reduce our business at Philadelphia or move
that business to another of our hubs, either of which actions could be costly. Our business, financial condition and results of operations could be harmed by an
increase in airport rates and fees charged by PHL in connection with and following the airport expansion.
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