US Airways 2011 Annual Report Download - page 8

Table of Contents
PART I
Item 1. Business
Overview
US Airways Group, a Delaware corporation, is a holding company whose primary business activity is the operation of a major network air carrier
through its wholly owned subsidiaries US Airways, Piedmont Airlines, Inc. ("Piedmont"), PSA Airlines, Inc. ("PSA"), Material Services Company, Inc.
("MSC") and Airways Assurance Limited ("AAL"). MSC and AAL operate in support of our airline subsidiaries in areas such as the procurement of aviation
fuel and insurance. US Airways Group was formed in 1982, and its origins trace back to the formation of All American Aviation in 1939. US Airways, a
Delaware corporation, was formed in 1982. Effective upon US Airways Group's emergence from bankruptcy on September 27, 2005, US Airways Group
merged with America West Holdings Corporation ("America West Holdings"), with US Airways Group as the surviving corporation.
Our principal executive offices are located at 111 West Rio Salado Parkway, Tempe, Arizona 85281. Our telephone number is [phone], and our
internet address is www.usairways.com. Information contained on our website is not and should not be deemed a part of this report or any other report or filing
filed with or furnished to the Securities and Exchange Commission ("SEC").
Available Information
A copy of this Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are available free of charge at
www.usairways.com as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
The U.S. Airline Industry
A strong pricing environment resulting from ongoing industry capacity discipline and robust consumer demand for air travel drove higher revenues and
profitable 2011 operations for substantially all major U.S. airlines. These higher revenues allowed the airline industry to partially offset a very significant
increase in fuel prices.
Airlines for America, the trade association for U.S. airlines formerly known as the Air Transport Association, reported that annual 2011 U.S. industry
passenger revenues and yields increased 10.2% and 9.4%, respectively, as compared to 2010. With respect to the U.S. airline industry's international versus
domestic performance, international markets outperformed domestic markets in year-over-year improvements in passenger revenues and yields. Airlines for
America reported that annual 2011 international passenger revenues and yields increased on a year-over-year basis by 11.8% and 10.1%, respectively,
whereas domestic market passenger revenues and yields increased on a year-over-year basis by 9.4% and 9.2%, respectively. Latin American and Pacific
markets led the stronger international performance whereas Atlantic market performance was weaker than domestic.
Fuel costs continued to be a significant uncertain variable for the industry. During 2011, jet fuel prices followed the price of Brent crude oil more
closely than the price of West Texas Intermediate crude oil. The average daily spot price for Brent crude oil during 2011 was $111 per barrel. This compares
to an average daily spot price of $80 per barrel for Brent crude oil during 2010. Brent crude oil prices were volatile in 2011, with daily spot prices fluctuating
between a low of $94 per barrel in January 2011 to a high of $127 per barrel in May 2011, and a year-end close of $108 per barrel on December 31, 2011.
Significant uncertainty continues to exist regarding the economic conditions driving passenger demand and whether airlines will have the ability to
maintain or increase fares at levels sufficient to absorb high fuel prices. See Part I, Item 1A, Risk Factors — "Downturns in economic conditions adversely
affect our business" and "Our business is dependent on the price and availability of aircraft fuel. Continued periods of high volatility in fuel costs, increased
fuel prices and significant disruptions in the supply of aircraft fuel could have a significant negative impact on our operating results and liquidity."
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