US Airways Reaches Agreements for Aircraft

US Airways Group Inc.
has reached agreements with its lenders and lessors for continued use and
operation of substantially all of its mainline and Express fleet.Section 1110 of the U.S. Bankruptcy Code requires that within 60 days of
its Sept. 12, 2004, Chapter 11 filing, US Airways must either (i) cure and
perform under the terms of its aircraft financing or (ii) negotiate
consensual arrangements with its lenders and lessors. Currently, US
Airways has agreed to cure and perform for all but 27 aircraft, which will
be subject to further negotiation. For these 27 aircraft, alternative
interim arrangements have been secured for 17 of the aircraft. US Airways
continues to negotiate with the lenders and lessors for the remaining ten
aircraft, and absent negotiated solutions, these ten aircraft will likely
be rejected.

“Identifying these 27 aircraft is a routine part of the process, and our
expectation is that our mainline fleet will remain largely intact,” said
Bruce R. Lakefield, US Airways president and chief executive officer. “Our
intent is to focus on those few aircraft that for a variety of reasons may
no longer be economical to fly, and if there is a downsizing of the fleet,
that it be minimal, and that it be transparent to our customers.”

Lakefield said that the February 2005 schedule US Airways announced last
month provided for nearly 230 additional daily flights without adding any
new aircraft due to changes in flying patterns and efficiencies—the
equivalent of approximately 27 additional aircraft to the current fleet.
“More point-to- point flying, more efficient aircraft utilization, and a
focus on key business and leisure markets in the eastern U.S. remain core
elements of the company’s Transformation Plan. We might conclude, however,
that some aircraft with fuel inefficiencies or significant maintenance or
operating costs might not make sense in an era of high fuel costs,
depressed revenue and over-capacity in the industry. We need to carefully
analyze and negotiate with our aircraft financers to reduce our costs and
make the company as efficient as possible.”
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