FAA, America West Reach Agreement On Operational Enhancements And Compromised Civil Penalties

America West Airlines, Inc. (NYSE: AWA)
and the Federal Aviation Administration (FAA) today announced they have
entered in a compromise agreement in which America West will implement a
series of new practices and procedures regarding certain maintenance
activities and pay a settlement amount of $2.5 million.  Additionally, the
agreement calls for a deferred $2.5 million payment which will be forgiven if
the Airline complies with the terms of the settlement agreement.  The
settlement agreement imposes no limitations on America West`s operations.
 
America West agreed to resolve all outstanding issues with the FAA and to
move forward in a spirit of partnership, to avoid the cost of protracted
litigation and focus resources on improving operations and customer service.
America West, which did not admit to any wrongdoing, stated the recent review
of its operations by the FAA demonstrates the carrier is operating at the
highest level of safety.

“America West Airlines has one of the top safety records in the industry,”
said Richard Goodmanson, president and chief executive officer of the Airline.
“We take our responsibility to the flying public and the FAA very seriously
and we are pleased by the FAA`s willingness to work with the company.  The
safety of our passengers was never affected.  We believe the problems cited
have been fully addressed, and the new practices and procedures will exceed
minimum FAA regulations.”

The most significant issue noted by the FAA was in connection with a
provision of America West`s Airbus A320 maintenance programs.  In accordance
with original manufacturer`s recommendations, those maintenance programs had
required periodic detailed visual inspections of passenger and cargo doors.
The Airline did not change its policy to an instrument testing procedure when
the manufacturer recommended that alternative procedure in 1994.
 
Subsequently, Airbus Industrie reconsidered the instrument testing
recommendation and the manufacturer now recommends that the instrumental
inspections be postponed until 16,000 takeoffs and landings, a milestone that
none of America West`s Airbus aircraft have reached.  Only 17 of the Airlines`
A320s were affected by the 1994 recommendation.
 
After the issue came to light earlier this year, America West modified the
testing procedure to comply with that manufacturer`s recommendation.  All 17
aircraft were tested immediately using the instrument procedures and no
problems were found.

While the FAA and the manufacturer have both confirmed that the
postponement of the instrument inspections did not compromise the
airworthiness or safety of the affected aircraft, the agency contended that
America West breached federal aviation regulations by not using the instrument
procedure.

America West said that the settlement agreement`s provisions will not have
a material adverse affect on the Company`s operations or financial results.
 
This press release contains forward-looking statements within the meaning
of the Securities Litigation Reform Act that involve risks and uncertainties,
including competitive practices in the industry, the impact of changes in fuel
prices, relationships with employees, the impact of industry regulation and
other factors described from time to time in the Company`s publicly available
SEC reports, which could cause actual results to differ materially.
 
America West Airlines, the nation`s ninth largest carrier, serves more
than 90 destinations in the U.S., Canada and Mexico.  America West Airlines is
a wholly owned subsidiary of America West Holdings Corporation, an aviation
and travel services company with 1997 sales of $1.9 billion.
 
This press release, as well as releases issued in the past year by America
West Holdings and its affiliates, can be accessed on the America West Internet
site at http://www.americawest.com.

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