ARLINGTON, Va., Aug. 27, 2002—US Airways has introduced a new set of policies designed to ensure its ability to continue to offer low fares for its most cost-conscious customers, while protecting the value of less restrictive fares for business travelers. The policies continue to reward higher paying passengers with options that reflect their willingness to pay more for their tickets in exchange for added benefits and flexibility. In addition, fees for various services are being implemented and fare rules and restrictions are being strictly enforced.

“These changes are a necessary response to the rapidly-changing marketplace for air travel,” said B. Ben Baldanza, senior vice president of marketing at US Airways. “Economic pressures continue to impact both air travelers and the airline industry. US Airways is seeking to retain valuable benefits for our premium travelers while trimming costs in a manner that allows us to maintain low fares for cost-conscious travelers to the hundreds of communities in our system.”

Effective immediately, non-refundable fares for all US Airways domestic, Caribbean, U.S. to and from Canada and U.S. to Europe destinations must be used for the specifically ticketed flight and will have no value once the flight has departed. Changes may be made to the non-refundable itineraries before scheduled departure, subject to certain restrictions and fees. Under the previous policy, the value of an unused non-refundable ticket could be credited toward the purchase of another US Airways ticket, less the applicable reissue fee, for up to one year.

“This change makes purchasing airline tickets like many other products that people buy for a specific date and time such as Broadway shows and sporting events. If you miss the event, your ticket isn`t good for the next day,” said Baldanza. “Since most people travel as originally ticketed, most customers will not be impacted by this change. This policy does not change our commitment to provide a high level of service to all US Airways passengers.”

Ray Pierce, chairman of Washington D.C.-based Executive Travel Associates, a member of the Travel Management Alliance, said, “This is the most sensible thing that US Airways can do. It makes a non-refundable ticket truly non-refundable and allows the airline to price accordingly. I applaud US Airways for taking this action. I`m glad an airline has the business sense to do this.”

Other Policy Changes to Non-refundable Fares—Customers ticketed on non-refundable fares will continue to earn full Dividend Miles credit. Effective for travel Jan. 1, 2003, and beyond, miles and segments earned on most non-refundable fares will not count toward Dividend Miles Chairman`s Preferred, Gold Preferred and Silver Preferred status—Corporate discount programs will no longer be applicable for certain non-refundable fare classes, generally those with advance purchase and minimum stay requirements—Customers who have non-refundable tickets will not be allowed to stand-by for alternate flights—Tour and consolidator tickets will become non-refundable and have no value after the ticketed travel date.

“Customers have clearly shown their preference for low fares. These moves allow US Airways to offer these fares in a more economic way while maintaining the benefits extended to higher paying passengers, such as the ability to refund and exchange tickets, stand-by for other flights and earn Dividend Miles credit toward Preferred status,” said Baldanza.

In addition to the rule changes, US Airways, like other carriers, has implemented the following changes:

Existing fare rules and restrictions, as well as policies on the collection of fees, will be strictly enforced—Customers ticketed by US Airways that qualify for an e-ticket and request a paper ticket will be charged $25 per ticket—On transatlantic flights, alcoholic beverages will no longer be offered for free to Economy class passengers—US Airways also has reduced its utilization of certain distribution channels, including online sites which do not specify the airline prior to the travel purchase, and domestic consolidators. The airline will continue to focus on making its lowest fares available on its Web site and via other effective low-cost channels.

“US Airways is recognizing a new competitive reality and tailoring our product accordingly,” Baldanza said. “These incremental changes will be the first of many that will positively impact our bottom line. By improving US Airways` revenues and our long-term viability, we will provide customers with continued competition and choice in the marketplace.”

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