##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-K


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the fiscal year ended December 31, 2005                                                 
|          
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from           to                                             

US Airways Group, Inc.


(Exact name of registrant as specified in its charter)


(Commission File No. 1-8444)


|                                                                                                                  |  |                                  
|----------------------------------------------------------------------------------------------------------------- |  | ---------------------------------
|Delaware                                                                                                          |  | 54-1194634                       
|(State or other Jurisdiction of Incorporation or
    Organization)                                                |  | (IRS Employer Identification No.)
|111 West Rio Salado Parkway, Tempe, Arizona 85281(Address of principal executive offices, including zip
    code)

(480) 693-0800


(Registrants telephone number, including area code)


Securities registered pursuant to Section 12(b) of the
Act:


|                                      |  |                                          
|------------------------------------- |  | -----------------------------------------
|Title of Each Class                   |  | Name of Each Exchange on Which Registered
|                                      |  |                                          
|Class B Common Stock, $0.01 par value |  | New York Stock Exchange                  

Securities registered pursuant to Section 12(g) of the
Act:     None


America West Airlines, Inc.


(Exact name of registrant as specified in its charter)


(Commission File No. 0-12337)


|                                                                                                                   |  |                                  
|------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------
|Delaware                                                                                                           |  | 86-0418245                       
|(State or other Jurisdiction of Incorporation or
    Organization)                                                 |  | (IRS Employer Identification No.)
|4000 East Sky Harbor Blvd., Phoenix, Arizona 85034(Address of principal executive offices, including zip
    code)

(480) 693-0800


(Registrants telephone number, including area code)


Securities registered pursuant to Section 12(b) of the
Act:     None


Securities registered pursuant to Section 12(g) of the
Act:     None


US Airways, Inc.


(Exact name of registrant as specified in its charter)


(Commission File No. 1-8442)


|                                                                                                                  |  |                                  
|----------------------------------------------------------------------------------------------------------------- |  | ---------------------------------
|Delaware                                                                                                          |  | 53-0218143                       
|(State or other Jurisdiction of Incorporation or
    Organization)                                                |  | (IRS Employer Identification No.)
|111 West Rio Salado Parkway, Tempe, Arizona 85281(Address of principal executive offices, including zip
    code)

(480) 693-0800


(Registrants telephone number, including area code)


Securities registered pursuant to Section 12(b) of the
Act:     None


Securities registered pursuant to Section 12(g) of the
Act:     None


(Continued on following page)


DOCUMENTS INCORPORATED BY REFERENCE


10-K.












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(Continued from previous page)




|                            |  |       |  |     
|--------------------------- |  | ----- |  | ----
|US Airways Group, Inc.      |  | Yes o |  | No þ
|America West Airlines, Inc. |  | Yes o |  | No þ
|US Airways, Inc.            |  | Yes o |  | No þ



|                           |  |       |  |     
|-------------------------- |  | ----- |  | ----
|US Airways Group, Inc.     |  | Yes o |  | No þ
|America West Airlines, Inc |  | Yes o |  | No þ
|US Airways, Inc.           |  | Yes o |  | No þ

þ o


S-K 10-K 10-K. o


12b-2


|                            |  |                           |  |                     |  |                        
|--------------------------- |  | ------------------------- |  | ------------------- |  | -----------------------
|US Airways Group, Inc.      |  | Large accelerated filer o |  | Accelerated filer þ |  | Non-accelerated filer o
|America West Airlines, Inc. |  | Large accelerated filer o |  | Accelerated filer o |  | Non-accelerated filer þ
|US Airways, Inc.            |  | Large accelerated filer o |  | Accelerated filer o |  | Non-accelerated filer þ

12b-2


|                            |  |       |  |     
|--------------------------- |  | ----- |  | ----
|US Airways Group, Inc.      |  | Yes o |  | No þ
|America West Airlines, Inc. |  | Yes o |  | No þ
|US Airways, Inc.            |  | Yes o |  | No þ







|                       |  |       |  |     
|---------------------- |  | ----- |  | ----
|US Airways Group, Inc. |  | Yes þ |  | No o
|US Airways, Inc.       |  | Yes þ |  | No o









---



##### 










US Airways Group, Inc.


America West Airlines, Inc.


US Airways, Inc.


Form 10-K


Year Ended December 31, 2005


Table of Contents


|           |  |                                                                                                                            |     |      |     | 
|---------- |  | -------------------------------------------------------------------------------------------------------------------------- | --- | ---- | --- | 
|           |  |                                                                                                                            |     | Page |    
|           |  |                                                                                                                            |     |      |    
|PART I    
|Item 1.    |  | Business                                                                                                                   |     |      | 1   | 
|Item 1A.   |  | Risk Factors                                                                                                               |     |      | 19  | 
|Item 1B.   |  | Unresolved Staff Comments                                                                                                  |     |      | 26  | 
|Item 2.    |  | Properties                                                                                                                 |     |      | 26  | 
|Item 3.    |  | Legal Proceedings                                                                                                          |     |      | 32  | 
|Item 4.    |  | Submission of Matters to a Vote of Security
    Holders                                                                    |     |      | 35  | 
|PART II   
|Item 5.    |  | Market for US Airways Groups
    Common Equity, Related Stockholder Matters and Issuer Purchases
    of Equity Securities |     |      | 36  | 
|Item 6.    |  | Selected Financial Data                                                                                                    |     |      | 38  | 
|Item 7.    |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                                  |     |      | 43  | 
|Item 7A.   |  | Quantitative and Qualitative Disclosures
    About Market Risk                                                             |     |      | 91  | 
|Item 8A.   |  | Consolidated Financial Statements and
    Supplementary Data of US Airways Group, Inc.                                     |     |      | 94  | 
|Item 8B.   |  | Consolidated Financial Statements and
    Supplementary Data of America West Airlines, Inc.                                |     |      | 162 | 
|Item 8C.   |  | Financial Statements and Supplementary Data
    of US Airways, Inc.                                                        |     |      | 203 | 
|Item 9.    |  | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure                                   |     |      | 268 | 
|Item 9A.   |  | Controls and Procedures                                                                                                    |     |      | 268 | 
|Item 9B.   |  | Other Information                                                                                                          |     |      | 268 | 
|PART III  
|Item 10.   |  | Directors and Executive Officers of the
    Registrants                                                                    |     |      | 269 | 
|Item 11.   |  | Executive Compensation                                                                                                     |     |      | 269 | 
|Item 12.   |  | Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder Matters                         |     |      | 269 | 
|Item 13.   |  | Certain Relationships and Related
    Transactions                                                                         |     |      | 269 | 
|Item 14.   |  | Principal Accountant Fees and Services                                                                                     |     |      | 270 | 
|PART IV   
|Item 15.   |  | Exhibits and Financial Statement
    Schedules                                                                             |     |      | 270 | 
|SIGNATURES |  |                                                                                                                            | 287 |     
|EX-10.74  
|EX-10.75  
|EX-10.79  
|EX-10.83  
|EX-18.1   
|EX-23.1   
|EX-31.1   
|EX-31.2   
|EX-31.3   
|EX-31.4   
|EX-31.5   
|EX-31.6   
|EX-32.1   
|EX-32.2   
|EX-32.3   



i



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10-K 10-K


Note Concerning Forward-Looking Statements






| |   |                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the impact of significant disruptions in the supply of aircraft
    fuel and historically high fuel prices;                                                                                                                                                                                              
|
| |  | our high level of fixed obligations;                                                                                                                                                                                                                                                                     
|
| |  | our ability to integrate the management, operations and labor
    groups of US Airways Group and America West Holdings;                                                                                                                                                                                  
|
| |  | our ability to achieve the synergies anticipated as a result of
    the merger and to achieve those synergies in a timely manner;                                                                                                                                                                        
|
| |  | the impact of continued significant operating losses;                                                                                                                                                                                                                                                    
|
| |  | labor costs and relations with unionized employees generally and
    the impact and outcome of labor negotiations;                                                                                                                                                                                       
|
| |  | changes in prevailing interest rates;                                                                                                                                                                                                                                                                    
|
| |  | reliance on automated systems and the impact of any failure of
    these systems;                                                                                                                                                                                                                        
|
| |  | our ability to obtain and maintain normal terms with vendors and
    service providers;                                                                                                                                                                                                                  
|
| |  | security-related and insurance costs;                                                                                                                                                                                                                                                                    
|
| |  | the impact of global instability including the continuing impact
    of the military presence in Iraq and Afghanistan and the
    terrorist attacks of September 11, 2001 and the potential
    impact of future hostilities, terrorist attacks, infectious
    disease outbreaks or other global events;
|
| |  | changes in government legislation and regulation;                                                                                                                                                                                                                                                        
|
| |  | our ability to use pre-merger NOLs and certain other tax
    attributes;                                                                                                                                                                                                                                 
|
| |  | competitive practices in the industry, including significant
    fare restructuring activities, capacity reductions and in court
    or out of court restructuring by major airlines;                                                                                                                    
|
| |  | continued existence of prepetition liabilities;                                                                                                                                                                                                                                                          
|
| |  | weather conditions;                                                                                                                                                                                                                                                                                      
|
| |  | our ability to obtain and maintain any necessary financing for
    operations and other purposes;                                                                                                                                                                                                        

ii



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##### Table of Contents





| |   |                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------
| |  | our ability to maintain adequate liquidity;                                                                         
|
| |  | our ability to maintain contracts that are critical to our
    operations;                                          
|
| |  | our ability to operate pursuant to the terms of our financing
    facilities (particularly the financial covenants);
|
| |  | our ability to attract and retain customers;                                                                        
|
| |  | the cyclical nature of the airline industry;                                                                        
|
| |  | our ability to attract and retain qualified personnel;                                                              
|
| |  | economic conditions; and                                                                                            
|
| |  | other risks and uncertainties listed from time to time in our
    reports to the Securities and Exchange Commission.

10-K.


iii



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##### Table of Contents






PART I







|        |         
|------- | --------
|Item 1. | Business

Overview


www.usairways.com.










1



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1-800-SEC-0330. 10-K, 10-K, 10-Q, 8-K www.usairways.com www.sec.gov


Airline Industry






2



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state-of


Airline Operations






Express Operations




| |                           
| | --------------------------
| | US Airways Express Network



3



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|                                                     |  |                   |  |                   
|---------------------------------------------------- |  | ----------------- |  | ------------------
|                                                     |  |                   |  | Number/Type       
|Carrier                                              |  | Agreement Type    |  | of Aircraft       
|                                                     |  |                   |  |                   
|PSA(1)                                               |  | Capacity Purchase |  | 49 regional jets  
|Piedmont(1)                                          |  | Capacity Purchase |  | 59 turboprops     
|Chautauqua Airlines, Inc. (Chautauqua)             |  | Capacity Purchase |  | 30 regional jets  
|Mesa                                                 |  | Capacity Purchase |  | 24 regional jets  
|Air Wisconsin Airlines Corporation (Air Wisconsin) |  | Capacity Purchase |  | 60 regional jets  
|Republic Airways (Republic)                        |  | Capacity Purchase |  | 10 regional jets  
|Colgan Airlines, Inc.                                |  | Prorate           |  | 28 turboprops     
|Air Midwest, Inc.                                    |  | Prorate           |  | 14 turboprops     
|Trans States Airlines, Inc. (Trans States)         |  | Prorate           |  | 8 regional jets(2)






|    |                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | PSA and Piedmont are wholly-owned subsidiaries of
    US Airways Group.                                                                                                                                                                                                                                                                
|   
|(2) | Prior to September 2005, Trans States operated up to eight
    turboprops under a prorate agreement and 13 regional jets under
    a capacity purchase agreement. In September 2005, Trans States
    began operating under a prorate agreement and operated eight
    regional jets as US Airways Express as of December 31,
    2005.



4



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| |                     
| | --------------------
| | America West Express



Marketing and Alliance Agreements with Other Airlines






| |    
| | ---
| | AWA









| |           
| | ----------
| | US Airways



5



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Competition in the Airline Industry










Industry Regulation and Airport Access






6



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7



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1,250-mile




8



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Employees and Labor Relations








|                                                                                    |  |                                  |  |              |       |          |           |  |            |    
|----------------------------------------------------------------------------------- |  | -------------------------------- |  | ------------ | ----- | -------- | --------- |  | ---------- | ---
|                                                                                    |  |                                  |  |              |       | Contract |          
|Union                                                                               |  | Class or Craft                   |  | Employees(1) |       |          | Amendable | 
|                                                                                    |  |                                  |  |              |       |          |           | 
|AWA:                                                                                |  |                                  |  |              |       |          |           |  |            |    
|Air Line Pilots Association (ALPA)                                                |  | Pilots                           |  |              | 1,900 |          |           |  | 12/30/2006 |    
|Association of Flight Attendants-CWA (AFA)                                        |  | Flight Attendants                |  |              | 2,500 |          |           |  | 05/04/2004 | (2)
|International Brotherhood of Teamsters (IBT)                                      |  | Mechanic and Related             |  |              | 800   |          |           |  | 10/07/2003 | (3)
|Transport Workers Union (TWU)                                                     |  | Fleet Service                    |  |              | 1,800 |          |           |  | 06/12/2005 | (4)
|TWU                                                                                 |  | Dispatch                         |  |              | 40    |          |           |  | 04/01/2008 | (5)
|Airline Customer Service Employee Association  IBT
    and CWA (the Association) |  | Passenger Service                |  |              | 2,600 |          |           |  | 12/31/2011 | (6)
|IBT                                                                                 |  | Stock Clerks                     |  |              | 60    |          |           |  | 04/04/2008 |    
|US Airways:                                                                         |  |                                  |  |              |       |          |           |  |            |    
|ALPA                                                                                |  | Pilots                           |  |              | 2,700 |          |           |  | 12/31/2009 |    
|AFA                                                                                 |  | Flight Attendants                |  |              | 4,600 |          |           |  | 12/31/2011 |    
|International Association of Machinists & Aerospace
    Workers (IAM)             |  | Mechanic and Related             |  |              | 2,600 |          |           |  | 12/31/2009 |    
|IAM                                                                                 |  | Fleet Service                    |  |              | 4,200 |          |           |  | 12/31/2009 |    
|IAM                                                                                 |  | Maintenance Training Specialists |  |              | 30    |          |           |  | 12/31/2009 |    

9



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|                |  |                                  |  |              |       |          |           |  |            |    
|--------------- |  | -------------------------------- |  | ------------ | ----- | -------- | --------- |  | ---------- | ---
|                |  |                                  |  |              |       | Contract |          
|Union           |  | Class or Craft                   |  | Employees(1) |       |          | Amendable | 
|                |  |                                  |  |              |       |          |           | 
|The Association |  | Passenger Service                |  |              | 3,800 |          |           |  | 12/31/2011 | (6)
|TWU             |  | Dispatch                         |  |              | 130   |          |           |  | 12/31/2009 |    
|TWU             |  | Flight Simulator Engineers       |  |              | 25    |          |           |  | 12/31/2011 |    
|TWU             |  | Flight Crew Training Instructors |  |              | 50    |          |           |  | 12/31/2011 |    






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Approximate number of active full time equivalent employees
    covered by the contract as of December 31, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(2) | In contract negotiations. On September 21, 2005, AFA filed
    for mediation with the National Mediation Board
    (NMB). On December 15, 2005, the NMB recessed
    the negotiations indefinitely.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(3) | In contract negotiations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(4) | In contract negotiations. On January 19, 2006, TWU filed
    for mediation with the NMB.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(5) | On February 17, 2006, TWU served notice that it is invoking
    a contract provision that allows it to re-open negotiations only
    on the issues of wage rates and hours of service as a result of
    changes to AWAs loan formerly guaranteed by the ATSB.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(6) | On December 5, 2005, US Airways and AWA reached an
    Interim Transition Agreement with the Association, an alliance
    created by the IBT, who formerly represented passenger service
    employees at AWA, and the Communication Workers of America
    (CWA), who formerly represented passenger service
    employees at US Airways. Pursuant to the Interim Transition
    Agreement, US Airways and AWA voluntarily recognized the
    Association as the collective bargaining representative of the
    AWA and US Airways passenger service employees. The parties
    agreed that AWA passenger service employees would transition to
    the US Airways-CWA collective bargaining agreement and thus
    AWAs separate contract negotiations with IBT were
    terminated.









Union disputes, employee
strikes and other labor-related disruptions may adversely affect
our operations.


10



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##### Table of Contents



Aviation Fuel






|     |  |         |     |               |               |   |               |            |  |                     |                    |  |  |  |      |  
|---- |  | ------- | --- | ------------- | ------------- | - | ------------- | ---------- |  | ------------------- | ------------------ |  |  |  | ---- | -
|     |  |         |     | Average Price |               |   | Aircraft Fuel |            |  | Percentage of Total |                   
|Year |  | Gallons |     |               | per Gallon(1) |   |               | Expense(1) |  |                     | Operating Expenses | 
|     |  |         |     |               |               |   |               |            |  |                     |                    | 
|2005 |  |         | 842 |               |               | $ | 1.766         |            |  | $                   | 1,486              |  |  |  | 20.0 | %
|2004 |  |         | 884 |               |               | $ | 1.121         |            |  | $                   | 991                |  |  |  | 13.4 | %
|2003 |  |         | 873 |               |               | $ | 0.883         |            |  | $                   | 771                |  |  |  | 11.0 | %






|    |                                                   
|--- | --------------------------------------------------
|(1) | Includes fuel taxes and the impact of fuel hedges.





|     |  |         |     |               |               |   |               |               |  |                 |          |  |  |  |      |  
|---- |  | ------- | --- | ------------- | ------------- | - | ------------- | ------------- |  | --------------- | -------- |  |  |  | ---- | -
|     |  |         |     |               |               |   |               | Percentage of | 
|     |  |         |     | Average Price |               |   | Aircraft Fuel |               |  | Total Operating |         
|Year |  | Gallons |     |               | per Gallon(1) |   |               | Expense(1)    |  |                 | Expenses | 
|     |  |         |     |               |               |   |               |               |  |                 |          | 
|2005 |  |         | 450 |               |               | $ | 1.636         |               |  | $               | 736      |  |  |  | 21.8 | %
|2004 |  |         | 450 |               |               | $ | 1.257         |               |  | $               | 566      |  |  |  | 20.5 | %
|2003 |  |         | 423 |               |               | $ | 0.930         |               |  | $               | 393      |  |  |  | 15.5 | %






|    |                                                   
|--- | --------------------------------------------------
|(1) | Includes fuel taxes and the impact of fuel hedges.







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the impact of global political instability on crude production;                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | unexpected changes to the availability of petroleum products due
    to disruptions in distribution systems or refineries, as
    evidenced in the third quarter of 2005 when Hurricane Katrina
    and Hurricane Rita caused widespread disruption to oil
    production, refinery operations and pipeline capacity along
    certain portions of the U.S. Gulf Coast. As a result of
    these disruptions, the price of jet fuel increased significantly
    and the availability of jet fuel supplies was diminished;
|
| |  | unpredicted increases to oil demand due to weather or the pace
    of economic growth;                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | inventory levels of crude, refined products and natural
    gas; and                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | other factors, such as the relative fluctuation between the
    U.S. dollar and other major currencies and influence of
    speculative positions on the futures exchanges.                                                                                                                                                                                                                                                                                                                                              

11



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Insurance






| |   |                                                                               
| | - | ------------------------------------------------------------------------------
| |  | liability for injury to members of the public, including
    passengers;      
|
| |  | damage to property of US Airways Group, its subsidiaries
    and others;      
|
| |  | loss of or damage to flight equipment, whether on the ground or
    in flight;
|
| |  | fire and extended coverage;                                                   
|
| |  | directors and officers;                                                       
|
| |  | travel agents errors and omissions;                                          
|
| |  | advertisers and media liability;                                             
|
| |  | fiduciary; and                                                                
|
| |  | workers compensation and employers liability.                               



Frequent Traveler Program






| |           
| | ----------
| | FlightFund





12



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| |               
| | --------------
| | Dividend Miles







| |                                            
| | -------------------------------------------
| | Combined Post-Merger Dividend Miles Program



Travel Packages










13



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www.usairwaysvacations.com, www.usvtravelagents.com www.awvcruises.com www.usvcruises.com


e-travel




Ticket Distribution




www.usairways.com www.americawest.com www.usairways.com






14



---



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www.usairways.com.


Pre-merger US Airways Groups Second
Chapter 11 Bankruptcy Proceedings










15



---



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16



---



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| |                                            
| | -------------------------------------------
| | Financing During the Chapter 11 Proceedings





| |                  
| | -----------------
| | Claims Resolution



PBGC Claim


17



---



##### Table of Contents





Agreements with ALPA




18



---



##### Table of Contents






Item 1A.     Risk
Factors


Risk Factors Relating to the Company and Industry Related
Risks




Our business is dependent on the price and availability of
aircraft fuel. Continued periods of historically high fuel
costs, significant disruptions in the supply of aircraft fuel or
significant further increases in fuel costs could have a
significant negative impact on our operating results.




Our high level of fixed obligations limits our ability to
fund general corporate requirements and obtain additional
financing, limits our flexibility in responding to competitive
developments and increases our vulnerability to adverse economic
and industry conditions.






| |   |                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A decrease in revenues results in a disproportionately greater
    percentage decrease in earnings.                                                        
|
| |  | We may not have sufficient liquidity to fund all of these fixed
    costs if our revenues decline or costs increase.                                       
|
| |  | We may have to use our working capital to fund these fixed costs
    instead of funding general corporate requirements, including
    capital expenditures.
|
| |  | We may not have sufficient liquidity to respond to competitive
    developments and adverse economic conditions.                                           





19



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We may not perform as well financially as we expect
following the merger.




The integration of US Airways Group and America West
Holdings following the merger presents significant
challenges.




US Airways Group continues to experience significant
operating losses.






20



---



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Union disputes, employee strikes and other labor-related
disruptions may adversely affect our operations.








Fluctuations in interest rates could adversely affect our
liquidity, operating expenses and results.




We rely heavily on automated systems to operate our
business and any failure of these systems, or the failure to
integrate them successfully following the merger, could harm our
business.




21



---



##### Table of Contents





If we incur problems with any of our third party service
providers, our operations could be adversely affected by a
resulting decline in revenue or negative public perception about
our services.




The travel industry, materially adversely affected by the
September 11, 2001 terrorist attacks, continues to face
on-going security concerns and cost burdens associated with
security.




Increases in insurance costs or reductions in insurance
coverage may adversely impact our operations and financial
results.




Changes in government regulation could increase our
operating costs and limit our ability to conduct our
business.




22



---



##### Table of Contents





The use of America West Holdings and US Airways
Groups respective pre-merger NOLs and certain other tax
attributes is limited following the merger.




The airline industry is intensely competitive.




Certain liabilities were not fully extinguished as a
result of confirmation of the plan of reorganization.




Interruptions or disruptions in service at one of our hub
airports could have a material adverse impact on our
operations.




We are at risk of losses and adverse publicity stemming
from any accident involving any of our aircraft.




23



---



##### Table of Contents



Our business is subject to weather factors and seasonal
variations in airline travel, which cause our results to
fluctuate.




Employee benefit plans represent significant continuing
costs to the sponsoring employers.




Risks Related to Our Common Stock


Our common stock has limited trading history and its
market price may be volatile.






| |   |                                                                                                
| | - | -----------------------------------------------------------------------------------------------
| |  | our operating results failing to meet the expectations of
    securities analysts or investors;
|
| |  | changes in financial estimates or recommendations by securities
    analysts;                  
|
| |  | material announcements by us or our competitors;                                               
|
| |  | movements in fuel prices;                                                                      
|
| |  | new regulatory pronouncements and changes in regulatory
    guidelines;                        
|
| |  | general and industry-specific economic conditions;                                             
|
| |  | public sales of a substantial number of shares of our common
    stock; and                    
|
| |  | general market conditions.                                                                     

Substantial sales of our common stock after the merger
could cause our stock price to fall.




24



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lock-up lock-up


Conversion of our convertible notes will dilute the
ownership interest of existing stockholders and could adversely
affect the market price of our common stock.




A small number of stockholders beneficially own a
substantial amount of our common stock.




Certain provisions of the amended and restated certificate
of incorporation and amended and restated bylaws of
US Airways Group will make it difficult for stockholders to
change the composition of our board of directors and may
discourage takeover attempts that some of our stockholders might
consider beneficial.






| |   |                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a classified board of directors with three-year staggered terms;                                                                                                                                                               
|
| |  | advance notice procedures for stockholder proposals to be
    considered at stockholders meetings;                                                                                                                            
|
| |  | the ability of US Airways Groups board of directors
    to fill vacancies on the board;                                                                                                                                       
|
| |  | a prohibition against stockholders taking action by written
    consent;                                                                                                                                                       
|
| |  | a prohibition against stockholders calling special meetings of
    stockholders;                                                                                                                                               
|
| |  | a requirement for the approval of holders of at least 80% of the
    voting power of the shares entitled to vote in the election of
    directors for the stockholders to amend the second amended and
    restated bylaws; and
|
| |  | super-majority voting requirements to modify or amend specified
    provisions of US Airways Groups amended and restated
    certificate of incorporation.                                                                    

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Our charter documents include provisions limiting voting
and ownership by foreign owners.


non-U.S.







|         |                          
|-------- | -------------------------
|Item 1B. | Unresolved Staff Comments








|        |           
|------- | ----------
|Item 2. | Properties

US Airways Group Flight Equipment


737-300




AWA


|         |  |            |     |        |           |  |   |        |  |  |       |  |  |          |     |  |  |  |      | 
|-------- |  | ---------- | --- | ------ | --------- |  | - | ------ |  |  | ----- |  |  | -------- | --- |  |  |  | ---- | 
|         |  |            |     | Owned/ |           |  |   |        |  |  |      
|A/C Type |  | Avg. Seats |     |        | Mortgaged |  |   | Leased |  |  | Total |  |  | Avg. Age |    
|         |  |            |     |        |           |  |   |        |  |  |       |  |  |          |    
|737-300  |  |            | 133 |        |           |  |  |        |  |  | 35    |  |  |          | 35  |  |  |  | 17.8 | 
|A319     |  |            | 124 |        |           |  |  |        |  |  | 37    |  |  |          | 37  |  |  |  | 4.7  | 
|A320     |  |            | 150 |        |           |  |  |        |  |  | 56    |  |  |          | 56  |  |  |  | 8.6  | 
|757-200  |  |            | 190 |        |           |  |  |        |  |  | 13    |  |  |          | 13  |  |  |  | 19.2 | 
|         |  |            |     |        |           |  |   |        |  |  |       |  |  |          |    
|Total    |  |            | 143 |        |           |  |  |        |  |  | 141   |  |  |          | 141 |  |  |  | 10.8 | 

26



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US Airways


|         |  |            |     |        |           |  |    |        |  |  |       |  |  |          |     |  |  |  |      | 
|-------- |  | ---------- | --- | ------ | --------- |  | -- | ------ |  |  | ----- |  |  | -------- | --- |  |  |  | ---- | 
|         |  |            |     | Owned/ |           |  |    |        |  |  |      
|A/C Type |  | Avg. Seats |     |        | Mortgaged |  |    | Leased |  |  | Total |  |  | Avg. Age |    
|         |  |            |     |        |           |  |    |        |  |  |       |  |  |          |    
|A330-300 |  |            | 266 |        |           |  | 4  |        |  |  | 5     |  |  |          | 9   |  |  |  | 5.4  | 
|A321     |  |            | 169 |        |           |  | 15 |        |  |  | 13    |  |  |          | 28  |  |  |  | 4.6  | 
|A320     |  |            | 142 |        |           |  | 8  |        |  |  | 12    |  |  |          | 20  |  |  |  | 6.2  | 
|A319     |  |            | 120 |        |           |  | 3  |        |  |  | 51    |  |  |          | 54  |  |  |  | 5.9  | 
|B767-200 |  |            | 203 |        |           |  |   |        |  |  | 10    |  |  |          | 10  |  |  |  | 16.5 | 
|B757-200 |  |            | 193 |        |           |  |   |        |  |  | 31    |  |  |          | 31  |  |  |  | 15.2 | 
|B737-400 |  |            | 144 |        |           |  |   |        |  |  | 40    |  |  |          | 40  |  |  |  | 15.9 | 
|B737-300 |  |            | 126 |        |           |  |   |        |  |  | 40    |  |  |          | 40  |  |  |  | 18.3 | 
|         |  |            |     |        |           |  |    |        |  |  |       |  |  |          |    
|Total    |  |            | 152 |        |           |  | 30 |        |  |  | 202   |  |  |          | 232 |  |  |  | 11.3 | 
|EMB-170  |  |            | 72  |        |           |  |   |        |  |  | 18    |  |  |          | 18  |  |  |  | 1.5  | 






|    |                                                                                           
|--- | ------------------------------------------------------------------------------------------
|(1) | All owned aircraft are pledged as collateral for various secured
    financing agreements.
|   
|(2) | The terms of the leases expire between 2006 and 2023.                                     



|                        |  |              |    |  |       |  |    |           |  |  |         |  |  |             |     |  |  |  |      | 
|----------------------- |  | ------------ | -- |  | ----- |  | -- | --------- |  |  | ------- |  |  | ----------- | --- |  |  |  | ---- | 
|                        |  | Average Seat |    |  |       |  |    |           |  |  | Average | 
|Type                    |  | Capacity     |    |  | Owned |  |    | Leased(1) |  |  | Total   |  |  | Age (years) |    
|                        |  |              |    |  |       |  |    |           |  |  |         |  |  |             |    
|CRJ-700                 |  |              | 70 |  |       |  | 7  |           |  |  | 7       |  |  |             | 14  |  |  |  | 1.1  | 
|CRJ-200                 |  |              | 50 |  |       |  | 12 |           |  |  | 23      |  |  |             | 35  |  |  |  | 1.8  | 
|De Havilland Dash 8-300 |  |              | 50 |  |       |  |   |           |  |  | 12      |  |  |             | 12  |  |  |  | 14.0 | 
|De Havilland Dash 8-100 |  |              | 37 |  |       |  | 32 |           |  |  | 6       |  |  |             | 38  |  |  |  | 15.7 | 
|De Havilland Dash 8-200 |  |              | 37 |  |       |  |   |           |  |  | 9       |  |  |             | 9   |  |  |  | 8.2  | 
|                        |  |              |    |  |       |  |    |           |  |  |         |  |  |             |    
|Total                   |  |              | 47 |  |       |  | 51 |           |  |  | 57      |  |  |             | 108 |  |  |  | 8.5  | 






|    |                                                      
|--- | -----------------------------------------------------
|(1) | The terms of the leases expire between 2006 and 2021.







|                      |                       |      |   |    |      |  |   |      |  |  |      |    |  |      |    |   |  |  |   |   | 
|--------------------- | --------------------- | ---- | - | -- | ---- |  | - | ---- |  |  | ---- | -- |  | ---- | -- | - |  |  | - | - | 
|                      |                       | 2006 |   |    | 2007 |  |   | 2008 |  |  | 2009 |    |  | 2010 |   
|                      |                       |      |   |    |      |  |   |      |  |  |      |    |  |      |   
|AWA                   |                       |      |   |    |      |  |   |      |  |  |      |    |  |      |    |   |  |  |   |  
|                      |                       |      |   |    |      |  |   |      |  |  |      |    |  |      |   
|Firm orders remaining |                       |      | 2 |    |      |  |  |      |  |  |     |    |  |      | 11 |   |  |  |  |  
|Lessor put options    |                       |      | 2 |    |      |  |  |      |  |  |     |    |  |      |   |   |  |  |  |  
|Lease terminations:   |                       |      |   |    |      |  |   |      |  |  |      |    |  |      |    |   |  |  |   |  
|                      | Scheduled expirations |      |   | 12 |      |  |   | 17   |  |  |      | 19 |  |      |    | 9 |  |  |   | 8 | 
|                      | Lessor call options   |      |   | 6  |      |  |   | 6    |  |  |      |   |  |      |    |  |  |  |   |  | 

27



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|                      |                       |      |   |    |      |  |   |      |  |  |      |    |  |      |   |    |  |  |    |    | 
|--------------------- | --------------------- | ---- | - | -- | ---- |  | - | ---- |  |  | ---- | -- |  | ---- | - | -- |  |  | -- | -- | 
|                      |                       | 2006 |   |    | 2007 |  |   | 2008 |  |  | 2009 |    |  | 2010 |  
|                      |                       |      |   |    |      |  |   |      |  |  |      |    |  |      |  
|US Airways            |                       |      |   |    |      |  |   |      |  |  |      |    |  |      |   |    |  |  |    |   
|                      |                       |      |   |    |      |  |   |      |  |  |      |    |  |      |  
|Firm orders remaining |                       |      |  |    |      |  |  |      |  |  |     |    |  |      | 5 |    |  |  | 14 |   
|Lessor put options    |                       |      |  |    |      |  |  |      |  |  |     |    |  |      |  |    |  |  |   |   
|Lease terminations:   |                       |      |   |    |      |  |   |      |  |  |      |    |  |      |   |    |  |  |    |   
|                      | Scheduled expirations |      |   | 11 |      |  |   | 22   |  |  |      | 42 |  |      |   | 25 |  |  |    | 16 | 
|                      | Lessor call options   |      |   | 18 |      |  |   | 18   |  |  |      | 18 |  |      |   | 9  |  |  |    |   | 

AWA Flight Equipment






737-200, 737-300 737-300s




US Airways Flight Equipment




28



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100-seat CRJ-700s EMB-170/190/195


EMB-170 EMB-170


CRJ-700


29



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737-300s, 737-400, 737-300




|                    |  |             |      |  |       |  |   |        |  |  |         |  |  |           |   |  |  |  |   | 
|------------------- |  | ----------- | ---- |  | ----- |  | - | ------ |  |  | ------- |  |  | --------- | - |  |  |  | - | 
|                    |  | Average     |      |  |       |  |   |        |  |  | Leased/ | 
|Type                |  | Age (years) |      |  | Owned |  |   | Leased |  |  | Total   |  |  | Subleased |  
|                    |  |             |      |  |       |  |   |        |  |  |         |  |  |           |  
|De Havilland Dash 8 |  |             | 15.6 |  |       |  | 1 |        |  |  |        |  |  |           | 1 |  |  |  |  | 

767-200ER A330-300




Ground Facilities






| |   |                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | executive and administrative offices in Tempe, Arizona;                                                                                                                        
|
| |  | its principal operating, overhaul and maintenance bases at the
    Pittsburgh International Charlotte/ Douglas International and
    Phoenix Sky Harbor International Airports;
|
| |  | training facilities in Pittsburgh, Phoenix and Charlotte;                                                                                                                      
|
| |  | central reservations offices in Winston-Salem, North Carolina,
    Tempe, Arizona and Reno, Nevada; and                                                                        
|
| |  | line maintenance bases and local ticket, cargo and
    administrative offices throughout its system.                                                                           



|                                         |  |                                                              |  |                |         |  |                     |                          
|---------------------------------------- |  | ------------------------------------------------------------ |  | -------------- | ------- |  | ------------------- | -------------------------
|                                         |  |                                                              |  | Approximate    |         |  |                    
|                                         |  |                                                              |  | Internal Floor |         |  |                    
|Principal Properties                     |  | Description                                                  |  | Area (sq. ft.) |         |  | Nature of Ownership
|                                         |  |                                                              |  |                |         |  |                    
|Tempe, AZ Headquarters                   |  | Nine story complex housing headquarters for US Airways Group |  |                | 225,000 |  |                     | Lease expires April 2014.
|Tempe, AZ                                |  | Administrative office complex                                |  |                | 148,000 |  |                     | Lease expires May 2012.  
|Philadelphia International Airport       |  | 68 exclusive gates, ticket counter space and concourse areas |  |                | 545,000 |  |                     | Lease expires June 2006. 
|Charlotte/ Douglas International Airport |  | 36 exclusive gates, ticket counter space and concourse areas |  |                | 226,000 |  |                     | Lease expires June 2016. 

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|                                                                                           |  |                                                                                                       |  |                |         |  |                     |                                                                                                            
|------------------------------------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------------- |  | -------------- | ------- |  | ------------------- | -----------------------------------------------------------------------------------------------------------
|                                                                                           |  |                                                                                                       |  | Approximate    |         |  |                    
|                                                                                           |  |                                                                                                       |  | Internal Floor |         |  |                    
|Principal Properties                                                                       |  | Description                                                                                           |  | Area (sq. ft.) |         |  | Nature of Ownership
|                                                                                           |  |                                                                                                       |  |                |         |  |                    
|Phoenix Sky Harbor International Airport                                                   |  | 42 exclusive gates, ticket counter space and administrative
    offices                               |  |                | 330,000 |  |                     | Airport Use Agreement expires June 2016. Gate use governed by
    month-to-month rates and charges program.
|Pittsburgh International Airport                                                           |  | 32 exclusive gates, ticket counter space and concourse areas                                          |  |                | 260,000 |  |                     | Lease expires May 2018.                                                                                    
|Las Vegas McCarran International Airport                                                   |  | 17 exclusive gates, ticket counter space and concourse areas                                          |  |                | 115,000 |  |                     | Lease expires June 2007.                                                                                   
|Reagan National                                                                            |  | 15 gates, ticket counter space and concourse areas                                                    |  |                | 80,000  |  |                     | Lease expires September 2016.                                                                              
|Maintenance facility  Charlotte, NC                                                       |  | Hangar bays, hangar shops, ground service equipment shops,
    cargo, catering and warehouse          |  |                | 847,000 |  |                     | Facilities and land leased from the City of Charlotte. Lease
    expires June 2017.                        
|Maintenance facility  Pittsburgh, PA                                                      |  | Hangar bays, hangar shops, ground service equipment shops,
    cargo, catering and warehouse          |  |                | 649,000 |  |                     | Facilities and land leased from Allegheny County Airport
    Authority. Lease expires December 2006.       
|Training facility  Charlotte, NC                                                          |  | Classroom training facilities and ten full flight simulator bays                                      |  |                | 159,000 |  |                     | Facilities and land leased from the City of Charlotte. Lease
    expires June 2017.                        
|Maintenance and technical support facility at Phoenix Sky Harbor
    International Airport |  | Four hangar bays, hangar shops, office space, warehouse and
    commissary facilities                 |  |                | 375,000 |  |                     | Facilities and land leased from the City of Phoenix. Lease
    expires September 2019.                     
|Flight Training and Systems Operations Control Center, Phoenix,
    AZ                     |  | Complex accommodates training facilities, systems operation
    control and crew scheduling functions |  |                | 164,000 |  |                     | Facilities and land leased from the City of Phoenix. Lease
    expires February 2031.                      





Terminal Construction Projects




31



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|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings

04-13819-SSM 03-13823








32



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33



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34



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|        |                                                    
|------- | ---------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders



35



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PART II







|        |                                                                                                                           
|------- | --------------------------------------------------------------------------------------------------------------------------
|Item 5. | Market for US Airways Groups Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities

Stock Exchange Listing




Over-the over-the


over-the


Market Prices of Common Stock


over-the


|            |  |                                                                   |  |      |       |  |     |   |       | 
|----------- |  | ----------------------------------------------------------------- |  | ---- | ----- |  | --- | - | ----- | 
|Year Ended  |  |                                                                   |  |      |       | 
|December 31 |  | Period                                                            |  | High |       |  | Low |  
|            |  |                                                                   |  |      |       |  |     |  
|2005        |  | Fourth Quarter                                                    |  | $    | 38.80 |  |     | $ | 20.85 | 
|            |  | Third Quarter (from September 27, 2005 to
    September 30, 2005) |  |      | 21.40 |  |     |   | 19.29 | 
|            |  |                                                                  
|            |  | Third Quarter (from July 1, 2005 to September 26,
    2005)(1)    |  |      | 0.77  |  |     |   | 0.15  | 
|            |  | Second Quarter                                                    |  |      | 1.49  |  |     |   | 0.62  | 
|            |  | First Quarter                                                     |  |      | 1.31  |  |     |   | 0.69  | 
|2004        |  | Fourth Quarter                                                    |  | $    | 2.00  |  |     | $ | 0.76  | 
|            |  | Third Quarter                                                     |  |      | 3.16  |  |     |   | 0.58  | 
|            |  | Second Quarter                                                    |  |      | 4.55  |  |     |   | 1.44  | 
|            |  | First Quarter                                                     |  |      | 6.77  |  |     |   | 4.11  | 






|    |                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As described above, the Class A common stock of pre-merger
    US Airways Group was cancelled upon the effectiveness of
    the plan of reorganization on September 27, 2005.





36



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Foreign Ownership Restrictions


non-U.S.


Recent Sales of Unregistered Securities








37



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Issuer Purchases of Equity Securities


|                       |  |              |           |     |                |                 |                   |                      |                           |                      |                       |  |  |  |   | 
|---------------------- |  | ------------ | --------- | --- | -------------- | --------------- | ----------------- | -------------------- | ------------------------- | -------------------- | --------------------- |  |  |  | - | 
|                       |  | (a)          |           |     | (b)            |                 |                   |                      |                           | (d)                  |                      
|                       |  |              |           |     |                | (c)             |                   |                      | Maximum Number (or        |                     
|                       |  |              |           |     |                | Total Number of |                   |                      | Approximate Dollar Value) |                     
|                       |  | Total Number |           |     |                |                 | Shares (or Units) |                      |                           | of Shares (or Units) |                      
|                       |  | of Shares    |           |     | Average Price  |                 |                   | Purchased as Part of |                           |                      | That May Yet Be       | 
|                       |  | (or Units)   |           |     | Paid per Share |                 |                   | Publicly Announced   |                           |                      | Purchased Under       | 
|Period                 |  | Purchased    |           |     | (or Unit)      |                 |                   | Plans or Programs    |                           |                      | the Plans or Programs | 
|                       |  |              |           |     |                |                 |                   |                      |                           |                      |                       | 
|10/1/2005 - 10/31/2005 |  |              | 7,735,770 | (1) |                | $               | 14.97             |                      |                           |                      | 7,735,770             |  |  |  |  | 
|11/1/2005 - 11/30/2005 |  |              |          |     |                |                 |                  |                      |                           |                      |                      |  |  |  |  | 
|12/1/2005 - 12/31/2005 |  |              |          |     |                |                 |                  |                      |                           |                      |                      |  |  |  |  | 
|                       |  |              |           |     |                |                 |                   |                      |                           |                      |                       | 
|Total                  |  |              | 7,735,770 |     |                |                 |                   |                      |                           |                      | 7,735,770             |  |  |  |  | 
|                       |  |              |           |     |                |                 |                   |                      |                           |                      |                       | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | On October 1, 2005, US Airways Group entered into an
    agreement with the ATSB to purchase all of its outstanding
    warrants for an aggregate purchase price of approximately
    $116 million. The transaction represents the repurchase of
    all of the replacement warrants issued to the ATSB in connection
    with the merger with America West Holdings. US Airways
    Group repurchased 7,735,770 warrants to purchase shares of
    common stock that had an exercise price of $7.27 per share.
    The average price paid per share is calculated by dividing the
    total cash paid for the warrants by the number of warrants
    purchased.






|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

Selected Consolidated Financial Data of US Airways
Group




|                                                                                          |         |                                        |       |        |      |   |       |       |   |   |       |      |  |      |       |        |   |   |       |        |  
|----------------------------------------------------------------------------------------- | ------- | -------------------------------------- | ----- | ------ | ---- | - | ----- | ----- | - | - | ----- | ---- |  | ---- | ----- | ------ | - | - | ----- | ------ | -
|                                                                                          |         | Year Ended December 31,                |      
|                                                                                          |         |                                        |      
|                                                                                          |         | 2005                                   |       |        | 2004 |   |       | 2003  |   |   | 2002  |      |  | 2001 |      
|                                                                                          |         |                                        |       |        |      |   |       |       |   |   |       |      |  |      |      
|                                                                                          |         | (In millions except per share amounts) |      
|Consolidated statements of operations data:                                               |         |                                        |       |        |      |   |       |       |   |   |       |      |  |      |       |        |   |   |       |       
|Operating revenues(a)                                                                     |         | $                                      | 5,077 |        |      | $ | 2,748 |       |   | $ | 2,572 |      |  | $    | 2,337 |        |   | $ | 2,296 |       
|Operating expenses(a)                                                                     |         |                                        | 5,294 |        |      |   | 2,768 |       |   |   | 2,539 |      |  |      | 2,497 |        |   |   | 2,714 |       
|Operating income (loss)(a)                                                                |         |                                        | (217  | )      |      |   | (20   | )     |   |   | 33    |      |  |      | (160  | )      |   |   | (418  | )     
|Income (loss) before cumulative effect of change in accounting
    principle(b)           |         |                                        | (335  | )      |      |   | (89   | )     |   |   | 57    |      |  |      | (180  | )      |   |   | (250  | )     
|Cumulative effect of accounting change(c)                                                 |         |                                        | 202   |        |      |   |      |       |   |   |      |      |  |      | 208   |        |   |   |      |       
|Net income (loss)                                                                         |         |                                        | (537  | )      |      |   | (89   | )     |   |   | 57    |      |  |      | (388  | )      |   |   | (250  | )     
|Earnings (loss) per share before cumulative effect of change in
    accounting principle: |         |                                        |       |        |      |   |       |       |   |   |       |      |  |      |       |        |   |   |       |       
|                                                                                          | Basic   |                                        |       | (10.65 | )    |   |       | (5.99 | ) |   |       | 4.03 |  |      |       | (12.92 | ) |   |       | (17.99 | )
|                                                                                          | Diluted |                                        |       | (10.65 | )    |   |       | (5.99 | ) |   |       | 3.07 |  |      |       | (12.92 | ) |   |       | (17.99 | )
|Cumulative effect of change in accounting principle                                       |         |                                        |       |        |      |   |       |       |   |   |       |      |  |      |       |        |   |   |       |       
|                                                                                          | Basic   |                                        |       | (6.41  | )    |   |       |      |   |   |       |     |  |      |       | (14.97 | ) |   |       |       |  
|                                                                                          | Diluted |                                        |       | (6.41  | )    |   |       |      |   |   |       |     |  |      |       | (14.97 | ) |   |       |       |  
|Net income (loss) per share:                                                              |         |                                        |       |        |      |   |       |       |   |   |       |      |  |      |       |        |   |   |       |       
|                                                                                          | Basic   |                                        |       | (17.06 | )    |   |       | (5.99 | ) |   |       | 4.03 |  |      |       | (27.89 | ) |   |       | (17.99 | )
|                                                                                          | Diluted |                                        |       | (17.06 | )    |   |       | (5.99 | ) |   |       | 3.07 |  |      |       | (27.89 | ) |   |       | (17.99 | )

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##### Table of Contents



|                                                                                                              |         |                                        |        |        |      |   |       |        |   |   |       |        |  |      |        |        |   |   |        |        |  
|------------------------------------------------------------------------------------------------------------- | ------- | -------------------------------------- | ------ | ------ | ---- | - | ----- | ------ | - | - | ----- | ------ |  | ---- | ------ | ------ | - | - | ------ | ------ | -
|                                                                                                              |         | Year Ended December 31,                |       
|                                                                                                              |         |                                        |       
|                                                                                                              |         | 2005                                   |        |        | 2004 |   |       | 2003   |   |   | 2002  |        |  | 2001 |       
|                                                                                                              |         |                                        |        |        |      |   |       |        |   |   |       |        |  |      |       
|                                                                                                              |         | (In millions except per share amounts) |       
|Unaudited pro forma net income (loss) (assuming change in method
    of accounting was applied retroactively) |         |                                        | (335   | )      |      |   | (142  | )      |   |   | 52    |        |  |      | (386   | )      |   |   | (252   | )     
|Unaudited pro forma net income (loss) per share Basic                                                         |         |                                        | (10.65 | )      |      |   | (9.53 | )      |   |   | 3.71  |        |  |      | (27.76 | )      |   |   | (18.12 | )     
|                                                                                                              | Diluted |                                        |        | (10.65 | )    |   |       | (9.53  | ) |   |       | 2.87   |  |      |        | (27.76 | ) |   |        | (18.12 | )
|Shares used for computation:                                                                                  |         |                                        |        |        |      |   |       |        |   |   |       |        |  |      |        |        |   |   |        |       
|                                                                                                              | Basic   |                                        |        | 31,488 |      |   |       | 14,861 |   |   |       | 14,252 |  |      |        | 13,911 |   |   |        | 13,889 |  
|                                                                                                              | Diluted |                                        |        | 31,488 |      |   |       | 14,861 |   |   |       | 23,147 |  |      |        | 13,911 |   |   |        | 13,889 |  
|Consolidated balance sheet data (at end of period):                                                           |         |                                        |        |        |      |   |       |        |   |   |       |        |  |      |        |        |   |   |        |       
|Total assets                                                                                                  |         | $                                      | 6,964  |        |      | $ | 1,475 |        |   | $ | 1,614 |        |  | $    | 1,439  |        |   | $ | 1,469  |       
|Long-term obligations, less current maturities(d)                                                             |         |                                        | 2,749  |        |      |   | 640   |        |   |   | 697   |        |  |      | 713    |        |   |   | 225    |       
|Total stockholders equity                                                                                    |         |                                        | 420    |        |      |   | 36    |        |   |   | 126   |        |  |      | 68     |        |   |   | 420    |       






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Certain prior year amounts have been reclassified to conform
    with the 2005 presentation. These reclassifications include
    reclassing: fuel hedging activities from nonoperating to
    operating expenses, fuel-related tax expenses from other
    expenses to aircraft fuel and related taxes expense and the sale
    of frequent flier miles and related marketing services to
    affinity partners from other operating expense to mainline
    passenger and other revenue. The portion of the affinity partner
    revenue related to passenger ticket sales is classified as
    mainline passenger revenue and the marketing portion of the
    affinity partner revenue is classified as other revenue.
|   
|    |  | The Company reclassified amounts related to settled fuel hedge
    transactions and
    mark-to-market
    adjustments on open hedge instruments from nonoperating income
    (expense) to operating. The amounts for the years ended
    December 31, 2005, 2004 and 2003 reduced operating expenses
    by $75 million, $24 million and $11, respectively. For
    the years ended December 31, 2002 and 2001, the amounts
    increased operating expenses by $1 million and
    $7 million, respectively.                                                                                                                                                                                                            
|   
|    |  | The sale of frequent flier miles and related marketing services
    to affinity partners were reclassed from operating expenses to
    operating revenues. The amounts for the years ended
    December 31, 2005, 2004, 2003, 2002 and 2001 were
    $20 million, $38 million, $32 million,
    $29 million and $24 million.                                                                                                                                                                                                                                                                                                                                                                                             
|   
|    |  | AWA Express expenses were reclassed from operating revenues to
    operating expenses. See also Part II, Item 8A,
    Note 5 Change in Method of Reporting for America West
    Express Results and Other Reclassifications.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|    |  | The 2005 results include $121 million of special charges,
    including $13 million of merger related transition
    expenses, a $27 million loss on the sale and leaseback of
    six 737-300 aircraft
    and two 757 aircraft, $7 million of power by the hour
    program penalties associated with the return of certain leased
    aircraft and a $50 million charge related to an amended
    Airbus purchase agreement, along with the write off of
    $7 million in capitalized interest. The Airbus
    restructuring fee was paid by means of set-off against existing
    equipment purchase deposits held by Airbus.                                                                                       
|   
|    |  | AWAs 2004 results include a $16 million net credit
    associated with the termination of the rate per engine hour
    agreement with General Electric Engine Services for overhaul
    maintenance services on V2500-A1 engines. This credit was
    partially offset by $2 million of net charges related to
    the return of certain Boeing 737-200 aircraft, which includes
    termination payments of $2 million, the write-down of
    leasehold improvements and deferred rent of $3 million,
    offset by the net reversal of maintenance reserves of
    $3 million related to the returned aircraft.                                                                                                       
|   
|    |  | AWAs 2003 results include $16 million of changes
    resulting from the elimination of AWAs hub operations in
    Columbus, Ohio ($11 million), the
    reduction-in-force of
    certain management, professional and administrative employees
    ($2 million) and the impairment of certain owned                                                                                                                                                                                                                                                                                                                                                                                                                   

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|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | Boeing 737-200 aircraft that have been grounded
    ($3 million), offset by a $1 million reduction due to
    a revision of the estimated costs related to the early
    termination of certain aircraft leases and a $1 million
    reduction related to the revision of estimated costs associated
    with the sale and leaseback of certain aircraft.                                                                                                                                                                                                                                                                         
|   
|    |  | The 2002 period includes $19 million of charges primarily
    related to the restructuring completed on January 18, 2002,
    resulting from the events of September 11, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  | The 2001 period includes $142 million of special charges
    related to the impairment of reorganization value in excess of
    amounts allocable to identifiable assets (ERV) and
    owned aircraft and engines, as well as the earlier-than-planned
    return of seven leased aircraft and severance expenses following
    a reduction-in-force in
    2001. See Note 7, Special Charges in
    US Airways Groups notes to consolidated financial
    statements included in Item 8A of this report.                                                                                                                    
|   
|(b) |  | Nonoperating income (expense) in the 2005 period includes an
    $8 million charge related to the write-off of the
    unamortized value of the ATSB warrants upon their repurchase in
    October 2005 and an aggregate $2 million write-off of debt
    issue costs associated with the exchange of the
    7.25% Senior Exchangeable Notes due 2023 and retirement of
    a portion of the loan formerly guaranteed by the ATSB. In the
    fourth quarter 2005 period, US Airways recorded
    $4 million of derivative gain attributable to stock options
    in Sabre, and warrants in a number of
    e-commerce companies.
|   
|    |  | The 2004 period includes a $1 million gain at AWA on the
    disposition of property and equipment due principally to the
    sale of one Boeing 737-200 aircraft and a $1 million charge
    for the write-off of debt issue costs in connection with the
    refinancing of the term loan.                                                                                                                                                                                                                                                                                                                                      
|   
|    |  | The 2003 period includes federal government assistance of
    $81 million recognized as nonoperating income under the
    Emergency Wartime Supplemental Appropriations Act and
    $9 million and $108 million recognized in 2002 and
    2001, respectively, as nonoperating income under the Air
    Transportation Safety and System Stabilization Act.                                                                                                                                                                                                                                                                       
|   
|(c) |  | The 2005 period includes a $202 million adjustment which
    represents the cumulative effect on retained earnings of the
    adoption of the direct expense method for accounting for major
    scheduled airframe, engine and certain component overhaul costs
    as of January 1, 2005. (See Part II, Item 8A,
    Note 4 Change in Accounting Policy for Maintenance
    Costs).                                                                                                                                                                                                                                           
|   
|    |  | The 2002 period includes a $208 million adjustment which
    represents the cumulative effect on retained earnings of the
    adoption of SFAS No. 142, Goodwill and other
    Intangible Assets which was issued by the FASB in June
    2001. SFAS No. 142 primarily addresses the accounting
    for goodwill and intangible assets subsequent to their
    acquisition. Under SFAS No. 142, ERV is reported as
    goodwill and accounted for in the same manner as goodwill.
    SFAS No. 142 was effective for fiscal years beginning
    after December 15, 2001.                                                        
|   
|(d) |  | Includes debt, capital leases and postretirement benefits other
    than pensions (noncurrent).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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Selected Financial Data of US Airways, Inc.




|                                                                           |  |              |       |   |  |                        |   |       |              |  |             |              |   |  |              |           |   |  |              |   |       |              |  |   |        |   |  |   |        |  
|-------------------------------------------------------------------------- |  | ------------ | ----- | - |  | ---------------------- | - | ----- | ------------ |  | ----------- | ------------ | - |  | ------------ | --------- | - |  | ------------ | - | ----- | ------------ |  | - | ------ | - |  | - | ------ | -
|                                                                           |  | Successor    |       |   |  |                       
|                                                                           |  | Company(a)   |       |   |  | Predecessor Company(a) |  
|                                                                           |  |              |       |   |  |                        |  
|                                                                           |  | Three Months |       |   |  | Nine Months            |   |       |              |  | Nine Months |              |   |  | Three Months |           |   | 
|                                                                           |  | Ended        |       |   |  | Ended                  |   |       | Year Ended   |  |             | Ended        |   |  |              | Ended     |   |  | Year Ended   |   |       | Year Ended   | 
|                                                                           |  | December 31, |       |   |  | September 30,          |   |       | December 31, |  |             | December 31, |   |  |              | March 31, |   |  | December 31, |   |       | December 31, | 
|                                                                           |  | 2005         |       |   |  | 2005                   |   |       | 2004         |  |             | 2003         |   |  |              | 2003      |   |  | 2002         |   |       | 2001         | 
|                                                                           |  |              |       |   |  |                        |   |       |              |  |             |              |   |  |              |           |   |  |              |   |       |              | 
|Operating revenues                                                         |  | $            | 1,756 |   |  |                        | $ | 5,457 |              |  | $           | 7,073        |   |  | $            | 5,250     |   |  |              | $ | 1,512 |              |  | $ | 6,915  |   |  | $ | 8,253  |  
|Operating expenses                                                         |  |              | 1,827 |   |  |                        |   | 5,599 |              |  |             | 7,421        |   |  |              | 5,292     |   |  |              |   | 1,714 |              |  |   | 8,236  |   |  |   | 9,874  |  
|                                                                           |  |              |       |   |  |                        |   |       |              |  |             |              |   |  |              |           |   |  |              |   |       |              | 
|Operating loss(b)                                                          |  | $            | (71   | ) |  |                        | $ | (142  | )            |  | $           | (348         | ) |  | $            | (42       | ) |  |              | $ | (202  | )            |  | $ | (1,321 | ) |  | $ | (1,621 | )
|Income (loss) before cumulative effect of accounting change                |  | $            | (120  | ) |  |                        | $ | 280   |              |  | $           | (578         | ) |  | $            | (160      | ) |  |              | $ | 1,613 |              |  | $ | (1,659 | ) |  | $ | (1,996 | )
|Cumulative effect of accounting change, net of applicable income
    taxes |  |              |      |   |  |                        |   |      |              |  |             |             |   |  |              |          |   |  |              |   |      |              |  |   |       |   |  |   | 7      |  
|                                                                           |  |              |       |   |  |                        |   |       |              |  |             |              |   |  |              |           |   |  |              |   |       |              | 
|Net income (loss)(c)                                                       |  | $            | (120  | ) |  |                        | $ | 280   |              |  | $           | (578         | ) |  | $            | (160      | ) |  |              | $ | 1,613 |              |  | $ | (1,659 | ) |  | $ | (1,989 | )
|                                                                           |  |              |       |   |  |                        |   |       |              |  |             |              |   |  |              |           |   |  |              |   |       |              | 



|                                     |  |              |       |   |  |                        |   |       |      |  |   |       |      |  |  |      |        |   |  |   |        |  
|------------------------------------ |  | ------------ | ----- | - |  | ---------------------- | - | ----- | ---- |  | - | ----- | ---- |  |  | ---- | ------ | - |  | - | ------ | -
|                                     |  | Successor    |       |   |  |                       
|                                     |  | Company(a)   |       |   |  | Predecessor Company(a) |  
|                                     |  |              |       |   |  |                        |  
|                                     |  | December 31, |      
|                                     |  |              |      
|                                     |  | 2005         |       |   |  | 2004                   |   |       | 2003 |  |   |       | 2002 |  |  | 2001 |       
|                                     |  |              |       |   |  |                        |   |       |      |  |   |       |      |  |  |      |       
|Total assets                         |  | $            | 4,808 |   |  |                        | $ | 8,250 |      |  | $ | 8,349 |      |  |  | $    | 6,464  |   |  | $ | 7,941  |  
|Long-term obligations(d)             |  | $            | 2,161 |   |  |                        | $ | 4,815 |      |  | $ | 4,591 |      |  |  | $    | 5,009  |   |  | $ | 5,147  |  
|Total stockholders equity (deficit) |  | $            | (133  | ) |  |                        | $ | (501  | )    |  | $ | 89    |      |  |  | $    | (4,956 | ) |  | $ | (2,630 | )






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | In connection with emergence from the first bankruptcy in March
    2003 and the second bankruptcy in September 2005,
    US Airways adopted fresh-start reporting in accordance with
    AICPA Statement of
    Position 90-7,
    Financial Reporting by Entities in Reorganization Under
    the Bankruptcy Code. As a result of the application of
    fresh-start reporting, the financial statements prior to
    March 31, 2003 are not comparable with the financial
    statements for the period April 1, 2003 to
    September 27, 2005, nor is either period comparable to
    periods after September 27, 2005. References to
    Successor Company refer to US Airways on and
    after September 27, 2005, after the application of
    fresh-start reporting for the second bankruptcy.
|   
|(b) |  | The operating results for the three months ended
    December 31, 2005, the nine months ended December 31,
    2003, the year ended December 31, 2002 and the year ended
    December 31, 2001 include the following unusual items:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The operating results for the three months ended
    December 31, 2005 include $15 million in transition
    and merger integration costs. These items included
    $7 million in insurance premiums related to policies for
    former officers and directors, $5 million in salaries and
    related benefits for severance, retention payments and stock
    awards, $1 million of aircraft livery costs,
    $1 million of programming service expense and
    $1 million in other expenses.
|
| |  | The operating results for the nine months ended
    December 31, 2003 include:                                                                                                                                                                                                                                                                                                                                                                                                                  



| |   |                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A $212 million, net of amounts due to certain affiliates,
    reduction in operating expenses in connection with the
    reimbursement for certain aviation-related security expenses in
    connection with the Emergency Wartime Supplemental
    Appropriations Act.

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| |   |                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------
| |  | A $35 million charge in connection with
    US Airways intention not to take delivery of certain
    aircraft scheduled for future delivery.



| |   |                                                          
| | - | ---------------------------------------------------------
| |  | The results for the year ended December 31, 2002 include:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A $392 million impairment charge as a result of an
    impairment analysis conducted on the
    B737-300,
    B737-400,
    B757-200 and
    B767-200 aircraft
    fleets as a result of changes to the aircrafts
    recoverability periods, the planned conversion of owned aircraft
    to leased aircraft and indications of possible material changes
    to the market values of these aircraft. The analysis revealed
    that estimated undiscounted future cash flows generated by these
    aircraft were less than their carrying values for four
    B737-300s, 15 B737-400s, 21 B757-200s and three B767-200s. In
    accordance with Statement of Financial Accounting Standards
    No. 144, Accounting for the Impairment or Disposal of
    Long-Lived Assets, the carrying values were reduced to
    fair market value.
|
| |  | A curtailment credit of $120 million related to certain
    postretirement benefit plans and a $30 million curtailment
    charge related to certain defined benefit pension plans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | An impairment charge of $21 million related to capitalized
    gates at certain airports in accordance with Statement of
    Financial Accounting Standards No. 142, Goodwill and
    Other Intangible Assets. The carrying values of the
    affected gates were reduced to fair value based on a third-party
    appraisal.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              



| |   |                                                          
| | - | ---------------------------------------------------------
| |  | The results for the year ended December 31, 2001 include:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | An aircraft impairment and related charge of $787 million.
    During August 2001, US Airways conducted an impairment
    analysis in accordance with Statement of Financial Accounting
    Standards No. 121 Accounting for the Impairment of
    Long-Lived Assets and for Long-Lived Assets to Be Disposed
    Of (SFAS 121) on its 36 F-100 aircraft,
    16 MD-80 aircraft and 39 B737-200 aircraft as a result of
    changes to the fleet plan as well as indications of possible
    material changes to the market values of these aircraft. The
    analysis revealed that estimated undiscounted future cash flows
    generated by these aircraft were less than their carrying
    values. In accordance with SFAS 121, the carrying values
    were reduced to fair market value. This analysis resulted in a
    pretax charge of $403 million. In the aftermath of
    September 11, 2001, US Airways elected to accelerate
    the retirement of the aforementioned aircraft. All B737-200
    aircraft retirements were accelerated to the end of 2001 while
    the F-100s and MD-80s were scheduled to be retired by April
    2002. Based on this, US Airways conducted another
    impairment analysis which revealed that these aircraft were
    impaired. This culminated in an additional pretax charge of
    $173 million largely reflecting the further diminution in
    value of used aircraft arising from the events of
    September 11, 2001. Management estimated fair market value
    using third-party appraisals, published sources and recent sales
    and leasing transactions. As a result of the events of
    September 11, 2001, US Airways reviewed other
    aircraft-related assets which resulted in a pretax charge of
    $15 million as certain aircraft assets had carrying values
    in excess of their fair value less costs to sell. Management
    estimated fair value based on recent sales and leasing
    transactions. US Airways also recognized a pretax charge of
    $26 million in connection with the write-down to lower of
    cost or market of surplus parts for the F-100, B737-200 and
    MD-80 fleets. Management estimated market value based on recent
    sales activity related to these parts. During the first quarter
    of 2002, US Airways entered into agreements to sell 97
    surplus aircraft and related spare engines and parts, including
    substantially all its DC-9, MD-80 and B737-200 aircraft. In
    connection with these agreements, US Airways reduced the
    carrying values of these assets resulting in a $148 million
    charge during the fourth quarter of 2001, including a
    $138 million impairment charge and a charge of
    $10 million to write down the related spare parts.
    Additionally, US Airways recognized a pretax impairment
    charge of $22 million in connection with the planned
    retirement of five B737-200 aircraft due to a third-partys
    early return of certain leased B737-200 aircraft, and early
    retirement of certain other B737-200s during the first quarter
    of 2001.

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | An $83 million charge for employee severance and benefits.
    In September 2001, US Airways announced that in connection
    with its reduced flight schedule it would terminate or furlough
    approximately 11,000 employees across all employee groups.
    Approximately 10,200 of the affected employees were terminated
    or furloughed on or prior to January 1, 2002. Substantially
    all the remaining affected employees were terminated or
    furloughed by May 2002. US Airways headcount
    reduction was largely accomplished through involuntary
    terminations/furloughs. In connection with this headcount
    reduction, US Airways offered a voluntary leave program to
    certain employee groups. Voluntary leave program participants
    generally received extended benefits (e.g. medical, dental, life
    insurance) but did not receive any furlough pay benefit. The
    nine months ended December 31, 2003 and the year ended
    December 31, 2002 include $1 million and
    $3 million, respectively, in reductions to severance pay
    and benefit accruals related to the involuntary termination or
    furlough of certain employees.
|
| |  | Charges of $4 million and $66 million, respectively,
    representing the present value of the future minimum lease
    payments on three B737-200 aircraft and four F-100 aircraft,
    respectively, that were permanently removed from service.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | A charge of $13 million representing the unamortized
    leasehold improvement balance for facilities to be abandoned and
    aircraft to be parked as of the facility abandonment date or
    aircraft park date. In addition, US Airways recognized a
    pretax charge of $3 million representing the present value
    of future noncancelable lease commitments beyond the facility
    abandonment date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | A $2 million curtailment charge related to a certain
    postretirement benefit plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) |  | Nonoperating income (expense) for the nine months ended
    September 30, 2005 and the year ended December 31,
    2004 include reorganization items which amounted to a
    $636 million net gain and a $32 million expense,
    respectively. The nine months ended December 31, 2003
    include a $30 million gain on the sale of
    US Airways investment in Hotwire, Inc. In connection
    with US Airways first bankruptcy, a
    $1.89 billion gain and charges of $294 million of
    reorganization items, net are included for the three months
    ended March 31, 2003 and the year ended December 31,
    2002, respectively.
|   
|(d) |  | Includes debt, capital leases and postretirement benefits other
    than pensions (noncurrent). Also includes liabilities subject to
    compromise at December 31, 2004 and December 31, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                






|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations

Background






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Emergence and Merger Transactions


The New Equity Investments


44



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Public Stock Offering


GE Merger MOU




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Continued use by US Airways Group of certain leased Airbus,
    Boeing and regional jet aircraft, the modification of monthly
    lease rates, and the return to GECC of certain other leased
    Airbus and Boeing aircraft.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | GECC provided a bridge facility of approximately
    $56 million for use by US Airways Group during the
    pendency of the Chapter 11 proceedings. US Airways
    paid an affiliate of GE $125 million in cash on
    September 30, 2005 in exchange for retirement of the bridge
    facility, forgiveness and release of US Airways from
    certain prepetition obligations, deferral of certain payment
    obligations and amendments to maintenance agreements. The
    payment was funded through the issuance of 7% Senior
    Convertible Notes due 2020 on September 30, 2005, as
    discussed in more detail below.                                                                                                                                                                                                                                                                                
|
| |  | In June 2005, GECC purchased and immediately leased back to
    US Airways Group: (a) the assets securing the credit
    facility obtained from GE in 2001 and the liquidity facility
    obtained from GE in 2003 in connection with US Airways
    Groups emergence from the first bankruptcy, and other GE
    obligations, consisting of 11 Airbus aircraft and 28 spare
    engines and engine stands; and (b) ten regional jet
    aircraft previously debt-financed by GECC. The proceeds from the
    sale leaseback transaction of approximately $633 million
    were used to pay down balances due to GE by US Airways
    Group under the 2003 GE liquidity facility in full, the GECC
    mortgage-debt financed CRJ aircraft in full, and a portion of
    the 2001 GE credit facility. The 2001 GE credit facility was
    amended to allow certain additional borrowings up to
    $28 million.

Airbus MOU




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | On September 27, 2005, US Airways and AWA entered into
    two loan agreements with Airbus Financial Services, as Initial
    Lender and Loan Agent, Wells Fargo Bank Northwest, National
    Association, as Collateral Agent, and US Airways Group, as
    guarantor, with commitments in initial aggregate amounts of up
    to $161 million and up to $89 million. The Airbus
    loans bear interest at a rate of LIBOR plus a margin, subject to
    adjustment. In each of the separate financial statements of
    US Airways and AWA, the Airbus loan has also been presented
    as a liability, as each entity is jointly and severally liable
    for this obligation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Airbus rescheduled US Airways Groups A320-family and
    A330-200 delivery commitments and has agreed to provide backstop
    financing for a substantial number of aircraft, subject to
    certain terms and conditions, on an order of 20 A350 aircraft.
    US Airways Groups A320-family aircraft are now
    scheduled for delivery in 2009 and 2010. US Airways
    Groups A330-200 aircraft are scheduled for delivery in
    2009 and 2010 and A350 aircraft deliveries are currently
    scheduled to occur beginning in 2011. The Airbus Memorandum of
    Understanding also eliminates cancellation penalties on
    US Airways Groups orders for the ten A330-200
    aircraft, provided that US Airways Group has met certain
    predelivery payment obligations under the A350 order. In
    connection with the restructuring of aircraft firm orders,
    US Airways Group and America West Holdings were required to
    pay an aggregate non-refundable restructuring fee which was paid
    by means of set- off against existing equipment purchase
    deposits of US Airways Group and America West Holdings held
    by

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| |  |                                                                                                                                                                                                                                                                                                                                                         
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Airbus. US Airways recorded its restructuring fee of
    $39 million as a reorganization item in the third quarter
    of 2005. The America West Holdings restructuring fee of
    $50 million was recorded as a special charge in the
    accompanying consolidated statement of operations, along with
    $7 million in related capitalized interest.

Restructuring of the ATSB
Loan Guarantees










| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 90% of the US Airways loan (Tranche A), which was the
    portion of the loan previously guaranteed by the ATSB, was
    originally funded through a participating lenders
    commercial paper conduit program and bears interest at a rate
    equal to the conduit providers weighted average cost
    related to the issuance of certain commercial paper notes and
    other short term borrowings plus 0.30%, provided that portions
    of Tranche A that were held by the ATSB or are held by an
    assignee and are no longer subject to such commercial paper
    conduit program bear interest at LIBOR plus 40 basis
    points, and portions of Tranche A that are under certain
    circumstances assigned free of the ATSB guarantee bear interest
    at LIBOR plus 6.0%; and
|
| |  | 10% of the US Airways loan (Tranche B) bears interest
    at the greater of the Tranche A interest rate plus 6.0% and
    LIBOR plus 6.0% from a prior rate of LIBOR plus 4.0%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 





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New Convertible Notes


Restructuring of Affinity Credit Card Partner
Agreement






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Restructuring of Credit Card Processing
Agreement successor-in








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US Airways Groups Emergence from
Bankruptcy


PBGC Claim


Agreements with ALPA


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2005 Overview


Merger and Related Synergies




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Integration Update






| |   |                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | We achieved the top ranking in on-time performance among all
    major airlines as reported by the DOT for the fourth quarter of
    2005.                                                             
|
| |  | We consolidated operations at 30 overlap airports, with seven
    airports remaining to be integrated.                                                                                                 
|
| |  | We signed an amended agreement with Embraer for 25 firm order
    and 32 additional firm order Embraer 170/190 family aircraft,
    with an option for up to an additional 50 aircraft.                
|
| |  | We achieved ETOPS (extended-range twin-engine operations)
    certification for Boeing 757 aircraft in long-range over-water
    service, which allowed the airline to begin new service to
    Hawaii.
|
| |  | We added 52 new pieces of ground equipment and additional
    personnel at our Philadelphia hub, which helped the airline run
    a much improved 2005 holiday operation as compared to 2004.          

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| |   |                                                                                  
| | - | ---------------------------------------------------------------------------------
| |  | repurchased warrants associated with AWAs ATSB loan for
    $116 million; and   
|
| |  | combined all of our insurance programs, which will save
    $41 million annually.





| |   |                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | established Dividend Miles as our frequent flyer program, and
    created mechanisms for reciprocal benefits, accrual and
    redemption between Dividend Miles and AWAs FlightFund
    program;
|
| |  | completed all Star Alliance joining requirements;                                                                                                                                                
|
| |  | introduced a new affinity credit card with Barclays PLC through
    our agreement with Juniper;                                                                                                  
|
| |  | announced three new European destinations, Lisbon, Milan and
    Stockholm, which will begin service this summer; and                                                                            
|
| |  | reduced numerous fares in several East Coast markets, including
    Philadelphia, Charlotte, Pittsburgh and New York/ LaGuardia.                                                                 





| |   |                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | recalled 55 furloughed US Airways pilots and announced
    several new hire flight attendant classes, which will include
    recalling furloughed US Airways flight attendants;                                     
|
| |  | began the process to bring some of the currently outsourced
    reservations work back in house by increasing hiring in
    Winston-Salem, North Carolina and Reno, Nevada;                                         
|
| |  | reached transition agreements with US Airways and
    AWAs pilots and flight attendants;                                                                                                                          
|
| |  | reached a transition agreement with a new labor alliance between
    CWA and IBT, which represents US Airways and
    AWAs customer service employees; and                                                        
|
| |  | received single carrier certification by the National Mediation
    Board, which will further the process of getting to single
    representation for US Airways and AWAs
    mechanics and fleet service workers.





| |   |                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we paid out three consecutive monthly bonuses, totaling
    $5 million, to employees for achieving
    on-time performance
    goals in October, November and December;                 
|
| |  | we implemented new internal communication programs designed to
    ensure senior management visibility among all areas of the
    Companys operation;                                  
|
| |  | we unveiled one of four heritage planes that will feature
    throwback liveries of the four major airlines that comprise the
    new US Airways (Allegheny, AWA, Piedmont and PSA); and
|
| |  | we began an aggressive leadership development training program
    that will ultimately touch all leaders at US Airways Group.                                                          

Cost Control




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Revenue Pricing Environment




Customer Service




|                       |  |         |      |  |           |  |      |      |  |  |      |  |  |  |      | 
|---------------------- |  | ------- | ---- |  | --------- |  | ---- | ---- |  |  | ---- |  |  |  | ---- | 
|                       |  | Fourth  |      |  | Full Year | 
|                       |  | Quarter |      |  |           | 
|                       |  | 2005    |      |  | 2005      |  |      | 2004 |  |  | 2003 | 
|                       |  |         |      |  |           |  |      |      |  |  |      | 
|On-time performance(a) |  |         | 80.7 |  |           |  | 77.8 |      |  |  | 78.1 |  |  |  | 80.4 | 
|Completion factor(b)   |  |         | 98.7 |  |           |  | 98.2 |      |  |  | 98.4 |  |  |  | 98.6 | 
|Mishandled baggage(c)  |  |         | 6.90 |  |           |  | 7.68 |      |  |  | 4.85 |  |  |  | 3.46 | 
|Customer complaints(d) |  |         | 1.26 |  |           |  | 1.55 |      |  |  | 1.14 |  |  |  | 0.88 | 






|    |  |                                                                           
|--- |  | --------------------------------------------------------------------------
|(a) |  | Percentage of reported flight operations arriving on time.                
|   
|(b) |  | Percentage of scheduled flight operations completed.                      
|   
|(c) |  | Rate of mishandled baggage reports per 1,000 passengers.                  
|   
|(d) |  | Rate of customer complaints filed with the DOT per 100,000
    passengers.



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US Airways Groups Results of Operations




|                                                                               |  |              |       |   |             |   |       |              |  |   |              |   |  |              |       |   |  |   |       | 
|------------------------------------------------------------------------------ |  | ------------ | ----- | - | ----------- | - | ----- | ------------ |  | - | ------------ | - |  | ------------ | ----- | - |  | - | ----- | 
|                                                                               |  | 2005         |       |   | 2004        |   |       | 2003         | 
|                                                                               |  |              |       |   |             |   |       |              | 
|                                                                               |  | Consolidated |       |   | 96 Days     |   |       |              |  |   |              |  
|                                                                               |  | US Airways   |       |   | US Airways  |   |       | America West |  |   | America West |   |  | America West |      
|                                                                               |  | Group        |       |   | Group, Inc. |   |       | Holdings     |  |   | Holdings     |   |  | Holdings     |      
|                                                                               |  |              |       |   |             |   |       |              |  |   |              |   |  |              |      
|Operating revenues                                                             |  | $            | 5,077 |   |             | $ | 1,822 |              |  | $ | 3,255        |   |  | $            | 2,748 |   |  | $ | 2,572 | 
|Operating expenses                                                             |  |              | 5,294 |   |             |   | 1,914 |              |  |   | 3,380        |   |  |              | 2,768 |   |  |   | 2,539 | 
|                                                                               |  |              |       |   |             |   |       |              |  |   |              |   |  |              |      
|Operating income (loss)                                                        |  |              | (217  | ) |             |   | (92   | )            |  |   | (125         | ) |  |              | (20   | ) |  |   | 33    | 
|Nonoperating income (expense), net                                             |  |              | (118  | ) |             |   | (44   | )            |  |   | (74          | ) |  |              | (69   | ) |  |   | 24    | 
|                                                                               |  |              |       |   |             |   |       |              |  |   |              |   |  |              |      
|Income (loss) before cumulative effect of a change in accounting
    principle |  | $            | (335  | ) |             | $ | (136  | )            |  | $ | (199         | ) |  | $            | (89   | ) |  | $ | 57    | 
|                                                                               |  |              |       |   |             |   |       |              |  |   |              |   |  |              |      



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AMERICA WEST AIRLINES, INC.


Consolidated Statements of Operations


For the Years Ended December 31, 2005, 2004 and 2003


|                                                                                                        |  |               |       |   |      |   |       |      |  |   |       |  
|------------------------------------------------------------------------------------------------------- |  | ------------- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                                                                                        |  | 2005          |       |   | 2004 |   |       | 2003 | 
|                                                                                                        |  |               |       |   |      |   |       |      | 
|                                                                                                        |  | (In millions) |      
|Operating revenues:                                                                                     |  |               |       |   |      |   |       |      |  |   |       |  
|Mainline passenger                                                                                      |  | $             | 2,521 |   |      | $ | 2,203 |      |  | $ | 2,118 |  
|Express passenger                                                                                       |  |               | 512   |   |      |   | 353   |      |  |   | 268   |  
|Cargo                                                                                                   |  |               | 33    |   |      |   | 28    |      |  |   | 27    |  
|Other                                                                                                   |  |               | 188   |   |      |   | 163   |      |  |   | 158   |  
|                                                                                                        |  |               |       |   |      |   |       |      | 
|Total operating revenues                                                                                |  |               | 3,254 |   |      |   | 2,747 |      |  |   | 2,571 |  
|                                                                                                        |  |               |       |   |      |   |       |      | 
|Operating expenses:                                                                                     |  |               |       |   |      |   |       |      |  |   |       |  
|Aircraft fuel and related taxes                                                                         |  |               | 812   |   |      |   | 590   |      |  |   | 404   |  
|Gain on fuel hedging instruments, net                                                                   |  |               | (75   | ) |      |   | (24   | )    |  |   | (11   | )
|Salaries and related costs                                                                              |  |               | 701   |   |      |   | 655   |      |  |   | 658   |  
|Express expenses                                                                                        |  |               | 545   |   |      |   | 374   |      |  |   | 287   |  
|Aircraft rent                                                                                           |  |               | 327   |   |      |   | 304   |      |  |   | 298   |  
|Aircraft maintenance                                                                                    |  |               | 259   |   |      |   | 206   |      |  |   | 223   |  
|Other rent and landing fees                                                                             |  |               | 176   |   |      |   | 168   |      |  |   | 155   |  
|Selling expenses                                                                                        |  |               | 161   |   |      |   | 153   |      |  |   | 156   |  
|Special charges (credits), net                                                                          |  |               | 106   |   |      |   | (16   | )    |  |   | 14    |  
|Depreciation and amortization                                                                           |  |               | 53    |   |      |   | 54    |      |  |   | 67    |  
|Other                                                                                                   |  |               | 309   |   |      |   | 299   |      |  |   | 283   |  
|                                                                                                        |  |               |       |   |      |   |       |      | 
|Total operating expenses                                                                                |  |               | 3,374 |   |      |   | 2,763 |      |  |   | 2,534 |  
|                                                                                                        |  |               |       |   |      |   |       |      | 
|Operating income (loss)                                                                                 |  |               | (120  | ) |      |   | (16   | )    |  |   | 37    |  
|                                                                                                        |  |               |       |   |      |   |       |      | 
|Nonoperating income (expenses):                                                                         |  |               |       |   |      |   |       |      |  |   |       |  
|Interest income                                                                                         |  |               | 25    |   |      |   | 14    |      |  |   | 13    |  
|Interest expense, net                                                                                   |  |               | (94   | ) |      |   | (86   | )    |  |   | (87   | )
|Federal government assistance                                                                           |  |               |      |   |      |   |      |      |  |   | 81    |  
|Gain on disposition of property and equipment                                                           |  |               | 2     |   |      |   | 1     |      |  |   |      |  
|Gain on sale of investment                                                                              |  |               |      |   |      |   |      |      |  |   | 10    |  
|Other, net                                                                                              |  |               | (8    | ) |      |   | 2     |      |  |   | 7     |  
|                                                                                                        |  |               |       |   |      |   |       |      | 
|Total nonoperating income (expenses), net                                                               |  |               | (75   | ) |      |   | (69   | )    |  |   | 24    |  
|                                                                                                        |  |               |       |   |      |   |       |      | 
|Income (loss) before income taxes (benefit) and cumulative
    effect of change in accounting principle |  | $             | (195  | ) |      | $ | (85   | )    |  | $ | 61    |  
|                                                                                                        |  |               |       |   |      |   |       |      | 



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|                                                      |  |                         |        |  |         |  |        |         |  |  |           |  |  |           |      |     |  |  |      |   
|----------------------------------------------------- |  | ----------------------- | ------ |  | ------- |  | ------ | ------- |  |  | --------- |  |  | --------- | ---- | --- |  |  | ---- | --
|                                                      |  | Year Ended December 31, |        |  | Percent |  |        | Percent | 
|                                                      |  |                         |        |  | Change  |  |        | Change  | 
|                                                      |  | 2005                    |        |  | 2004    |  |        | 2003    |  |  | 2005-2004 |  |  | 2004-2003 |     
|                                                      |  |                         |        |  |         |  |        |         |  |  |           |  |  |           |     
|Revenue passenger miles (in millions)(a)              |  |                         | 24,260 |  |         |  | 23,333 |         |  |  | 21,295    |  |  |           | 4.0  |     |  |  | 9.6  |   
|Available seat miles (in millions)(b)                 |  |                         | 30,503 |  |         |  | 30,153 |         |  |  | 27,888    |  |  |           | 1.2  |     |  |  | 8.1  |   
|Load factor (percent)(c)                              |  |                         | 79.5   |  |         |  | 77.4   |         |  |  | 76.4      |  |  |           | 2.1  | pts |  |  | 1.0  | pt
|Yield (cents)(d)                                      |  |                         | 10.39  |  |         |  | 9.44   |         |  |  | 9.95      |  |  |           | 10.1 |     |  |  | (5.1 | ) 
|Passenger revenue per available seat mile (cents)(e)  |  |                         | 8.27   |  |         |  | 7.31   |         |  |  | 7.60      |  |  |           | 13.1 |     |  |  | (3.8 | ) 
|Total revenue per available seat mile (cents)(f)      |  |                         | 8.99   |  |         |  | 7.94   |         |  |  | 8.26      |  |  |           | 13.2 |     |  |  | (3.9 | ) 
|Passenger enplanements (in thousands)(g)              |  |                         | 22,130 |  |         |  | 21,132 |         |  |  | 20,050    |  |  |           | 4.7  |     |  |  | 5.4  |   
|Aircraft (end of period)                              |  |                         | 141    |  |         |  | 138    |         |  |  | 139       |  |  |           | 2.2  |     |  |  | (0.7 | ) 
|Average daily aircraft utilization (hours)(h)         |  |                         | 11.0   |  |         |  | 10.9   |         |  |  | 10.1      |  |  |           | 0.9  |     |  |  | 7.9  |   
|Block hours(i)                                        |  |                         | 564    |  |         |  | 557    |         |  |  | 519       |  |  |           | 1.3  |     |  |  | 7.3  |   
|Average stage length (miles)(j)                       |  |                         | 1,028  |  |         |  | 1,052  |         |  |  | 1,005     |  |  |           | (2.3 | )   |  |  | 4.7  |   
|Average passenger journey (miles)(k)                  |  |                         | 1,659  |  |         |  | 1,686  |         |  |  | 1,564     |  |  |           | (1.6 | )   |  |  | 7.8  |   
|Fuel consumption (gallons in millions)                |  |                         | 449    |  |         |  | 450    |         |  |  | 423       |  |  |           | (0.2 | )   |  |  | 6.4  |   
|Average fuel price including tax (dollars per gallon) |  |                         | 1.80   |  |         |  | 1.31   |         |  |  | 0.96      |  |  |           | 37.4 |     |  |  | 36.5 |   
|Full-time equivalent employees (end of period)        |  |                         | 12,100 |  |         |  | 11,893 |         |  |  | 11,475    |  |  |           | 0.1  |     |  |  | 3.6  |   






|    |  |                                                                                                                                                                                                                                                
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Revenue passenger mile (RPM)  A basic
    measure of sales volume. It is one passenger flown one mile.                                                                                                                                      
|   
|(b) |  | Available seat mile (ASM)  A basic
    measure of production. It is one seat flown one statute mile.                                                                                                                                        
|   
|(c) |  | Load factor  The percentage of available seats that
    are filled with revenue passengers.                                                                                                                                                   
|   
|(d) |  | Yield  A measure of airline revenue derived by
    dividing passenger revenue by revenue passenger miles and
    expressed in cents per mile.                                                                                                 
|   
|(e) |  | Passenger revenue per available seat mile
    (RASM)  Total passenger revenues divided
    by total available seat miles.                                                                                                                   
|   
|(f) |  | Total revenue per available seat mile  Total
    operating revenues divided by total available seat miles.                                                                                                                                    
|   
|(g) |  | Passenger enplanements  The number of passengers on
    board an aircraft including local, connecting and through
    passengers.                                                                                                             
|   
|(h) |  | Average daily aircraft utilization  The average
    number of block hours per day for all aircraft in service.                                                                                                                                
|   
|(i) |  | Block hours  The hours measured from the moment an
    aircraft first moves under its own power, including taxi time,
    for the purposes of flight until the aircraft is docked at the
    next point of landing and its power is shut down.
|   
|(j) |  | Average stage length  The average of the distances
    flown on each segment of every route.                                                                                                                                                  
|   
|(k) |  | Average passenger journey  The average one-way trip
    measured in statute miles for one passenger origination.                                                                                                                              

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|                                       |  |                         |       |   |         |  |       |         |  |  |           |   |  |           |      |   |  |  |       |  
|-------------------------------------- |  | ----------------------- | ----- | - | ------- |  | ----- | ------- |  |  | --------- | - |  | --------- | ---- | - |  |  | ----- | -
|                                       |  | Year Ended December 31, |       |   | Percent |  |       | Percent | 
|                                       |  |                         |       |   | Change  |  |       | Change  | 
|                                       |  | 2005                    |       |   | 2004    |  |       | 2003    |  |  | 2005-2004 |   |  | 2004-2003 |     
|                                       |  |                         |       |   |         |  |       |         |  |  |           |   |  |           |     
|                                       |  | (In cents)              |       |   |         |  |      
|Aircraft fuel and related taxes        |  |                         | 2.66  |   |         |  | 1.95  |         |  |  | 1.45      |   |  |           | 36.0 |   |  |  | 35.0  |  
|Gains on fuel hedging instruments, net |  |                         | (0.25 | ) |         |  | (0.08 | )       |  |  | (0.04     | ) |  |           |     |   |  |  |      |  
|Salaries and related costs             |  |                         | 2.30  |   |         |  | 2.17  |         |  |  | 2.36      |   |  |           | 5.8  |   |  |  | (7.9  | )
|Aircraft rent                          |  |                         | 1.07  |   |         |  | 1.01  |         |  |  | 1.07      |   |  |           | 6.3  |   |  |  | (5.4  | )
|Aircraft maintenance                   |  |                         | 0.85  |   |         |  | 0.68  |         |  |  | 0.80      |   |  |           | 24.5 |   |  |  | (14.8 | )
|Other rent and landing fees            |  |                         | 0.58  |   |         |  | 0.56  |         |  |  | 0.55      |   |  |           | 3.8  |   |  |  | 0.4   |  
|Selling expenses                       |  |                         | 0.53  |   |         |  | 0.51  |         |  |  | 0.56      |   |  |           | 4.2  |   |  |  | (9.2  | )
|Depreciation and amortization          |  |                         | 0.17  |   |         |  | 0.18  |         |  |  | 0.24      |   |  |           | (3.6 | ) |  |  | (24.8 | )
|Special charges (credits), net         |  |                         | 0.35  |   |         |  | (0.05 | )       |  |  | 0.06      |   |  |           |     |   |  |  |      |  
|Other                                  |  |                         | 1.02  |   |         |  | 0.99  |         |  |  | 1.02      |   |  |           | 2.3  |   |  |  | (2.5  | )
|                                       |  |                         |       |   |         |  |       |         |  |  |           |   |  |           |     
|                                       |  |                         | 9.28  |   |         |  | 7.92  |         |  |  | 8.07      |   |  |           | 17.0 |   |  |  | (1.7  | )
|                                       |  |                         |       |   |         |  |       |         |  |  |           |   |  |           |     

2005 Compared With 2004














| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Aircraft fuel and related tax expense per ASM increased 36.0%
    due primarily to a 37.4% increase in the average price per
    gallon of fuel to $1.80 in 2005 from $1.31 in 2004.                                                                                                                                                                                                                                                                                                           
|
| |  | Salaries and related costs per ASM increased 5.8% primarily due
    to a $23 million increase in benefit related expenses,
    including $13 million in defined contribution plan payments
    that our pilots became eligible for beginning on January 1,
    2005, a $5 million increase related to self-funded
    disability requirements and higher medical insurance costs of
    $4 million. A $9 million accrual for employee
    performance bonuses also contributed to the increase.

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Aircraft rent expense per ASM increased 6.3% due principally to
    aircraft mix, as previously owned and leased
    Boeing 737-200
    aircraft were retired or returned to aircraft lessors and
    replaced with leased Airbus A320 and A319 aircraft at higher
    monthly lease rates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | Aircraft maintenance materials and repair expense per ASM
    increased 24.5% due principally to the change in AWAs
    accounting policy for certain maintenance costs in 2005
    discussed above. See note 3, Change in Accounting
    Principle for Maintenance Costs, to the consolidated
    financial statements in Item 8B of this report.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | Other rent and landing fees per ASM increased 3.8% mainly due to
    higher landing fees ($4 million) and airport rents
    ($4 million).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | Selling expenses per ASM increased 4.2% due to higher credit
    card fee expenses of $8 million and advertising expenses of
    $2 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Depreciation and amortization expense per ASM decreased 3.6% due
    principally to decreases in amortization expense related to
    computer hardware and software ($3 million) and rotable and
    repairable spare parts ($3 million) as a result of the 2005
    change in accounting policy for certain maintenance costs
    discussed above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Other operating expenses per ASM increased 2.3% in 2005.
    Increases in property taxes ($3 million), ground handling
    services ($2 million), airport guard services
    ($2 million) and crew per diem ($2 million) during
    2005 were offset in part by lower legal fees ($6 million).
    The 2005 period included an $8 million aggregate loss
    associated with two aircraft sale-leaseback transactions and a
    $5 million accrual for a retroactive billing by the TSA for
    passenger security fees. The 2004 period included a
    $6 million charge resulting from the settlement of pending
    litigation and a $5 million loss on the sale and leaseback
    of two new aircraft. A $4 million gain resulting from the
    settlement of a claim in bankruptcy for amounts earned under an
    executory contract, a $2 million gain resulting from the
    settlement of a lawsuit related to certain computer hardware and
    software that had previously been written off, a $2 million
    reduction in bad debt expense due to a recovery of a previously
    reserved debt and a $1 million volume incentive earned due
    to certain affinity card sales levels meeting certain contract
    thresholds in 2004 also contributed to the year-over-year
    increase.





737-200


2004 Compared with 2003




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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Aircraft fuel and related tax expense per ASM increased 35.0%
    due primarily to a 36.5% increase in the average price per
    gallon of fuel to $1.31 in 2004 from $0.96 in 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Salaries and related costs per ASM decreased 7.9% due to
    increased productivity. ASMs increased 8.1% in 2004, while
    average full-time equivalent employees decreased 2.2% year-over
    year. This increase in productivity was offset in part by a
    $27 million increase in pilot payroll expense, principally
    as a result of the new labor agreement with ALPA that was
    effective December 30, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | Aircraft rent expense per ASM decreased 5.4% due to the 7.9%
    increase in aircraft utilization.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | Aircraft maintenance materials and repair expense per ASM
    decreased 14.8% due to decreases in capitalized maintenance
    amortization expense ($23 million) and aircraft maintenance
    expense ($4 million). The decrease in capitalized
    maintenance amortization expense was driven by changes in the
    estimated useful life of certain engines, effective
    January 1, 2004, as a result of changes in aircraft
    utilization ($9 million) and certain aircraft engine
    overhaul costs, effective April 1, 2003, driven by a new
    maintenance agreement that guarantees minimum cycles on engine
    overhauls ($2 million). These decreases were partially
    offset by increases in airframe maintenance ($6 million)
    and engine overhaul ($4 million) expenses.                                                                                                                                                                       
|
| |  | Other rents and landing fees expense per ASM remained flat year
    over year as increases in airport rents ($7 million) and
    landing fees ($6 million) were offset by the 8.1% increase
    in ASMs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |  | Selling expenses per ASM decreased 9.2% due to reductions in
    various travel agency incentive programs and override
    commissions ($9 million) and decreases in advertising
    expenses ($1 million), which were offset in part by higher
    credit card expenses ($4 million), and reservation system
    booking fees ($4 million).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | Depreciation and amortization expense per ASM decreased 24.8%
    due to lower computer hardware and software amortization
    ($6 million) as a result of AWAs cash conservation
    program, which reduced capital expenditures, and lower
    amortization on aircraft leasehold improvements
    ($2 million). The change in the estimated useful life
    resulting from changes in aircraft utilization discussed above
    contributed to the decrease in depreciation for improvements on
    AWAs owned aircraft ($3 million) and rotable and
    repairable spare parts ($2 million).                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | Other operating expenses per ASM decreased 2.5% in 2004.
    Decreases in catering costs ($6 million), bad debt expense
    ($3 million) and traffic liability insurance
    ($2 million) were offset by increases in passenger traffic
    related expenses ($4 million), legal fees
    ($4 million), airport guard services ($2 million) and
    ground handling expenses ($2 million). The 2004 period
    included a $6 million charge resulting from the settlement
    of pending litigation and a $5 million loss on the sale and
    leaseback of two new aircraft. A $4 million gain resulting
    from the settlement of a claim in bankruptcy for amounts earned
    under an executory contract, a $2 million gain resulting
    from the settlement of a lawsuit related to certain computer
    hardware and software that had previously been written off, a
    $2 million reduction in bad debt expense due to a recovery
    of a previously reserved

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| |  |                                                                                                                                                                                                                                                                                                                         
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | debt and a $1 million volume incentive earned due to
    certain affinity card sales levels meeting certain contract
    thresholds in 2004 also contributed to the year-over-year
    decrease. The 2003 period includes a $4 million gain
    related to the purchase and subsequent exchange of an A320
    airframe.







US Airways Results of Operations


90-7,


US AIRWAYS, INC.


Combined Successor and Predecessor Company Statement of
Operations


For the Years Ended December 31, 2005, 2004 and 2003


(in millions)


|                    |                    |                          |   |       |       |  |   |         |       |  |   |       |       | 
|------------------- | ------------------ | ------------------------ | - | ----- | ----- |  | - | ------- | ----- |  | - | ----- | ----- | 
|                    |                    | 2005(a)                  |   |       | 2004  |  |   | 2003(b) |      
|                    |                    |                          |   |       |       |  |   |         |      
|Operating revenues: |                    |                          |   |       |       |  |   |         |       |  |   |      
|                    | Mainline passenger |                          | $ | 4,861 |       |  | $ | 4,969   |       |  | $ | 4,943 |      
|                    | Express passenger  |                          |   | 1,620 |       |  |   | 1,379   |       |  |   | 1,208 |      
|                    | Cargo              |                          |   | 95    |       |  |   | 132     |       |  |   | 132   |      
|                    | Other              |                          |   | 636   |       |  |   | 593     |       |  |   | 479   |      
|                    |                    |                          |   |       |       |  |   |         |      
|                    |                    | Total operating revenues |   |       | 7,212 |  |   |         | 7,073 |  |   |       | 6,762 | 

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|                               |                                 |                                     |      |       |       |   |      |         |       |   |       |       |       | 
|------------------------------ | ------------------------------- | ----------------------------------- | ---- | ----- | ----- | - | ---- | ------- | ----- | - | ----- | ----- | ----- | 
|                               |                                 | 2005(a)                             |      |       | 2004  |   |      | 2003(b) |      
|                               |                                 |                                     |      |       |       |   |      |         |      
|Operating expenses:            |                                 |                                     |      |       |       |   |      |         |       |   |       |      
|                               | Aircraft fuel and related taxes |                                     |      | 1,486 |       |   |      | 991     |       |   |       | 771   |      
|                               | Salaries and related costs      |                                     |      | 1,399 |       |   |      | 2,169   |       |   |       | 2,410 |      
|                               | Express expenses                |                                     |      | 1,861 |       |   |      | 1,572   |       |   |       | 1,269 |      
|                               | Aircraft rent                   |                                     |      | 392   |       |   |      | 399     |       |   |       | 398   |      
|                               | Aircraft maintenance            |                                     |      | 334   |       |   |      | 299     |       |   |       | 320   |      
|                               | Other rent and landing fees     |                                     |      | 366   |       |   |      | 396     |       |   |       | 400   |      
|                               | Selling expenses                |                                     |      | 324   |       |   |      | 360     |       |   |       | 377   |      
|                               | Special charges, net            |                                     |      | 15    |       |   |      |        |       |   |       | 34    |      
|                               | Depreciation and amortization   |                                     |      | 189   |       |   |      | 220     |       |   |       | 216   |      
|                               | Government compensation         |                                     |      |      |       |   |      |        |       |   |       | (212  | )    
|                               | Other                           |                                     |      | 1,059 |       |   |      | 1,015   |       |   |       | 1,023 |      
|                               |                                 |                                     |      |       |       |   |      |         |      
|                               |                                 | Total operating expenses            |      |       | 7,425 |   |      |         | 7,421 |   |       |       | 7,006 | 
|Operating loss                 |                                 |                                     | (213 | )     |       |   | (348 | )       |       |   | (244  | )    
|Nonoperating income (expense)  |                                 |                                     |      |       |       |   |      |         |       |   |       |      
|                               | Interest income                 |                                     |      | 26    |       |   |      | 12      |       |   |       | 17    |      
|                               | Interest expense, net           |                                     |      | (287  | )     |   |      | (236    | )     |   |       | (237  | )    
|                               | Reorganization items, net       |                                     |      | 636   |       |   |      | (32     | )     |   |       | 1,888 |      
|                               | Other, net                      |                                     |      | (4    | )     |   |      | 19      |       |   |       | 35    |      
|                               |                                 |                                     |      |       |       |   |      |         |      
|                               |                                 | Total nonoperating income (expense) |      |       | 371   |   |      |         | (237  | ) |       |       | 1,703 | 
|Income (loss) before taxes     |                                 |                                     | 158  |       |       |   | (585 | )       |       |   | 1,459 |      
|Income tax provision (benefit) |                                 |                                     | (2   | )     |       |   | (7   | )       |       |   | 7     |      
|                               |                                 |                                     |      |       |       |   |      |         |      
|Net income (loss)              |                                 | $                                   | 160  |       |       | $ | (578 | )       |       | $ | 1,452 |      
|                               |                                 |                                     |      |       |       |   |      |         |      






|    |  |                                                                                                                                                                                                                           
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | The full year 2005 includes the combined results for the three
    months ended December 31, 2005 (Successor Company) and the
    nine months ended September 30, 2005 (Predecessor Company).                             
|   
|(b) |  | The full year 2003 includes the combined results for the nine
    months ended December 31, 2003 and the three months ended
    March 31, 2003. US Airways emerged from the first
    bankruptcy effective March 31, 2003.



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|                                                      |  |                         |         |  |         |  |         |         |  |  |           |  |  |           |       |     |  |  |      |    
|----------------------------------------------------- |  | ----------------------- | ------- |  | ------- |  | ------- | ------- |  |  | --------- |  |  | --------- | ----- | --- |  |  | ---- | ---
|                                                      |  | Year Ended December 31, |         |  | Percent |  |         | Percent | 
|                                                      |  |                         |         |  | Change  |  |         | Change  | 
|                                                      |  | 2005                    |         |  | 2004    |  |         | 2003    |  |  | 2005-2004 |  |  | 2004-2003 |      
|                                                      |  |                         |         |  |         |  |         |         |  |  |           |  |  |           |      
|Mainline:                                             |  |                         |         |  |         |  |         |         |  |  |           |  |  |           |       |     |  |  |      |    
|Revenue passenger miles (in millions)                 |  |                         | 38,895  |  |         |  | 39,970  |         |  |  | 37,796    |  |  |           | (2.7  | )   |  |  | 5.8  |    
|Available seat miles (in millions)                    |  |                         | 51,518  |  |         |  | 53,229  |         |  |  | 51,584    |  |  |           | (3.2  | )   |  |  | 3.2  |    
|Load factor (percent)                                 |  |                         | 75.5    |  |         |  | 75.1    |         |  |  | 73.3      |  |  |           | 0.4   | pts |  |  | 1.8  | pts
|Yield (cents)                                         |  |                         | 12.50   |  |         |  | 12.43   |         |  |  | 13.08     |  |  |           | 0.6   |     |  |  | (5.0 | )  
|Passenger revenue per available seat mile (cents)     |  |                         | 9.44    |  |         |  | 9.33    |         |  |  | 9.58      |  |  |           | 1.2   |     |  |  | (2.6 | )  
|Passenger enplanements (in thousands)                 |  |                         | 39,977  |  |         |  | 41,518  |         |  |  | 41,264    |  |  |           | (3.7  | )   |  |  | (0.6 | )  
|Aircraft (end of period)                              |  |                         | 232     |  |         |  | 281     |         |  |  | 282       |  |  |           | (17.4 | )   |  |  | 0.4  |    
|Block hours                                           |  |                         | 928,362 |  |         |  | 960,678 |         |  |  | 956,888   |  |  |           | (3.4  | )   |  |  | 0.4  |    
|Average stage length (miles)                          |  |                         | 793     |  |         |  | 792     |         |  |  | 761       |  |  |           | 0.1   |     |  |  | 4.1  |    
|Average passenger journey (miles)                     |  |                         | 973     |  |         |  | 963     |         |  |  | 916       |  |  |           | 1.0   |     |  |  | 5.1  |    
|Fuel consumption (gallons in millions)                |  |                         | 842     |  |         |  | 884     |         |  |  | 873       |  |  |           | (4.8  | )   |  |  | 1.3  |    
|Average fuel price including tax (dollars per gallon) |  |                         | 1.77    |  |         |  | 1.12    |         |  |  | 0.88      |  |  |           | 58.0  |     |  |  | 27.3 |    
|Average number of full-time equivalent employees      |  |                         | 21,486  |  |         |  | 26,670  |         |  |  | 26,640    |  |  |           | (19.4 | )   |  |  | 0.1  |    

2005 Compared With 2004










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|                                |  |              |       |  |         |  |       |           |  |  |       |  
|------------------------------- |  | ------------ | ----- |  | ------- |  | ----- | --------- |  |  | ----- | -
|                                |  | Year Ended   |       |  |        
|                                |  | December 31, |       |  | Percent | 
|                                |  |              |       |  | Change  | 
|                                |  | 2005         |       |  | 2004    |  |       | 2005-2004 | 
|                                |  |              |       |  |         |  |       |           | 
|Aircraft fuel and related taxes |  |              | 2.89  |  |         |  | 1.86  |           |  |  | 55.4  |  
|Salaries and related costs      |  |              | 2.72  |  |         |  | 4.07  |           |  |  | (33.2 | )
|Aircraft rent                   |  |              | 0.76  |  |         |  | 0.75  |           |  |  | 1.3   |  
|Aircraft maintenance            |  |              | 0.65  |  |         |  | 0.56  |           |  |  | 16.1  |  
|Other rent and landing fees     |  |              | 0.71  |  |         |  | 0.74  |           |  |  | (4.1  | )
|Selling expenses                |  |              | 0.63  |  |         |  | 0.68  |           |  |  | (7.4  | )
|Special charges, net            |  |              | 0.03  |  |         |  |      |           |  |  |      |  
|Depreciation and amortization   |  |              | 0.37  |  |         |  | 0.41  |           |  |  | (9.8  | )
|Other                           |  |              | 2.04  |  |         |  | 1.92  |           |  |  | 6.3   |  
|                                |  |              |       |  |         |  |       |           | 
|                                |  |              | 10.80 |  |         |  | 10.99 |           |  |  | (1.7  | )
|                                |  |              |       |  |         |  |       |           | 





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Aircraft fuel and related tax expense per ASM increased 55.4%
    primarily due to a 58.0% increase in the average price per
    gallon of fuel from $1.12 in 2004 to $1.77 in 2005, partially
    offset by a 4.8% decrease in consumption.                                                                                                                                                                                                                                 
|
| |  | Salaries and related costs per ASM decreased 33.2% primarily due
    to lower wage and benefits rates as a result of the cost-savings
    agreements achieved with each of the collective bargaining
    groups, including the termination of defined benefit pension
    plans and the curtailment of postretirement benefits, as well as
    lower headcount as compared to the same period in 2004.                                                                       
|
| |  | Aircraft rent expense per ASM increased 1.3% reflecting a shift
    in the mix of leased to owned aircraft in 2005 as compared to
    2004.                                                                                                                                                                                                                                                                                                                                  
|
| |  | Aircraft maintenance per ASM increased 16.1% reflecting the
    shift to outside vendors to perform scheduled maintenance,
    partially offsetting the decrease in salaries and related costs
    described above.                                                                                                                                                                                                                                                          
|
| |  | Other rent and landing fees per ASM decreased 4.1% primarily due
    to space rent reductions negotiated during the bankruptcy
    proceedings.                                                                                                                                                                                                                                                                                                                              
|
| |  | Selling expenses per ASM decreased 7.4% primarily due to
    reduction in travel agent commissions and the termination of
    certain marketing contracts and reductions in advertising
    programs as a result of the bankruptcy.                                                                                                                                                                                                                                          
|
| |  | US Airways recorded $15 million of special charges in
    the fourth quarter of 2005 related to transition and integration
    costs associated with the merger. See note 4 to
    US Airways financial statements included in
    Item 8C of this report.                                                                                                                                                                                                                  
|
| |  | Depreciation and amortization decreased 9.8% per ASM as a
    result of fewer owned aircraft in the operating fleet and lower
    book values on the continuing fleet as a result of fresh-start
    reporting.                                                                                                                                                                                                                                                              
|
| |  | Other operating expenses increased primarily as a result of
    increases to expenses associated with the redemption of Dividend
    Miles on partner airlines and future travel on US Airways
    as well as increases in costs associated with outsourced
    aircraft cleaning services. These increases were partially
    offset by decreases in insurance expense, outsourced technology
    services and schedule-related costs including passenger food
    expenses.



65



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mark-to


2004 Compared With 2003










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|                                |  |              |       |  |         |  |       |           |  |  |       |  
|------------------------------- |  | ------------ | ----- |  | ------- |  | ----- | --------- |  |  | ----- | -
|                                |  | Year Ended   |       |  |        
|                                |  | December 31, |       |  | Percent | 
|                                |  |              |       |  | Change  | 
|                                |  | 2004         |       |  | 2003    |  |       | 2004-2003 | 
|                                |  |              |       |  |         |  |       |           | 
|Aircraft fuel and related taxes |  |              | 1.86  |  |         |  | 1.49  |           |  |  | 24.8  |  
|Salaries and related costs      |  |              | 4.07  |  |         |  | 4.67  |           |  |  | (12.8 | )
|Aircraft rent                   |  |              | 0.75  |  |         |  | 0.77  |           |  |  | (2.6  | )
|Aircraft maintenance            |  |              | 0.56  |  |         |  | 0.62  |           |  |  | (9.7  | )
|Other rent and landing fees     |  |              | 0.74  |  |         |  | 0.78  |           |  |  | (5.1  | )
|Selling expenses                |  |              | 0.68  |  |         |  | 0.73  |           |  |  | (6.8  | )
|Special charges, net            |  |              |      |  |         |  | 0.07  |           |  |  |      |  
|Depreciation and amortization   |  |              | 0.41  |  |         |  | 0.42  |           |  |  | (2.4  | )
|Government compensation         |  |              |      |  |         |  | (0.41 | )         |  |  |      |  
|Other                           |  |              | 1.92  |  |         |  | 1.98  |           |  |  | (3.0  | )
|                                |  |              |       |  |         |  |       |           | 
|                                |  |              | 10.99 |  |         |  | 11.12 |           |  |  | (1.2  | )
|                                |  |              |       |  |         |  |       |           | 





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Aircraft fuel and related tax expense per ASM increased 24.8%
    primarily due to a 27.3% increase in the average price per
    gallon of fuel from $0.88 in 2003 to $1.12 in 2004.                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | Salaries and related costs per ASM decreased 12.8% primarily due
    to lower employee pension, medical and dental and postretirement
    medical benefit expense, and an $89 million decrease in
    stock-compensation expense related to the issuance of
    US Airways Group Class A common stock to employees
    covered by collective bargaining agreements following the
    emergence from the first bankruptcy in 2003, reduced headcount
    in 2004 as compared to 2003, and lower wage rates in the fourth
    quarter of 2004 as a result of interim or permanent relief from
    labor contracts.
|
| |  | Aircraft rent expense per ASM decreased 2.6% due to increases in
    mainline stage length while total aircraft rent remained flat
    from 2004 as compared to full year 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | Aircraft maintenance per ASM decreased 9.7% reflecting lower
    costs associated with third-party engine and airframe repair
    services and the write-off of certain surplus inventory in the
    second quarter of 2003.                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Selling expenses per ASM decreased 6.8% primarily due to
    reduction in commissions, partially offset by increases in
    advertising and computer reservations fees.                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | US Airways recorded $34 million of special charges in
    2003 primarily related to aircraft order cancellation penalties.
    See note 4 to US Airways financial statements in
    Item 8C of this report.                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Depreciation and amortization per ASM decreased 2.4% due to
    lower book values on the existing fleet as a result of
    fresh-start reporting effective March 31, 2003 and due to
    reduced amortization associated with capitalized software,
    partially offset by the write-off of certain ground equipment
    and an indefinite lived foreign slot.                                                                                                                                                                                                                                                 
|
| |  | Other operating expenses per ASM decreased due to reductions in
    insurance expense and schedule-related expenses including
    passenger food expenses, partially offset by increases in the
    cost associated with the redemption of Dividend Miles for travel
    on partner airlines and future travel on US Airways as well
    as increases in to costs associated with passenger and baggage
    screening and navigation fees. The 2003 period also includes
    $28 million in reductions to an accrual upon the resolution
    of previously outstanding contingencies.                           



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Description of Reorganization items




|                                                     |  |                     |        |   |              |   |              |           |  |   |        |  
|---------------------------------------------------- |  | ------------------- | ------ | - | ------------ | - | ------------ | --------- |  | - | ------ | -
|                                                     |  | Predecessor Company |       
|                                                     |  |                     |       
|                                                     |  | Nine Months         |        |   |              |   | Three Months |          
|                                                     |  | Ended               |        |   | Year Ended   |   |              | Ended     | 
|                                                     |  | September 30,       |        |   | December 31, |   |              | March 31, | 
|                                                     |  | 2005                |        |   | 2004         |   |              | 2003      | 
|                                                     |  |                     |        |   |              |   |              |           | 
|Curtailment of postretirement benefits(a)            |  | $                   | 1,420  |   |              | $ |             |           |  | $ |       |  
|Termination of pension plans(b)                      |  |                     | 801    |   |              |   |             |           |  |   | 386    |  
|Discharge of liabilities(c)                          |  |                     | 75     |   |              |   |             |           |  |   | 3,655  |  
|Aircraft order cancellation penalties & reversals(d) |  |                     | 30     |   |              |   | (7           | )         |  |   |       |  
|Interest income on accumulated cash                  |  |                     | 7      |   |              |   | 4            |           |  |   | 2      |  
|Damage and deficiency claims(e)                      |  |                     | 2      |   |              |   | (2           | )         |  |   | (1,892 | )
|Revaluation of assets and liabilities(f)             |  |                     | (1,498 | ) |              |   |             |           |  |   | (1,106 | )
|Severance including benefits(g)                      |  |                     | (96    | ) |              |   |             |           |  |   |       |  
|Professional fees                                    |  |                     | (57    | ) |              |   | (27          | )         |  |   | (51    | )
|Airbus equipment deposits and credits, net(h)        |  |                     | (35    | ) |              |   |             |           |  |   |       |  
|Restructured aircraft financings(i)                  |  |                     | (5     | ) |              |   |             |           |  |   | 946    |  
|Write-off of deferred compensation                   |  |                     | (4     | ) |              |   |             |           |  |   |       |  
|Loss on aircraft abandonment(j)                      |  |                     |       |   |              |   |             |           |  |   | (9     | )
|Other                                                |  |                     | (4     | ) |              |   |             |           |  |   | (43    | )
|                                                     |  |                     |        |   |              |   |              |           | 
|                                                     |  | $                   | 636    |   |              | $ | (32          | )         |  | $ | 1,888  |  
|                                                     |  |                     |        |   |              |   |              |           | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | In January 2005, the Bankruptcy Court approved settlement
    agreements between US Airways and its unions and the
    court-appointed Section 1114 Committee, representing
    retirees other than those represented by the IAM and TWU, to
    begin the significant curtailment of postretirement medical
    benefits. US Airways recognized a gain of $183 million
    in connection with this curtailment in the first quarter of
    2005. Upon the emergence from bankruptcy and effectiveness of
    the plan of reorganization, an additional gain of
    $1.24 billion was recognized as the liability associated
    with the postretirement medical benefits was reduced to fair
    market value. See also Note 7 to US Airways
    financial statements included in Item 8C of this report.

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|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | Also in January 2005, US Airways terminated three defined
    benefit plans related to the flight attendants, mechanics and
    certain other employees (see note 7 to
    US Airways financial statements included in
    Item 8C of this report). The PBGC was appointed trustee of
    the plans upon termination. US Airways recognized a
    curtailment gain of $24 million and a $91 million
    minimum pension liability adjustment in connection with the
    terminations in the first quarter of 2005. Upon the effective
    date of the plan of reorganization and in connection with the
    settlement with the PBGC, the remaining liabilities associated
    with these plans were written off, net of settlement amounts.                                                                        
|   
|    |  | Effective March 31, 2003, US Airways terminated its
    qualified and nonqualified pilot defined benefit pension plans.
    The PBGC was appointed trustee of the qualified plan effective
    with the termination. US Airways recognized a gain in
    connection with the termination which is partially offset by the
    estimate of the PBGC claim.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(c) |  | Reflects the discharge of trade accounts payable and other
    liabilities upon emergence from bankruptcy. Most of these
    obligations were only entitled to receive such distributions of
    cash and common stock as provided for under the plan of
    reorganization in each of the bankruptcies. A portion of the
    liabilities subject to compromise in the bankruptcies were
    restructured and continued, as restructured, to be liabilities
    of the Successor Company.                                                                                                                                                                                                                                                                                                                            
|   
|(d) |  | As a result of US Airways bankruptcy filing in
    September 2004, US Airways was not able to secure the
    financing necessary to take on-time delivery of three scheduled
    regional jet aircraft and therefore accrued penalties of
    $3 million until delivery of these aircraft was made to a
    US Airways Express affiliate in August 2005. Offsetting
    these penalties is the reversal of $33 million in penalties
    recorded by US Airways in the nine months ended
    December 31, 2003 due to its intention not to take delivery
    of certain aircraft scheduled for future delivery. In connection
    with the Airbus MOU, the accrual for these penalties were
    reversed (see also notes 1 and 4 to US Airways
    financial statements included in Item 8C of this report).        
|   
|    |  | As the result of US Airways bankruptcy filing in
    September 2004, it failed to meet the conditions precedent for
    continued financing of regional jets and was not able to take
    delivery of scheduled aircraft and therefore incurred penalties
    of $7 million in the fourth quarter of 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(e) |  | Damage and deficiency claims are largely a result of
    US Airways election to either restructure, abandon or
    reject aircraft debt and leases during the bankruptcy
    proceedings. As a result of the confirmation of the plan of
    reorganization and the effectiveness of the merger, these claims
    were withdrawn and the accruals reversed.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(f) |  | As of September 30, 2005, US Airways recorded
    $1.5 billion of adjustments to reflect assets and
    liabilities at fair value, including an initial net write-down
    of goodwill of $1.82 billion. Goodwill of $584 million
    was recorded to reflect the excess of the estimated fair value
    of liabilities and equity over identifiable assets. Subsequent
    to September 30, 2005, US Airways recorded an
    additional $148 million of goodwill to reflect adjustments
    to the fair value of certain assets and liabilities.                                                                                                                                                                                                                                                                    
|   
|    |  | As of March 31, 2003, US Airways recorded
    $1.11 billion of adjustments to reflect assets and
    liabilities at fair value (including a $1.12 billion
    liability increase related to the revaluation of
    US Airways remaining defined benefit pension plans
    and postretirement benefit plans and a $333 million
    write-up of gates,
    slots and routes) and the write-off of the Predecessor
    Companys equity accounts. In addition, goodwill of
    $2.41 billion was recorded to reflect the excess of the
    estimated fair value of liabilities and equity over identifiable
    assets.                                                                                                                                                                                                
|   
|    |  | Subsequent to March 31, 2003, US Airways recorded an
    additional $62 million of adjustments to reflect assets and
    liabilities at fair value, including a $281 million
    decrease to property and equipment, net, a $121 million
    decrease to long-term debt, net of current maturities, a
    $13 million increase to deferred gains and credits, net, a
    $54 million increase to other intangibles, net, a
    $15 million decrease to employee benefit liabilities and
    other and a $6 million decrease to accounts payable. In
    addition, a $6 million adjustment was made to paid-in
    capital reflecting a reallocation of US Airways Group
    equity as a result of additional fair value adjustments to
    assets at certain US Airways Group subsidiaries other than
    US Airways.

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|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(g) |  | In connection with filing for bankruptcy on September 12,
    2004, US Airways achieved cost-savings agreements with its
    principal collective bargaining groups. In connection with the
    new labor agreements, approximately 5,000 employees across
    several of US Airways labor groups were involuntarily
    terminated or participated in voluntary furlough and termination
    programs.                              
|   
|(h) |  | In connection with the Airbus MOU, US Airways was
    required to pay a restructuring fee of $39 million, which
    was paid by means of offset against existing equipment deposits
    held by Airbus. US Airways also received credits from
    Airbus totaling $4 million in 2005, primarily related to
    equipment deposits. See also Note 1 to
    US Airways financial statements included in
    Item 8C of this report.    
|   
|(i) |  | The GE Merger MOU provided for the continued use of certain
    leased Airbus, Boeing and regional jet aircraft, the
    modification of monthly lease rates and the return of certain
    other leased Airbus and Boeing aircraft. The GE Merger MOU also
    provided for the sale-leaseback of assets securing various GE
    obligations. In connection with these transactions,
    US Airways recorded a net loss of $5 million.
|   
|    |  | In connection with the first bankruptcy, US Airways
    restructured aircraft debt and lease agreements related to 119
    aircraft including the conversion of 52 mortgages to operating
    leases. The restructured terms generally provide for shorter
    lease periods and lower lease rates.                                                                                                                                   
|   
|(j) |  | For the three months ended March 31, 2003, reorganization
    items includes expenses related to seven aircraft that were
    legally abandoned as part of the first bankruptcy. Related
    aircraft liabilities were adjusted for each aircrafts
    expected allowed collateral value.                                                                                                                                            

Liquidity and Capital Resources




| |                         
| | ------------------------
| | Sources and Uses of Cash



| |                 
| | ----------------
| | US Airways Group







70



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| |    
| | ---
| | AWA





71



---



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| |           
| | ----------
| | US Airways









debtor-in


72



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| |            
| | -----------
| | Commitments





| |                      
| | ---------------------
| | New Convertible Notes









| |   
| | --
| | GE



73



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| |                  
| | -----------------
| | Airbus Term Loans









| |           
| | ----------
| | ATSB Loans





74



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 90% of the US Airways loan (Tranche A), which was the
    portion of the loan previously guaranteed by the ATSB, was
    originally funded through a participating lenders
    commercial paper conduit program and bears interest at a rate
    equal to the conduit providers weighted average cost
    related to the issuance of certain commercial paper notes and
    other short term borrowings plus 0.30%, provided that portions
    of Tranche A that were held by the ATSB or are held by an
    assignee and no longer subject to such commercial paper conduit
    program bear interest at LIBOR plus 40 basis points, and
    portions of Tranche A that are under certain circumstances
    assigned free of the ATSB guarantee bear interest at LIBOR plus
    6.0%; and
|
| |  | 10% of the US Airways loan (Tranche B) bears interest
    at the greater of the Tranche A interest rate plus 6.0% and
    LIBOR plus 6.0%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  









| |   |                                         
| | - | ----------------------------------------
| |  | $525 million through March 2006;        
|
| |  | $500 million through September 2006;    
|
| |  | $475 million through March 2007;        
|
| |  | $450 million through September 2007;    
|
| |  | $400 million through March 2008;        
|
| |  | $350 million through September 2008; and
|
| |  | $300 million through September 2010.    



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| |                                                                              
| | -----------------------------------------------------------------------------
| | Exchange of Common Stock for AWAs 7.25 Percent
    Senior Exchangeable Notes







| |                                                        
| | -------------------------------------------------------
| | Restructuring of Affinity Credit Card Partner Agreement





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| |                                                  
| | -------------------------------------------------
| | Restructuring of Credit Card Processing Agreement

successor-in






77



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| |                                 
| | --------------------------------
| | Asset Based Financings and Sales







| |                            
| | ---------------------------
| | Airbus Purchase Commitments









78



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| |                             
| | ----------------------------
| | Embraer Purchase Commitments





| |                                
| | -------------------------------
| | Bombardier Purchase Commitments

CRJ-700




| |                            
| | ---------------------------
| | Covenants and Credit Rating

Risk Factors Relating to
the Company and Industry Related Risks  Our high
level of fixed obligations limits our ability to fund general
corporate requirements and obtain additional financing, limits
our flexibility in responding to competitive developments and
increases our vulnerability to adverse economic and industry
conditions.




79



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| |                         
| | ------------------------
| | GECC Term Loan Financing











| |                                       
| | --------------------------------------
| | Senior Secured Discount Notes Due 2009





80



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3 4 3 4 3 4




| |                                       
| | --------------------------------------
| | 7.5% Convertible Senior Notes due 2009





|                    |  |                  |        |  
|------------------- |  | ---------------- | ------ | -
|Year                |  | Redemption Price |       
|                    |  |                  |       
|2005                |  |                  | 103.75 | %
|2006                |  |                  | 102.50 | %
|2007                |  |                  | 101.25 | %
|2008 and thereafter |  |                  | 100.00 | %



| |                               
| | ------------------------------
| | Off-Balance Sheet Arrangements



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| |    
| | ---
| | AWA

Pass Through Trusts




Special Facility Revenue Bonds




82



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| |           
| | ----------
| | US Airways

Pass Through Trusts


Special Facility Revenue Bonds


Jet Service Agreements


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Other Indebtedness and
Obligations




|                                       |                                                   |                        |       |     |      |   |       |      |  |   |       |     |  |      |       |     |            |   |       |       |  |   |        |       |  |   |        |       | 
|-------------------------------------- | ------------------------------------------------- | ---------------------- | ----- | --- | ---- | - | ----- | ---- |  | - | ----- | --- |  | ---- | ----- | --- | ---------- | - | ----- | ----- |  | - | ------ | ----- |  | - | ------ | ----- | 
|                                       |                                                   | Payments Due by Period |      
|                                       |                                                   |                        |      
|                                       |                                                   | 2006                   |       |     | 2007 |   |       | 2008 |  |   | 2009  |     |  | 2010 |       |     | Thereafter |   |       | Total | 
|                                       |                                                   |                        |       |     |      |   |       |      |  |   |       |     |  |      |       |     |            |   |       |       | 
|US Airways Group(1)                    |                                                   |                        |       |     |      |   |       |      |  |   |       |     |  |      |       |     |            |   |       |       |  |   |        |       |  |   |        |      
|                                       | Debt(2)                                           |                        | $     |    |      |   | $     |     |  |   | $     | 54  |  |      | $     | 54  |            |   | $     | 78    |  |   | $      | 144   |  |   | $      | 330   | 
|                                       | Aircraft related and other commitments            |                        |       | 36  |      |   |       | 36   |  |   |       | 36  |  |      |       | 34  |            |   |       | 48    |  |   |        | 1,668 |  |   |        | 1,858 | 
|US Airways(3)                          |                                                   |                        |       |     |      |   |       |      |  |   |       |     |  |      |       |     |            |   |       |       |  |   |        |       |  |   |        |      
|                                       | Debt and capital lease obligations                |                        |       | 117 |      |   |       | 152  |  |   |       | 198 |  |      |       | 243 |            |   |       | 221   |  |   |        | 994   |  |   |        | 1,925 | 
|                                       | Aircraft purchase and operating lease commitments |                        |       | 761 |      |   |       | 704  |  |   |       | 713 |  |      |       | 886 |            |   |       | 1,173 |  |   |        | 3,936 |  |   |        | 8,173 | 
|                                       | Regional capacity purchase agreements             |                        |       | 597 |      |   |       | 604  |  |   |       | 616 |  |      |       | 628 |            |   |       | 641   |  |   |        | 2,917 |  |   |        | 6,003 | 
|AWA(3)                                 |                                                   |                        |       |     |      |   |       |      |  |   |       |     |  |      |       |     |            |   |       |       |  |   |        |       |  |   |        |      
|                                       | Debt and capital lease obligations                |                        |       | 94  |      |   |       | 117  |  |   |       | 198 |  |      |       | 257 |            |   |       | 171   |  |   |        | 29    |  |   |        | 866   | 
|                                       | Aircraft purchase and operating lease commitments |                        |       | 470 |      |   |       | 381  |  |   |       | 358 |  |      |       | 683 |            |   |       | 241   |  |   |        | 1,630 |  |   |        | 3,763 | 
|                                       | Regional capacity purchase agreements             |                        |       | 569 |      |   |       | 580  |  |   |       | 592 |  |      |       | 603 |            |   |       | 616   |  |   |        | 945   |  |   |        | 3,905 | 
|Other US Airways Group subsidiaries(4) |                                                   |                        | 10    |     |      |   | 2     |      |  |   | 1     |     |  |      |      |     |            |   |      |       |  |   |       |       |  |   | 13     |      
|                                       |                                                   |                        |       |     |      |   |       |      |  |   |       |     |  |      |       |     |            |   |       |       | 
|Total                                  |                                                   | $                      | 2,654 |     |      | $ | 2,576 |      |  | $ | 2,766 |     |  | $    | 3,388 |     |            | $ | 3,189 |       |  | $ | 12,263 |       |  | $ | 26,836 |      
|                                       |                                                   |                        |       |     |      |   |       |      |  |   |       |     |  |      |       |     |            |   |       |       | 






|    |                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | These commitments represent those specifically entered into by
    US Airways Group or joint commitments entered into by
    US Airways Group, AWA and US Airways under which each
    entity is jointly and severally liable.                                                                                                 
|   
|(2) | Includes $144 million aggregate principal amount of
    7% Senior Convertible Notes due 2020 issued by
    US Airways Group and $186 million under two loan
    agreements entered into by AWA and US Airways with Airbus
    Financial Services. US Airways and AWA are jointly and
    severally liable for the Airbus loans.
|   
|(3) | Commitments listed separately under US Airways or AWA
    represent commitments under agreements entered into separately
    by those companies.                                                                                                                                                                               
|   
|(4) | Represents operating lease commitments entered into by
    US Airways Groups other airline subsidiaries Piedmont
    and PSA.                                                                                                                                                                                                 



84



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Other Information




| |             
| | ------------
| | Income Taxes











| |                           
| | --------------------------
| | Related Party Transactions



Critical Accounting Policies and Estimates


10-K


85



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| |                  
| | -----------------
| | Passenger revenue



|                 |  |                   |     |  |                   |   |     | 
|---------------- |  | ----------------- | --- |  | ----------------- | - | --- | 
|                 |  | December 31, 2005 |     |  | December 31, 2004 |  
|                 |  |                   |     |  |                   |  
|US Airways Group |  | $                 | 788 |  |                   | $ | 195 | 
|AWA              |  | $                 | 218 |  |                   | $ | 195 | 
|US Airways       |  | $                 | 570 |  |                   | $ | 615 | 









| |                       
| | ----------------------
| | Impairment of Goodwill





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90-7




| |                                                          
| | ---------------------------------------------------------
| | Impairment of long-lived assets and intangible
    assets





| |                           
| | --------------------------
| | Frequent traveler programs





87



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| |                                              
| | ---------------------------------------------
| | Fresh-start reporting and purchase accounting

90-7.


88



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| |   |                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Long-lived tangible and identifiable intangible assets, and
    certain noncurrent liabilities, all of which may change based on
    the consideration of additional analysis by US Airways and
    its valuation consultants;                 
|
| |  | Accrued expenses that may change based on identification of
    final fees and costs associated with emergence from bankruptcy,
    resolution of disputed claims and completion of the bankruptcy
    proceedings relating to the Debtors; and
|
| |  | Tax liabilities, which may be adjusted based upon additional
    information to be received from taxing authorities.                                                                                                                           

10-K




| |                                       
| | --------------------------------------
| | Deferred tax asset valuation allowance





| |                                           
| | ------------------------------------------
| | Pensions and other postretirement benefits





89



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US Airways pension plan terminations:


US Airways postretirement benefit obligations: 90-7,






Recent Accounting and Reporting Developments






90



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|         |                                                               
|-------- | --------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures About Market
    Risk

Market Risk Sensitive Instruments




91



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| |                     
| | --------------------
| | Commodity Price Risk





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the impact of global political instability on crude production;                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | unexpected changes to the availability of petroleum products due
    to disruptions in distribution systems or refineries as
    evidenced in the third quarter of 2005 when Hurricane Katrina
    and Hurricane Rita caused widespread disruption to oil
    production, refinery operations and pipeline capacity along
    certain portions of the U.S. Gulf Coast. As a result of
    these disruptions, the price of jet fuel increased significantly
    and the availability of jet fuel supplies was diminished;
|
| |  | unpredicted increases to oil demand due to weather or the pace
    of economic growth;                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | inventory levels of crude, refined products and natural
    gas; and                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | other factors, such as the relative fluctuation between the
    U.S. dollar and other major currencies and influence of
    speculative positions on the futures exchanges.                                                                                                                                                                                                                                                                                                                                             











| |                   
| | ------------------
| | Interest Rate Risk



92



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|                   |                             |                        |     |     |      |   |     |      |   |   |      |     |   |      |     |     |            |   |     |       |   |   |     |     |   |   |       |  | 
|------------------ | --------------------------- | ---------------------- | --- | --- | ---- | - | --- | ---- | - | - | ---- | --- | - | ---- | --- | --- | ---------- | - | --- | ----- | - | - | --- | --- | - | - | ----- |  | 
|                   |                             | Expected Maturity Date |    
|                   |                             |                        |    
|                   |                             | 2006                   |     |     | 2007 |   |     | 2008 |   |   | 2009 |     |   | 2010 |     |     | Thereafter |   |     | Total |  
|                   |                             |                        |     |     |      |   |     |      |   |   |      |     |   |      |     |     |            |   |     |       |  
|Fixed-rate debt    |                             | $                      | 8   |     |      | $ | 5   |      |   | $ | 4    |     |   | $    | 116 |     |            | $ | 4   |       |   | $ | 254 |     |   | $ | 391   | 
|                   | Weighted avg. interest rate |                        |     | 7.1 | %    |   |     | 7.2  | % |   |      | 7.2 | % |      |     | 7.0 | %          |   |     | 7.0   | % |   |     | 7.0 | % |   |       |  | 
|Variable-rate debt |                             | $                      | 203 |     |      | $ | 264 |      |   | $ | 447  |     |   | $    | 435 |     |            | $ | 493 |       |   | $ | 888 |     |   | $ | 2,730 | 
|                   | Weighted avg. interest rate |                        |     | 9.2 | %    |   |     | 9.1  | % |   |      | 8.9 | % |      |     | 8.8 | %          |   |     | 8.5   | % |   |     | 8.5 | % |   |       |  | 





| |                  
| | -----------------
| | Equity Price Risk



93



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|         |                                                                                       
|-------- | --------------------------------------------------------------------------------------
|Item 8A. | Consolidated Financial Statements and Supplementary Data
    of US Airways Group, Inc.



Managements Annual Report on Internal Control over
Financial Reporting


13a-15(f) 15d-15(f)




| |   |                                                                                                                                                                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of the assets of US Airways Group;                                                                                                                                                                                             
|
| |  | provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that receipts and expenditures of US Airways Group are
    being made only in accordance with authorizations of management
    and directors of US Airways Group; and
|
| |  | provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of
    US Airways Groups assets that could have a material
    effect on the financial statements.                                                                                                                                            









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Report of Independent Registered Public Accounting Firm






Internal Control 
Integrated Framework








Internal
Control-Integrated Framework Internal Control-Integrated Framework .










95



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Report of Independent Registered Public Accounting Firm






















96



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US Airways Group, Inc.


Consolidated Statements of Operations


For the Years Ended December 31, 2005, 2004 and 2003


(in millions, except share and per share data)


|                                                                                                                       |                                                            |                                           |        |        |       |   |        |       |       |   |        |       |       | 
|---------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------- | ----------------------------------------- | ------ | ------ | ----- | - | ------ | ----- | ----- | - | ------ | ----- | ----- | 
|                                                                                                                       |                                                            | 2005                                      |        |        | 2004  |   |        | 2003  |      
|                                                                                                                       |                                                            |                                           |        |        |       |   |        |       |      
|Operating revenues:                                                                                                    |                                                            |                                           |        |        |       |   |        |       |       |   |        |      
|                                                                                                                       | Mainline passenger                                         |                                           | $      | 3,695  |       |   | $      | 2,203 |       |   | $      | 2,118 |      
|                                                                                                                       | Express passenger                                          |                                           |        | 976    |       |   |        | 353   |       |   |        | 268   |      
|                                                                                                                       | Cargo                                                      |                                           |        | 58     |       |   |        | 28    |       |   |        | 27    |      
|                                                                                                                       | Other                                                      |                                           |        | 348    |       |   |        | 164   |       |   |        | 159   |      
|                                                                                                                       |                                                            |                                           |        |        |       |   |        |       |      
|                                                                                                                       |                                                            | Total operating revenues                  |        |        | 5,077 |   |        |       | 2,748 |   |        |       | 2,572 | 
|                                                                                                                       |                                                            |                                           |        |        |       |   |        |       |      
|Operating expenses:                                                                                                    |                                                            |                                           |        |        |       |   |        |       |       |   |        |      
|                                                                                                                       | Aircraft fuel and related taxes                            |                                           |        | 1,214  |       |   |        | 590   |       |   |        | 404   |      
|                                                                                                                       | Gain on fuel hedging instruments, net                      |                                           |        | (75    | )     |   |        | (24   | )     |   |        | (11   | )    
|                                                                                                                       | Salaries and related costs                                 |                                           |        | 1,045  |       |   |        | 657   |       |   |        | 660   |      
|                                                                                                                       | Express expenses                                           |                                           |        | 1,073  |       |   |        | 374   |       |   |        | 287   |      
|                                                                                                                       | Aircraft rent                                              |                                           |        | 429    |       |   |        | 304   |       |   |        | 298   |      
|                                                                                                                       | Aircraft maintenance                                       |                                           |        | 344    |       |   |        | 206   |       |   |        | 223   |      
|                                                                                                                       | Other rents and landing fees                               |                                           |        | 267    |       |   |        | 168   |       |   |        | 155   |      
|                                                                                                                       | Selling expenses                                           |                                           |        | 231    |       |   |        | 153   |       |   |        | 156   |      
|                                                                                                                       | Special charges (credits), net                             |                                           |        | 121    |       |   |        | (16   | )     |   |        | 14    |      
|                                                                                                                       | Depreciation and amortization                              |                                           |        | 88     |       |   |        | 54    |       |   |        | 67    |      
|                                                                                                                       | Other                                                      |                                           |        | 557    |       |   |        | 302   |       |   |        | 286   |      
|                                                                                                                       |                                                            |                                           |        |        |       |   |        |       |      
|                                                                                                                       |                                                            | Total operating expenses                  |        |        | 5,294 |   |        |       | 2,768 |   |        |       | 2,539 | 
|                                                                                                                       |                                                            |                                           |        |        |       |   |        |       |      
|                                                                                                                       |                                                            | Operating income (loss)                   |        |        | (217  | ) |        |       | (20   | ) |        |       | 33    | 
|                                                                                                                       |                                                            |                                           |        |        |       |   |        |       |      
|Nonoperating income (expenses):                                                                                        |                                                            |                                           |        |        |       |   |        |       |       |   |        |      
|                                                                                                                       | Interest income                                            |                                           |        | 30     |       |   |        | 8     |       |   |        | 6     |      
|                                                                                                                       | Interest expense, net                                      |                                           |        | (147   | )     |   |        | (80   | )     |   |        | (80   | )    
|                                                                                                                       | Federal government assistance                              |                                           |        |       |       |   |        |      |       |   |        | 81    |      
|                                                                                                                       | Other, net                                                 |                                           |        | (1     | )     |   |        | 3     |       |   |        | 17    |      
|                                                                                                                       |                                                            |                                           |        |        |       |   |        |       |      
|                                                                                                                       |                                                            | Total nonoperating income (expenses), net |        |        | (118  | ) |        |       | (69   | ) |        |       | 24    | 
|                                                                                                                       |                                                            |                                           |        |        |       |   |        |       |      
|Income (loss) before income taxes and cumulative effect of
    change in accounting principle                          |                                                            |                                           | (335   | )      |       |   | (89    | )     |       |   | 57     |      
|Income taxes                                                                                                           |                                                            |                                           |       |        |       |   |       |       |       |   |       |      
|                                                                                                                       |                                                            |                                           |        |        |       |   |        |       |      
|Income (loss) before cumulative effect of change in accounting
    principle                                           |                                                            |                                           | (335   | )      |       |   | (89    | )     |       |   | 57     |      
|Cumulative effect of change in accounting principle (Note 4)                                                           |                                                            |                                           | 202    |        |       |   |       |       |       |   |       |      
|                                                                                                                       |                                                            |                                           |        |        |       |   |        |       |      
|Net income (loss)                                                                                                      |                                                            | $                                         | (537   | )      |       | $ | (89    | )     |       | $ | 57     |      
|                                                                                                                       |                                                            |                                           |        |        |       |   |        |       |      
|Unaudited pro forma net income (loss) (assuming change in method
    of accounting was applied retroactively) (Note 4) |                                                            |                                           | (335   | )      |       | $ | (142   | )     |       | $ | 52     |      
|                                                                                                                       |                                                            |                                           |        |        |       |   |        |       |      
|Earnings (loss) per common share:                                                                                      |                                                            |                                           |        |        |       |   |        |       |       |   |        |      
|Basic:                                                                                                                 |                                                            |                                           |        |        |       |   |        |       |       |   |        |      
|                                                                                                                       | Before cumulative effect of change in accounting principle |                                           | $      | (10.65 | )     |   | $      | (5.99 | )     |   | $      | 4.03  |      
|                                                                                                                       | Cumulative effect of change in accounting principle        |                                           |        | (6.41  | )     |   |        |      |       |   |        |      |      
|                                                                                                                       |                                                            |                                           |        |        |       |   |        |       |      
|                                                                                                                       | Earnings (loss) per share                                  |                                           | $      | (17.06 | )     |   | $      | (5.99 | )     |   | $      | 4.03  |      
|                                                                                                                       |                                                            |                                           |        |        |       |   |        |       |      
|Diluted:                                                                                                               |                                                            |                                           |        |        |       |   |        |       |       |   |        |      
|                                                                                                                       | Before cumulative effect of change in accounting principle |                                           | $      | (10.65 | )     |   | $      | (5.99 | )     |   | $      | 3.07  |      
|                                                                                                                       | Cumulative effect of change in accounting principle        |                                           |        | (6.41  | )     |   |        |      |       |   |        |      |      
|                                                                                                                       |                                                            |                                           |        |        |       |   |        |       |      
|                                                                                                                       | Earnings (loss) per share                                  |                                           | $      | (17.06 | )     |   | $      | (5.99 | )     |   | $      | 3.07  |      
|                                                                                                                       |                                                            |                                           |        |        |       |   |        |       |      
|Shares used for computation (in thousands):                                                                            |                                                            |                                           |        |        |       |   |        |       |       |   |        |      
|Basic                                                                                                                  |                                                            |                                           | 31,488 |        |       |   | 14,861 |       |       |   | 14,252 |      
|Diluted                                                                                                                |                                                            |                                           | 31,488 |        |       |   | 14,861 |       |       |   | 23,147 |      



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US Airways Group, Inc.


Consolidated Balance Sheets


December 31, 2005 and 2004


(in millions, except share and per share amounts)


|                                            |                                                                                                                                             |                                                   |       |       |       |   |       |      |     | 
|------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------- | ----- | ----- | ----- | - | ----- | ---- | --- | 
|                                            |                                                                                                                                             | 2005                                              |       |       | 2004  |  
|                                            |                                                                                                                                             |                                                   |       |       |       |  
|ASSETS                                     
|Current assets                              |                                                                                                                                             |                                                   |       |       |       |   |       |     
|                                            | Cash and cash equivalents                                                                                                                   |                                                   | $     | 1,125 |       |   | $     | 149  |    
|                                            | Short-term investments                                                                                                                      |                                                   |       | 452   |       |   |       | 127  |    
|                                            | Restricted cash                                                                                                                             |                                                   |       | 8     |       |   |       | 41   |    
|                                            | Accounts receivable, net                                                                                                                    |                                                   |       | 353   |       |   |       | 109  |    
|                                            | Materials and supplies, net                                                                                                                 |                                                   |       | 229   |       |   |       | 58   |    
|                                            | Prepaid expenses and other                                                                                                                  |                                                   |       | 392   |       |   |       | 141  |    
|                                            |                                                                                                                                             |                                                   |       |       |       |  
|                                            |                                                                                                                                             | Total current assets                              |       |       | 2,559 |   |       |      | 625 | 
|Property and equipment                      |                                                                                                                                             |                                                   |       |       |       |   |       |     
|                                            | Flight equipment                                                                                                                            |                                                   |       | 1,920 |       |   |       | 927  |    
|                                            | Other property and equipment                                                                                                                |                                                   |       | 532   |       |   |       | 291  |    
|                                            | Less accumulated depreciation and amortization                                                                                              |                                                   |       | (431  | )     |   |       | (625 | )  
|                                            |                                                                                                                                             |                                                   |       |       |       |  
|                                            |                                                                                                                                             |                                                   | 2,021 |       |       |   | 593   |     
|                                            | Equipment purchase deposits                                                                                                                 |                                                   |       | 43    |       |   |       | 63   |    
|                                            |                                                                                                                                             |                                                   |       |       |       |  
|                                            |                                                                                                                                             | Net property and equipment                        |       |       | 2,064 |   |       |      | 656 | 
|Other assets                                |                                                                                                                                             |                                                   |       |       |       |   |       |     
|                                            | Goodwill                                                                                                                                    |                                                   |       | 732   |       |   |       |     |    
|                                            | Other intangibles, net                                                                                                                      |                                                   |       | 583   |       |   |       |     |    
|                                            | Restricted cash                                                                                                                             |                                                   |       | 792   |       |   |       | 72   |    
|                                            | Other assets, net                                                                                                                           |                                                   |       | 234   |       |   |       | 122  |    
|                                            |                                                                                                                                             |                                                   |       |       |       |  
|                                            |                                                                                                                                             | Total other assets                                |       |       | 2,341 |   |       |      | 194 | 
|                                            |                                                                                                                                             |                                                   |       |       |       |  
|                                            |                                                                                                                                             | $                                                 | 6,964 |       |       | $ | 1,475 |     
|                                            |                                                                                                                                             |                                                   |       |       |       |  
|LIABILITIES & STOCKHOLDERS EQUITY         
|Current liabilities                         |                                                                                                                                             |                                                   |       |       |       |   |       |     
|                                            | Current maturities of debt and capital leases                                                                                               |                                                   | $     | 211   |       |   | $     | 155  |    
|                                            | Accounts payable                                                                                                                            |                                                   |       | 530   |       |   |       | 174  |    
|                                            | Air traffic liability                                                                                                                       |                                                   |       | 788   |       |   |       | 195  |    
|                                            | Accrued compensation and vacation                                                                                                           |                                                   |       | 209   |       |   |       | 43   |    
|                                            | Accrued taxes                                                                                                                               |                                                   |       | 171   |       |   |       | 33   |    
|                                            | Other accrued expenses                                                                                                                      |                                                   |       | 750   |       |   |       | 65   |    
|                                            |                                                                                                                                             |                                                   |       |       |       |  
|                                            |                                                                                                                                             | Total current liabilities                         |       |       | 2,659 |   |       |      | 665 | 
|Noncurrent liabilities and deferred credits |                                                                                                                                             |                                                   |       |       |       |   |       |     
|                                            | Long-term debt and capital leases, net of current maturities                                                                                |                                                   |       | 2,749 |       |   |       | 640  |    
|                                            | Deferred credits                                                                                                                            |                                                   |       | 254   |       |   |       | 43   |    
|                                            | Employee benefit liabilities and other                                                                                                      |                                                   |       | 882   |       |   |       | 91   |    
|                                            |                                                                                                                                             |                                                   |       |       |       |  
|                                            |                                                                                                                                             | Total noncurrent liabilities and deferred credits |       |       | 3,885 |   |       |      | 774 | 
|Commitments and contingencies (Note 12)     |                                                                                                                                             |                                                   |       |       |       |   |       |     
|Stockholders equity                        |                                                                                                                                             |                                                   |       |       |       |   |       |     
|                                            | Preferred stock, $0.01 par value; 48,800,000 shares
    authorized, no shares issued                                                        |                                                   |       |      |       |   |       |     |    
|                                            | Class A common stock, $0.01 par value;
    1,200,000 shares authorized, 460,657 shares issued and
    outstanding at December 31, 2004      |                                                   |       |      |       |   |       |     |    
|                                            | Class B common stock, $0.01 par value;
    100,000,000 shares authorized, 21,270,506 shares
    issued and outstanding at December 31, 2004 |                                                   |       |      |       |   |       | 1    |    
|                                            | Common stock, $0.01 par value; 200,000,000 shares
    authorized, 81,664,005 shares outstanding at
    December 31, 2005                    |                                                   |       | 1     |       |   |       |     |    
|                                            | Additional paid-in capital                                                                                                                  |                                                   |       | 1,258 |       |   |       | 632  |    
|                                            | Accumulated deficit                                                                                                                         |                                                   |       | (826  | )     |   |       | (289 | )  
|                                            | Treasury stock, Class B common stock at cost,
    6,780,500 shares in 2004                                                                  |                                                   |       |      |       |   |       | (308 | )  
|                                            | Treasury stock, common stock, 418,977 shares in 2005                                                                                        |                                                   |       | (13   | )     |   |       |     |    
|                                            |                                                                                                                                             |                                                   |       |       |       |  
|Total stockholders equity                  |                                                                                                                                             |                                                   | 420   |       |       |   | 36    |     
|                                            |                                                                                                                                             |                                                   |       |       |       |  
|                                            |                                                                                                                                             | $                                                 | 6,964 |       |       | $ | 1,475 |     
|                                            |                                                                                                                                             |                                                   |       |       |       |  



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US Airways Group, Inc.


Consolidated Statements of Cash Flows


For the Years Ended December 31, 2005, 2004 and 2003


(in millions)


|                                                                                                       |                                                                   |      |       |      |      |   |     |      |   |   |      |      |  
|------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------- | ---- | ----- | ---- | ---- | - | --- | ---- | - | - | ---- | ---- | -
|                                                                                                       |                                                                   | 2005 |       |      | 2004 |   |     | 2003 |  
|                                                                                                       |                                                                   |      |       |      |      |   |     |      |  
|Cash flows from operating activities:                                                                  |                                                                   |      |       |      |      |   |     |      |   |   |      |     
|Net income (loss)                                                                                      |                                                                   | $    | (537  | )    |      | $ | (89 | )    |   | $ | 57   |     
|Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities: |                                                                   |      |       |      |      |   |     |      |   |   |      |     
|                                                                                                       | Cumulative effect of accounting change                            |      |       | 202  |      |   |     |     |   |   |      |     |  
|                                                                                                       | Depreciation and amortization                                     |      |       | 88   |      |   |     | 54   |   |   |      | 67   |  
|                                                                                                       | Amortization of capitalized maintenance                           |      |       |     |      |   |     | 86   |   |   |      | 105  |  
|                                                                                                       | Amortization of deferred credits                                  |      |       | (23  | )    |   |     | (8   | ) |   |      | (11  | )
|                                                                                                       | Amortization of deferred rent                                     |      |       | 5    |      |   |     | 6    |   |   |      | 10   |  
|                                                                                                       | Amortization of warrants                                          |      |       | 12   |      |   |     | 7    |   |   |      | 8    |  
|                                                                                                       | Amortization of debt issue costs and guarantee fees               |      |       | 30   |      |   |     | 36   |   |   |      | 36   |  
|                                                                                                       | Amortization of bond discount                                     |      |       | 11   |      |   |     | 4    |   |   |      | 3    |  
|                                                                                                       | Amortization of investment discount and premium, net              |      |       | 9    |      |   |     | 1    |   |   |      | 1    |  
|                                                                                                       | Stock-based compensation                                          |      |       | 5    |      |   |     |     |   |   |      |     |  
|                                                                                                       | Special charges (credits), net                                    |      |       | 105  |      |   |     | (15  | ) |   |      | 14   |  
|                                                                                                       | Gain on sale of investment                                        |      |       |     |      |   |     |     |   |   |      | (3   | )
|                                                                                                       | Other                                                             |      |       | (18  | )    |   |     | 28   |   |   |      | 8    |  
|Changes in operating assets and liabilities:                                                           |                                                                   |      |       |      |      |   |     |      |   |   |      |     
|                                                                                                       | Decrease (increase) in restricted cash                            |      |       | 120  |      |   |     | 2    |   |   |      | (43  | )
|                                                                                                       | Decrease (increase) in accounts receivable, net                   |      |       | 55   |      |   |     | (13  | ) |   |      | (5   | )
|                                                                                                       | Decrease (increase) in expendable spare parts and supplies, net   |      |       | (8   | )    |   |     | 1    |   |   |      | (3   | )
|                                                                                                       | Increase in prepaid expenses                                      |      |       | (67  | )    |   |     | (49  | ) |   |      | (46  | )
|                                                                                                       | Decrease (increase) in other assets, net                          |      |       | 13   |      |   |     |     |   |   |      |     |  
|                                                                                                       | Increase (decrease) in accounts payable                           |      |       | (45  | )    |   |     | (35  | ) |   |      | 18   |  
|                                                                                                       | Increase (decrease) in air traffic liability                      |      |       | (54  | )    |   |     | 20   |   |   |      | 4    |  
|                                                                                                       | Increase (decrease) in accrued compensation and vacation benefits |      |       | (1   | )    |   |     | (18  | ) |   |      | 20   |  
|                                                                                                       | Increase (decrease) in accrued taxes                              |      |       | (5   | )    |   |     | (4   | ) |   |      | 2    |  
|                                                                                                       | Increase (decrease) in other accrued liabilities                  |      |       | (37  | )    |   |     | 6    |   |   |      | (1   | )
|                                                                                                       | Increase in other liabilities                                     |      |       | 186  |      |   |     | 1    |   |   |      | 1    |  
|                                                                                                       |                                                                   |      |       |      |      |   |     |      |  
|Net cash provided by operating activities                                                              |                                                                   |      | 46    |      |      |   | 21  |      |   |   | 242  |     
|                                                                                                       |                                                                   |      |       |      |      |   |     |      |  
|Cash flows from investing activities:                                                                  |                                                                   |      |       |      |      |   |     |      |   |   |      |     
|                                                                                                       | Purchases of property and equipment                               |      |       | (44  | )    |   |     | (219 | ) |   |      | (154 | )
|                                                                                                       | Purchases of short-term investments                               |      |       | (711 | )    |   |     | (488 | ) |   |      | (634 | )
|                                                                                                       | Sales of short-term investments                                   |      |       | 416  |      |   |     | 708  |   |   |      | 364  |  
|                                                                                                       | Cash acquired as part of acquisition                              |      |       | 279  |      |   |     |     |   |   |      |     |  
|                                                                                                       | Costs incurred as part of acquisition                             |      |       | (21  | )    |   |     |     |   |   |      |     |  
|                                                                                                       | Purchases of investments in debt securities                       |      |       |     |      |   |     | (35  | ) |   |      | (80  | )
|                                                                                                       | Sales of investments in debt securities                           |      |       |     |      |   |     | 20   |   |   |      | 10   |  
|                                                                                                       | Decrease (increase) in restricted cash                            |      |       | (112 | )    |   |     | (2   | ) |   |      | (24  | )
|                                                                                                       | Proceeds from sales of other property and equipment               |      |       | 592  |      |   |     | 32   |   |   |      | 26   |  
|                                                                                                       |                                                                   |      |       |      |      |   |     |      |  
|Net cash provided by (used in) investing activities                                                    |                                                                   |      | 399   |      |      |   | 16  |      |   |   | (492 | )   
|                                                                                                       |                                                                   |      |       |      |      |   |     |      |  
|Cash flows from financing activities:                                                                  |                                                                   |      |       |      |      |   |     |      |   |   |      |     
|                                                                                                       | Proceeds from issuance of debt                                    |      |       | 655  |      |   |     | 142  |   |   |      | 87   |  
|                                                                                                       | Repayment of debt                                                 |      |       | (741 | )    |   |     | (176 | ) |   |      | (17  | )
|                                                                                                       | Issuance of common stock                                          |      |       | 732  |      |   |     |     |   |   |      |     |  
|                                                                                                       | Acquisition of warrants                                           |      |       | (116 | )    |   |     |     |   |   |      |     |  
|                                                                                                       | Payment of debt issue costs                                       |      |       |     |      |   |     | (1   | ) |   |      | (3   | )
|                                                                                                       | Other                                                             |      |       | 1    |      |   |     | (6   | ) |   |      |     |  
|                                                                                                       |                                                                   |      |       |      |      |   |     |      |  
|Net cash provided by (used in) financing activities                                                    |                                                                   |      | 531   |      |      |   | (41 | )    |   |   | 67   |     
|                                                                                                       |                                                                   |      |       |      |      |   |     |      |  
|Net increase (decrease) in cash and cash equivalents                                                   |                                                                   |      | 976   |      |      |   | (4  | )    |   |   | (183 | )   
|Cash and cash equivalents at beginning of year                                                         |                                                                   |      | 149   |      |      |   | 153 |      |   |   | 336  |     
|Cash and cash equivalents at end of year                                                               |                                                                   | $    | 1,125 |      |      | $ | 149 |      |   | $ | 153  |     
|                                                                                                       |                                                                   |      |       |      |      |   |     |      |  



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##### Table of Contents



US Airways Group, Inc.


Consolidated Statements of Stockholders Equity and
Comprehensive Income


For the Years Ended December 31, 2005, 2004 and 2003


(in millions except share amounts)


|                                                                                                                                              |  |        |   |         |        |         |        |  |            |         |    |             |           |   |       |               |  |   |          |         |  |          |    |   |       |   |     |   |  |   |      |   |  |   |      |  
|--------------------------------------------------------------------------------------------------------------------------------------------- |  | ------ | - | ------- | ------ | ------- | ------ |  | ---------- | ------- | -- | ----------- | --------- | - | ----- | ------------- |  | - | -------- | ------- |  | -------- | -- | - | ----- | - | --- | - |  | - | ---- | - |  | - | ---- | -
|                                                                                                                                              |  |        |   |         |        |         |        |  |            |         |    | Accumulated |           |   |       |               |  |   |         
|                                                                                                                                              |  |        |   | Class A |        | Class B |        |  | Additional |         |    | Retained    |           |   | Other |               |  |   |          | Class B |  |          |   
|                                                                                                                                              |  | Common |   |         | Common |         | Common |  |            | Paid-In |    |             | Earnings/ |   |       | Comprehensive |  |   | Treasury |         |  | Treasury |    |   |      
|                                                                                                                                              |  | Stock  |   |         | Stock  |         | Stock  |  |            | Capital |    |             | (Deficit) |   |       | Income        |  |   | Stock    |         |  | Stock    |    |   | Total |  
|                                                                                                                                              |  |        |   |         |        |         |        |  |            |         |    |             |           |   |       |               |  |   |          |         |  |          |    |   |       |  
|Balance at December 31, 2002                                                                                                                  |  | $      |  |         |        | $       |       |  |            | $       | 1  |             |           | $ | 629   |               |  | $ | (257     | )       |  | $        | 2  |   |       | $ |    |   |  | $ | (306 | ) |  | $ | 69   |  
|Net income                                                                                                                                    |  |        |  |         |        |         |       |  |            |         |   |             |           |   |      |               |  |   | 57       |         |  |          |   |   |       |   |    |   |  |   |     |   |  |   | 57   |  
|Correction of other comprehensive income(a)                                                                                                   |  |        |  |         |        |         |       |  |            |         |   |             |           |   |      |               |  |   |         |         |  |          | (2 | ) |       |   |    |   |  |   |     |   |  |   | (2   | )
|Conversion of 33,955 shares of Class A Common stock to
    Class B common stock                                                               |  |        |  |         |        |         |       |  |            |         |   |             |           |   |      |               |  |   |         |         |  |          |   |   |       |   |    |   |  |   |     |   |  |   |     |  
|Issuance of 682,237 shares of Class B common stock
    pursuant to the exercise of stock warrants                                             |  |        |  |         |        |         |       |  |            |         |   |             |           |   |      |               |  |   |         |         |  |          |   |   |       |   |    |   |  |   |     |   |  |   |     |  
|Issuance of 186,254 shares of Class B common stock
    pursuant to the exercise of stock options                                              |  |        |  |         |        |         |       |  |            |         |   |             |           |   | 2     |               |  |   |         |         |  |          |   |   |       |   |    |   |  |   |     |   |  |   | 2    |  
|Cancellation of 1,537 shares of Class B common stock
    issued as restricted stock                                                           |  |        |  |         |        |         |       |  |            |         |   |             |           |   |      |               |  |   |         |         |  |          |   |   |       |   |    |   |  |   |     |   |  |   |     |  
|                                                                                                                                              |  |        |   |         |        |         |        |  |            |         |    |             |           |   |       |               |  |   |          |         |  |          |    |   |       |   |    
|Balance at December 31, 2003                                                                                                                  |  |        |  |         |        |         |       |  |            |         | 1  |             |           |   | 631   |               |  |   | (200     | )       |  |          |   |   |       |   |    |   |  |   | (306 | ) |  |   | 126  |  
|Net loss                                                                                                                                      |  |        |  |         |        |         |       |  |            |         |   |             |           |   |      |               |  |   | (89      | )       |  |          |   |   |       |   |    |   |  |   |     |   |  |   | (89  | )
|Acquisition of 63,393 shares of Class B treasury stock
    due to default on loan                                                             |  |        |  |         |        |         |       |  |            |         |   |             |           |   |      |               |  |   |         |         |  |          |   |   |       |   |    |   |  |   | (2   | ) |  |   | (2   | )
|Issuance of 62,420 shares of Class B common stock
    pursuant to the exercise of stock warrants                                              |  |        |  |         |        |         |       |  |            |         |   |             |           |   |      |               |  |   |         |         |  |          |   |   |       |   |    |   |  |   |     |   |  |   |     |  
|Issuance of 71,917 shares of Class B common stock
    pursuant to the exercise of stock options                                               |  |        |  |         |        |         |       |  |            |         |   |             |           |   | 1     |               |  |   |         |         |  |          |   |   |       |   |    |   |  |   |     |   |  |   | 1    |  
|Accelerated vesting                                                                                                                           |  |        |  |         |        |         |       |  |            |         |   |             |           |   |      |               |  |   |         |         |  |          |   |   |       |   |    |   |  |   |     |   |  |   |     |  
|                                                                                                                                              |  |        |   |         |        |         |        |  |            |         |    |             |           |   |       |               |  |   |          |         |  |          |    |   |       |   |    
|Balance at December 31, 2004                                                                                                                  |  |        |  |         |        |         |       |  |            |         | 1  |             |           |   | 632   |               |  |   | (289     | )       |  |          |   |   |       |   |    |   |  |   | (308 | ) |  |   | 36   |  
|Net loss                                                                                                                                      |  |        |  |         |        |         |       |  |            |         |   |             |           |   |      |               |  |   | (537     | )       |  |          |   |   |       |   |    |   |  |   |     |   |  |   | (537 | )
|Issuance of 36,465,445 shares of common stock                                                                                                 |  |        | 1 |         |        |         |       |  |            |         |   |             |           |   | 564   |               |  |   |         |         |  |          |   |   |       |   |    |   |  |   |     |   |  |   | 565  |  
|Issuance of 7,533,334 shares of common stock pursuant to
    the exercise of stock options by investors, net of issuance costs                |  |        |  |         |        |         |       |  |            |         |   |             |           |   | 113   |               |  |   |         |         |  |          |   |   |       |   |    |   |  |   |     |   |  |   | 113  |  
|Issuance of 9,775,000 shares of common stock pursuant to a
    public stock offering, net of issuance costs                                   |  |        |  |         |        |         |       |  |            |         |   |             |           |   | 180   |               |  |   |         |         |  |          |   |   |       |   |    |   |  |   |     |   |  |   | 180  |  
|Issuance of 8,212,119 shares of common stock to unsecured
    creditors                                                                       |  |        |  |         |        |         |       |  |            |         |   |             |           |   | 96    |               |  |   |         |         |  |          |   |   |       |   |    |   |  |   |     |   |  |   | 96   |  
|Withholding of 418,977 shares from the issuance of stock to
    unsecured creditors to cover tax obligations                                  |  |        |  |         |        |         |       |  |            |         |   |             |           |   |      |               |  |   |         |         |  |          |   |   |       |   | (13 | ) |  |   |     |   |  |   | (13  | )
|Issuance of 792,475 shares of common stock pursuant to the
    exercise of stock options                                                      |  |        |  |         |        |         |       |  |            |         |   |             |           |   | 12    |               |  |   |         |         |  |          |   |   |       |   |    |   |  |   |     |   |  |   | 12   |  
|Cancellation of 6,781,470 shares of Class B Treasury
    Stock due to the merger                                                              |  |        |  |         |        |         |       |  |            |         |   |             |           |   |      |               |  |   |         |         |  |          |   |   |       |   |    |   |  |   | 308  |   |  |   | 308  |  
|Conversion of 460,657 shares of Class A common stock
    to US Airways Group common stock                                                     |  |        |  |         |        |         |       |  |            |         |   |             |           |   |      |               |  |   |         |         |  |          |   |   |       |   |    |   |  |   |     |   |  |   |     |  
|Conversion of 21,430,147 shares of Class B common
    stock to US Airways Group common stock                                                  |  |        |  |         |        |         |       |  |            |         | (1 | )           |           |   | (315  | )             |  |   |         |         |  |          |   |   |       |   |    |   |  |   |     |   |  |   | (316 | )
|Issuance of 4,195,275 shares of common stock pursuant to
    the conversion of the 7.25% notes                                                |  |        |  |         |        |         |       |  |            |         |   |             |           |   | 87    |               |  |   |         |         |  |          |   |   |       |   |    |   |  |   |     |   |  |   | 87   |  
|Repurchase of 7,735,770 warrants held by the ATSB                                                                                             |  |        |  |         |        |         |       |  |            |         |   |             |           |   | (116  | )             |  |   |         |         |  |          |   |   |       |   |    |   |  |   |     |   |  |   | (116 | )
|Stock compensation for stock appreciation rights and restricted
    stock units that will be ultimately settled in shares of common
    stock |  |        |  |         |        |         |       |  |            |         |   |             |           |   | 5     |               |  |   |         |         |  |          |   |   |       |   |    |   |  |   |     |   |  |   | 5    |  
|                                                                                                                                              |  |        |   |         |        |         |        |  |            |         |    |             |           |   |       |               |  |   |          |         |  |          |    |   |       |   |    
|Balance at December 31, 2005                                                                                                                  |  | $      | 1 |         |        | $       |       |  |            | $       |   |             |           | $ | 1,258 |               |  | $ | (826     | )       |  | $        |   |   |       | $ | (13 | ) |  | $ |     |   |  | $ | 420  |  
|                                                                                                                                              |  |        |   |         |        |         |        |  |            |         |    |             |           |   |       |               |  |   |          |         |  |          |    |   |       |   |    






|    |                                                                                        
|--- | ---------------------------------------------------------------------------------------
|(a) | Correction of Other Comprehensive Income  See
    Note 2(k), Derivative Instruments.



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US Airways Group, Inc.


Notes to Consolidated Financial Statements




|   |                                              
|-- | ---------------------------------------------
|1. | Merger with America West Holdings Corporation





New equity investments


Public stock offering


GE Merger MOU




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The GE Merger MOU provided for continued use by US Airways
    Group of certain leased Airbus, Boeing and regional jet
    aircraft, the modification of monthly lease rates, and the
    return to GECC of certain other leased Airbus and Boeing
    aircraft.                                                                                                                                                                                                                                
|
| |  | GECC provided a bridge facility of approximately
    $56 million for use by US Airways Group during the
    pendency of the Chapter 11 proceedings. US Airways
    paid an affiliate of General Electric (GE)
    $125 million in cash on September 30, 2005 in exchange
    for retirement of the bridge facility, forgiveness and release
    of US Airways from certain prepetition obligations,
    deferral of certain payment obligations, and amendments to
    maintenance agreements.

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In June 2005, GECC purchased and immediately leased back to
    US Airways Group: (a) the assets securing the credit
    facility obtained from GE in 2001 (the 2001 GE Credit
    Facility) and the liquidity facility obtained from GE in
    2003 in connection with US Airways Groups emergence
    from the first bankruptcy (the 2003 GE Liquidity
    Facility), and other GE obligations, consisting of
    11 Airbus aircraft and 28 spare engines and engine stands;
    and (b) ten regional jet aircraft previously debt financed
    by GECC. The proceeds from the sale leaseback transaction of
    approximately $633 million were used to pay down balances
    due to GE by US Airways Group under the 2003
    GE Liquidity Facility in full, the GECC mortgage-debt
    financed CRJ aircraft in full, and a portion of the 2001 GE
    Credit Facility. The 2001 GE Credit Facility was amended to
    allow certain additional borrowings up to $28 million.

Airbus MOU




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | On September 27, 2005, US Airways and AWA entered into
    two loan agreements with Airbus Financial Services
    (AFS), as Initial Lender and Loan Agent, Wells
    Fargo Bank Northwest, National Association, as Collateral Agent,
    and US Airways Group, as guarantor, with commitments in
    initial aggregate amounts of up to $161 million and up to
    $89 million (the Airbus $161 Million Loan
    and the Airbus $89 Million Loan and,
    collectively, the Airbus Loans). The Airbus Loans
    bear interest at a rate of LIBOR plus a margin, subject to
    adjustment. The outstanding principal amount of the Airbus
    $89 Million Loan will be forgiven in writing on
    December 31, 2010, or an earlier date, if on that date the
    outstanding principal amount of, accrued interest on, and all
    other amounts due under the Airbus $161 Million Loan have
    been paid in full.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | Airbus has rescheduled US Airways Groups A320-family
    and A330-200 delivery
    commitments and has agreed to provide backstop financing for a
    substantial number of aircraft, subject to certain terms and
    conditions, on an order of 20 A350 aircraft. US Airways
    Groups A320-family aircraft are now scheduled for delivery
    in 2009 and 2010. US Airways Groups A330-200 aircraft
    are scheduled for delivery in 2009 and 2010 and A350 aircraft
    deliveries are currently scheduled to occur beginning in 2011.
    The Airbus MOU also eliminates cancellation penalties on
    US Airways Groups orders for the ten A330-200
    aircraft, provided that US Airways Group has met certain
    predelivery payment obligations under the A350 order. In
    connection with the restructuring of aircraft firm orders,
    US Airways and America West Holdings were required to pay
    an aggregate non-refundable restructuring fee which was paid by
    means of set-off against existing equipment purchase deposits of
    US Airways Group and America West Holdings held by Airbus.
    US Airways recorded its restructuring fee of
    $39 million as a reorganization item in the third quarter
    of 2005. AWAs restructuring fee was $50 million,
    along with $7 million of capitalized interest, which was
    written off as a special charge upon execution of the agreement.

Restructuring of the ATSB
Loan Guarantees


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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)








New Convertible Notes


Restructuring of Affinity Credit Card Partner
Agreement






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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)










Restructuring of Credit Card Processing
Agreement successor-in




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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)








Asset Based Financings and Sales






|   |                                                                         
|-- | ------------------------------------------------------------------------
|2. | Basis of presentation and summary of significant accounting
    policies



|    |                                               
|--- | ----------------------------------------------
|(a) | Nature of operations and operating environment







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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|    |                      
|--- | ---------------------
|(b) | Basis of presentation











|    |                                            
|--- | -------------------------------------------
|(c) | Cash equivalents and short-term investments



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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)








|    |                
|--- | ---------------
|(d) | Restricted cash





|    |                            
|--- | ---------------------------
|(e) | Materials and supplies, net





|    |                       
|--- | ----------------------
|(f) | Property and equipment









|    |             
|--- | ------------
|(g) | Income taxes



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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)






|    |                                    
|--- | -----------------------------------
|(h) | Goodwill and other intangibles, net







|                                   |       |      |     |     |     |   |   |   | 
|---------------------------------- | ----- | ---- | --- | --- | --- | - | - | - | 
|                                   |       | Cost |     |     | A/A |  
|                                   |       |      |     |     |     |  
|Airport take-off and landing slots |       | $    | 453 |     |     | $ | 4 |  
|Airport gate leasehold rights      |       |      | 52  |     |     |   | 4 |  
|                                   |       |      |     |     |     |  
|                                   | Total |      | $   | 505 |     |   | $ | 8 | 
|                                   |       |      |     |     |     |  










|    |                  
|--- | -----------------
|(i) | Other assets, net



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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)






|    |                          
|--- | -------------------------
|(j) | Frequent traveler program





|    |                       
|--- | ----------------------
|(k) | Derivative instruments









e-commerce




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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|    |                                
|--- | -------------------------------
|(l) | Deferred gains and credits, net











|    |                   
|--- | ------------------
|(m) | Passenger revenues







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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)








|    |                         
|--- | ------------------------
|(n) | Stock-based compensation





|                                                                                  |                       |      |      |        |      |   |     |       |   |   |    |      | 
|--------------------------------------------------------------------------------- | --------------------- | ---- | ---- | ------ | ---- | - | --- | ----- | - | - | -- | ---- | 
|                                                                                  |                       | 2005 |      |        | 2004 |   |     | 2003  |  
|                                                                                  |                       |      |      |        |      |   |     |       |  
|Net income (loss), as reported                                                    |                       | $    | (537 | )      |      | $ | (89 | )     |   | $ | 57 |     
|Add: Stock-based compensation included in reported net income
    (loss)          |                       |      | 4    |        |      |   |    |       |   |   |   |     
|Deduct: Stock-based compensation determined under the fair value
    based method |                       |      | (12  | )      |      |   | (6  | )     |   |   | (4 | )   
|                                                                                  |                       |      |      |        |      |   |     |       |  
|Pro forma net income (loss)                                                       |                       | $    | (545 | )      |      | $ | (95 | )     |   | $ | 53 |     
|                                                                                  |                       |      |      |        |      |   |     |       |  
|Earnings (loss) per share:                                                        |                       |      |      |        |      |   |     |       |   |   |    |     
|                                                                                  | Basic  as reported   |      | $    | (17.06 | )    |   | $   | (5.99 | ) |   | $  | 4.03 | 
|                                                                                  | Basic  pro forma     |      | $    | (17.30 | )    |   | $   | (6.39 | ) |   | $  | 3.73 | 
|                                                                                  | Diluted  as reported |      | $    | (17.06 | )    |   | $   | (5.99 | ) |   | $  | 3.07 | 
|                                                                                  | Diluted  pro forma   |      | $    | (17.30 | )    |   | $   | (6.39 | ) |   | $  | 2.88 | 



|    |                             
|--- | ----------------------------
|(o) | Maintenance and repair costs



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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)






|    |                 
|--- | ----------------
|(p) | Selling expenses





|    |                 
|--- | ----------------
|(q) | Express expenses



|                                |  |              |       |  |              |   |     |              |  |   |     | 
|------------------------------- |  | ------------ | ----- |  | ------------ | - | --- | ------------ |  | - | --- | 
|                                |  | Year Ended   |       |  | Year Ended   |   |     | Year Ended   | 
|                                |  | December 31, |       |  | December 31, |   |     | December 31, | 
|                                |  | 2005         |       |  | 2004         |   |     | 2003         | 
|                                |  |              |       |  |              |   |     |              | 
|Aircraft fuel and related taxes |  | $            | 256   |  |              | $ | 102 |              |  | $ | 61  | 
|Salaries and related costs      |  |              | 61    |  |              |   |    |              |  |   |    | 
|Capacity purchases              |  |              | 567   |  |              |   | 238 |              |  |   | 198 | 
|Other rent and landing fees     |  |              | 19    |  |              |   | 8   |              |  |   | 7   | 
|Aircraft rent                   |  |              | 23    |  |              |   |    |              |  |   |    | 
|Selling expenses                |  |              | 45    |  |              |   | 23  |              |  |   | 19  | 
|Aircraft maintenance            |  |              | 17    |  |              |   |    |              |  |   |    | 
|Depreciation and amortization   |  |              | 7     |  |              |   |    |              |  |   |    | 
|Other expenses                  |  |              | 78    |  |              |   | 3   |              |  |   | 2   | 
|                                |  |              |       |  |              |   |     |              | 
|Express expenses                |  | $            | 1,073 |  |              | $ | 374 |              |  | $ | 287 | 
|                                |  |              |       |  |              |   |     |              | 



|    |                           
|--- | --------------------------
|(r) | Variable interest entities



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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|    |                              
|--- | -----------------------------
|(s) | New accounting pronouncements















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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)






|   |                                    
|-- | -----------------------------------
|3. | New equity structure and conversion

non-U.S. non-U.S.










|   |                                                  
|-- | -------------------------------------------------
|4. | Change in accounting policy for maintenance costs



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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)








|                                                                                     |  |      |        |   |      |   |       |      |  |   |      | 
|------------------------------------------------------------------------------------ |  | ---- | ------ | - | ---- | - | ----- | ---- |  | - | ---- | 
|                                                                                     |  | 2005 |        |   | 2004 |   |       | 2003 | 
|                                                                                     |  |      |        |   |      |   |       |      | 
|Earnings (loss) per share                                                            |  |      |        |   |      |   |       |      |  |   |      | 
|Basic  As Reported before cumulative effect of change
    in accounting principle   |  | $    | (10.65 | ) |      | $ | (5.99 | )    |  | $ | 4.03 | 
|Basic  Pro Forma                                                                    |  |      | (10.65 | ) |      |   | (9.53 | )    |  |   | 3.71 | 
|Diluted  As Reported before cumulative effect of
    change in accounting principle |  | $    | (10.65 | ) |      | $ | (5.99 | )    |  | $ | 3.07 | 
|Diluted  Pro Forma                                                                  |  |      | (10.65 | ) |      |   | (9.53 | )    |  |   | 2.87 | 





|   |                                                                                               
|-- | ----------------------------------------------------------------------------------------------
|5. | Change in method of reporting for America West Express
    results and other reclassifications



86-seat 37-seat




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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)










|                         |  |                              |       |  |                   |   |     |                 |  |   |       | 
|------------------------ |  | ---------------------------- | ----- |  | ----------------- | - | --- | --------------- |  | - | ----- | 
|                         |  | Year Ended December 31, 2004 |      
|                         |  |                              |      
|                         |  | As Previously Reported       |       |  | Reclassifications |   |     | As Reclassified | 
|                         |  |                              |       |  |                   |   |     |                 | 
|Operating revenues:      |  |                              |       |  |                   |   |     |                 |  |   |       | 
|Mainline passenger       |  | $                            | 2,197 |  |                   | $ | 6   | (1)             |  | $ | 2,203 | 
|Express revenue          |  |                              |      |  |                   |   | 353 | (2)             |  |   | 353   | 
|Cargo and other          |  |                              | 142   |  |                   |   | 50  | (2)(3)          |  |   | 192   | 
|                         |  |                              |       |  |                   |   |     |                 | 
|Total operating revenues |  |                              | 2,339 |  |                   |   | 409 |                 |  |   | 2,748 | 
|                         |  |                              |       |  |                   |   |     |                 | 
|Operating expenses:      |  |                              |       |  |                   |   |     |                 |  |   |       | 
|Operating expenses       |  |                              | 2,383 |  |                   |   | 11  | (4)(5)          |  |   | 2,394 | 
|Express expenses         |  |                              |      |  |                   |   | 374 | (5)             |  |   | 374   | 
|                         |  |                              |       |  |                   |   |     |                 | 
|Total operating expenses |  | $                            | 2,383 |  |                   | $ | 385 |                 |  | $ | 2,768 | 
|                         |  |                              |       |  |                   |   |     |                 | 

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)


|                         |  |                              |       |  |                   |   |     |                 |  |   |       | 
|------------------------ |  | ---------------------------- | ----- |  | ----------------- | - | --- | --------------- |  | - | ----- | 
|                         |  | Year Ended December 31, 2003 |      
|                         |  |                              |      
|                         |  | As Previously Reported       |       |  | Reclassifications |   |     | As Reclassified | 
|                         |  |                              |       |  |                   |   |     |                 | 
|Operating revenues:      |  |                              |       |  |                   |   |     |                 |  |   |       | 
|Mainline passenger       |  | $                            | 2,114 |  |                   | $ | 4   | (6)             |  | $ | 2,118 | 
|Express revenue          |  |                              |      |  |                   |   | 268 | (7)             |  |   | 268   | 
|Cargo and other          |  |                              | 141   |  |                   |   | 45  | (7)(8)          |  |   | 186   | 
|                         |  |                              |       |  |                   |   |     |                 | 
|Total operating revenues |  |                              | 2,255 |  |                   |   | 317 |                 |  |   | 2,572 | 
|                         |  |                              |       |  |                   |   |     |                 | 
|Operating expenses:      |  |                              |       |  |                   |   |     |                 |  |   |       | 
|Operating expenses       |  |                              | 2,233 |  |                   |   | 19  | (9)(10)         |  |   | 2,252 | 
|Express expenses         |  |                              |      |  |                   |   | 287 | (10)            |  |   | 287   | 
|                         |  |                              |       |  |                   |   |     |                 | 
|Total operating expenses |  | $                            | 2,233 |  |                   | $ | 306 |                 |  | $ | 2,539 | 
|                         |  |                              |       |  |                   |   |     |                 | 






| |     |                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Reclassification of $6 million related to the sale of
    frequent flier miles and related marketing services to affinity
    partners from Operating expenses  Other
    to Operating revenues  Mainline passenger.                                                                                                                                                               
|
| | (2) | Reclassification of $353 million Express revenue and
    $371 million Express operating expenses from
    Operating revenues  Other to
    Operating revenues  Mainline passenger
    revenue and to Operating expenses  other.                                                                                                                                                 
|
| | (3) | Reclassification of $32 million related to the sale of
    frequent flier miles and related marketing services to affinity
    partners from Operating expenses  Other
    to Operating revenues  Other.                                                                                                                                                                           
|
| | (4) | Reclassification of $24 million credit related to fuel
    hedging activity from nonoperating to operating expenses.
    Reclassification of $38 million related to the sale of
    frequent flier miles and related marketing services to affinity
    partners from Operating expenses  Other
    to Operating revenues  Mainline passenger
    and Operating revenues  Other.
|
| | (5) | Reclassification of $371 million and $3 million of
    Express operating expenses from Operating
    revenues  Other and Operating
    expenses  Other, respectively.                                                                                                                                                                                                              
|
| | (6) | Reclassification of $4 million related to the sale of
    frequent flier miles and related marketing services to affinity
    partners from Operating expenses  Other
    to Operating revenues  Mainline passenger.                                                                                                                                                               
|
| | (7) | Reclassification of $268 million Express revenue and
    $285 million Express operating expenses from
    Operating revenues  Other to
    Operating revenues  Mainline passenger
    revenue and to Operating expenses  Other.                                                                                                                                                 
|
| | (8) | Reclassification of $28 million related to the sale of
    frequent flier miles and related marketing services to affinity
    partners from Operating expenses  Other
    to Operating revenues  Other.                                                                                                                                                                           
|
| | (9) | Reclassification of $11 million credit related to fuel
    hedging activity from nonoperating to operating expenses.
    Reclassification of $32 million related to the sale of
    frequent flier miles and related marketing services to affinity
    partners from Operating expenses  Other
    to Operating revenues  Mainline passenger
    and Operating revenues  Other.



|     |                                                                                                                                                                            
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Reclassification of $285 million and $2 million of
    Express operating expenses from Operating
    revenues  Other and Operating
    expenses  Other, respectively.



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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|   |                               
|-- | ------------------------------
|6. | Earning/ loss per common share

in-the


|                                                                                |                                                        |                         |            |            |      |   |            |            |  |   |            |            | 
|------------------------------------------------------------------------------- | ------------------------------------------------------ | ----------------------- | ---------- | ---------- | ---- | - | ---------- | ---------- |  | - | ---------- | ---------- | 
|                                                                                |                                                        | Year Ended December 31, |           
|                                                                                |                                                        |                         |           
|                                                                                |                                                        | 2005                    |            |            | 2004 |   |            | 2003       | 
|                                                                                |                                                        |                         |            |            |      |   |            |            | 
|Basic earnings (loss) per share:                                                |                                                        |                         |            |            |      |   |            |            |  |   |            |           
|Income (loss) before cumulative effect of change in accounting
    principle    |                                                        | $                       | (335       | )          |      | $ | (89        | )          |  | $ | 57         |           
|Cumulative effect of change in accounting principle                             |                                                        |                         | 202        |            |      |   |           |            |  |   |           |           
|                                                                                |                                                        |                         |            |            |      |   |            |            | 
|Net income (loss)                                                               |                                                        | $                       | (537       | )          |      | $ | (89        | )          |  | $ | 57         |           
|                                                                                |                                                        |                         |            |            |      |   |            |            | 
|Weighted average common shares outstanding                                      |                                                        |                         | 31,487,574 |            |      |   | 14,860,922 |            |  |   | 14,252,279 |           
|                                                                                |                                                        |                         |            |            |      |   |            |            | 
|Basic earnings (loss) per share:                                                |                                                        |                         |            |            |      |   |            |            |  |   |            |           
|Earnings (loss) before cumulative effect of change in accounting
    principle  |                                                        | $                       | (10.65     | )          |      | $ | (5.99      | )          |  | $ | 4.03       |           
|Cumulative effect of change in accounting principle                             |                                                        | $                       | (6.41      | )          |      |   |           |            |  |   |           |           
|                                                                                |                                                        |                         |            |            |      |   |            |            | 
|Net earnings (loss) per share                                                   |                                                        | $                       | (17.06     | )          |      | $ | (5.99      | )          |  | $ | 4.03       |           
|                                                                                |                                                        |                         |            |            |      |   |            |            | 
|Diluted earnings (loss) per share:                                              |                                                        |                         |            |            |      |   |            |            |  |   |            |           
|Income (loss) before cumulative effect of change in accounting
    principle    |                                                        | $                       | (335       | )          |      | $ | (89        | )          |  | $ | 57         |           
|Cumulative effect of change in accounting principle                             |                                                        |                         | 202        |            |      |   |           |            |  |   |           |           
|                                                                                |                                                        |                         |            |            |      |   |            |            | 
|Net income (loss)                                                               |                                                        |                         | (537       | )          |      |   | (89        | )          |  |   | 57         |           
|Interest expense on 7.5% convertible senior notes                               |                                                        |                         |           |            |      |   |           |            |  |   | 11         |           
|Interest expense on 7.25% senior exchangeable notes                             |                                                        |                         |           |            |      |   |           |            |  |   | 3          |           
|                                                                                |                                                        |                         |            |            |      |   |            |            | 
|Income (loss) for purposes of computing diluted net income
    (loss) per share |                                                        | $                       | (537       | )          |      | $ | (89        | )          |  | $ | 71         |           
|                                                                                |                                                        |                         |            |            |      |   |            |            | 
|Share computation:                                                              |                                                        |                         |            |            |      |   |            |            |  |   |            |           
|                                                                                | Weighted average common shares outstanding             |                         |            | 31,487,574 |      |   |            | 14,860,922 |  |   |            | 14,252,279 | 
|                                                                                | Assumed exercise of stock options and warrants         |                         |            |           |      |   |            |           |  |   |            | 4,111,028  | 
|                                                                                | Assumed conversion of 7.5% convertible senior notes    |                         |            |           |      |   |            |           |  |   |            | 3,365,109  | 
|                                                                                | Assumed conversion of 7.25% senior exchangeable notes  |                         |            |           |      |   |            |           |  |   |            | 1,418,159  | 
|                                                                                |                                                        |                         |            |            |      |   |            |            | 
|                                                                                | Weighted average common shares outstanding as adjusted |                         |            | 31,487,574 |      |   |            | 14,860,922 |  |   |            | 23,146,575 | 
|                                                                                |                                                        |                         |            |            |      |   |            |            | 

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)


|                                                                               |  |                         |        |   |      |   |       |      |  |   |      | 
|------------------------------------------------------------------------------ |  | ----------------------- | ------ | - | ---- | - | ----- | ---- |  | - | ---- | 
|                                                                               |  | Year Ended December 31, |       
|                                                                               |  |                         |       
|                                                                               |  | 2005                    |        |   | 2004 |   |       | 2003 | 
|                                                                               |  |                         |        |   |      |   |       |      | 
|Diluted earnings (loss) per share:                                             |  |                         |        |   |      |   |       |      |  |   |      | 
|Earnings (loss) before cumulative effect of change in accounting
    principle |  | $                       | (10.65 | ) |      | $ | (5.99 | )    |  | $ | 3.07 | 
|Cumulative effect of change in accounting principle                            |  |                         | (6.41  | ) |      |   |      |      |  |   |     | 
|                                                                               |  |                         |        |   |      |   |       |      | 
|Earnings (loss) per share                                                      |  | $                       | (17.06 | ) |      | $ | (5.99 | )    |  | $ | 3.07 | 
|                                                                               |  |                         |        |   |      |   |       |      | 





04-08,


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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|   |                               
|-- | ------------------------------
|7. | Special charges (credits), net



|                                                 |  |                         |     |     |      |   |     |      |  |   |    |     
|------------------------------------------------ |  | ----------------------- | --- | --- | ---- | - | --- | ---- |  | - | -- | ----
|                                                 |  | Year Ended December 31, |    
|                                                 |  |                         |    
|                                                 |  | 2005                    |     |     | 2004 |   |     | 2003 | 
|                                                 |  |                         |     |     |      |   |     |      | 
|Airbus restructuring                             |  | $                       | 57  | (a) |      | $ |    |      |  | $ |   |     
|Merger related transition expenses               |  |                         | 28  | (b) |      |   |    |      |  |   |   |     
|Sale leaseback transactions                      |  |                         | 27  | (c) |      |   | (1  | )(g) |  |   |   |     
|Power by the hour program penalties              |  |                         | 7   | (d) |      |   |    |      |  |   |   |     
|Severance due to change in control               |  |                         | 2   | (e) |      |   |    |      |  |   |   |     
|Aircraft returns                                 |  |                         | 1   | (f) |      |   | 2   | (f)  |  |   | (1 | )(i)
|Termination of V2500 power by the hour agreement |  |                         |    |     |      |   | (16 | )(h) |  |   |   |     
|Elimination of hub operations  Columbus         |  |                         |    |     |      |   |    |      |  |   | 11 | (j) 
|Reduction in workforce                           |  |                         |    |     |      |   |    |      |  |   | 2  | (k) 
|Impairment loss on aircraft                      |  |                         |    |     |      |   |    |      |  |   | 3  | (l) 
|Other                                            |  |                         | (1  | )   |      |   | (1  | )    |  |   | (1 | )   
|                                                 |  |                         |     |     |      |   |     |      | 
|Total                                            |  | $                       | 121 |     |      | $ | (16 | )    |  | $ | 14 |     
|                                                 |  |                         |     |     |      |   |     |      | 






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | In the third quarter of 2005, in connection with the merger and
    the Airbus MOU executed between Airbus, US Airways Group,
    US Airways and AWA, certain aircraft firm orders were
    restructured. In connection with that restructuring,
    US Airways Group and America West Holdings were required to
    pay non-refundable restructuring fees. AWAs restructuring
    fee of $50 million has been classified as a special charge,
    along with $7 million in associated capitalized interest.
    The restructuring fee was paid by means of set-off against
    existing equipment deposits of AWA held by Airbus.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(b) |  | In connection with the merger, America West Holdings and
    US Airways incurred $13 million and $15 million,
    respectively, of transition and merger integration costs in the
    fourth quarter of 2005 related to transitioning the employees,
    systems and facilities of AWA and US Airways into one
    consolidated company. The $13 million includes insurance
    premiums of $4 million related to policies for former
    officers and directors, compensation expense of $3 million
    for special stock awards granted under a program designed to
    retain key employees through the integration period,
    professional and technical fees of $3 million and sales and
    marketing program expenses of $2 million related to
    notifying frequent traveler program members about the merger.
    The $15 million includes $7 million in insurance
    premiums related to policies for former officers and directors,
    $5 million for severance, retention and stock awards,
    $1 million of aircraft livery costs, $1 million of
    programming service expense and $1 million in other
    expenses.
|   
|(c) |  | In the third quarter of 2005, a $27 million loss was
    incurred related to the sale-leaseback of six Boeing 737-200
    aircraft and two Boeing 757 aircraft.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(d) |  | In the fourth quarter of 2005, in connection with the return of
    certain leased aircraft, AWA incurred expenses of
    $7 million related to penalties incurred under an
    outsourced maintenance arrangement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(e) |  | In the third and fourth quarter of 2005, AWA recorded severance
    expense totaling approximately $2 million for terminated
    employees resulting from the merger. The majority of the
    $2 million will be paid in the first quarter of 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(f) |  | In August 2004, AWA entered into definitive agreements with two
    lessors to return six Boeing 737-200 aircraft. Three of these
    aircraft were returned to the lessors in the third quarter of
    2004, two were                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | returned in the fourth quarter of 2004 and one was returned in
    January 2005. In addition, AWA continues negotiating with one
    lessor on the return of its remaining two Boeing
    737-200 aircraft, one
    of which was parked in March 2002. The other aircraft was
    removed from service in January 2005. In connection with the
    return of the aircraft, AWA recorded $2 million of special
    charges in 2004, which include lease termination payments of
    $2 million and the write-down of leasehold improvements and
    aircraft rent balances of $3 million, offset by the net
    reversal of lease return provisions of $3 million. In the
    first quarter of 2005, AWA recorded $1 million in special
    charges related to the final Boeing
    737-200 aircraft, which
    was removed from service in January 2005.                                                                                                                                                            
|   
|(g) |  | In the first quarter of 2004, AWA recorded a $1 million
    reduction in special charges related to the revision of
    estimated costs associated with the sale and leaseback of
    certain aircraft.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(h) |  | In December 2004, AWA and GE mutually agreed to terminate the
    V2500 A-1 power by
    hour (PBH) agreement effective January 1, 2005.
    This agreement was entered into March 1998 with an original term
    of ten years. For terminating the agreement early, AWA received
    a $20 million credit to be applied to amounts due for other
    engines under the 1998 agreement. AWA had capitalized PBH
    payments for
    V2500 A-1 engines
    in excess of the unamortized cost of the overhauls performed by
    GE of approximately $4 million. With the termination of
    this agreement, these payments were not realizable and as a
    result, AWA wrote off this amount against the $20 million
    credit referred to above, resulting in a $16 million net
    gain.                                                                                                                                                                                                                       
|   
|(i) |  | In the first quarter of 2003, AWA recorded a $1 million
    reduction in special charges related to the earlier-than-planned
    return of certain leased aircraft in 2001 and 2002, as all
    payments related to these aircraft returns had been made.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(j) |  | In February 2003, AWA announced the elimination of its hub
    operations in Columbus, Ohio. As a result, 12 regional jets, all
    of which were operated by Chautauqua Airlines under the America
    West Express banner, were phased out of the fleet. In addition,
    the hub was downsized from 49 daily departures to 15
    destinations to four flights per day to Phoenix and Las Vegas.
    Service to New York City LaGuardia Airport was also eliminated
    because perimeter rules at the airport prohibit flights beyond
    1,500 miles, precluding service from AWAs hubs in
    Phoenix and Las Vegas. In the first, second and third quarters
    of 2003, AWA recorded special charges totaling $11 million
    related to the costs associated with the termination of certain
    aircraft and facility contracts, employee transfer and severance
    expenses and the write-off of leasehold improvements in
    Columbus, Ohio. All payments were completed as of
    December 31, 2005.
|   
|(k) |  | In April 2003, as part of a cost reduction program, AWA
    implemented a plan to reduce management, professional and
    administrative payroll costs that resulted in 161 fewer
    employees within these workgroups. As a result, AWA recorded a
    special charge of $2 million related to this
    reduction-in-force. All
    payments were completed as of December 31, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(l) |  | In June 2003, AWA recorded an impairment loss of $3 million
    related to three owned Boeing 737-200 aircraft that were
    grounded and subsequently sold.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        



|   |                      
|-- | ---------------------
|8. | Financial instruments



|    |        
|--- | -------
|(a) | General



121



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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)










|    |                                     
|--- | ------------------------------------
|(b) | Fair values of financial instruments



| |                                                         
| | --------------------------------------------------------
| | Cash Equivalents, Short-term Investments and Receivables





|                                   |                                 |      |       |       |      |   |     |     | 
|---------------------------------- | ------------------------------- | ---- | ----- | ----- | ---- | - | --- | --- | 
|Held-to-maturity securities:       |                                 | 2005 |       |       | 2004 |  
|                                   |                                 |      |       |       |      |  
|Cash and cash equivalents:         |                                 |      |       |       |      |   |     |    
|Corporate notes                    |                                 | $    | 497   |       |      | $ |    |    
|Cash and money market funds        |                                 |      | 628   |       |      |   | 147 |    
|U.S. government securities         |                                 |      |      |       |      |   | 2   |    
|                                   |                                 |      |       |       |      |  
|                                   | Total cash and cash equivalents |      | $     | 1,125 |      |   | $   | 149 | 
|                                   |                                 |      |       |       |      |  
|Short-term investments:            |                                 |      |       |       |      |   |     |    
|Corporate notes                    |                                 | $    | 56    |       |      | $ | 69  |    
|U.S. government securities         |                                 |      |      |       |      |   |    |    
|                                   |                                 |      |       |       |      |  
|                                   | Total short-term investments    |      | $     | 56    |      |   | $   | 69  | 
|                                   |                                 |      |       |       |      |  
|Total Held-to-maturity securities: |                                 | $    | 1,181 |       |      | $ | 218 |    
|                                   |                                 |      |       |       |      |  

|                                    |                              |      |     |     |      |   |    |    | 
|----------------------------------- | ---------------------------- | ---- | --- | --- | ---- | - | -- | -- | 
|Available-for-sale securities:      |                              | 2005 |     |     | 2004 |  
|                                    |                              |      |     |     |      |  
|Short-term investments:             |                              |      |     |     |      |   |    |   
|Auction rate securities             |                              | $    | 396 |     |      | $ | 58 |   
|                                    |                              |      |     |     |      |  
|                                    | Total short-term investments |      | $   | 396 |      |   | $  | 58 | 
|                                    |                              |      |     |     |      |  
|Total Available-for-sale securities |                              | $    | 396 |     |      | $ | 58 |   
|                                    |                              |      |     |     |      |  

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)


held-to held-to






| |               
| | --------------
| | Long-term debt





|   |                                                    
|-- | ---------------------------------------------------
|9. | Long-term debt, including capital lease obligations



|                                                                                                                                          |  |              |       |  |              |   |     | 
|----------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ----- |  | ------------ | - | --- | 
|                                                                                                                                          |  | December 31, |       |  | December 31, |  
|                                                                                                                                          |  | 2005         |       |  | 2004         |  
|                                                                                                                                          |  |              |       |  |              |  
|Secured                                                                                                                                   |  |              |       |  |              |   |     | 
|AWA Citibank Loan (formerly AWA ATSB Loan), variable interest
    rate of 12.27%, installments due 2005 through 2008(a)                   |  | $            | 250   |  |              | $ |    | 
|Equipment notes payable, notes retired September 2005                                                                                     |  |              |      |  |              |   | 39  | 
|Capital lease obligations                                                                                                                 |  |              |      |  |              |   | 8   | 
|GECC term loan, variable interest rate of 8.43%, quarterly
    installments beginning 2006 through 2010(b)                                |  |              | 111   |  |              |   | 111 | 
|Senior secured discount notes, variable interest rate of 7.91%,
    installments due 2005 through 2009(c)                                 |  |              | 34    |  |              |   | 36  | 
|Airbus Loans, variable interest rate of 9.96%, quarterly
    installments beginning 2008 through 2010(d)                                  |  |              | 186   |  |              |   |    | 
|Equipment notes payable, variable interest rates of 6.20% to
    9.22%, averaging 8.50% as of December 31, 2005                           |  |              | 1,240 |  |              |   |    | 
|US Airways Citibank Loan (formerly US Airways ATSB
    Loan), variable interest rate of 10.10%, installments due 2006
    through 2010(e) |  |              | 551   |  |              |   |    | 
|Slot Financing, interest rate of 8%, installments due through
    2015(f)                                                                 |  |              | 50    |  |              |   |    | 
|Capital Lease Obligations, interest rate of 8%, installments due
    through 2021(g)                                                      |  |              | 46    |  |              |   |    | 
|GE Credit Facility, variable interest rate of 8.30%,
    installments due 2006 to 2010(h)                                                 |  |              | 28    |  |              |   |    | 
|                                                                                                                                          |  |              |       |  |              |  
|                                                                                                                                          |  |              | 2,496 |  |              |   | 194 | 
|                                                                                                                                          |  |              |       |  |              |  

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)


|                                                                                                                  |                    |              |       |      |              |   |      |      |  
|----------------------------------------------------------------------------------------------------------------- | ------------------ | ------------ | ----- | ---- | ------------ | - | ---- | ---- | -
|                                                                                                                  |                    | December 31, |       |      | December 31, |  
|                                                                                                                  |                    | 2005         |       |      | 2004         |  
|                                                                                                                  |                    |              |       |      |              |  
|Unsecured                                                                                                         |                    |              |       |      |              |   |      |     
|AWA ATSB Loan, reclassified as secured in 2005(a)                                                                 |                    |              |      |      |              |   | 343  |     
|7% senior convertible notes, interest only payments until
    due in 2020(i)                                      |                    |              | 144   |      |              |   |     |     
|103/4% senior
    unsecured notes, redeemed January 2005(j)                                                       |                    |              |      |      |              |   | 40   |     
|7.5% convertible senior notes, interest only payments until
    due in 2009(k)                                    |                    |              | 112   |      |              |   | 112  |     
|7.25% senior exchangeable notes(l)                                                                                |                    |              |      |      |              |   | 253  |     
|Equipment notes payable, interest rates of 90-day LIBOR +1.25%,
    averaging 5.5%, installments due through 2006 |                    |              | 4     |      |              |   | 16   |     
|Industrial development bonds, fixed interest rate of 6.3% due
    2023(m)                                         |                    |              | 29    |      |              |   | 29   |     
|State loan, variable interest rate of 8.99%, installments due
    2005 through 2007                               |                    |              | 1     |      |              |   | 1    |     
|Juniper prepaid miles, variable interest rate of 8.61%, interest
    only payments until due in 2010(n)           |                    |              | 325   |      |              |   |     |     
|Note payable to PBGC, interest rate of 6%, interest only
    payments until due 2012(o)                           |                    |              | 10    |      |              |   |     |     
|                                                                                                                  |                    |              |       |      |              |  
|                                                                                                                  |                    |              | 625   |      |              |   | 794  |     
|                                                                                                                  |                    |              |       |      |              |  
|Total long-term debt and capital lease obligations                                                                |                    |              | 3,121 |      |              |   | 988  |     
|Less: Unamortized discount on debt                                                                                |                    |              | (161  | )    |              |   | (193 | )   
|                                                                                                                  | Current maturities |              |       | (211 | )            |   |      | (155 | )
|                                                                                                                  |                    |              |       |      |              |  
|Long-term debt and capital lease obligations, net of current
    maturities                                       |                    | $            | 2,749 |      |              | $ | 640  |     
|                                                                                                                  |                    |              |       |      |              |  






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | In January 2002, AWA closed a $429 million loan backed by a
    $380 million federal loan guarantee provided by the ATSB.
    Certain third-party counter-guarantors fully and unconditionally
    guaranteed the payment of an aggregate of $45 million of
    the outstanding principal amount under the government guaranteed
    loan plus accrued and unpaid interest thereon. In addition,
    America West Holdings fully and unconditionally guaranteed the
    payment of all principal, premium, interest and other
    obligations outstanding under the government guaranteed loan and
    pledged the stock of AWA to secure its obligations under such
    guarantee. Principal amounts under this loan were scheduled to
    become due in ten installments of $43 million on each
    March 31 and September 30, commencing on
    March 31, 2004 and ending on September 30, 2008. In
    addition, AWA was charged an annual guarantee fee in respect of
    the ATSB guarantee equal to 8.0% of the guaranteed amount in
    2005. On September 27, 2005, AWA made a voluntary
    prepayment of $9 million in principal, thus reducing the
    remaining semi-annual installments due to $42 million.
    Principal amounts outstanding under the government guaranteed
    loan bear interest at a rate per annum equal to LIBOR plus
    40 basis points.
|   
|    |  | In connection with the consummation of the merger, on
    September 27, 2005, AWA, as borrower, entered into an
    Amended and Restated Loan Agreement (the AWA ATSB
    Loan) with the ATSB. The ATSB Loan amended and restated
    the previously outstanding loans of AWA guaranteed in part by
    the ATSB. On October 19, 2005, $238 million of the AWA
    ATSB Loan, of which $228 million was guaranteed by the
    ATSB, was sold by the lender by order of the ATSB to 13 fixed
    income investors. The sale of the debt removed the ATSB
    guaranty. Due to the sale on October 19, 2005, the ATSB no
    longer guarantees any portion of the loan and has no interest in
    any of AWAs debt. As a result of the sale of the loan,
    $11 million of the outstanding principal balance remains
    guaranteed by certain third party counter- guarantors. The
    non-guaranteed portion of the loan is no longer subject to
    payment of the annual guarantee fee; rather, as of the date of
    the loan sale, those principal amounts                                                                                                                                                                                                                                                                                                             

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | bear interest at a rate per annum equal to LIBOR plus
    840 basis points increasing by 5 basis points on
    January 18 of each year, beginning January 18, 2006 through
    the end of the loan term, payable on a quarterly basis. All
    other terms associated with this loan remain unchanged. As a
    result of the sale of the loan, the AWA ATSB Loan is now
    referred to as the AWA Citibank Loan, and had an outstanding
    balance of $250 million at December 31, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|    |  | The AWA Citibank Loan is now secured debt. It requires certain
    prepayments from the proceeds of specified asset sales by
    US Airways Group and the other loan parties, and
    US Airways Group is required to maintain consolidated
    unrestricted cash and cash equivalents, less: (a) the
    amount of all outstanding advances by credit card processors and
    clearing houses in excess of 20% of the air traffic liabilities;
    (b) $250 million presumed necessary to fund a
    subsequent tax trust (to the extent not otherwise funded by
    US Airways Group); (c) $35 million presumed
    necessary to post collateral to clearing houses (to the extent
    not posted); and (d) any unrestricted cash or cash
    equivalents held in unperfected accounts; in an amount (subject
    to partial reduction under certain circumstances upon mandatory
    prepayments made with the net proceeds of future borrowings and
    issuances of capital stock) not less than:                                                                                                                                                                                                                
|   
|    |  |  $525 million from September 27, 2005
    through March 2006;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|    |  |  $500 million through September 2006;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|    |  |  $475 million through March 2007;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  |  $450 million through September 2007;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|    |  |  $400 million through March 2008;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  |  $350 million through September 2008; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|    |  |  $300 million through September 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(b) |  | On September 10, 2004, AWA entered into a term loan
    financing with GECC providing for loans in an aggregate amount
    of $111 million. AWA used approximately $77 million of
    the proceeds from this financing to repay in full its term loan
    with Mizuho Corporate Bank, Ltd. and certain other lenders and
    to pay certain costs associated with this transaction. AWA used
    the remaining proceeds for general corporate purposes. The new
    term loan financing consists of two secured term loan
    facilities: a $76 million term loan facility secured
    primarily by spare parts, rotables and appliances (the
    Spare Parts Facility); and a $35 million term
    loan facility secured primarily by aircraft engines and parts
    installed in such engines (the Engine Facility).                                                                                                                                                                                                                                                                                                                                                                                            
|   
|    |  | The facilities are cross-collateralized on a subordinated basis,
    and the collateral securing the facilities also secures on a
    subordinated basis certain of AWAs other existing debt and
    lease obligations to GECC and its affiliates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|    |  | The loans under the Spare Parts Facility are payable in full at
    maturity on September 10, 2010. The loans under the Engine
    Facility are payable in equal quarterly installments of
    approximately $1 million beginning on March 10, 2006
    through June 10, 2010, with the remaining loan amount of
    $12 million payable at maturity on September 10, 2010.
    The loans under each facility may be prepaid in an amount not
    less than $5 million at any time after the
    30th monthly anniversary of the funding date under such
    facility. If AWA fails to maintain a certain ratio of rotables
    to loans under the Spare Parts Facility, it may be required to
    pledge additional rotables or cash as collateral, provide a
    letter of credit or prepay some or all of the loans under the
    Spare Parts Facility. In addition, the loans under the Engine
    Facility are subject to mandatory prepayment upon the occurrence
    of certain events of loss applicable to, or certain dispositions
    of, aircraft engines securing the facility. Principal amounts
    outstanding under the loans bear interest at a rate per annum
    based on three-month LIBOR plus a

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | margin. Both facilities contain customary events of default,
    including payment defaults, cross-defaults, breach of covenants,
    bankruptcy and insolvency defaults and judgment defaults.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(c) |  | On December 27, 2004, AWA raised additional capital by
    financing its Phoenix maintenance facility and flight training
    center. The flight training center was previously unencumbered,
    and the maintenance facility became unencumbered earlier in 2004
    when AWA refinanced its term loan. Using its leasehold interest
    in these two facilities as collateral, AWA, through a wholly
    owned subsidiary named FTCHP LLC, raised $31 million
    through the issuance of senior secured discount notes. The notes
    were issued by FTCHP at a discount pursuant to the terms of a
    senior secured term loan agreement among the Company, FTCHP,
    Heritage Bank SSB, as administrative agent, Citibank, N.A., as
    the initial lender, and the other lenders from time to time
    party thereto. Citibank, N.A. subsequently assigned all of its
    interests in the notes to third party lenders.
|   
|    |  | AWA has fully and unconditionally guaranteed the payment and
    performance of FTCHPs obligations under the notes and the
    loan agreement. The notes require aggregate principal payments
    of $36 million with principal payments of $2 million
    due on each of the first two anniversary dates and the remaining
    principal amount due on the fifth anniversary date. The notes
    may be prepaid in full at any time (subject to customary LIBOR
    breakage costs) and in partial amounts of $2 million on the
    third and fourth anniversary dates. The unpaid principal amount
    of the notes bears interest based on LIBOR plus a margin subject
    to adjustment based on a loan to collateral value ratio.                                                                                                                                                                                          
|   
|    |  | The loan agreement contains customary covenants applicable to
    loans of this type, including obligations relating to the
    preservation of the collateral and restrictions on the
    activities of FTCHP. In addition, the loan agreement contains
    events of default, including payment defaults, cross-defaults to
    other debt of FTCHP, if any, breach of covenants, bankruptcy and
    insolvency defaults and judgment defaults.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|    |  | In connection with this financing, AWA sold all of its leasehold
    interests in the maintenance facility and flight training center
    to FTCHP and entered into subleases for the facilities with
    FTCHP at lease rates expected to approximate the interest
    payments due under the notes. In addition, AWA agreed to make
    future capital contributions to FTCHP in amounts sufficient to
    cover principal payments and other amounts owing pursuant to the
    notes and the loan agreement.                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    |  | The proceeds from this financing, together with $11 million
    from operating cash flow, were irrevocably deposited with the
    trustee for AWAs
    103/4% senior
    unsecured notes due 2005, and the notes were subsequently
    redeemed on January 26, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(d) |  | On September 27, 2005, US Airways and AWA entered into
    two loan agreements with Airbus Financial Services
    (AFS), an affiliate of Airbus, with commitments in
    initial aggregate amounts of up to $161 million and up to
    $89 million. The Airbus loans bear interest at a rate of
    LIBOR plus a margin, subject to adjustment during the term of
    the loans under certain conditions, and have been recorded as an
    obligation of US Airways Group. Amounts drawn upon the
    Airbus loans are drawn first upon the Airbus $161 million
    loan until it has been drawn in its full amount, in which event
    the remaining portion of the $250 million total commitment
    is drawn upon the Airbus $89 million loan.                                                                                                                                                                              
|   
|    |  | On September 27, 2005, all of the Airbus $161 million
    loan and $14 million of the Airbus $89 million loan
    were drawn and are available for use for general corporate
    purposes. At December 31, 2005, a total of
    $186 million was drawn under the Airbus loans. The
    remaining portion of the Airbus loans is payable in multiple
    draws upon the occurrence of certain conditions, including the
    taking of delivery of certain aircraft, on the due dates for
    certain amounts owing to AFS or its affiliates to refinance such
    amounts, after payment of certain invoices for goods and
    services provided by AFS or its affiliates, or upon receipt by
    AFS of certain amounts payable in respect of existing aircraft
    financing transactions. The full amount of the Airbus loans is
    expected to be available by the end of 2006.                                              

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | US Airways and AWA are jointly and severally liable for the
    Airbus loans; accordingly, the full amount outstanding under the
    loans is reflected in the financial statements of
    US Airways and AWA.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  | The amortization payments under the Airbus $161 million
    loan will become due in equal quarterly installments of
    $13 million beginning on March 31, 2008, with the
    final installment due on December 31, 2010. The outstanding
    principal amount of Airbus $89 million loan will be
    forgiven in writing on December 31, 2010, or an earlier
    date, if on that date the outstanding principal amount of,
    accrued interest on, and all other amounts due under the Airbus
    $161 million loan have been paid in full and
    US Airways and AWA comply with the aircraft delivery
    schedule.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(e) |  | In connection with the consummation of the merger, on
    September 27, 2005, US Airways, as borrower, entered
    into the US Airways ATSB Loan with the ATSB. Also on
    September 27, 2005, AWA entered into the Amended and
    Restated AWA Loan Agreement. The ATSB Loans amended and restated
    the previously outstanding loans of both US Airways and
    AWA, each guaranteed in part by the ATSB. On October 19,
    2005, $539 million of US Airways ATSB Loan, of which
    $525 million was guaranteed by the ATSB, was sold by the
    lender by order of the ATSB to 13 fixed income investors. Due to
    the sale on October 19, 2005, the ATSB no longer guarantees
    any portion of the loan and has no interest in any of
    US Airways debt. As a result of the sale of the loan,
    the principal amounts bear interest as a rate per annum equal to
    LIBOR plus 600 basis points, payable on a quarterly basis,
    and are no longer subject to payment of the quarterly guarantee
    fee. All other terms associated with this loan remain unchanged.
    As a result of the sale of the loan, the US Airways ATSB
    Loan is now referred to as the US Airways Citibank Loan,
    and had an outstanding balance of $551 million at
    December 31, 2005.
|   
|    |  | Ninety percent of the US Airways Citibank Loan
    (Tranche A), the previously guaranteed portion of the loan,
    was originally funded through a participating lenders
    commercial paper conduit program and bears interest at a rate
    equal to the conduit providers weighted average cost
    related to the issuance of certain commercial paper notes and
    other short term borrowings plus 0.30%, provided that portions
    of Tranche A that are held by the US Airways Citibank
    Loan or by an assignee and no longer subject to such commercial
    paper conduit program bear interest at LIBOR plus 40 basis
    points, and portions of Tranche A that are under certain
    circumstances assigned free of the ATSB guarantee bear interest
    at LIBOR plus 6.0%. Ten percent of the US Airways Citibank
    Loan (Tranche B) bears interest at the greater of the
    Tranche A interest rate plus 6.0% and LIBOR plus 6.0%, as
    compared with the previous rate of LIBOR plus 4.0%. The
    US Airways Citibank loan also reschedules amortization
    payments for US Airways with semi-annual payments beginning
    on March 31, 2007 and continuing through September 30,
    2010.                                                                       
|   
|    |  | The US Airways Citibank Loan requires certain prepayments
    from the proceeds of specified asset sales by US Airways
    Group and the other loan parties, and US Airways Group is
    required to maintain consolidated unrestricted cash and cash
    equivalents, less: (a) the amount of all outstanding
    advances by credit card processors and clearing houses in excess
    of 20% of the air traffic liabilities;
    (b) $250 million presumed necessary to fund a
    subsequent tax trust (to the extent not otherwise funded by
    US Airways Group); (c) $35 million presumed
    necessary to post collateral to clearing houses (to the extent
    not posted); and (d) any unrestricted cash or cash
    equivalents held in unperfected accounts; in an amount (subject
    to partial reduction under certain circumstances upon mandatory
    prepayments made with the net proceeds of future borrowings and
    issuances of capital stock) not less than:                                                                                                                                                                                                                                                                                                             
|   
|    |  |  $525 million from September 27, 2005
    through March 2006;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  |  $500 million through September 2006;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|    |  |  $475 million through March 2007;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  |  $450 million through September 2007;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|    |  |  $400 million through March 2008;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|    |  |  $350 million through September 2008; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  |  $300 million through September 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|    |  | US Airways was required to pay down the principal of its
    loan with the first $125 million of net proceeds from
    specified asset sales identified in connection with its
    Chapter 11 proceedings, whether completed before or after
    emergence. US Airways then retains the next
    $83 million of net proceeds from specified assets sales,
    and must prepay the principal of the loan with 60% of net
    proceeds in excess of an aggregate of $208 million from
    specified asset sales to the ATSB. Any such asset sales proceeds
    up to $275 million are to be applied to the outstanding
    principal balance in order of maturity, and any such asset sales
    proceeds in excess of $275 million are to be applied to the
    outstanding principal balance on a pro rata across all
    maturities in accordance with the loans early amortization
    provisions. As a result, semi-annual payments are now scheduled
    to begin on September 30, 2007, instead of March 31,
    2007, as originally scheduled in the loan agreement.
    US Airways made prepayments totaling $156 million in
    connection with these specified asset sales completed during
    2005.
|   
|(f) |  | In September 2005, US Airways entered into an agreement to
    sell and leaseback certain of its commuter slots at Ronald
    Reagan Washington National Airport and New York LaGuardia
    Airport. US Airways continues to hold the right to
    repurchase the slots anytime after the second anniversary of the
    slot sale/leaseback transaction. These transactions were
    accounted for as secured financings. Installments are due
    monthly through 2015.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(g) |  | Capital lease obligations consist principally of certain airport
    maintenance and facility leases which expire in 2018 and 2021.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(h) |  | GE, together with its affiliates, is US Airways
    Groups largest aircraft creditor, having financed or
    leased a substantial portion of its aircraft prior to the most
    recent Chapter 11 filing. In June 2005, GE purchased the
    assets securing the GE Credit Facility in a sale-leaseback
    transaction. The sale proceeds realized from the sale-leaseback
    transaction were applied to repay the 2003 GE Liquidity
    Facility, the mortgage financing associated with the CRJ
    aircraft and a portion of the 2001 GE Credit Facility. The
    balance of the GECC Credit Facility was amended to allow
    additional borrowings of $21 million in July 2005, which
    resulted in a total principal balance outstanding thereunder of
    $28 million. The operating leases are cross-defaulted with
    all other GE obligations, other than excepted obligations, and
    are subject to agreed upon return conditions.                                                                                                                                                                                                                                                        
|   
|(i) |  | On September 30, 2005, US Airways Group issued
    $144 million aggregate principal amount of 7% Senior
    Convertible Notes due 2020 (the 7% Senior Convertible
    Notes) for proceeds, net of expenses, of approximately
    $139 million. The 7% Senior Convertible Notes are
    US Airways Groups senior unsecured obligations and
    rank equally in right of payment to its other senior unsecured
    and unsubordinated indebtedness and are effectively subordinated
    to its secured indebtedness to the extent of the value of assets
    securing such indebtedness. The 7% Senior Convertible Notes
    are fully and unconditionally guaranteed, jointly and severally
    and on a senior unsecured basis, by US Airways Groups
    two major operating subsidiaries, US Airways and AWA. The
    guarantees are the guarantors unsecured obligations and
    rank equally in right of payment to the other senior unsecured
    and unsubordinated indebtedness of the guarantors and are
    effectively subordinated to the guarantors secured
    indebtedness to the extent of the value of assets securing such
    indebtedness.                                            
|   
|    |  | The 7% Senior Convertible Notes bear interest at the rate
    of 7% per year payable in cash semiannually in arrears on
    March 30 and September 30 of each year, beginning
    March 30, 2006. The 7% Senior Convertible Notes mature
    on September 30, 2020.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | Holders may convert, at any time on or prior to maturity or
    redemption, any outstanding notes (or portions thereof) into
    shares of US Airways Groups common stock, initially
    at a conversion rate of 41.4508 shares of US Airways
    Groups common stock per $1,000 principal amount of notes
    (equivalent to an initial conversion price of approximately
    $24.12 per share of US Airways Groups common
    stock). If a holder elects to convert its notes in connection
    with certain specified fundamental changes that occur prior to
    October 5, 2015, the holder will be entitled to receive
    additional shares of US Airways Groups common stock
    as a make whole premium upon conversion. In lieu of delivery of
    shares of US Airways Groups common stock upon
    conversion of all or any portion of the notes, US Airways
    Group may elect to pay holders surrendering notes for conversion
    cash or a combination of shares and cash.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|    |  | Holders may require US Airways Group to purchase for cash
    or shares or a combination thereof, at US Airways
    Groups election, all or a portion of their 7% Senior
    Convertible Notes on September 30, 2010 and
    September 30, 2015 at a purchase price equal to 100% of the
    principal amount of the 7% Senior Convertible Notes to be
    repurchased plus accrued and unpaid interest, if any, to the
    purchase date. In addition, if US Airways Group experiences
    a specified fundamental change, holders may require
    US Airways Group to purchase for cash, shares or a
    combination thereof, at its election, all or a portion of their
    7% Senior Convertible Notes, subject to specified
    exceptions, at a price equal to 100% of the principal amount of
    the 7% Senior Convertible Notes plus accrued and unpaid
    interest, if any, to the purchase date. Prior to October 5,
    2010, the 7% Senior Convertible Notes will not be
    redeemable at US Airways Groups option.
    US Airways Group may redeem all or a portion of the
    7% Senior Convertible Notes at any time on or after
    October 5, 2010, at a price equal to 100% of the principal
    amount of the 7% Senior Convertible Notes plus accrued and
    unpaid interest, if any, to the redemption date if the closing
    price of US Airways Groups common stock has exceeded
    115% of the conversion price for at least 20 trading days in the
    30 consecutive trading day period ending on the trading day
    before the date on which US Airways Group mails the
    optional redemption notice.
|   
|(j) |  | In August 1995, AWA issued $75 million principal amount of
    103/4% senior
    unsecured notes due 2005, of which $40 million remained
    outstanding at December 31, 2004. Interest on the
    103/4% senior
    unsecured notes was payable semi-annually in arrears on
    March 1 and September 1 of each year. On
    December 27, 2004, AWA called for the redemption on
    January 26, 2005 of all of the senior unsecured notes at a
    redemption price of 100% of the principal amount thereof plus
    accrued and unpaid interest through the redemption date. In
    addition, AWA irrevocably deposited the $31 million raised
    through the maintenance facility and flight training center
    financing, as discussed in note (c) above, together with an
    additional $11 million from its operating cash flow, with
    the trustee for the senior unsecured notes. The senior notes
    were subsequently redeemed on January 26, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(k) |  | In January 2002, in connection with the closing of the original
    AWA ATSB loan and the related transactions, America West
    Holdings issued $105 million of 7.5% convertible
    senior notes due 2009, of which approximately $112 million
    remained outstanding at December 31, 2005 (including
    $22 million of interest paid through December 31, 2004
    as a deemed loan added to the initial principal thereof).
    Beginning January 18, 2005, these notes are convertible
    into shares of common stock of US Airways Group, at the
    option of the holders, at an initial conversion price of
    $29.09 per share or a conversion ratio of approximately
    34.376 shares per $1,000 principal amount of such notes,
    subject to standard anti-dilution adjustments. Interest on the
    7.5% convertible senior notes is payable semiannually in arrears
    on June 1 and December 1 of each year. At America West
    Holdings option, the first six interest payments were
    payable in the form of a deemed loan added to the principal
    amount of these notes. The 7.5% convertible senior notes
    will mature on January 18, 2009 unless earlier converted or
    redeemed. The payment of principal, premium and interest on the
    7.5% convertible senior notes is fully and unconditionally
    guaranteed by AWA and US Airways Group. For financial
    reporting purposes, America West Holdings recorded the
    convertible senior notes at their fair                                                                                                                              

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | market value on the date of issuance. The balance at
    December 31, 2005 is net of an unamortized discount of
    $18 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(l) |  | In July and August of 2003, AWA completed a private placement of
    approximately $87 million issue price of 7.25% Senior
    Exchangeable Notes due 2023. The notes bore cash interest at a
    rate of 2.49% per year, and were redeemable or exchangeable
    under certain conditions. Completion of the merger between
    US Airways Group and America West Holdings on
    September 27, 2005 constituted a change of
    control under these notes and required AWA to make an
    offer to holders to purchase those notes within 30 business days
    after the effective time of the merger at a purchase price of
    $343.61 per $1,000 principal amount at maturity. Under the
    terms of the notes and the related Guarantee and Exchange
    Agreement, dated as of July 30, 2003, between America West
    Holdings and U.S. Bank National Association, as Trustee, as
    supplemented by the Guarantee and Exchange Agreement Supplement
    No. 1 among America West Holdings, US Airways Group
    and the Trustee, dated as of September 27, 2005, AWAs
    obligation to purchase the notes was satisfied at
    US Airways Groups election by delivery of shares of
    US Airways Group common stock having a fair market
    value of not less than $343.61 per $1,000 principal
    amount at maturity. For this purpose, fair market
    value means 95% of the market price of US Airways
    Group common stock calculated as the average closing prices over
    the five business days ending on and including the third
    business day before the purchase date.
|   
|    |  | On October 24, 2005, US Airways Group issued a total
    of 4,156,411 shares of its common stock in exchange for
    approximately $250 million in principal amount at maturity
    of AWAs Senior Exchangeable Notes due 2023, which notes
    were fully and unconditionally guaranteed by US Airways
    Group. The shares were exchanged at a rate of 16 shares of
    US Airways Group common stock per $1,000 principal amount
    at maturity, in full satisfaction of the purchase price of the
    notes. The amount of notes exchanged represented approximately
    99% of the outstanding principal amount, and approximately
    $2 million in principal amount at maturity of the notes
    remained outstanding after the exchange. On November 30,
    2005, US Airways Group issued a total of 38,864 shares
    of its common stock to repurchase the remaining outstanding
    principal amount of the notes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(m) |  | The industrial development revenue bonds are due April 2023.
    Interest at 6.3% is payable semiannually on April 1 and
    October 1. The bonds are subject to optional redemption
    prior to the maturity date on or after April 1, 2008, in
    whole or in part, on any interest payment date at the following
    redemption prices: 102% on April 1 or October 1, 2008;
    101% on April 1 or October 1, 2009; and 100% on
    April 1, 2010 and thereafter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(n) |  | In connection with the merger, AWA, US Airways Group and
    Juniper, entered into an agreement on August 8, 2005
    amending AWAs co-branded credit card agreement with
    Juniper, dated January 25, 2005. Pursuant to the amended
    credit card agreement, Juniper agreed to offer and market an
    airline mileage award credit card program to the general public
    to participate in US Airways Groups Dividend Miles
    program through the use of a co-branded credit card.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|    |  | US Airways Groups credit card program is currently
    administered by Bank of America, N.A. (USA). On
    December 28, 2005, US Airways issued a notice of
    termination under its agreement with Bank of America and that
    notice will become effective on December 28, 2007. Pending
    termination of the Bank of America agreement, both Juniper and
    Bank of America will run separate credit card programs for
    US Airways Group. The amended credit card agreement is the
    subject of pending litigation filed by Bank of America against
    US Airways Group, US Airways and AWA (See
    Note 12(d)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|    |  | The amended credit card agreement took effect at the effective
    time of the merger. The credit card services provided by Juniper
    under the amended credit card agreement began in January 2006,
    and will continue until the expiration date, which is the later
    of December 31, 2012 or seven years from the date on which
    Juniper commences marketing to the general public.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | Under the amended credit card agreement, Juniper will pay to
    US Airways Group fees for each mile awarded to each credit
    card account administered by Juniper, subject to certain
    exceptions. Pursuant to the original credit card agreement,
    Juniper paid to AWA a bonus of $20 million. Juniper also
    agreed to pay a one-time bonus payment of $130 million,
    following the effectiveness of the merger, subject to certain
    conditions. The $130 million bonus payment was made to AWA
    on October 3, 2005. The entire $150 million balance
    for bonus payments are included in Deferred gains and
    other liabilities in the accompanying consolidated balance
    sheet as of December 31, 2005. US Airways Group will
    not recognize any revenue from the bonus payments until the dual
    branding period has expired, approximately February 2008. At
    that time the Company expects to begin recognizing revenue from
    the bonus payments on a straight-line basis through December
    2012, the expiration date of the Juniper agreement. Further, if
    Juniper is not granted exclusivity to offer a co-branded credit
    card after the dual branding period, US Airways Group must
    repay the bonus payments and repurchase unused pre-paid miles
    with interest, plus $50 million in liquidated damages.
    Juniper will pay an annual bonus of $5 million to
    US Airways Group, subject to certain exceptions, for each
    year after Juniper becomes the exclusive issuer of the
    co-branded credit card.
|   
|    |  | In addition, Juniper pre-paid for miles from US Airways
    Group for an aggregate of $325 million, subject to the same
    conditions as apply to the $130 million bonus payment. To
    the extent that the miles are not used by Juniper as allowed
    under with the co-branded credit card program in certain
    circumstances, US Airways Group will repurchase these miles
    in 12 equal quarterly installments beginning on the fifth year
    prior to the expiration date of the amended credit card
    agreement until paid in full. US Airways Group will make
    monthly interest payments at LIBOR plus 4.75% to Juniper,
    beginning on November 1, 2005, based on the amount of pre-
    purchased miles that have not been used by Juniper in connection
    with the co-branded credit card program and have not been
    repurchased by US Airways Group. US Airways Group will
    be required to repurchase pre-purchased miles under certain
    reductions in the collateral held under the credit card
    processing agreement with JP Morgan Chase Bank, N.A.
    Accordingly, the prepayment has been recorded as additional
    indebtedness.                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|    |  | Juniper requires US Airways Group to maintain an average
    quarterly balance of cash, cash equivalents and short-term
    investments of at least $1 billion for the entirety of the
    agreement. Further, the agreement requires US Airways Group
    to maintain certain financial ratios beginning January 1,
    2006. Juniper may, at its option, terminate the amended credit
    card agreement, make payments to US Airways Group under the
    amended credit card agreement in the form of pre-purchased miles
    rather than cash, or require US Airways Group to repurchase
    the pre-purchased miles before the fifth year prior to the
    expiration date in the event that US Airways Group breaches
    its obligations under the amended credit card agreement, or upon
    the occurrence of certain events.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(o) |  | In connection with US Airways Groups emergence from
    bankruptcy in September 2005, it reached a settlement with the
    PBGC related to the termination of three of its defined benefit
    pension plans. The settlement included the issuance of a
    $10 million note which matures in 2012 and bears interest
    at 6% payable annually in arrears.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|           |  |   |       | 
|---------- |  | - | ----- | 
|2006       |  |   | 211   | 
|2007       |  |   | 269   | 
|2008       |  |   | 450   | 
|2009       |  |   | 554   | 
|2010       |  |   | 470   | 
|Thereafter |  |   | 1,167 | 
|           |  |   |      
|           |  | $ | 3,121 | 
|           |  |   |      





|    |                                   
|--- | ----------------------------------
|10. | Employee pension and benefit plans



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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|    |                                                           
|--- | ----------------------------------------------------------
|(a) | Defined benefit and other postretirement benefit
    plans



|                                                 |                                       |                  |     |       |                |   |      |    |  
|------------------------------------------------ | ------------------------------------- | ---------------- | --- | ----- | -------------- | - | ---- | -- | -
|                                                 |                                       |                  |     | Other |               
|                                                 |                                       | Defined Benefit  |     |       | Postretirement |  
|                                                 |                                       | Pension Plans(1) |     |       | Benefits       |  
|                                                 |                                       |                  |     |       |                |  
|                                                 |                                       | Year Ended       |     |       | Year Ended     |  
|                                                 |                                       | Dec. 31, 2005    |     |       | Dec. 31, 2005  |  
|                                                 |                                       |                  |     |       |                |  
|Fair value of plan assets at beginning of period |                                       | $                | 37  |       |                | $ |     |   
|                                                 | Actual return on plan assets          |                  |     | 1     |                |   |      |   |  
|                                                 | Employer contributions                |                  |     |      |                |   |      |   |  
|                                                 | Plan participants contributions      |                  |     |      |                |   |      |   |  
|                                                 | Gross benefits paid                   |                  |     | (1    | )              |   |      |   |  
|                                                 |                                       |                  |     |       |                |  
|Fair value of plan assets at end of period       |                                       |                  | 37  |       |                |   |     |   
|                                                 |                                       |                  |     |       |                |  
|Benefit obligation at beginning of period        |                                       |                  | 64  |       |                |   | 233  |   
|                                                 | Service cost                          |                  |     |      |                |   |      | 1  |  
|                                                 | Interest cost                         |                  |     | 1     |                |   |      | 3  |  
|                                                 | Plan participants contributions      |                  |     |      |                |   |      |   |  
|                                                 | Actuarial (gain) loss                 |                  |     | (4    | )              |   |      | (3 | )
|                                                 | Gross benefits paid                   |                  |     | (1    | )              |   |      |   |  
|                                                 |                                       |                  |     |       |                |  
|Benefit obligation at end of period              |                                       |                  | 60  |       |                |   | 234  |   
|                                                 |                                       |                  |     |       |                |  
|Funded status of the plan                        |                                       |                  | (23 | )     |                |   | (234 | ) 
|                                                 | Unrecognized actuarial (gain)/ loss   |                  |     | (4    | )              |   |      | (3 | )
|                                                 | Contributions for October to December |                  |     |      |                |   |      | 9  |  
|                                                 |                                       |                  |     |       |                |  
|Net liability recognized                         |                                       | $                | (27 | )     |                | $ | (228 | ) 
|                                                 |                                       |                  |     |       |                |  



|                      |  |                 |     |       |                |   |      |  
|--------------------- |  | --------------- | --- | ----- | -------------- | - | ---- | -
|                      |  |                 |     | Other |               
|                      |  | Defined Benefit |     |       | Postretirement |  
|                      |  | Pension Plans   |     |       | Benefits       |  
|                      |  |                 |     |       |                |  
|                      |  | Dec. 31, 2005   |     |       | Dec. 31, 2005  |  
|                      |  |                 |     |       |                |  
|Accrued benefit cost  |  | $               | (27 | )     |                | $ | (228 | )
|                      |  |                 |     |       |                |  
|Net amount recognized |  | $               | (27 | )     |                | $ | (228 | )
|                      |  |                 |     |       |                |  






|    |                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | For plans with accumulated benefit obligations in excess of plan
    assets, the aggregate accumulated benefit obligations, projected
    benefit obligations and plan assets were $56 million,
    $60 million and $37 million, respectively at
    December 31, 2005.

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|                              |  |                 |       |       |                |  |       | 
|----------------------------- |  | --------------- | ----- | ----- | -------------- |  | ----- | 
|                              |  |                 |       | Other |               
|                              |  | Defined Benefit |       |       | Postretirement | 
|                              |  | Pension Plans   |       |       | Benefits       | 
|                              |  |                 |       |       |                | 
|                              |  | Year Ended      |       |       | Year Ended     | 
|                              |  | Dec. 31, 2005   |       |       | Dec. 31, 2005  | 
|                              |  |                 |       |       |                | 
|Discount rate                 |  |                 | 5.75% |       |                |  | 5.30% | 
|Rate of compensation increase |  |                 | 4.00% |       |                |  | 4.00% | 







|                                            |  |             |    |  |             |   |    |  
|------------------------------------------- |  | ----------- | -- |  | ----------- | - | -- | -
|                                            |  | 1% Increase |    |  | 1% Decrease |  
|                                            |  |             |    |  |             |  
|Effect on total service and interest costs  |  | $           | 1  |  |             | $ |   |  
|Effect on postretirement benefit obligation |  | $           | 10 |  |             | $ | (9 | )



|                               |  |                 |      |       |                |  |      |  
|------------------------------ |  | --------------- | ---- | ----- | -------------- |  | ---- | -
|                               |  |                 |      | Other |               
|                               |  | Defined Benefit |      |       | Postretirement | 
|                               |  | Pension Plans   |      |       | Benefits       | 
|                               |  |                 |      |       |                | 
|                               |  | Year Ended      |      |       | Year Ended     | 
|                               |  | Dec. 31, 2005   |      |       | Dec. 31, 2005  | 
|                               |  |                 |      |       |                | 
|Discount rate                  |  |                 | 5.75 | %     |                |  | 5.30 | %
|Expected return on plan assets |  |                 | 8.00 | %     |                |  |     |  
|Rate of compensation increase  |  |                 | 4.00 | %     |                |  | 4.00 | %



|                               |  |               |    |  
|------------------------------ |  | ------------- | -- | -
|                               |  | Year Ended    |   
|                               |  | Dec. 31, 2005 |   
|                               |  |               |   
|Service cost                   |  | $             |   |  
|Interest cost                  |  |               | 1  |  
|Expected return on plan assets |  |               | (1 | )
|                               |  |               |   
|Total periodic cost            |  | $             |   |  
|                               |  |               |   

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|                    |  |               |   | 
|------------------- |  | ------------- | - | 
|                    |  | Year Ended    |  
|                    |  | Dec. 31, 2005 |  
|                    |  |               |  
|Service cost        |  | $             | 1 | 
|Interest cost       |  |               | 3 | 
|                    |  |               |  
|Total periodic cost |  | $             | 4 | 
|                    |  |               |  



|             |  |                 |    |                |                  |   |    |                  |  |   |   | 
|------------ |  | --------------- | -- | -------------- | ---------------- | - | -- | ---------------- |  | - | - | 
|             |  |                 |    | Other          |                  |   |   
|             |  |                 |    | Postretirement |                  |   |   
|             |  | Defined Benefit |    |                | Benefits before  |   |    |                 
|             |  | Pension Plans   |    |                | Medicare Subsidy |   |    | Medicare Subsidy | 
|             |  |                 |    |                |                  |   |    |                  | 
|2006         |  | $               | 2  |                |                  | $ | 27 |                  |  | $ |  | 
|2007         |  |                 | 2  |                |                  |   | 25 |                  |  |   |  | 
|2008         |  |                 | 3  |                |                  |   | 24 |                  |  |   |  | 
|2009         |  |                 | 3  |                |                  |   | 22 |                  |  |   | 1 | 
|2010         |  |                 | 3  |                |                  |   | 21 |                  |  |   | 1 | 
|2011 to 2015 |  |                 | 27 |                |                  |   | 80 |                  |  |   | 2 | 





|                  |  |  |     |  
|----------------- |  |  | --- | -
|Equity securities |  |  | 68  | %
|Debt securities   |  |  | 27  |  
|Real estate       |  |  |    |  
|Other             |  |  | 5   |  
|                  |  |  |    
|Total             |  |  | 100 | %
|                  |  |  |    





|    |                                   
|--- | ----------------------------------
|(b) | Defined contribution pension plans



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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)








|    |                        
|--- | -----------------------
|(c) | Postemployment benefits





|    |                     
|--- | --------------------
|(d) | Profit sharing plans







|    |             
|--- | ------------
|11. | Income Taxes



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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)








|                                                                                    |       |                         |      |   |      |   |     |      |  |   |     |   | 
|----------------------------------------------------------------------------------- | ----- | ----------------------- | ---- | - | ---- | - | --- | ---- |  | - | --- | - | 
|                                                                                    |       | Year Ended December 31, |     
|                                                                                    |       |                         |     
|                                                                                    |       | 2005                    |      |   | 2004 |   |     | 2003 | 
|                                                                                    |       |                         |      |   |      |   |     |      | 
|Income tax expense (benefit) at the federal statutory income tax
    rate           |       | $                       | (188 | ) |      | $ | (31 | )    |  | $ | 20  |  
|State income tax expense (benefit), net of federal income tax
    expense (benefit) |       |                         |     |   |      |   | (3  | )    |  |   | 2   |  
|Change in state deferreds                                                           |       |                         | (15  | ) |      |   |    |      |  |   | (3  | )
|Change in valuation allowance                                                       |       |                         | 218  |   |      |   | 32  |      |  |   | (17 | )
|Book expense not deductible for tax                                                 |       |                         | (4   | ) |      |   |    |      |  |   |    |  
|Indefinite lived asset to goodwill                                                  |       |                         | (13  | ) |      |   |    |      |  |   |    |  
|Other, net                                                                          |       |                         | 2    |   |      |   | 2   |      |  |   | (2  | )
|                                                                                    |       |                         |      |   |      |   |     |      | 
|                                                                                    | Total |                         | $    |  |      |   | $   |     |  |   | $   |  | 
|                                                                                    |       |                         |      |   |      |   |     |      | 



pre-1994


pre-1994


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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




| |                                   
| | ----------------------------------
| | Composition of Deferred Tax Items:



|                                                   |                                           |                                |      |      |       |   |      |     |     |  
|-------------------------------------------------- | ----------------------------------------- | ------------------------------ | ---- | ---- | ----- | - | ---- | --- | --- | -
|                                                   |                                           | 2005                           |      |      | 2004  |  
|                                                   |                                           |                                |      |      |       |  
|Deferred tax assets:                               |                                           |                                |      |      |       |   |      |    
|                                                   | Net operating loss carryforwards          |                                | $    | 569  |       |   | $    | 184 |    
|                                                   | Aircraft leases                           |                                |      | 13   |       |   |      | 14  |    
|                                                   | Employee benefits                         |                                |      | 296  |       |   |      | 13  |    
|                                                   | Frequent flyer accrual                    |                                |      | 4    |       |   |      | 7   |    
|                                                   | Restructuring and other reserves          |                                |      | 3    |       |   |      | 4   |    
|                                                   | Tax credit carryforwards                  |                                |      | 25   |       |   |      | 1   |    
|                                                   | Other                                     |                                |      | 193  |       |   |      | 3   |    
|                                                   |                                           |                                |      |      |       |  
|                                                   |                                           | Gross deferred tax assets      |      |      | 1,103 |   |      |     | 226 |  
|Deferred tax liabilities:                          |                                           |                                |      |      |       |   |      |    
|                                                   | Accelerated depreciation and amortization |                                |      | (391 | )     |   |      | (95 | )  
|                                                   | Aircraft leases                           |                                |      | (27  | )     |   |      |    |    
|                                                   | Sales lease back transactions             |                                |      | (142 | )     |   |      |    |    
|                                                   | Other                                     |                                |      | (128 | )     |   |      | (2  | )  
|                                                   |                                           |                                |      |      |       |  
|                                                   |                                           | Gross deferred tax liabilities |      |      | (688  | ) |      |     | (97 | )
|Net deferred tax assets before valuation allowance |                                           |                                | 415  |      |       |   | 129  |    
|Less valuation allowance                           |                                           |                                | (446 | )    |       |   | (129 | )  
|                                                   |                                           |                                |      |      |       |  
|Net deferred liability                             |                                           | $                              | (31  | )    |       | $ |     |    
|                                                   |                                           |                                |      |      |       |  





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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|    |                              
|--- | -----------------------------
|12. | Commitments and Contingencies



|    |                                                                      
|--- | ---------------------------------------------------------------------
|(a) | Commitments to purchase flight equipment and maintenance
    services



| |                            
| | ---------------------------
| | Airbus Purchase Commitments













| |                             
| | ----------------------------
| | Embraer Purchase Commitments



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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)






| |                                
| | -------------------------------
| | Bombardier Purchase Commitments

CRJ-700




| |                               
| | ------------------------------
| | Engine Maintenance Commitments





|    |       
|--- | ------
|(b) | Leases



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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|           |                                                        |                |    |     |                  |   |       |        | 
|---------- | ------------------------------------------------------ | -------------- | -- | --- | ---------------- | - | ----- | ------ | 
|           |                                                        | Capital Leases |    |     | Operating Leases |  
|           |                                                        |                |    |     |                  |  
|2006       |                                                        | $              | 5  |     |                  | $ | 1,156 |       
|2007       |                                                        |                | 5  |     |                  |   | 1,054 |       
|2008       |                                                        |                | 5  |     |                  |   | 974   |       
|2009       |                                                        |                | 5  |     |                  |   | 872   |       
|2010       |                                                        |                | 5  |     |                  |   | 792   |       
|Thereafter |                                                        |                | 55 |     |                  |   | 5,566 |       
|           |                                                        |                |    |     |                  |  
|           | Total minimum lease payments                           |                |    | 80  |                  |   | $     | 10,414 | 
|           |                                                        |                |    |     |                  |  
|           | Less sublease rental receipts                          |                |    |    |                  |   |       |        | 
|           |                                                        |                |    |     |                  |  
|           | Total minimum lease payments                           |                |    | 80  |                  |   |       |        | 
|           | Less amount representing interest                      |                |    | (34 | )                |   |       |        | 
|           |                                                        |                |    |     |                  |  
|           | Present value of future minimum capital lease payments |                |    | 46  |                  |   |       |        | 
|           | Less current obligations under capital leases          |                |    | (5  | )                |   |       |        | 
|           |                                                        |                |    |     |                  |  
|           | Long-term obligations under capital leases             |                | $  | 41  |                  |   |       |        | 
|           |                                                        |                |    |     |                  |  







|                              |                                        |      |    |    |      |   |    |    | 
|----------------------------- | -------------------------------------- | ---- | -- | -- | ---- | - | -- | -- | 
|                              |                                        | 2005 |    |    | 2004 |  
|                              |                                        |      |    |    |      |  
|Ground property               |                                        | $    | 32 |    |      | $ | 34 |   
|Less accumulated amortization |                                        |      | (1 | )  |      |   | (3 | ) 
|                              |                                        |      |    |    |      |  
|                              | Total net book value of capital leases |      | $  | 31 |      |   | $  | 31 | 
|                              |                                        |      |    |    |      |  





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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)










|    |                                          
|--- | -----------------------------------------
|(c) | Regional jet capacity purchase agreements







|    |                  
|--- | -----------------
|(d) | Legal proceedings



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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)


04-13819-SSM 03-13823-SSM)








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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)






pre-answer






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Notes to Consolidated Financial Statements 
(Continued)






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Notes to Consolidated Financial Statements 
(Continued)










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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)






|    |                                     
|--- | ------------------------------------
|(e) | Guarantees (including revenue bonds)













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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|    |                              
|--- | -----------------------------
|(e) | Concentration of credit risks







|    |                                            
|--- | -------------------------------------------
|13. | Nonoperating income (expenses)  other, net

e-commerce












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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|    |                                   
|--- | ----------------------------------
|14. | Supplemental cash flow information



|                       |                                                                                     |              |   |       |      |  |   |      |   |  |   |     |  
|---------------------- | ----------------------------------------------------------------------------------- | ------------ | - | ----- | ---- |  | - | ---- | - |  | - | --- | -
|                       |                                                                                     | Year Ended   |  
|                       |                                                                                     | December 31, |  
|                       |                                                                                     |              |  
|                       |                                                                                     | 2005         |   |       | 2004 |  |   | 2003 |  
|                       |                                                                                     |              |   |       |      |  |   |      |  
|Non-cash transactions: |                                                                                     |              |   |       |      |  |   |      |   |  |   |    
|                       | Reclassification of investments in debt securities to short-term                    |              | $ | 30    |      |  | $ | 26   |   |  | $ | 29  |  
|                       | Fair value of assets acquired in business combination                               |              |   | 5,568 |      |  |   |     |   |  |   |    |  
|                       | Liabilities assumed in business combination                                         |              |   | 5,451 |      |  |   |     |   |  |   |    |  
|                       | Cancellation of convertible notes                                                   |              |   |      |      |  |   |     |   |  |   | (1  | )
|                       | Cancellation of 10.75% senior unsecured notes related to
    sale of NLG investment |              |   |      |      |  |   |     |   |  |   | (10 | )
|                       | Notes payable issued for equipment purchase deposits                                |              |   | 9     |      |  |   | 17   |   |  |   | 5   |  
|                       | Notes payable canceled under the aircraft purchase agreement                        |              |   | (21   | )    |  |   | (7   | ) |  |   | (7  | )
|                       | Payment in kind notes issued, net of returns                                        |              |   |      |      |  |   | 9    |   |  |   | 9   |  
|                       | Acquisition of shares due to loan default                                           |              |   |      |      |  |   | 2    |   |  |   |    |  
|Cash transactions:     |                                                                                     |              |   |       |      |  |   |      |   |  |   |    
|                       | Interest paid, net of amounts capitalized                                           |              |   | 88    |      |  |   | 24   |   |  |   | 17  |  
|                       | Income taxes paid (refunded)                                                        |              |   |      |      |  |   | 1    |   |  |   | (4  | )



|    |                           
|--- | --------------------------
|15. | Related party transactions







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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)






|    |                                            
|--- | -------------------------------------------
|16. | Merger Accounting and Pro Forma Information



|    |                          
|--- | -------------------------
|(a) | Purchase price allocation



|                                                                                 |                      |   |    |     | 
|-------------------------------------------------------------------------------- | -------------------- | - | -- | --- | 
|Fair value of common shares issued to US Airways
    Groups unsecured creditors |                      | $ | 96 |    
|Estimated merger costs                                                           |                      |   | 21 |    
|                                                                                 |                      |   |   
|                                                                                 | Total purchase price |   | $  | 117 | 
|                                                                                 |                      |   |   



|                        |                      |   |        |     | 
|----------------------- | -------------------- | - | ------ | --- | 
|Current assets          |                      | $ | 1,098  |    
|Property and equipment  |                      |   | 2,367  |    
|Other intangible assets |                      |   | 592    |    
|Other assets            |                      |   | 779    |    
|Goodwill                |                      |   | 732    |    
|Liabilities assumed     |                      |   | (5,451 | )  
|                        |                      |   |       
|                        | Total purchase price |   | $      | 117 | 
|                        |                      |   |       



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Notes to Consolidated Financial Statements 
(Continued)








|                                           |                                             |   |     |     |  
|------------------------------------------ | ------------------------------------------- | - | --- | --- | -
|Goodwill reported as of September 30, 2005 |                                             | $ | 584 |    
|                                           | Property and equipment                      |   |     | 23  |  
|                                           | Other assets                                |   |     | 23  |  
|                                           | Air traffic liability                       |   |     | 11  |  
|                                           | Other accrued expenses                      |   |     | 49  |  
|                                           | Deferred gains and credits                  |   |     | 50  |  
|                                           | Postretirement benefits other than pensions |   |     | (10 | )
|                                           | Employee benefit liabilities and other      |   |     | 2   |  
|                                           |                                             |   |    
|Goodwill reported as of December 31, 2005  |                                             | $ | 732 |    
|                                           |                                             |   |    





|    |                      
|--- | ---------------------
|(b) | Pro forma information



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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|                                        |  |              |        |   |              |   |        |  
|--------------------------------------- |  | ------------ | ------ | - | ------------ | - | ------ | -
|                                        |  | Year Ended   |        |   | Year Ended   |  
|                                        |  | December 31, |        |   | December 31, |  
|                                        |  | 2005         |        |   | 2004         |  
|                                        |  |              |        |   |              |  
|Operating revenues                      |  | $            | 10,440 |   |              | $ | 9,456  |  
|Operating expenses                      |  |              | 10,799 |   |              |   | 9,858  |  
|                                        |  |              |        |   |              |  
|Operating loss                          |  |              | (359   | ) |              |   | (402   | )
|Net loss                                |  | $            | (891   | ) |              | $ | (652   | )
|Basic and fully diluted loss per share  |  | $            | (13.89 | ) |              | $ | (10.93 | )
|Basic and diluted shares (in thousands) |  |              | 64,159 |   |              |   | 59,654 |  



|    |                                           
|--- | ------------------------------------------
|17. | Operating segments and related disclosures





|              |       |              |       |       |              |   |       |              |  |   |       |       | 
|------------- | ----- | ------------ | ----- | ----- | ------------ | - | ----- | ------------ |  | - | ----- | ----- | 
|              |       | Year Ended   |       |       | Year Ended   |   |       | Year Ended   | 
|              |       | December 31, |       |       | December 31, |   |       | December 31, | 
|              |       | 2005         |       |       | 2004         |   |       | 2003         | 
|              |       |              |       |       |              |   |       |              | 
|United States |       | $            | 4,575 |       |              | $ | 2,572 |              |  | $ | 2,431 |      
|Foreign       |       |              | 502   |       |              |   | 176   |              |  |   | 141   |      
|              |       |              |       |       |              |   |       |              | 
|              | Total |              | $     | 5,077 |              |   | $     | 2,748        |  |   | $     | 2,572 | 
|              |       |              |       |       |              |   |       |              | 



|    |                     
|--- | --------------------
|18. | Stockholders Equity



|    |             
|--- | ------------
|(a) | Common Stock

non-U.S. non-U.S.




|    |         
|--- | --------
|(b) | Warrants



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Notes to Consolidated Financial Statements 
(Continued)








|    |                         
|--- | ------------------------
|19. | Stock options and awards







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(Continued)








i.e




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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|                              |           |           |           |          |                |   |       |       | 
|----------------------------- | --------- | --------- | --------- | -------- | -------------- | - | ----- | ----- | 
|                              |           |           |           | Weighted |               
|                              |           | Number of |           |          | Average        |  
|1994 Plan                     |           | Shares    |           |          | Exercise Price |  
|                              |           |           |           |          |                |  
|Balance at December 31, 2002: |           |           | 2,439,270 |          |                | $ | 33.96 |      
|                              | Granted   |           |           |         |                |   |       |      | 
|                              | Exercised |           |           | (97,208  | )              |   | $     | 14.75 | 
|                              | Canceled  |           |           | (448,831 | )              |   | $     | 37.01 | 
|                              |           |           |           |          |                |  
|Balance at December 31, 2003: |           |           | 1,893,231 |          |                | $ | 34.19 |      
|                              | Granted   |           |           |         |                |   |       |      | 
|                              | Exercised |           |           | (9,760   | )              |   | $     | 9.21  | 
|                              | Canceled  |           |           | (211,211 | )              |   | $     | 23.94 | 
|                              |           |           |           |          |                |  
|Balance at December 31, 2004: |           |           | 1,672,260 |          |                | $ | 35.63 |      
|                              | Granted   |           |           |         |                |   |       |      | 
|                              | Exercised |           |           | (167,411 | )              |   | $     | 18.28 | 
|                              | Canceled  |           |           | (237,809 | )              |   | $     | 33.74 | 
|                              |           |           |           |          |                |  
|Balance at December 31, 2005: |           |           | 1,267,040 |          |                | $ | 38.28 |      
|                              |           |           |           |          |                |  

|                              |           |           |           |          |                |   |       |       | 
|----------------------------- | --------- | --------- | --------- | -------- | -------------- | - | ----- | ----- | 
|                              |           |           |           | Weighted |               
|                              |           | Number of |           |          | Average        |  
|2002 Plan                     |           | Shares    |           |          | Exercise Price |  
|                              |           |           |           |          |                |  
|Balance at December 31, 2002: |           |           | 834,025   |          |                | $ | 12.11 |      
|                              | Granted   |           |           | 734,480  |                |   | $     | 8.92  | 
|                              | Exercised |           |           | (88,992  | )              |   | $     | 11.57 | 
|                              | Canceled  |           |           | (75,343  | )              |   | $     | 11.57 | 
|                              |           |           |           |          |                |  
|Balance at December 31, 2003: |           |           | 1,404,170 |          |                | $ | 10.51 |      
|                              |           |           |           |          |                |  
|                              | Granted   |           |           | 813,870  |                |   | $     | 24.49 | 
|                              | Exercised |           |           | (62,139  | )              |   | $     | 8.79  | 
|                              | Canceled  |           |           | (61,705  | )              |   | $     | 16.84 | 
|                              |           |           |           |          |                |  
|Balance at December 31, 2004: |           |           | 2,094,196 |          |                | $ | 15.80 |      
|                              |           |           |           |          |                |  
|                              | Granted   |           |           | 806,075  |                |   | $     | 14.52 | 
|                              | Exercised |           |           | (786,014 | )              |   | $     | 11.37 | 
|                              | Canceled  |           |           | (66,519  | )              |   | $     | 16.35 | 
|                              |           |           |           |          |                |  
|Balance at December 31, 2005: |           |           | 2,047,738 |          |                | $ | 16.98 |      
|                              |           |           |           |          |                |  

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)


|                              |                  |           |           |           |                |   |       |       | 
|----------------------------- | ---------------- | --------- | --------- | --------- | -------------- | - | ----- | ----- | 
|                              |                  |           |           | Weighted  |               
|                              |                  | Number of |           |           | Average        |  
|2005 Plan                     |                  | Shares    |           |           | Exercise Price |  
|                              |                  |           |           |           |                |  
|Balance at December 31, 2004: |                  |           |          |           |                |   |      |      
|                              | Options Granted  |           |           | 2,034,000 |                |   | $     | 23.08 | 
|                              | Awards Granted   |           |           | 696,375   |                |   |       |      | 
|                              | Exercised        |           |           |          |                |   |       |      | 
|                              | Options Canceled |           |           | (61,500   | )              |   | $     | 20.64 | 
|                              | Awards Canceled  |           |           | (9,200    | )              |   |       |      | 
|                              |                  |           |           |           |                |  
|Balance at December 31, 2005: |                  |           | 2,659,675 |           |                | $ | 23.15 |      
|                              |                  |           |           |           |                |  



|                         |  |             |           |          |                  |  |      |                |         |   |             |          |  |          |           |  |  |   |       | 
|------------------------ |  | ----------- | --------- | -------- | ---------------- |  | ---- | -------------- | ------- | - | ----------- | -------- |  | -------- | --------- |  |  | - | ----- | 
|                         |  |             |           | Weighted |                  |  |      |                | Options |   |             | Weighted | 
|                         |  | Options     |           |          | Average          |  |      | Weighted       |         |   | and Awards  |          |  | Average  |          
|                         |  | and Awards  |           |          | Remaining        |  |      | Average        |         |   | Currently   |          |  | Exercise |          
|Range of Exercise Prices |  | Outstanding |           |          | Contractual Life |  |      | Exercise Price |         |   | Exercisable |          |  | Price    |          
|                         |  |             |           |          |                  |  |      |                |         |   |             |          |  |          |          
|$0.00 to $0.00           |  |             | 687,175   |          |                  |  | 2.03 |                |         |   |            |          |  |          |          |  |  |   |      | 
|$0.01 to $9.21           |  |             | 485,879   |          |                  |  | 6.82 |                |         | $ | 7.39        |          |  |          | 485,879   |  |  | $ | 7.39  | 
|$9.22 to $24.05          |  |             | 2,145,485 |          |                  |  | 8.73 |                |         | $ | 17.24       |          |  |          | 887,735   |  |  | $ | 13.94 | 
|$24.06 to $26.06         |  |             | 645,790   |          |                  |  | 7.95 |                |         | $ | 25.56       |          |  |          | 645,790   |  |  | $ | 25.56 | 
|$26.07 to $43.48         |  |             | 1,439,920 |          |                  |  | 7.62 |                |         | $ | 29.14       |          |  |          | 518,920   |  |  | $ | 31.96 | 
|$43.49 to $70.76         |  |             | 570,204   |          |                  |  | 2.81 |                |         | $ | 52.41       |          |  |          | 570,204   |  |  | $ | 52.41 | 
|                         |  |             |           |          |                  |  |      |                |         |   |             |          |  |          |          
|                         |  |             | 5,974,453 |          |                  |  | 6.89 |                |         | $ | 21.58       |          |  |          | 3,108,528 |  |  | $ | 25.40 | 
|                         |  |             |           |          |                  |  |      |                |         |   |             |          |  |          |          



|                         |  |      |     |   |      |  |     |      |  |  |     |  
|------------------------ |  | ---- | --- | - | ---- |  | --- | ---- |  |  | --- | -
|                         |  | 2005 |     |   | 2004 |  |     | 2003 | 
|                         |  |      |     |   |      |  |     |      | 
|Risk free interest rate  |  |      | 3.4 | % |      |  | 3.4 | %    |  |  | 2.8 | %
|Expected dividend yield  |  |      | 0   | % |      |  | 0   | %    |  |  | 0   | %
|Expected life (in years) |  |      | 4.0 |   |      |  | 4.8 |      |  |  | 4.8 |  
|Volatility               |  |      | 54  | % |      |  | 54  | %    |  |  | 70  | %



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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|    |                                                
|--- | -----------------------------------------------
|20. | Valuation and Qualifying Accounts (in millions)

|                                                |                              |            |   |     |           |  |   |            |         |  |           |     |  |  |   |     | 
|----------------------------------------------- | ---------------------------- | ---------- | - | --- | --------- |  | - | ---------- | ------- |  | --------- | --- |  |  | - | --- | 
|                                                |                              | Balance at |   |     |           |  |   |            | Balance | 
|                                                |                              | Beginning  |   |     |           |  |   |            | at End  | 
|Description                                     |                              | of Period  |   |     | Additions |  |   | Deductions |         |  | of Period |    
|                                                |                              |            |   |     |           |  |   |            |         |  |           |    
|Allowance for doubtful receivables:             |                              |            |   |     |           |  |   |            |         |  |           |     |  |  |   |    
|                                                | Year ended December 31, 2005 |            | $ | 1   |           |  | $ | 12(a       | )       |  | $         | 3   |  |  | $ | 10  | 
|                                                |                              |            |   |     |           |  |   |            |         |  |           |    
|                                                | Year ended December 31, 2004 |            | $ | 6   |           |  | $ | 1          |         |  | $         | 6   |  |  | $ | 1   | 
|                                                |                              |            |   |     |           |  |   |            |         |  |           |    
|                                                | Year ended December 31, 2003 |            | $ | 7   |           |  | $ | 1          |         |  | $         | 2   |  |  | $ | 6   | 
|                                                |                              |            |   |     |           |  |   |            |         |  |           |    
|Allowance for obsolescence:                     |                              |            |   |     |           |  |   |            |         |  |           |     |  |  |   |    
|                                                | Year ended December 31, 2005 |            | $ | 15  |           |  | $ | 9          |         |  | $         |    |  |  | $ | 24  | 
|                                                |                              |            |   |     |           |  |   |            |         |  |           |    
|                                                | Year ended December 31, 2004 |            | $ | 12  |           |  | $ | 3          |         |  | $         |    |  |  | $ | 15  | 
|                                                |                              |            |   |     |           |  |   |            |         |  |           |    
|                                                | Year ended December 31, 2003 |            | $ | 9   |           |  | $ | 3          |         |  | $         |    |  |  | $ | 12  | 
|                                                |                              |            |   |     |           |  |   |            |         |  |           |    
|Valuation allowance on deferred tax asset, net: |                              |            |   |     |           |  |   |            |         |  |           |     |  |  |   |    
|                                                | Year ended December 31, 2005 |            | $ | 127 |           |  | $ | 976        |         |  | $         | 657 |  |  | $ | 446 | 
|                                                |                              |            |   |     |           |  |   |            |         |  |           |    
|                                                | Year ended December 31, 2004 |            | $ | 96  |           |  | $ | 55         |         |  | $         | 24  |  |  | $ | 127 | 
|                                                |                              |            |   |     |           |  |   |            |         |  |           |    
|                                                | Year ended December 31, 2003 |            | $ | 79  |           |  | $ | 39         |         |  | $         | 22  |  |  | $ | 96  | 
|                                                |                              |            |   |     |           |  |   |            |         |  |           |    
|Leased aircraft return provision:               |                              |            |   |     |           |  |   |            |         |  |           |     |  |  |   |    
|                                                | Year ended December 31, 2005 |            | $ | 32  |           |  | $ | 2          |         |  | $         | 34  |  |  | $ |    | 
|                                                |                              |            |   |     |           |  |   |            |         |  |           |    
|                                                | Year ended December 31, 2004 |            | $ | 27  |           |  | $ | 7          |         |  | $         | 2   |  |  | $ | 32  | 
|                                                |                              |            |   |     |           |  |   |            |         |  |           |    
|                                                | Year ended December 31, 2003 |            | $ | 22  |           |  | $ | 9          |         |  | $         | 4   |  |  | $ | 27  | 
|                                                |                              |            |   |     |           |  |   |            |         |  |           |    
|Reserves for workforce reduction:               |                              |            |   |     |           |  |   |            |         |  |           |     |  |  |   |    
|                                                | Year ended December 31, 2005 |            | $ |    |           |  | $ | 50(b       | )       |  | $         | 24  |  |  | $ | 26  | 
|                                                |                              |            |   |     |           |  |   |            |         |  |           |    
|                                                | Year ended December 31, 2004 |            | $ |    |           |  | $ |           |         |  | $         |    |  |  | $ |    | 
|                                                |                              |            |   |     |           |  |   |            |         |  |           |    
|                                                | Year ended December 31, 2003 |            | $ |    |           |  | $ |           |         |  | $         |    |  |  | $ |    | 
|                                                |                              |            |   |     |           |  |   |            |         |  |           |    






| |     |                                                                                                                                                               
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | Allowance for doubtful receivables additions in the 2005 period
    include $8 million from the opening balance sheet of
    US Airways at September 27, 2005.
|
| | (b) | Reserves for workforce reduction additions in the 2005 period
    include $53 million from the opening balance sheet of
    US Airways at September 27, 2005. 



|    |                                                   
|--- | --------------------------------------------------
|21. | Select quarterly financial information (unaudited)



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Notes to Consolidated Financial Statements 
(Continued)






|                                                                          |  |             |     |     |                |   |     |           |  |   |                |     |  |   |     |  
|------------------------------------------------------------------------- |  | ----------- | --- | --- | -------------- | - | --- | --------- |  | - | -------------- | --- |  | - | --- | -
|                                                                          |  | 1st Quarter |     |     | 2nd Quarter    |  
|                                                                          |  |             |     |     |                |  
|2005                                                                      |  | (As         |     |     | (As Previously |   |     | (As       |  |   | (As Previously |    
|                                                                          |  | Adjusted)   |     |     | Reported)      |   |     | Adjusted) |  |   | Reported)      |    
|Operating revenues                                                        |  | $           | 733 | (1) |                | $ | 723 |           |  | $ | 842            | (2) |  | $ | 833 |  
|Operating expenses                                                        |  |             | 688 | (1) |                |   | 673 |           |  |   | 829            | (2) |  |   | 803 |  
|Operating income                                                          |  |             | 45  |     |                |   | 50  |           |  |   | 13             |     |  |   | 30  |  
|Nonoperating expenses, net                                                |  |             | (16 | )   |                |   | (16 | )         |  |   | (17            | )   |  |   | (16 | )
|Income tax expense                                                        |  |             |    |     |                |   |    |           |  |   |               |     |  |   |    |  
|Income (loss) before cumulative effect of change in accounting
    policy |  |             | 29  |     |                |   | 34  |           |  |   | (4             | )   |  |   | 14  |  

|                                                                          |  |             |       |     |                |   |     |                |  |   |       |   |  |  |  | 
|------------------------------------------------------------------------- |  | ----------- | ----- | --- | -------------- | - | --- | -------------- |  | - | ----- | - |  |  |  | 
|                                                                          |  | 3rd Quarter |       |     | 4th Quarter    |   |     |               
|                                                                          |  |             |       |     |                |   |     |               
|2005                                                                      |  | (As         |       |     | (As Previously |   |     | (As Previously |  |   |      
|                                                                          |  | Adjusted)   |       |     | Reported)      |   |     | Reported)      |  |   |      
|Operating revenues                                                        |  | $           | 926   |     |                | $ | 926 |                |  | $ | 2,576 |   |  |  |  | 
|Operating expenses                                                        |  |             | 1,009 | (3) |                |   | 997 |                |  |   | 2,768 |   |  |  |  | 
|Operating income                                                          |  |             | (83   | )   |                |   | (71 | )              |  |   | (192  | ) |  |  |  | 
|Nonoperating expenses, net                                                |  |             | (16   | )   |                |   | (16 | )              |  |   | (69   | ) |  |  |  | 
|Income tax expense                                                        |  |             |      |     |                |   |    |                |  |   |      |   |  |  |  | 
|Income (loss) before cumulative effect of change in accounting
    policy |  |             | (99   | )   |                |   | (87 | )              |  |   | (261  | ) |  |  |  | 

|                                                                          |  |              |     |     |                |   |     |              |  |   |                |     |  |   |     |  
|------------------------------------------------------------------------- |  | ------------ | --- | --- | -------------- | - | --- | ------------ |  | - | -------------- | --- |  | - | --- | -
|                                                                          |  | 1st Quarter  |     |     | 2nd Quarter    |  
|                                                                          |  |              |     |     |                |  
|2004                                                                      |  | (Pro Forma   |     |     | (As Previously |   |     | (Pro Forma   |  |   | (As Previously |    
|                                                                          |  | as Adjusted) |     |     | Reported)      |   |     | as Adjusted) |  |   | Reported)      |    
|Operating revenues                                                        |  | $            | 657 | (4) |                | $ | 648 |              |  | $ | 705            | (5) |  | $ | 694 |  
|Operating expenses                                                        |  |              | 648 | (4) |                |   | 634 |              |  |   | 692            | (5) |  |   | 668 |  
|Operating income                                                          |  |              | 9   |     |                |   | 14  |              |  |   | 13             |     |  |   | 26  |  
|Nonoperating expenses                                                     |  |              | (16 | )   |                |   | (16 | )            |  |   | (15            | )   |  |   | (15 | )
|Income tax expense                                                        |  |              |    |     |                |   |    |              |  |   |               |     |  |   |    |  
|Income (loss) before cumulative effect of change in accounting
    policy |  |              | (7  | )   |                |   | (2  | )            |  |   | (2             | )   |  |   | 11  |  

|                                                                          |  |              |     |     |                |   |     |              |  |   |                |     |  |   |     |  
|------------------------------------------------------------------------- |  | ------------ | --- | --- | -------------- | - | --- | ------------ |  | - | -------------- | --- |  | - | --- | -
|                                                                          |  | 3rd Quarter  |     |     | 4th Quarter    |  
|                                                                          |  |              |     |     |                |  
|2004                                                                      |  | (Pro Forma   |     |     | (As Previously |   |     | (Pro Forma   |  |   | (As Previously |    
|                                                                          |  | as Adjusted) |     |     | Reported)      |   |     | as Adjusted) |  |   | Reported)      |    
|Operating revenues                                                        |  | $            | 689 | (6) |                | $ | 679 |              |  | $ | 697            | (7) |  | $ | 580 |  
|Operating expenses                                                        |  |              | 714 | (6) |                |   | 689 |              |  |   | 757            | (7) |  |   | 618 |  
|Operating income                                                          |  |              | (25 | )   |                |   | (10 | )            |  |   | (60            | )   |  |   | (38 | )
|Nonoperating expenses                                                     |  |              | (19 | )   |                |   | (19 | )            |  |   | (19            | )   |  |   | (31 | )
|Income tax expense                                                        |  |              |    |     |                |   |    |              |  |   |               |     |  |   |    |  
|Income (loss) before cumulative effect of change in accounting
    policy |  |              | (44 | )   |                |   | (29 | )            |  |   | (79            | )   |  |   | (69 | )

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)







|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Reflects reclassification of $2 million and $8 million
    related to the sale of frequent flier miles and related
    marketing services to affinity partners from Other
    expenses to Mainline passenger and Other
    revenues. Reflects $5 million additional maintenance
    expense, resulting from the accounting policy change from the
    deferral method for maintenance costs to the direct expense
    method.                                                                                                                                                                                                                                                                                                                                                 
|   
|(2) | Reflects reclassification of $2 million and $7 million
    related to the sale of frequent flier miles and related
    marketing services to affinity partners from Other
    expenses to Mainline passenger and Other
    revenues. Reflects $17 million additional maintenance
    expense, resulting from the accounting policy change from the
    deferral method for maintenance costs to the direct expense
    method.                                                                                                                                                                                                                                                                                                                                                
|   
|(3) | Reflects $12 million additional maintenance expense,
    resulting from the accounting policy change from the deferral
    method for maintenance costs to the direct expense method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(4) | Reflects reclassification of $2 million and $7 million
    related to the sale of frequent flier miles and related
    marketing services to affinity partners from Other
    expenses to Mainline passenger and Other
    revenues. Reflects $5 million additional pro forma
    maintenance expense presented for comparative purposes,
    resulting from the accounting policy change from the deferral
    method for maintenance costs to the direct expense method.                                                                                                                                                                                                                                                                                                    
|   
|(5) | Reflects reclassification of $2 million and $9 million
    related to the sale of frequent flier miles and related
    marketing services to affinity partners from Other
    expenses to Mainline passenger and Other
    revenues. Reflects $13 million additional pro forma
    maintenance expense presented for comparative purposes,
    resulting from the accounting policy change from the deferral
    method for maintenance costs to the direct expense method.                                                                                                                                                                                                                                                                                                   
|   
|(6) | Reflects reclassification of $2 million and $8 million
    related to the sale of frequent flier miles and related
    marketing services to affinity partners from Other
    expenses to Mainline passenger and Other
    revenues. Reflects $15 million additional pro forma
    maintenance expense presented for comparative purposes,
    resulting from the accounting policy change from the deferral
    method for maintenance costs to the direct expense method.                                                                                                                                                                                                                                                                                                   
|   
|(7) | Reflects reclassification of $1 million and $7 million
    related to the sale of frequent flier miles and related
    marketing services to affinity partners from Other
    expenses to Mainline passenger and Other
    revenues, reclassification of $109 million of Express
    operating expenses from operating revenues to operating expenses
    and reclassification of $12 million net loss related to
    fuel hedging activity for settled and
    mark-to-market changes
    from nonoperating to operating expenses. Reflects
    $10 million additional pro forma maintenance expense
    presented for comparative purposes, resulting from the
    accounting policy change from the deferral method for
    maintenance costs to the direct expense method.

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)




|                                                                        |  |                              |        |   |             |   |        |             |  |   |        |  
|----------------------------------------------------------------------- |  | ---------------------------- | ------ | - | ----------- | - | ------ | ----------- |  | - | ------ | -
|                                                                        |  | Year Ended December 31, 2005 |       
|                                                                        |  |                              |       
|                                                                        |  | 1st Quarter                  |        |   | 2nd Quarter |   |        | 3rd Quarter | 
|                                                                        |  |                              |        |   |             |   |        |             | 
|Net income (loss) using the deferral method                             |  | $                            | 34     |   |             | $ | 14     |             |  | $ | (87    | )
|Effect of change to direct expense method                               |  |                              | (5     | ) |             |   | (18    | )           |  |   | (15    | )
|                                                                        |  |                              |        |   |             |   |        |             | 
|Pro forma net income (loss) using the direct expense method             |  | $                            | 29     |   |             | $ | (4     | )           |  | $ | (102   | )
|                                                                        |  |                              |        |   |             |   |        |             | 
|Pro forma earnings (loss) per common share:                             |  |                              |        |   |             |   |        |             |  |   |        |  
|Basic:                                                                  |  |                              |        |   |             |   |        |             |  |   |        |  
|Net income (loss) using the deferral method                             |  | $                            | 2.25   |   |             | $ | 0.94   |             |  | $ | (5.04  | )
|Effect of change to direct expense method                               |  |                              | (0.36  | ) |             |   | (1.22  | )           |  |   | (0.85  | )
|                                                                        |  |                              |        |   |             |   |        |             | 
|Pro forma earnings (loss) per share using the direct expense
    method |  | $                            | 1.89   |   |             | $ | (0.28  | )           |  | $ | (5.89  | )
|                                                                        |  |                              |        |   |             |   |        |             | 
|Diluted:                                                                |  |                              |        |   |             |   |        |             |  |   |        |  
|Net income (loss) using the deferral method                             |  | $                            | 1.49   |   |             | $ | 0.94   |             |  | $ | (5.04  | )
|Effect of change to direct expense method                               |  |                              | (0.20  | ) |             |   | (1.22  | )           |  |   | (0.85  | )
|                                                                        |  |                              |        |   |             |   |        |             | 
|Pro forma earnings (loss) per share using the direct expense
    method |  | $                            | 1.29   |   |             | $ | (0.28  | )           |  | $ | (5.89  | )
|                                                                        |  |                              |        |   |             |   |        |             | 
|Shares used for computation: (000)                                      |  |                              |        |   |             |   |        |             |  |   |        |  
|Basic                                                                   |  |                              | 14,913 |   |             |   | 14,863 |             |  |   | 17,262 |  
|Diluted                                                                 |  |                              | 25,728 |   |             |   | 14,863 |             |  |   | 17,262 |  

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US Airways Group, Inc.


Notes to Consolidated Financial Statements 
(Continued)


|                                                                        |  |                              |        |   |             |   |        |             |  |   |             |   |  |       |        |   |  |   |        |  
|----------------------------------------------------------------------- |  | ---------------------------- | ------ | - | ----------- | - | ------ | ----------- |  | - | ----------- | - |  | ----- | ------ | - |  | - | ------ | -
|                                                                        |  | Year Ended December 31, 2004 |       
|                                                                        |  |                              |       
|                                                                        |  | 1st Quarter                  |        |   | 2nd Quarter |   |        | 3rd Quarter |  |   | 4th Quarter |   |  | Total |       
|                                                                        |  |                              |        |   |             |   |        |             |  |   |             |   |  |       |       
|Net income (loss) using the deferral method                             |  | $                            | (2     | ) |             | $ | 11     |             |  | $ | (29         | ) |  | $     | (69    | ) |  | $ | (89    | )
|Effect of change to direct expense method                               |  |                              | (7     | ) |             |   | (15    | )           |  |   | (19         | ) |  |       | (12    | ) |  |   | (53    | )
|                                                                        |  |                              |        |   |             |   |        |             |  |   |             |   |  |       |       
|Pro forma net income (loss) using the direct expense method             |  | $                            | (9     | ) |             | $ | (4     | )           |  | $ | (48         | ) |  | $     | (81    | ) |  | $ | (142   | )
|                                                                        |  |                              |        |   |             |   |        |             |  |   |             |   |  |       |       
|Pro forma earnings (loss) per common share:                             |  |                              |        |   |             |   |        |             |  |   |             |   |  |       |        |   |  |   |        |  
|Basic:                                                                  |  |                              |        |   |             |   |        |             |  |   |             |   |  |       |        |   |  |   |        |  
|Net income (loss) using the deferral method                             |  | $                            | (0.11  | ) |             | $ | 0.72   |             |  | $ | (1.92       | ) |  | $     | (4.66  | ) |  | $ | (5.99  | )
|Effect of change to direct expense method                               |  |                              | (0.48  | ) |             |   | (1.02  | )           |  |   | (1.25       | ) |  |       | (0.79  | ) |  |   | (3.54  | )
|                                                                        |  |                              |        |   |             |   |        |             |  |   |             |   |  |       |       
|Pro forma earnings (loss) per share using the direct expense
    method |  | $                            | (0.59  | ) |             | $ | (0.30  | )           |  | $ | (3.17       | ) |  | $     | (5.45  | ) |  | $ | (9.53  | )
|                                                                        |  |                              |        |   |             |   |        |             |  |   |             |   |  |       |       
|Diluted:                                                                |  |                              |        |   |             |   |        |             |  |   |             |   |  |       |        |   |  |   |        |  
|Net income (loss) using the deferral method                             |  | $                            | (0.11  | ) |             | $ | 0.72   |             |  | $ | (1.92       | ) |  | $     | (4.66  | ) |  | $ | (5.99  | )
|Effect of change to direct expense method                               |  |                              | (0.48  | ) |             |   | (1.02  | )           |  |   | (1.25       | ) |  |       | (0.79  | ) |  |   | (3.54  | )
|                                                                        |  |                              |        |   |             |   |        |             |  |   |             |   |  |       |       
|Pro forma earnings (loss) per share using the direct expense
    method |  | $                            | (0.59  | ) |             | $ | (0.30  | )           |  | $ | (3.17       | ) |  | $     | (5.45  | ) |  | $ | (9.53  | )
|                                                                        |  |                              |        |   |             |   |        |             |  |   |             |   |  |       |       
|Shares used for computation: (000)                                      |  |                              |        |   |             |   |        |             |  |   |             |   |  |       |        |   |  |   |        |  
|Basic                                                                   |  |                              | 14,789 |   |             |   | 14,852 |             |  |   | 14,896      |   |  |       | 14,907 |   |  |   | 14,861 |  
|Diluted                                                                 |  |                              | 14,789 |   |             |   | 14,852 |             |  |   | 14,896      |   |  |       | 14,907 |   |  |   | 14,861 |  



|    |                 
|--- | ----------------
|22. | Subsequent event



| |                         
| | ------------------------
| | Purchase of 757 aircraft



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|         |                                                                                            
|-------- | -------------------------------------------------------------------------------------------
|Item 8B. | Consolidated Financial Statements and Supplementary Data
    of America West Airlines, Inc.

Report of Independent Registered Public Accounting Firm




















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America West Airlines, Inc.


Consolidated Statements of Operations


For the Years Ended December 31, 2005, 2004 and 2003


(in millions)


|                                                                                                                        |                                               |                                           |      |       |       |   |      |       |       |   |    |       |       | 
|----------------------------------------------------------------------------------------------------------------------- | --------------------------------------------- | ----------------------------------------- | ---- | ----- | ----- | - | ---- | ----- | ----- | - | -- | ----- | ----- | 
|                                                                                                                        |                                               | 2005                                      |      |       | 2004  |   |      | 2003  |      
|                                                                                                                        |                                               |                                           |      |       |       |   |      |       |      
|Operating revenues:                                                                                                     |                                               |                                           |      |       |       |   |      |       |       |   |    |      
|                                                                                                                        | Mainline passenger                            |                                           | $    | 2,521 |       |   | $    | 2,203 |       |   | $  | 2,118 |      
|                                                                                                                        | Express revenue                               |                                           |      | 512   |       |   |      | 353   |       |   |    | 268   |      
|                                                                                                                        | Cargo                                         |                                           |      | 33    |       |   |      | 28    |       |   |    | 27    |      
|                                                                                                                        | Other                                         |                                           |      | 188   |       |   |      | 163   |       |   |    | 158   |      
|                                                                                                                        |                                               |                                           |      |       |       |   |      |       |      
|                                                                                                                        |                                               | Total operating revenues                  |      |       | 3,254 |   |      |       | 2,747 |   |    |       | 2,571 | 
|                                                                                                                        |                                               |                                           |      |       |       |   |      |       |      
|Operating expenses:                                                                                                     |                                               |                                           |      |       |       |   |      |       |       |   |    |      
|                                                                                                                        | Aircraft fuel and related taxes               |                                           |      | 812   |       |   |      | 590   |       |   |    | 404   |      
|                                                                                                                        | Gains on fuel hedging instruments, net        |                                           |      | (75   | )     |   |      | (24   | )     |   |    | (11   | )    
|                                                                                                                        | Salaries and related costs                    |                                           |      | 701   |       |   |      | 655   |       |   |    | 658   |      
|                                                                                                                        | Express expenses                              |                                           |      | 545   |       |   |      | 374   |       |   |    | 287   |      
|                                                                                                                        | Aircraft rent                                 |                                           |      | 327   |       |   |      | 304   |       |   |    | 298   |      
|                                                                                                                        | Aircraft maintenance                          |                                           |      | 259   |       |   |      | 206   |       |   |    | 223   |      
|                                                                                                                        | Other rent and landing fees                   |                                           |      | 176   |       |   |      | 168   |       |   |    | 155   |      
|                                                                                                                        | Selling expenses                              |                                           |      | 161   |       |   |      | 153   |       |   |    | 156   |      
|                                                                                                                        | Special charges (credits), net                |                                           |      | 106   |       |   |      | (16   | )     |   |    | 14    |      
|                                                                                                                        | Depreciation and amortization                 |                                           |      | 53    |       |   |      | 54    |       |   |    | 67    |      
|                                                                                                                        | Other                                         |                                           |      | 309   |       |   |      | 299   |       |   |    | 283   |      
|                                                                                                                        |                                               |                                           |      |       |       |   |      |       |      
|                                                                                                                        |                                               | Total operating expenses                  |      |       | 3,374 |   |      |       | 2,763 |   |    |       | 2,534 | 
|                                                                                                                        |                                               |                                           |      |       |       |   |      |       |      
|Operating income (loss)                                                                                                 |                                               |                                           | (120 | )     |       |   | (16  | )     |       |   | 37 |      
|                                                                                                                        |                                               |                                           |      |       |       |   |      |       |      
|Nonoperating income (expenses):                                                                                         |                                               |                                           |      |       |       |   |      |       |       |   |    |      
|                                                                                                                        | Interest income                               |                                           |      | 25    |       |   |      | 14    |       |   |    | 13    |      
|                                                                                                                        | Interest expense, net                         |                                           |      | (94   | )     |   |      | (86   | )     |   |    | (87   | )    
|                                                                                                                        | Federal government assistance                 |                                           |      |      |       |   |      |      |       |   |    | 81    |      
|                                                                                                                        | Gain on disposition of property and equipment |                                           |      | 2     |       |   |      | 1     |       |   |    |      |      
|                                                                                                                        | Gain on sale of investments                   |                                           |      |      |       |   |      |      |       |   |    | 10    |      
|                                                                                                                        | Other, net                                    |                                           |      | (8    | )     |   |      | 2     |       |   |    | 7     |      
|                                                                                                                        |                                               |                                           |      |       |       |   |      |       |      
|                                                                                                                        |                                               | Total nonoperating income (expenses), net |      |       | (75   | ) |      |       | (69   | ) |    |       | 24    | 
|                                                                                                                        |                                               |                                           |      |       |       |   |      |       |      
|Income (loss) before income taxes and cumulative effect of
    change in accounting principle                           |                                               |                                           | (195 | )     |       |   | (85  | )     |       |   | 61 |      
|Income taxes                                                                                                            |                                               |                                           |     |       |       |   |     |       |       |   |   |      
|                                                                                                                        |                                               |                                           |      |       |       |   |      |       |      
|Income (loss) before cumulative effect of change in accounting
    principle                                            |                                               |                                           | (195 | )     |       |   | (85  | )     |       |   | 61 |      
|Cumulative effect of change in accounting principle (Note 3)                                                            |                                               |                                           | 202  |       |       |   |     |       |       |   |   |      
|                                                                                                                        |                                               |                                           |      |       |       |   |      |       |      
|Net income (loss)                                                                                                       |                                               | $                                         | (397 | )     |       | $ | (85  | )     |       | $ | 61 |      
|                                                                                                                        |                                               |                                           |      |       |       |   |      |       |      
|Unaudited pro forma net income (loss) (assuming change in method
    of accounting was applied retroactively): (Note 3) |                                               |                                           | (195 | )     |       | $ | (138 | )     |       | $ | 56 |      
|                                                                                                                        |                                               |                                           |      |       |       |   |      |       |      



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America West Airlines, Inc.


Consolidated Balance Sheets


December 31, 2005 and 2004


(in millions, except share amounts)


|                                                    |                                                                              |                                         |       |      |       |   |       |      |     | 
|--------------------------------------------------- | ---------------------------------------------------------------------------- | --------------------------------------- | ----- | ---- | ----- | - | ----- | ---- | --- | 
|                                                    |                                                                              | 2005                                    |       |      | 2004  |  
|                                                    |                                                                              |                                         |       |      |       |  
|ASSETS                                             
|Current assets                                      |                                                                              |                                         |       |      |       |   |       |     
|                                                    | Cash and cash equivalents                                                    |                                         | $     | 632  |       |   | $     | 128  |    
|                                                    | Short-term investments                                                       |                                         |       | 319  |       |   |       | 127  |    
|                                                    | Restricted cash                                                              |                                         |       |     |       |   |       | 41   |    
|                                                    | Accounts receivable, net                                                     |                                         |       | 119  |       |   |       | 109  |    
|                                                    | Materials and supplies, net                                                  |                                         |       | 87   |       |   |       | 58   |    
|                                                    | Prepaid expenses and other                                                   |                                         |       | 169  |       |   |       | 141  |    
|                                                    |                                                                              |                                         |       |      |       |  
|                                                    |                                                                              | Total current assets                    |       |      | 1,326 |   |       |      | 604 | 
|Property and equipment                              |                                                                              |                                         |       |      |       |   |       |     
|                                                    | Flight equipment                                                             |                                         |       | 348  |       |   |       | 927  |    
|                                                    | Other property and equipment                                                 |                                         |       | 309  |       |   |       | 289  |    
|                                                    | Less accumulated depreciation and amortization                               |                                         |       | (399 | )     |   |       | (624 | )  
|                                                    |                                                                              |                                         |       |      |       |  
|                                                    |                                                                              |                                         | 258   |      |       |   | 592   |     
|                                                    | Equipment deposits                                                           |                                         |       | 11   |       |   |       | 64   |    
|                                                    |                                                                              |                                         |       |      |       |  
|                                                    |                                                                              | Net property and equipment              |       |      | 269   |   |       |      | 656 | 
|Other assets                                        |                                                                              |                                         |       |      |       |   |       |     
|                                                    | Restricted cash                                                              |                                         |       | 229  |       |   |       | 72   |    
|                                                    | Advances to parent company                                                   |                                         |       | 261  |       |   |       | 259  |    
|                                                    | Other assets, net                                                            |                                         |       | 107  |       |   |       | 120  |    
|                                                    |                                                                              |                                         |       |      |       |  
|                                                    |                                                                              | Total other assets                      |       |      | 597   |   |       |      | 451 | 
|                                                    |                                                                              |                                         |       |      |       |  
|                                                    |                                                                              | $                                       | 2,192 |      |       | $ | 1,711 |     
|                                                    |                                                                              |                                         |       |      |       |  
|                                                   
|LIABILITIES & STOCKHOLDERS EQUITY
    (DEFICIENCY)
|Current liabilities                                 |                                                                              |                                         |       |      |       |   |       |     
|                                                    | Current maturities of long-term debt and capital leases                      |                                         | $     | 94   |       |   | $     | 154  |    
|                                                    | Accounts payable                                                             |                                         |       | 216  |       |   |       | 173  |    
|                                                    | Payable to affiliate, net                                                    |                                         |       | 443  |       |   |       |     |    
|                                                    | Air traffic liability                                                        |                                         |       | 218  |       |   |       | 195  |    
|                                                    | Accrued compensation and vacation                                            |                                         |       | 59   |       |   |       | 43   |    
|                                                    | Accrued taxes                                                                |                                         |       | 25   |       |   |       | 21   |    
|                                                    | Other accrued expenses                                                       |                                         |       | 59   |       |   |       | 66   |    
|                                                    |                                                                              |                                         |       |      |       |  
|                                                    |                                                                              | Total current liabilities               |       |      | 1,114 |   |       |      | 652 | 
|                                                    | Long-term debt and capital leases, net of current maturities                 |                                         |       | 936  |       |   |       | 640  |    
|                                                    | Deferred gains and other liabilities                                         |                                         |       | 252  |       |   |       | 132  |    
|Commitments and contingencies (Note 9)              |                                                                              |                                         |       |      |       |   |       |     
|Stockholders equity (deficiency)                   |                                                                              |                                         |       |      |       |   |       |     
|                                                    | Common stock, $0.01 par, 1,000 shares authorized, issued
    and outstanding |                                         |       |     |       |   |       |     |    
|                                                    | Additional paid-in capital                                                   |                                         |       | 555  |       |   |       | 555  |    
|                                                    | Accumulated deficit                                                          |                                         |       | (665 | )     |   |       | (268 | )  
|                                                    |                                                                              |                                         |       |      |       |  
|                                                    |                                                                              | Total stockholders equity (deficiency) |       |      | (110  | ) |       |      | 287 | 
|                                                    |                                                                              |                                         |       |      |       |  
|                                                    |                                                                              | $                                       | 2,192 |      |       | $ | 1,711 |     
|                                                    |                                                                              |                                         |       |      |       |  



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America West Airlines, Inc.


Consolidated Statements of Cash Flows


(in millions)


|                                               |                                                                                                        |                                                      |                                                      |      |      |      |     |      |     |     |     |      |     |      |  
|---------------------------------------------- | ------------------------------------------------------------------------------------------------------ | ---------------------------------------------------- | ---------------------------------------------------- | ---- | ---- | ---- | --- | ---- | --- | --- | --- | ---- | --- | ---- | -
|                                               |                                                                                                        | 2005                                                 |                                                      |      | 2004 |      |     | 2003 |    
|                                               |                                                                                                        |                                                      |                                                      |      |      |      |     |      |    
|Cash flows from operating activities:          |                                                                                                        |                                                      |                                                      |      |      |      |     |      |     |     |     |     
|                                               | Net income (loss)                                                                                      |                                                      | $                                                    | (397 | )    |      | $   | (85  | )   |     | $   | 61   |    
|                                               | Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities: |                                                      |                                                      |      |      |      |     |      |     |     |     |      |    
|                                               |                                                                                                        | Cumulative effect of change in accounting principle  |                                                      |      | 202  |      |     |      |    |     |     |      |    |     
|                                               |                                                                                                        | Depreciation and amortization                        |                                                      |      | 53   |      |     |      | 54  |     |     |      | 67  |     
|                                               |                                                                                                        | Amortization of capitalized maintenance              |                                                      |      |     |      |     |      | 86  |     |     |      | 105 |     
|                                               |                                                                                                        | Amortization of deferred credits                     |                                                      |      | (8   | )    |     |      | (8  | )   |     |      | (11 | )   
|                                               |                                                                                                        | Amortization of deferred rent                        |                                                      |      | 5    |      |     |      | 6   |     |     |      | 10  |     
|                                               |                                                                                                        | Amortization of warrants                             |                                                      |      | 12   |      |     |      | 7   |     |     |      | 8   |     
|                                               |                                                                                                        | Amortization of debt issue costs and guarantee fees  |                                                      |      | 30   |      |     |      | 36  |     |     |      | 36  |     
|                                               |                                                                                                        | Amortization of bond discount                        |                                                      |      | 5    |      |     |      | 4   |     |     |      | 3   |     
|                                               |                                                                                                        | Amortization of investment discount and premium, net |                                                      |      |     |      |     |      | 1   |     |     |      | 1   |     
|                                               |                                                                                                        | Gain on sale of investments                          |                                                      |      |     |      |     |      |    |     |     |      | (3  | )   
|                                               |                                                                                                        | Special charges, net                                 |                                                      |      | 106  |      |     |      | (15 | )   |     |      | 14  |     
|                                               |                                                                                                        | Other                                                |                                                      |      | (18  | )    |     |      | 28  |     |     |      | 7   |     
|Changes in operating assets and liabilities:   |                                                                                                        |                                                      |                                                      |      |      |      |     |      |     |     |     |     
|                                               | Decrease (increase) in restricted cash                                                                 |                                                      |                                                      | 41   |      |      |     | 1    |     |     |     | (43  | )  
|                                               | Decrease (increase) in accounts receivable, net                                                        |                                                      |                                                      | (10  | )    |      |     | (13  | )   |     |     | 4    |    
|                                               | Decrease (increase) in expendable spare parts and supplies, net                                        |                                                      |                                                      | (3   | )    |      |     | 1    |     |     |     | (2   | )  
|                                               | Increase in prepaid expenses                                                                           |                                                      |                                                      | (53  | )    |      |     | (49  | )   |     |     | (46  | )  
|                                               | Decrease (increase) in other assets, net                                                               |                                                      |                                                      | (37  | )    |      |     | (3   | )   |     |     |     |    
|                                               | Increase (decrease) in accounts payable                                                                |                                                      |                                                      | (7   | )    |      |     | (37  | )   |     |     | 9    |    
|                                               | Increase in air traffic liability                                                                      |                                                      |                                                      | 23   |      |      |     | 20   |     |     |     | 4    |    
|                                               | Increase (decrease) in accrued compensation and vacation benefits                                      |                                                      |                                                      | 12   |      |      |     | (18  | )   |     |     | 20   |    
|                                               | Increase (decrease) in payable to affiliate                                                            |                                                      |                                                      | 998  |      |      |     |     |     |     |     |     |    
|                                               | Decrease in accrued taxes                                                                              |                                                      |                                                      | 4    |      |      |     | (3   | )   |     |     | (17  | )  
|                                               | Increase (decrease) in other accrued liabilities                                                       |                                                      |                                                      | (7   | )    |      |     | 6    |     |     |     | (2   | )  
|                                               | Increase in other liabilities                                                                          |                                                      |                                                      | 23   |      |      |     | 1    |     |     |     | 1    |    
|                                               |                                                                                                        |                                                      |                                                      |      |      |      |     |      |    
|                                               |                                                                                                        |                                                      | Net cash provided by operating activities            |      |      | 974  |     |      |     | 20  |     |      |     | 226  |  
|                                               |                                                                                                        |                                                      |                                                      |      |      |      |     |      |    
|Cash flows from investing activities:          |                                                                                                        |                                                      |                                                      |      |      |      |     |      |     |     |     |     
|                                               | Purchases of property and equipment                                                                    |                                                      |                                                      | (37  | )    |      |     | (219 | )   |     |     | (154 | )  
|                                               | Purchases of short-term investments                                                                    |                                                      |                                                      | (579 | )    |      |     | (488 | )   |     |     | (634 | )  
|                                               | Sales of short-term investments                                                                        |                                                      |                                                      | 416  |      |      |     | 708  |     |     |     | 364  |    
|                                               | Purchases of investments in debt securities                                                            |                                                      |                                                      |     |      |      |     | (35  | )   |     |     | (80  | )  
|                                               | Sales of investments in debt securities                                                                |                                                      |                                                      |     |      |      |     | 20   |     |     |     | 10   |    
|                                               | Increase in restricted cash                                                                            |                                                      |                                                      | (157 | )    |      |     | (2   | )   |     |     | (24  | )  
|                                               | Proceeds from sales of other property and equipment                                                    |                                                      |                                                      | 74   |      |      |     | 32   |     |     |     | 26   |    
|                                               |                                                                                                        |                                                      |                                                      |      |      |      |     |      |    
|                                               |                                                                                                        |                                                      | Net cash provided by (used in) investing activities  |      |      | (283 | )   |      |     | 16  |     |      |     | (492 | )
|                                               |                                                                                                        |                                                      |                                                      |      |      |      |     |      |    
|Cash flows from financing activities           |                                                                                                        |                                                      |                                                      |      |      |      |     |      |     |     |     |     
|                                               | Proceeds from issuance of debt                                                                         |                                                      |                                                      |     |      |      |     | 142  |     |     |     | 87   |    
|                                               | Repayment of debt                                                                                      |                                                      |                                                      | (183 | )    |      |     | (176 | )   |     |     | (17  | )  
|                                               | Payment of debt issue costs                                                                            |                                                      |                                                      |     |      |      |     | (1   | )   |     |     | (3   | )  
|                                               | Other                                                                                                  |                                                      |                                                      | (4   | )    |      |     | (7   | )   |     |     | (2   | )  
|                                               |                                                                                                        |                                                      |                                                      |      |      |      |     |      |    
|                                               |                                                                                                        |                                                      | Net cash provided by (used in) financing activities  |      |      | (187 | )   |      |     | (42 | )   |      |     | 65   |  
|                                               |                                                                                                        |                                                      |                                                      |      |      |      |     |      |    
|                                               |                                                                                                        |                                                      | Net increase (decrease) in cash and cash equivalents |      |      | 504  |     |      |     | (6  | )   |      |     | (201 | )
|Cash and cash equivalents at beginning of year |                                                                                                        |                                                      | 128                                                  |      |      |      | 134 |      |     |     | 335 |     
|                                               |                                                                                                        |                                                      |                                                      |      |      |      |     |      |    
|Cash and cash equivalents at end of year       |                                                                                                        | $                                                    | 632                                                  |      |      | $    | 128 |      |     | $   | 134 |     
|                                               |                                                                                                        |                                                      |                                                      |      |      |      |     |      |    



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America West Airlines, Inc.


Consolidated Statements of Stockholders Equity
(Deficiency)


and Comprehensive Income


For the Years Ended December 31, 2005, 2004 and 2003


(in millions)


|                                            |  |            |     |  |             |   |                   |               |  |   |       |   |  |   |      |  
|------------------------------------------- |  | ---------- | --- |  | ----------- | - | ----------------- | ------------- |  | - | ----- | - |  | - | ---- | -
|                                            |  | Additional |     |  |             |   | Accumulated Other |               |  |  
|                                            |  | Paid-In    |     |  | Accumulated |   |                   | Comprehensive |  |   |      
|                                            |  | Capital    |     |  | Deficit     |   |                   | Income        |  |   | Total |  
|                                            |  |            |     |  |             |   |                   |               |  |   |       |  
|Balance at December 31, 2002                |  | $          | 555 |  |             | $ | (244              | )             |  | $ | 2     |   |  | $ | 313  |  
|                                            |  |            |     |  |             |   |                   |               |  |   |       |  
|Net income                                  |  |            |    |  |             |   | 61                |               |  |   |      |   |  |   | 61   |  
|Correction of other comprehensive income(a) |  |            |    |  |             |   |                  |               |  |   | (2    | ) |  |   | (2   | )
|                                            |  |            |     |  |             |   |                   |               |  |   |       |  
|Balance at December 31, 2003, as restated   |  | $          | 555 |  |             | $ | (183              | )             |  | $ |      |   |  | $ | 372  |  
|                                            |  |            |     |  |             |   |                   |               |  |   |       |  
|Net loss                                    |  |            |    |  |             |   | (85               | )             |  |   |      |   |  |   | (85  | )
|                                            |  |            |     |  |             |   |                   |               |  |   |       |  
|Balance at December 31, 2004                |  | $          | 555 |  |             | $ | (268              | )             |  | $ |      |   |  | $ | 287  |  
|                                            |  |            |     |  |             |   |                   |               |  |   |       |  
|Net loss                                    |  |            |    |  |             |   | (397              | )             |  |   |      |   |  |   | (397 | )
|                                            |  |            |     |  |             |   |                   |               |  |   |       |  
|Balance at December 31, 2005                |  | $          | 555 |  |             | $ | (665              | )             |  | $ |      |   |  | $ | (110 | )
|                                            |  |            |     |  |             |   |                   |               |  |   |       |  






|    |  |                                                                                         
|--- |  | ----------------------------------------------------------------------------------------
|(a) |  | Correction of Other Comprehensive Income  See
    Note 2 (j), Derivative Instruments.



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America West Airlines, Inc.


Notes to Consolidated Financial Statements




|   |                                                                        
|-- | -----------------------------------------------------------------------
|1. | Merger Agreement between US Airways Group and America
    West Holdings





New equity investments


Public stock offering


GE Merger MOU




| |   |                                                                                                                                                                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | GE agreed to the early return to GECC of ten leased aircraft
    including six Boeing
    737-300 and four Airbus
    A320-200 aircraft. Five of these aircraft, including one Boeing
    737-300s and four
    Airbus A320-200s were
    already returned and the remaining aircraft are scheduled for
    return by the fourth quarter of 2006.
|
| |  | GE also agreed to waive certain return conditions, as provided
    in the underlying lease agreements, related to the early return
    aircraft described above.                                                                                                                                                                                 

Airbus MOU




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | On September 27, 2005, US Airways and AWA entered into
    two loan agreements with Airbus Financial Services, as Initial
    Lender and Loan Agent, Wells Fargo Bank Northwest, National
    Association, as Collateral Agent, and US Airways Group, as
    guarantor, with commitments in initial aggregate amounts of up
    to $161 million and up to $89 million. The Airbus
    loans bear interest at a rate of LIBOR plus a margin, subject to
    adjustment, and have been recorded as an obligation of
    US Airways Group.
|
| |  | AVSA and AWA agreed to reschedule the delivery dates of 11
    aircraft to be purchased under an existing amended agreement,
    including three
    A319-100 and eight
    A320-200 aircraft. All
    of the A320-200 aircraft and two of the A319-100 aircraft were
    originally scheduled for delivery in 2006                                                                                                                                                                                                                    

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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | with the last A319-100 to be delivered in the first quarter of
    2007. As rescheduled, these aircraft will be from March through
    December 2009.                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | In connection with the restructuring of aircraft firm orders,
    US Airways Group and America West Holdings were required to
    pay an aggregate non-refundable restructuring fee which was paid
    by means of set-off against existing equipment purchase deposits
    of US Airways Group and America West Holdings held by
    Airbus. The America West Holdings restructuring fee of
    $50 million has been recorded as a special charge in the
    accompanying consolidated statement of operations, along with
    $7 million in related capitalized interest.

Restructuring of the ATSB
Loan Guarantees






New Convertible Notes


Restructuring of Affinity Credit Card Partner
Agreement


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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)












Restructuring of Credit Card Processing
Agreement successor-in


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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)








Asset Based Financings




|   |                                                                         
|-- | ------------------------------------------------------------------------
|2. | Basis of Presentation and Summary of Significant Accounting
    Policies



|    |                                               
|--- | ----------------------------------------------
|(a) | Nature of operations and operating environment









|    |                      
|--- | ---------------------
|(b) | Basis of Presentation



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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)








|    |                                                  
|--- | -------------------------------------------------
|(c) | Cash, Cash Equivalents and Short-term Investments









|    |                
|--- | ---------------
|(d) | Restricted Cash





|    |                            
|--- | ---------------------------
|(e) | Materials and supplies, net





|    |                       
|--- | ----------------------
|(f) | Property and Equipment





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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)








|    |             
|--- | ------------
|(g) | Income Taxes





|    |                  
|--- | -----------------
|(h) | Other assets, net





|    |                          
|--- | -------------------------
|(i) | Frequent Traveler Program





|    |                       
|--- | ----------------------
|(j) | Derivative Instruments









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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)








|    |                 
|--- | ----------------
|(k) | Deferred Credits







|    |                  
|--- | -----------------
|(l) | Passenger Revenue









|    |                         
|--- | ------------------------
|(m) | Stock-based Compensation



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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)






|                                                                                  |  |      |      |   |      |   |     |      |  |   |    |  
|--------------------------------------------------------------------------------- |  | ---- | ---- | - | ---- | - | --- | ---- |  | - | -- | -
|                                                                                  |  | 2005 |      |   | 2004 |   |     | 2003 | 
|                                                                                  |  |      |      |   |      |   |     |      | 
|Net income (loss), as reported                                                    |  | $    | (397 | ) |      | $ | (85 | )    |  | $ | 61 |  
|Add: Stock-based compensation included in reported net income
    (loss)          |  |      | 3    |   |      |   |    |      |  |   |   |  
|Deduct: Stock-based compensation determined under the fair value
    based method |  |      | (11  | ) |      |   | (6  | )    |  |   | (4 | )
|                                                                                  |  |      |      |   |      |   |     |      | 
|Pro forma net income (loss)                                                       |  | $    | (405 | ) |      | $ | (91 | )    |  | $ | 57 |  
|                                                                                  |  |      |      |   |      |   |     |      | 



|    |                             
|--- | ----------------------------
|(n) | Maintenance and Repair Costs





|    |                 
|--- | ----------------
|(o) | Selling expenses





|    |                 
|--- | ----------------
|(p) | Express expenses



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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|                                |  |              |     |  |              |   |     |              |  |   |     | 
|------------------------------- |  | ------------ | --- |  | ------------ | - | --- | ------------ |  | - | --- | 
|                                |  | Year Ended   |     |  | Year Ended   |   |     | Year Ended   | 
|                                |  | December 31, |     |  | December 31, |   |     | December 31, | 
|                                |  | 2005         |     |  | 2004         |   |     | 2003         | 
|                                |  |              |     |  |              |   |     |              | 
|Aircraft fuel and related taxes |  | $            | 182 |  |              | $ | 102 |              |  | $ | 61  | 
|Capacity purchases              |  |              | 317 |  |              |   | 238 |              |  |   | 198 | 
|Other rent and landing fees     |  |              | 11  |  |              |   | 8   |              |  |   | 7   | 
|Selling expenses                |  |              | 32  |  |              |   | 23  |              |  |   | 19  | 
|Other expenses                  |  |              | 3   |  |              |   | 3   |              |  |   | 2   | 
|                                |  |              |     |  |              |   |     |              | 
|Express expenses                |  | $            | 545 |  |              | $ | 374 |              |  | $ | 287 | 
|                                |  |              |     |  |              |   |     |              | 



|    |                                 
|--- | --------------------------------
|(q) | Recent Accounting Pronouncements











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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)










|   |                                                  
|-- | -------------------------------------------------
|3. | Change in Accounting Policy for Maintenance Costs









|   |                                                                                               
|-- | ----------------------------------------------------------------------------------------------
|4. | Change in Method of Reporting for America West Express
    Results and Other Reclassifications



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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)












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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|                         |  |                              |       |  |                   |   |     |              |  |   |       | 
|------------------------ |  | ---------------------------- | ----- |  | ----------------- | - | --- | ------------ |  | - | ----- | 
|                         |  | Year Ended December 31, 2004 |      
|                         |  |                              |      
|                         |  | As Previously                |       |  |                   |   | As  |             
|                         |  | Reported                     |       |  | Reclassifications |   |     | Reclassified | 
|                         |  |                              |       |  |                   |   |     |              | 
|Operating revenues:      |  |                              |       |  |                   |   |     |              |  |   |       | 
|Mainline passenger       |  | $                            | 2,197 |  |                   | $ | 6   | (1)          |  | $ | 2,203 | 
|Express revenue          |  |                              |      |  |                   |   | 353 | (2)          |  |   | 353   | 
|Cargo and other          |  |                              | 141   |  |                   |   | 50  | (2)(3)       |  |   | 191   | 
|                         |  |                              |       |  |                   |   |     |              | 
|Total operating revenues |  | $                            | 2,338 |  |                   | $ | 409 |              |  | $ | 2,747 | 
|                         |  |                              |       |  |                   |   |     |              | 
|Operating expenses:      |  |                              |       |  |                   |   |     |              |  |   |       | 
|Operating expenses       |  | $                            | 2,378 |  |                   | $ | 11  | (4)(5)       |  | $ | 2,389 | 
|Express expenses         |  |                              |      |  |                   |   | 374 | (5)          |  |   | 374   | 
|                         |  |                              |       |  |                   |   |     |              | 
|Total operating expenses |  | $                            | 2,378 |  |                   | $ | 385 |              |  | $ | 2,763 | 
|                         |  |                              |       |  |                   |   |     |              | 

|                         |  |                              |       |  |                   |   |     |              |  |   |       | 
|------------------------ |  | ---------------------------- | ----- |  | ----------------- | - | --- | ------------ |  | - | ----- | 
|                         |  | Year Ended December 31, 2003 |      
|                         |  |                              |      
|                         |  | As Previously                |       |  |                   |   | As  |             
|                         |  | Reported                     |       |  | Reclassifications |   |     | Reclassified | 
|                         |  |                              |       |  |                   |   |     |              | 
|Operating revenues:      |  |                              |       |  |                   |   |     |              |  |   |       | 
|Mainline passenger       |  | $                            | 2,114 |  |                   | $ | 4   | (6)          |  | $ | 2,118 | 
|Express revenue          |  |                              |      |  |                   |   | 268 | (7)          |  |   | 268   | 
|Cargo and other          |  |                              | 140   |  |                   |   | 45  | (7)(8)       |  |   | 185   | 
|                         |  |                              |       |  |                   |   |     |              | 
|Total operating revenues |  | $                            | 2,254 |  |                   | $ | 317 |              |  | $ | 2,571 | 
|                         |  |                              |       |  |                   |   |     |              | 
|Operating expenses:      |  |                              |       |  |                   |   |     |              |  |   |       | 
|Operating expenses       |  | $                            | 2,228 |  |                   | $ | 19  | (9)(10)      |  | $ | 2,247 | 
|Express expenses         |  |                              |      |  |                   |   | 287 | (10)         |  |   | 287   | 
|                         |  |                              |       |  |                   |   |     |              | 
|Total operating expenses |  | $                            | 2,228 |  |                   | $ | 306 |              |  | $ | 2,534 | 
|                         |  |                              |       |  |                   |   |     |              | 






|    |                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Reclassification of $6 million related to the sale of
    frequent flier miles and related marketing services to affinity
    partners from Operating expenses  Other
    to Operating revenues  Mainline passenger.                                                                                                                                                               
|   
|(2) | Reclassification of $353 million Express revenue and
    $371 million Express operating expenses from
    Operating revenues  Other to
    Mainline passenger revenue and to Operating
    expenses  Other.                                                                                                                                                                      
|   
|(3) | Reclassification of $32 million related to the sale of
    frequent flier miles and related marketing services to affinity
    partners from Operating expenses  Other
    to Operating revenues  Other.                                                                                                                                                                           
|   
|(4) | Reclassification of $24 million credit related to fuel
    hedging activity from nonoperating to operating expenses.
    Reclassification of $38 million related to the sale of
    frequent flier miles and related marketing services to affinity
    partners from Operating expenses  Other
    to Operating revenues  Mainline passenger
    and Operating revenues  Other.
|   
|(5) | Reclassification of $371 million and $3 million of
    Express operating expenses from Operating
    revenues  Other and Operating
    expenses  Other, respectively.                                                                                                                                                                                                              

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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|    |                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(6) | Reclassification of $4 million related to the sale of
    frequent flier miles and related marketing services to affinity
    partners from Operating expenses  Other
    to Operating revenues  Mainline passenger.                                                                                                                                                                
|   
|(7) | Reclassification of $268 million Express revenue and
    $285 million Express operating expenses from
    Operating revenues  Other to
    Mainline passenger revenue and to Operating
    expenses  Other.                                                                                                                                                                       
|   
|(8) | Reclassification of $28 million related to the sale of
    frequent flier miles and related marketing services to affinity
    partners from Operating expenses  Other
    to Operating revenues  Other.                                                                                                                                                                            
|   
|(9) | Reclassification of $11 million credit related to fuel
    hedging activity from nonoperating to operating expenses.
    Reclassification of $32 million related to the sale of
    frequent flier miles and related marketing services to affinity
    partners from Operating expenses   Other
    to Operating revenues  Mainline passenger
    and Operating revenues  Other.



|     |                                                                                                                                                                            
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Reclassification of $285 million and $2 million of
    Express operating expenses from Operating
    revenues  Other and Operating
    expenses  Other, respectively.





|   |                
|-- | ---------------
|5. | Special Charges



|                                                 |  |                         |     |     |      |   |     |      |  |   |    |     
|------------------------------------------------ |  | ----------------------- | --- | --- | ---- | - | --- | ---- |  | - | -- | ----
|                                                 |  | Year Ended December 31, |    
|                                                 |  |                         |    
|                                                 |  | 2005                    |     |     | 2004 |   |     | 2003 | 
|                                                 |  |                         |     |     |      |   |     |      | 
|Airbus restructuring                             |  | $                       | 57  | (a) |      | $ |    |      |  | $ |   |     
|Sale leaseback transactions                      |  |                         | 27  | (b) |      |   | (1  | )(g) |  |   |   |     
|Merger related transition expenses               |  |                         | 13  | (c) |      |   |    |      |  |   |   |     
|Power by the hour program penalties              |  |                         | 7   | (d) |      |   |    |      |  |   |   |     
|Severance due to change in control               |  |                         | 2   | (e) |      |   |    |      |  |   |   |     
|Aircraft returns                                 |  |                         | 1   | (f) |      |   | 2   | (f)  |  |   | (1 | )(i)
|Termination of V2500 power by the hour agreement |  |                         |    |     |      |   | (16 | )(h) |  |   |   |     
|Elimination of hub operations  Columbus         |  |                         |    |     |      |   |    |      |  |   | 11 | (j) 
|Reduction in workforce                           |  |                         |    |     |      |   |    |      |  |   | 2  | (k) 
|Impairment loss on aircraft                      |  |                         |    |     |      |   |    |      |  |   | 3  | (l) 
|Other                                            |  |                         | (1  | )   |      |   | (1  | )    |  |   | (1 | )   
|                                                 |  |                         |     |     |      |   |     |      | 
|Total                                            |  | $                       | 106 |     |      | $ | (16 | )    |  | $ | 14 |     
|                                                 |  |                         |     |     |      |   |     |      | 






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | In the third quarter of 2005, in connection with the merger and
    the Airbus MOU executed between Airbus, US Airways Group,
    US Airways and AWA, certain aircraft firm orders were
    restructured. In connection with that restructuring,
    US Airways Group and America West Holdings were required to
    pay non-refundable restructuring fees. AWAs restructuring
    fee of $50 million has been classified as a special charge,
    along with $7 million in associated capitalized interest.
    The restructuring fee was paid by means of set-off against
    existing equipment deposits of AWA held by Airbus.
|   
|(b) |  | In the third quarter of 2005, a $27 million loss was
    incurred related to the sale-leaseback of six
    737-300 aircraft and
    two 757 aircraft.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) |  | In the fourth quarter of 2005, AWA recorded $13 million of
    merger related expenses related to transitioning the employees,
    systems and facilities of AWA and US Airways into one
    consolidated company. The $13 million includes insurance
    premiums of $4 million related to policies for former
    officers and directors, compensation expense of $3 million
    for special stock awards, granted under a program designed to
    retain key employees through the integration period,
    professional and technical fees of $3 million and sales and
    marketing program expenses of $2 million related to
    notifying frequent traveler program members about the merger.                                                                                                                                                                                                                                                                                                                                                                           
|   
|(d) |  | In the fourth quarter of 2005, in connection with the return of
    certain leased aircraft, AWA incurred expenses of
    $7 million related to penalties incurred under the
    outsourced maintenance arrangement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(e) |  | In the third and fourth quarter of 2005, AWA recorded severance
    expense totaling approximately $2 million for terminated
    employees resulting from the merger. The majority of the
    $2 million will be paid in the first quarter of 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(f) |  | In August 2004, AWA entered into definitive agreements with two
    lessors to return six Boeing
    737-200 aircraft. Three
    of these aircraft were returned to the lessors in the third
    quarter of 2004, two were returned in the fourth quarter of 2004
    and one was returned in January 2005. In addition, AWA continues
    negotiating with one lessor on the return of its remaining two
    Boeing 737-200 aircraft, one of which was parked in March 2002.
    The other aircraft was removed from service in January 2005. In
    connection with the return of the aircraft, AWA recorded
    $2 million of special charges in 2004, which include lease
    termination payments of $2 million and the write-down of
    leasehold improvements and aircraft rent balances of
    $3 million, offset by the net reversal of lease return
    provisions of $3 million. In the first quarter of 2005, AWA
    recorded $1 million in special charges related to the final
    Boeing 737-200 aircraft which was removed from service in
    January 2005.
|   
|(g) |  | In the first quarter of 2004, AWA recorded a $1 million
    reduction in special charges related to the revision of
    estimated costs associated with the sale and leaseback of
    certain aircraft.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(h) |  | In December 2004, AWA and GE mutually agreed to terminate the
    V2500 A-1 power by hour
    (PBH) agreement effective January 1, 2005. This
    agreement was entered into March 1998 with an original term of
    ten years. For terminating the agreement early, AWA received a
    $20 million credit to be applied to amounts due for other
    engines under the 1998 agreement. AWA had capitalized PBH
    payments for V2500 A-1
    engines in excess of the unamortized cost of the overhauls
    performed by GE of approximately $4 million. With the
    termination of this agreement, these payments were not
    realizable and as a result, AWA wrote off this amount against
    the $20 million credit referred to above, resulting in a
    $16 million net gain.                                                                                                                                                                                                                                                                                     
|   
|(i) |  | In the first quarter of 2003, AWA recorded a $1 million
    reduction in special charges related to the earlier-than-planned
    return of certain leased aircraft in 2001 and 2002, as all
    payments related to these aircraft returns had been made.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(j) |  | In February 2003, AWA announced the elimination of its hub
    operations in Columbus, Ohio. As a result, 12 regional jets, all
    of which were operated by Chautauqua Airlines under the America
    West Express banner, were phased out of the fleet. In addition,
    the hub was downsized from 49 daily departures to 15
    destinations to four flights per day to Phoenix and Las Vegas.
    Service to New York City La Guardia Airport was also
    eliminated because perimeter rules at the airport prohibit
    flights beyond 1,500 miles, precluding service from
    AWAs hubs in Phoenix and Las Vegas. In the first, second
    and third quarters of 2003, AWA recorded special charges
    totaling $11 million related to the costs associated with
    the termination of certain aircraft and facility contracts,
    employee transfer and severance expenses and the write-off of
    leasehold improvements in Columbus, Ohio. All payments were
    completed as of December 31, 2005.                                                         
|   
|(k) |  | In April 2003, as part of a cost reduction program, AWA
    implemented a plan to reduce management, professional and
    administrative payroll costs that resulted in 161 fewer
    employees within these                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|    |  |                                                                                                                                                                          
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | workgroups. As a result, AWA recorded a special charge of
    $2 million related to this
    reduction-in-force. All
    payments were completed as of December 31, 2005.
|   
|(l) |  | In June 2003, AWA recorded an impairment loss of $3 million
    related to three owned Boeing
    737-200 aircraft that
    were grounded and subsequently sold.         



|   |                         
|-- | ------------------------
|6. | Stock Options and Awards





|   |                      
|-- | ---------------------
|7. | Financial Instruments



|    |                                    
|--- | -----------------------------------
|(a) | Fair Value of Financial Instruments



| |                                                         
| | --------------------------------------------------------
| | Cash Equivalents, Short-term Investments and Receivables





|                                   |                                 |      |     |     |      |   |     |     | 
|---------------------------------- | ------------------------------- | ---- | --- | --- | ---- | - | --- | --- | 
|Held-to-maturity securities:       |                                 | 2005 |     |     | 2004 |  
|                                   |                                 |      |     |     |      |  
|Cash and cash equivalents:         |                                 |      |     |     |      |   |     |    
|Corporate notes                    |                                 | $    | 318 |     |      | $ |    |    
|Cash and money market funds        |                                 |      | 314 |     |      |   | 127 |    
|U.S. government securities         |                                 |      |    |     |      |   | 1   |    
|                                   |                                 |      |     |     |      |  
|                                   | Total cash and cash equivalents |      | $   | 632 |      |   | $   | 128 | 
|                                   |                                 |      |     |     |      |  
|Short-term investments:            |                                 |      |     |     |      |   |     |    
|Corporate notes                    |                                 | $    | 55  |     |      | $ | 69  |    
|U.S. government securities         |                                 |      |    |     |      |   |    |    
|                                   |                                 |      |     |     |      |  
|                                   | Total short-term investments    |      |     | 55  |      |   |     | 69  | 
|                                   |                                 |      |     |     |      |  
|Total Held-to-maturity securities: |                                 | $    | 687 |     |      | $ | 197 |    
|                                   |                                 |      |     |     |      |  

|                                    |                              |      |     |     |      |   |    |    | 
|----------------------------------- | ---------------------------- | ---- | --- | --- | ---- | - | -- | -- | 
|Available-for-sale securities:      |                              | 2005 |     |     | 2004 |  
|                                    |                              |      |     |     |      |  
|Auction rate securities             |                              |      | 264 |     |      |   | 58 |   
|                                    |                              |      |     |     |      |  
|                                    | Total short-term investments |      |     | 264 |      |   |    | 58 | 
|                                    |                              |      |     |     |      |  
|Total Available-for-sale securities |                              | $    | 264 |     |      | $ | 58 |   
|                                    |                              |      |     |     |      |  

held-to


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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)


held-to






| |               
| | --------------
| | Long-term Debt





|    |                           
|--- | --------------------------
|(b) | Fuel Price Risk Management







|   |                                          
|-- | -----------------------------------------
|8. | Debt, Including Capital Lease Obligations



|                                                                                                                    |  |              |     |  |              |   |     | 
|------------------------------------------------------------------------------------------------------------------- |  | ------------ | --- |  | ------------ | - | --- | 
|                                                                                                                    |  | December 31, |     |  | December 31, |  
|                                                                                                                    |  | 2005         |     |  | 2004         |  
|                                                                                                                    |  |              |     |  |              |  
|Secured                                                                                                             |  |              |     |  |              |   |     | 
|AWA Citibank Loan (formerly ATSB loan), variable interest rate
    of 12.27%, installments due 2005 through 2008(a) |  | $            | 250 |  |              | $ |    | 
|Equipment notes payable, notes retired September 2005                                                               |  |              |    |  |              |   | 39  | 
|Capital lease obligations                                                                                           |  |              |    |  |              |   | 8   | 
|GECC term loan, variable interest rate of 8.43%, quarterly
    installments beginning 2006 through 2010(b)          |  |              | 111 |  |              |   | 111 | 
|Senior secured discount notes, variable interest rate of 7.91%,
    installments due 2005 through 2009(c)           |  |              | 34  |  |              |   | 36  | 
|Airbus Loans, variable interest rate of 9.96%, quarterly
    installments beginning 2008 through 2010(d)            |  |              | 186 |  |              |   |    | 
|                                                                                                                    |  |              |     |  |              |  
|                                                                                                                    |  |              | 581 |  |              |   | 194 | 
|                                                                                                                    |  |              |     |  |              |  

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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)


|                                                                                                                  |                    |              |       |     |              |   |      |      |  
|----------------------------------------------------------------------------------------------------------------- | ------------------ | ------------ | ----- | --- | ------------ | - | ---- | ---- | -
|                                                                                                                  |                    | December 31, |       |     | December 31, |  
|                                                                                                                  |                    | 2005         |       |     | 2004         |  
|                                                                                                                  |                    |              |       |     |              |  
|Unsecured                                                                                                         |                    |              |       |     |              |   |      |     
|ATSB loan, reclassified as secured in 2005(a)                                                                     |                    |              |      |     |              |   | 343  |     
|103/4% senior
    unsecured notes, redeemed January 2005(e)                                                       |                    |              |      |     |              |   | 40   |     
|7.5% convertible senior notes, interest only payments until
    due in 2009(f)                                    |                    |              | 112   |     |              |   | 112  |     
|7.25% senior exchangeable notes(g)                                                                                |                    |              |      |     |              |   | 253  |     
|Equipment notes payable, interest rates of 90-day LIBOR +1.25%,
    averaging 5.5%, installments due through 2006 |                    |              | 4     |     |              |   | 16   |     
|Industrial development bonds, fixed interest rate of 6.3% due
    2023(h)                                         |                    |              | 29    |     |              |   | 29   |     
|State loan, variable interest rate of 8.99%, installments due
    2005 through 2007                               |                    |              | 1     |     |              |   | 1    |     
|Juniper prepaid miles, variable interest rate of 8.61%, interest
    only payments until due in 2010(i)           |                    |              | 325   |     |              |   |     |     
|                                                                                                                  |                    |              |       |     |              |  
|                                                                                                                  |                    |              | 471   |     |              |   | 794  |     
|                                                                                                                  |                    |              |       |     |              |  
|Total long-term debt and capital lease obligations                                                                |                    |              | 1,052 |     |              |   | 988  |     
|Less: Unamortized discount on debt                                                                                |                    |              | (22   | )   |              |   | (194 | )   
|                                                                                                                  | Current maturities |              |       | (94 | )            |   |      | (154 | )
|                                                                                                                  |                    |              |       |     |              |  
|Long-term debt and capital lease obligations, net of current
    maturities                                       |                    | $            | 936   |     |              | $ | 640  |     
|                                                                                                                  |                    |              |       |     |              |  






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | In January 2002, AWA closed a $429 million loan backed by a
    $380 million federal loan guarantee provided by the ATSB.
    Certain third-party counter-guarantors fully and unconditionally
    guaranteed the payment of an aggregate of $45 million of
    the outstanding principal amount under the government guaranteed
    loan plus accrued and unpaid interest thereon. In addition,
    America West Holdings fully and unconditionally guaranteed the
    payment of all principal, premium, interest and other
    obligations outstanding under the government guaranteed loan and
    pledged the stock of AWA to secure its obligations under such
    guarantee. Principal amounts under this loan were scheduled to
    become due in ten installments of $43 million on each
    March 31 and September 30, commencing on
    March 31, 2004 and ending on September 30, 2008. In
    addition, AWA was charged an annual guarantee fee in respect of
    the ATSB guarantee equal to 8.0% of the guaranteed amount in
    2005. On September 27, 2005, AWA made a voluntary
    prepayment of $9 million in principal, thus reducing the
    remaining semi-annual installments due to $42 million.
    Principal amounts outstanding under the government guaranteed
    loan bear interest at a rate per annum equal to LIBOR plus
    40 basis points.                    
|   
|    |  | In connection with the consummation of the merger, on
    September 27, 2005, AWA, as borrower, entered into an
    Amended and Restated Loan Agreement (the AWA ATSB
    Loan) with the ATSB. The ATSB Loan amended and restated
    the previously outstanding loans of AWA guaranteed in part by
    the ATSB. On October 19, 2005, $238 million of
    AWAs ATSB Loan, of which $228 million was guaranteed
    by the ATSB, was sold by the lender by order of the ATSB to 13
    fixed income investors. The sale of the debt removed the ATSB
    guaranty. Due to the sale on October 19, 2005, the ATSB no
    longer guarantees any portion of the loan and has no interest in
    any of AWAs debt. As a result of the sale of the loan,
    $11 million of the outstanding principal balance remains
    guaranteed by certain third party counter- guarantors. The
    non-guaranteed portion of the loan is no longer subject to
    payment of the annual guarantee fee; rather, as of the date of
    the loan sale, those principal amounts bear interest at a rate
    per annum equal to LIBOR plus 840 basis points increasing
    by 5 basis points on January 18 of each year, beginning
    January 18, 2006 through the end of the loan term, payable
    on a quarterly basis. All other terms associated with this loan
    remain unchanged. As a result of the sale

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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | of the loan, the AWA ATSB Loan is now called the AWA Citibank
    Loan, and had an outstanding balance of $250 million at
    December 31, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|    |  | The AWA Citibank Loan is now secured debt. It requires certain
    prepayments from the proceeds of specified asset sales by
    US Airways Group and the other loan parties, and
    US Airways Group is required to maintain consolidated
    unrestricted cash and cash equivalents, less: (a) the
    amount of all outstanding advances by credit card processors and
    clearing houses in excess of 20% of the air traffic liabilities;
    (b) $250 million presumed necessary to fund a
    subsequent tax trust (to the extent not otherwise funded by
    US Airways Group); (c) $35 million presumed
    necessary to post collateral to clearing houses (to the extent
    not posted); and (d) any unrestricted cash or cash
    equivalents held in unperfected accounts; in an amount (subject
    to partial reduction under certain circumstances upon mandatory
    prepayments made with the net proceeds of future borrowings and
    issuances of capital stock) not less than:                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|    |  |  $525 million from September 27, 2005
    through March 2006;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|    |  |  $500 million through September 2006;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|    |  |  $475 million through March 2007;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|    |  |  $450 million through September 2007;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|    |  |  $400 million through March 2008;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|    |  |  $350 million through September 2008; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|    |  |  $300 million through September 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(b) |  | On September 10, 2004, AWA entered into a term loan
    financing with GECC providing for loans in an aggregate amount
    of $111 million. AWA used approximately $77 million of
    the proceeds from this financing to repay in full its term loan
    with Mizuho Corporate Bank, Ltd. and certain other lenders and
    to pay certain costs associated with this transaction. AWA used
    the remaining proceeds for general corporate purposes. The new
    term loan financing consists of two secured term loan
    facilities: a $76 million term loan facility secured
    primarily by spare parts, rotables and appliances (the
    Spare Parts Facility); and a $35 million term
    loan facility secured primarily by aircraft engines and parts
    installed in such engines (the Engine Facility).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|    |  | The facilities are cross-collateralized on a subordinated basis,
    and the collateral securing the facilities also secures on a
    subordinated basis certain of AWAs other existing debt and
    lease obligations to GECC and its affiliates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|    |  | The loans under the Spare Parts Facility are payable in full at
    maturity on September 10, 2010. The loans under the Engine
    Facility are payable in equal quarterly installments of
    approximately $1 million beginning on March 10, 2006
    through June 10 2010, with the remaining loan amount of
    $12 million payable at maturity on September 10, 2010.
    The loans under each facility may be prepaid in an amount not
    less than $5 million at any time after the
    30th monthly anniversary of the funding date under such
    facility. If AWA fails to maintain a certain ratio of rotables
    to loans under the Spare Parts Facility, it may be required to
    pledge additional rotables or cash as collateral, provide a
    letter of credit or prepay some or all of the loans under the
    Spare Parts Facility. In addition, the loans under the Engine
    Facility are subject to mandatory prepayment upon the occurrence
    of certain events of loss applicable to, or certain dispositions
    of, aircraft engines securing the facility. Principal amounts
    outstanding under the loans bear interest at a rate per annum
    based on three-month LIBOR plus a margin. Both facilities
    contain customary events of default, including payment defaults,
    cross-defaults, breach of covenants, bankruptcy and insolvency
    defaults and judgment defaults.
|   
|(c) |  | On December 27, 2004, AWA raised additional capital by
    financing its Phoenix maintenance facility and flight training
    center. The flight training center was previously unencumbered,
    and the maintenance facility became unencumbered in 2004 when
    AWA refinanced its term loan. Using its                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | leasehold interest in these two facilities as collateral, AWA,
    through a wholly owned subsidiary named FTCHP LLC, raised
    $31 million through the issuance of senior secured discount
    notes. The notes were issued by FTCHP at a discount pursuant to
    the terms of a senior secured term loan agreement among AWA,
    FTCHP, Heritage Bank SSB, as administrative agent, Citibank,
    N.A., as the initial lender, and the other lenders from time to
    time party thereto. Citibank, N.A. subsequently assigned all of
    its interests in the notes to third party lenders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|    |  | AWA has fully and unconditionally guaranteed the payment and
    performance of FTCHPs obligations under the notes and the
    loan agreement. The notes require aggregate principal payments
    of $36 million with principal payments of $2 million
    due on each of the first two anniversary dates and the remaining
    principal amount due on the fifth anniversary date. The notes
    may be prepaid in full at any time (subject to customary LIBOR
    breakage costs) and in partial amounts of $2 million on the
    third and fourth anniversary dates. The unpaid principal amount
    of the notes bears interest based on LIBOR plus a margin subject
    to adjustment based on a loan to collateral value ratio.                                                                                                                                                                                                                                                                                                                                                           
|   
|    |  | The loan agreement contains customary covenants applicable to
    loans of this type, including obligations relating to the
    preservation of the collateral and restrictions on the
    activities of FTCHP. In addition, the loan agreement contains
    events of default, including payment defaults, cross-defaults to
    other debt of FTCHP, if any, breach of covenants, bankruptcy and
    insolvency defaults and judgment defaults.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|    |  | In connection with this financing, AWA sold all of its leasehold
    interests in the maintenance facility and flight training center
    to FTCHP and entered into subleases for the facilities with
    FTCHP at lease rates expected to approximate the interest
    payments due under the notes. In addition, AWA agreed to make
    future capital contributions to FTCHP in amounts sufficient to
    cover principal payments and other amounts owing pursuant to the
    notes and the loan agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|    |  | The proceeds from this financing, together with $11 million
    from operating cash flow, were irrevocably deposited with the
    trustee for AWAs
    103/4% senior
    unsecured notes due 2005, and the notes were subsequently
    redeemed on January 26, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(d) |  | On September 27, 2005, US Airways and AWA entered into
    two loan agreements with Airbus Financial Services
    (AFS), an affiliate of Airbus, with commitments in
    initial aggregate amounts of up to $161 million and up to
    $89 million. The Airbus loans bear interest at a rate of
    LIBOR plus a margin, subject to adjustment during the term of
    the loans under certain conditions and have been recorded as an
    obligation of US Airways Group. Amounts drawn upon the
    Airbus loans are drawn first upon the Airbus $161 million
    loan until it has been drawn in its full amount, in which event
    the remaining portion of the $250 million total commitment
    is drawn upon the Airbus $89 million loan.                                                                                                                                                                                                                                                                                                                                                
|   
|    |  | On September 27, 2005, all of the Airbus $161 million
    loan and $14 million of the Airbus $89 million loan
    were drawn and are available for use for general corporate
    purposes. At December 31, 2005, a total of
    $186 million was drawn under the Airbus loans. The
    remaining portion of the Airbus loans is payable in multiple
    draws upon the occurrence of certain conditions, including the
    taking of delivery of certain aircraft, on the due dates for
    certain amounts owing to AFS or its affiliates to refinance such
    amounts, after payment of certain invoices for goods and
    services provided by AFS or its affiliates, or upon receipt by
    AFS of certain amounts payable in respect of existing aircraft
    financing transactions. The full amount of the Airbus loans is
    expected to be available by the end of 2006. US Airways and
    AWA are jointly and severally liable for the Airbus loans;
    accordingly, the full amount outstanding under the loans is
    reflected in the financial statements of US Airways and AWA.
|   
|    |  | The amortization payments under the Airbus $161 million
    loan will become due in equal quarterly installments of
    $13 million beginning on March 31, 2008, with the
    final installment due on December 31, 2010. The outstanding
    principal amount of Airbus $89 million loan will be
    forgiven in writing on December 31, 2010, or an earlier
    date, if on that date the outstanding principal amount of,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | accrued interest on, and all other amounts due under the Airbus
    $161 million loan have been paid in full and
    US Airways and AWA comply with the aircraft delivery
    schedule.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(e) |  | In August 1995, AWA issued $75 million principal amount of
    103/4% senior
    unsecured notes due 2005, of which $40 million remained
    outstanding at December 31, 2004. Interest on the
    103/4% senior
    unsecured notes was payable semi-annually in arrears on
    March 1 and September 1 of each year. On
    December 27, 2004, AWA called for the redemption on
    January 26, 2005 of all of the senior unsecured notes at a
    redemption price of 100% of the principal amount thereof plus
    accrued and unpaid interest through the redemption date. In
    addition, AWA irrevocably deposited the $31 million raised
    through the maintenance facility and flight training center
    financing, as discussed in note (c) above, together with an
    additional $11 million from its operating cash flow, with
    the trustee for the senior unsecured notes. The senior notes
    were subsequently redeemed on January 26, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(f) |  | In January 2002, in connection with the closing of the original
    AWA ATSB loan and the related transactions, America West
    Holdings issued $105 million of 7.5% convertible
    senior notes due 2009, of which approximately $112 million
    remained outstanding at December 31, 2005 (including
    $22 million of interest paid through December 31, 2004
    as a deemed loan added to the initial principal thereof).
    Beginning January 18, 2005, these notes are convertible
    into shares of common stock of US Airways Group, at the
    option of the holders, at an initial conversion price of
    $29.09 per share or a conversion ratio of approximately
    34.376 shares per $1,000 principal amount of such notes,
    subject to standard anti-dilution adjustments. Interest on the
    7.5% convertible senior notes is payable semiannually in
    arrears on June 1 and December 1 of each year. At
    America West Holdings option, the first six interest
    payments were payable in the form of a deemed loan added to the
    principal amount of these notes. The 7.5% convertible
    senior notes will mature on January 18, 2009 unless earlier
    converted or redeemed. The payment of principal, premium and
    interest on the 7.5% convertible senior notes is fully and
    unconditionally guaranteed by AWA and US Airways Group. For
    financial reporting purposes, America West Holdings recorded the
    convertible senior notes at their fair market value on the date
    of issuance. The balance at December 31, 2005 is net of an
    unamortized discount of $18 million.
|   
|(g) |  | In July and August of 2003, AWA completed a private placement of
    approximately $87 million issue price of 7.25% Senior
    Exchangeable Notes due 2023. The notes bore cash interest at a
    rate of 2.49% per year, and were redeemable or exchangeable
    under certain conditions. Completion of the merger between
    US Airways Group and America West Holdings on
    September 27, 2005 constituted a change of
    control under these notes and required AWA to make an
    offer to holders to purchase those notes within 30 business days
    after the effective time of the merger at a purchase price of
    $343.61 per $1,000 principal amount at maturity. Under the
    terms of the notes and the related Guarantee and Exchange
    Agreement, dated as of July 30, 2003, between America West
    Holdings and U.S. Bank National Association, as Trustee, as
    supplemented by the Guarantee and Exchange Agreement Supplement
    No. 1 among America West Holdings, US Airways Group
    and the Trustee, dated as of September 27, 2005, AWAs
    obligation to purchase the notes was satisfied at
    US Airways Groups election by delivery of shares of
    US Airways Group common stock having a fair market
    value of not less than $343.61 per $1,000 principal
    amount at maturity. For this purpose, fair market
    value means 95% of the market price of US Airways
    Group common stock calculated as the average closing prices over
    the five business days ending on and including the third
    business day before the purchase date.                                 
|   
|    |  | On October 24, 2005, US Airways Group issued a total
    of 4,156,411 shares of its common stock in exchange for
    approximately $250 million in principal amount at maturity
    of AWAs Senior Exchangeable Notes due 2023, which notes
    were fully and unconditionally guaranteed by US Airways
    Group. The shares were exchanged at a rate of 16 shares of
    US Airways Group common stock per $1,000 principal amount
    at maturity, in full satisfaction of the purchase price of the
    notes. The                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

186



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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | amount of notes exchanged represented approximately 99% of the
    outstanding principal amount, and approximately $2 million
    in principal amount at maturity of the notes remained
    outstanding after the exchange. On November 30, 2005,
    US Airways Group issued a total of 38,864 shares of
    its common stock to repurchase the remaining outstanding
    principal amount of the notes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(h) |  | The industrial development revenue bonds are due April 2023.
    Interest at 6.3% is payable semiannually on April 1 and
    October 1. The bonds are subject to optional redemption prior to
    the maturity date on or after April 1, 2008, in whole or in
    part, on any interest payment date at the following redemption
    prices: 102% on April 1 or October 1, 2008; 101% on
    April 1 or October 1, 2009; and 100% on April 1,
    2010 and thereafter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(i) |  | In connection with the merger, AWA, US Airways Group and
    Juniper Bank, a subsidiary of Barclays PLC (Juniper), entered
    into an agreement on August 8, 2005 amending AWAs
    co-branded credit card agreement with Juniper, dated
    January 25, 2005. Pursuant to the amended credit card
    agreement, Juniper agreed to offer and market an airline mileage
    award credit card program to the general public to participate
    in US Airways Groups Dividend Miles program through
    the use of a co-branded credit card.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|    |  | US Airways Groups credit card program is currently
    administered by Bank of America, N.A. (USA). On
    December 28, 2005, US Airways issued a notice of
    termination under its agreement with Bank of America and that
    notice will become effective on December 28, 2007. Pending
    termination of the Bank of America agreement, both Juniper and
    Bank of America will run separate credit card programs for
    US Airways Group. The amended credit card agreement is the
    subject of pending litigation filed by Bank of America against
    US Airways Group, US Airways and AWA (See
    Note 9(e)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|    |  | The amended credit card agreement took effect at the effective
    time of the merger. The credit card services provided by Juniper
    under the amended credit card agreement began in January 2006,
    and will continue until the expiration date, which is the later
    of December 31, 2012 or seven years from the date on which
    Juniper commences marketing to the general public.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|    |  | Under the amended credit card agreement, Juniper will pay to
    US Airways Group fees for each mile awarded to each credit
    card account administered by Juniper, subject to certain
    exceptions. Pursuant to the original credit card agreement,
    Juniper paid to AWA a bonus of $20 million. Juniper also
    agreed to pay a one-time bonus payment of $130 million,
    following the effectiveness of the merger, subject to certain
    conditions. The $130 million bonus payment was made to AWA
    on October 3, 2005. The entire $150 million balance
    for bonus payments are included in Deferred gains and
    other liabilities in the accompanying consolidated balance
    sheet as of December 31, 2005. US Airways Group will
    not recognize any revenue from the bonus payments until the dual
    branding period has expired, approximately February 2008. At
    that time the Company expects to begin recognizing revenue from
    the bonus payments on a straight-line basis through December
    2012, the expiration date of the Juniper agreement. Further, if
    Juniper is not granted exclusivity to offer a co-branded credit
    card after the dual branding period, US Airways Group must
    repay the bonus payments and repurchase unused pre-paid miles
    with interest, plus $50 million in liquidated damages.
    Juniper will pay an annual bonus of $5 million to
    US Airways Group, subject to certain exceptions, for each
    year after Juniper becomes the exclusive issuer of the
    co-branded credit card.
|   
|    |  | On October 3, 2005, Juniper pre-paid for miles from
    US Airways Group totaling $325 million, subject to the
    same conditions as apply to the $130 million bonus payment.
    To the extent that these miles are not used by Juniper as
    allowed under the co-branded credit card program in certain
    circumstances, US Airways Group will repurchase these miles
    in 12 equal quarterly installments beginning on the fifth year
    prior to the expiration date of the co-branded credit card
    agreement with Juniper, until paid in full. US Airways
    Group makes monthly interest payments at LIBOR plus 4.75% to
    Juniper, beginning on November 1, 2005, based on the amount
    of pre-purchased miles that have not been used                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)




| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | by Juniper in connection with the co-branded credit card program
    and have not been repurchased by US Airways Group.
    US Airways Group will be required to repurchase
    pre-purchased miles under certain reductions in the collateral
    held under the credit card processing agreement with JP Morgan
    Chase Bank, N.A. Accordingly, the prepayment has been recorded
    as additional indebtedness.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Juniper requires US Airways Group to maintain an average
    quarterly balance of cash, cash equivalents and short-term
    investments of at least $1 billion for the entirety of the
    agreement. Further, the agreement requires US Airways Group
    to maintain certain financial ratios beginning January 1,
    2006. Juniper may, at its option, terminate the amended credit
    card agreement, make payments to US Airways Group under the
    amended credit card agreement in the form of pre-purchased miles
    rather than cash, or require US Airways Group to repurchase
    the pre-purchased miles before the fifth year prior to the
    expiration date of the co-branded credit card agreement with
    Juniper in the event that US Airways Group breaches its
    obligations under the amended credit card agreement, or upon the
    occurrence of certain events.
|
| |  | At December 31, 2005, the estimated maturities of long-term
    debt are as follows (in millions):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

|           |  |   |       | 
|---------- |  | - | ----- | 
|2006       |  |   | 94    | 
|2007       |  |   | 117   | 
|2008       |  |   | 252   | 
|2009       |  |   | 310   | 
|2010       |  |   | 250   | 
|Thereafter |  |   | 29    | 
|           |  |   |      
|           |  | $ | 1,052 | 
|           |  |   |      





|   |                              
|-- | -----------------------------
|9. | Commitments and Contingencies



|    |       
|--- | ------
|(a) | Leases





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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)










737-300






|                             |  |           |       | 
|---------------------------- |  | --------- | ----- | 
|                             |  | Operating |      
|Years Ending December 31,    |  | Leases    |      
|                             |  |           |      
|2006                         |  | $         | 384   | 
|2007                         |  |           | 360   | 
|2008                         |  |           | 309   | 
|2009                         |  |           | 271   | 
|2010                         |  |           | 243   | 
|Thereafter                   |  |           | 1,629 | 
|                             |  |           |      
|Total minimum lease payments |  | $         | 3,196 | 
|                             |  |           |      



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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)






|    |              
|--- | -------------
|(b) | Revenue Bonds









|    |                                                                      
|--- | ---------------------------------------------------------------------
|(c) | Commitments to purchase flight equipment and maintenance
    services



| |                            
| | ---------------------------
| | Airbus Purchase Commitments





A330-200


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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)








| |                            
| | ---------------------------
| | Engine Purchase Commitments



V2500-A5






|     |  |   |     | 
|---- |  | - | --- | 
|2006 |  | $ | 86  | 
|2007 |  |   | 20  | 
|2008 |  |   | 48  | 
|2009 |  |   | 413 | 
|     |  |   |    
|     |  | $ | 567 | 
|     |  |   |    



| |                               
| | ------------------------------
| | Engine Maintenance Commitments



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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|    |                            
|--- | ---------------------------
|(d) | Sale-Leaseback Transactions













|    |                  
|--- | -----------------
|(e) | Legal Proceedings





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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)










|    |                                        
|--- | ---------------------------------------
|(f) | General Guarantees and Indemnifications







|    |                             
|--- | ----------------------------
|(g) | Concentration of credit risk





|    |             
|--- | ------------
|10. | Income Taxes



193



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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)








|                                                                                    |       |                         |      |   |      |   |     |      |  |   |     |   | 
|----------------------------------------------------------------------------------- | ----- | ----------------------- | ---- | - | ---- | - | --- | ---- |  | - | --- | - | 
|                                                                                    |       | Year Ended December 31, |     
|                                                                                    |       |                         |     
|                                                                                    |       | 2005                    |      |   | 2004 |   |     | 2003 | 
|                                                                                    |       |                         |      |   |      |   |     |      | 
|Income tax expense (benefit) at the federal statutory income tax
    rate           |       | $                       | (139 | ) |      | $ | (30 | )    |  | $ | 21  |  
|State income tax expense (benefit), net of federal income tax
    expense (benefit) |       |                         |     |   |      |   | (3  | )    |  |   | 3   |  
|Change in state deferreds                                                           |       |                         | (15  | ) |      |   |    |      |  |   | (3  | )
|Change in valuation allowance                                                       |       |                         | 156  |   |      |   | 31  |      |  |   | (18 | )
|Expired tax credits                                                                 |       |                         |     |   |      |   |    |      |  |   |    |  
|Other, net                                                                          |       |                         | (2   | ) |      |   | 2   |      |  |   | (3  | )
|                                                                                    |       |                         |      |   |      |   |     |      | 
|                                                                                    | Total |                         | $    |  |      |   | $   |     |  |   | $   |  | 
|                                                                                    |       |                         |      |   |      |   |     |      | 





pre-1994


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##### Table of Contents



America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)




| |                                  
| | ---------------------------------
| | Composition of Deferred Tax Items



|                                                   |                                           |                           |      |     |      |   |      |     |     | 
|-------------------------------------------------- | ----------------------------------------- | ------------------------- | ---- | --- | ---- | - | ---- | --- | --- | 
|                                                   |                                           | 2005                      |      |     | 2004 |  
|                                                   |                                           |                           |      |     |      |  
|Deferred tax assets:                               |                                           |                           |      |     |      |   |      |    
|                                                   | Net operating loss carryforwards          |                           | $    | 235 |      |   | $    | 183 |    
|                                                   | Aircraft leases                           |                           |      | 13  |      |   |      | 13  |    
|                                                   | Employee benefits                         |                           |      | 21  |      |   |      | 13  |    
|                                                   | Frequent flyer accrual                    |                           |      | 4   |      |   |      | 7   |    
|                                                   | Restructuring and other reserves          |                           |      | 3   |      |   |      | 4   |    
|                                                   | Tax credit carryforwards                  |                           |      | 1   |      |   |      | 1   |    
|                                                   | Other                                     |                           |      | 1   |      |   |      | 3   |    
|                                                   |                                           |                           |      |     |      |  
|                                                   |                                           | Gross deferred tax assets |      |     | 278  |   |      |     | 224 | 
|Deferred tax liabilities:                          |                                           |                           |      |     |      |   |      |    
|                                                   | Accelerated depreciation and amortization |                           |      | 9   |      |   |      | (95 | )  
|                                                   | Partnership losses                        |                           |      | (1  | )    |   |      | (2  | )  
|                                                   | Other                                     |                           |      | (2  | )    |   |      |    |    
|                                                   |                                           |                           |      |     |      |  
|                                                   | Gross deferred tax liabilities            |                           |      | 6   |      |   |      | (97 | )  
|Net deferred tax assets before valuation allowance |                                           |                           | 284  |     |      |   | 127  |    
|Less valuation allowance                           |                                           |                           | (284 | )   |      |   | (127 | )  
|                                                   |                                           |                           |      |     |      |  
|Net deferred liability                             |                                           | $                         |     |     |      | $ |     |    
|                                                   |                                           |                           |      |     |      |  







|    |                      
|--- | ---------------------
|11. | Employee Benefit Plan



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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)








|    |                     
|--- | --------------------
|12. | Stockholders Equity



|    |             
|--- | ------------
|(a) | Common Stock





|    |         
|--- | --------
|(b) | Warrants







|    |                                         
|--- | ----------------------------------------
|13. | Advances to Parent Company and Affiliate



196



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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)










|    |                                            
|--- | -------------------------------------------
|14. | Nonoperating Income (Expenses)  Other, Net











197



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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|    |                                                     
|--- | ----------------------------------------------------
|15. | Supplemental Information to Statements of Cash Flows



|                       |                                                                                                         |                                           |   |      |      |  |   |      |    |  |   |     |    |  
|---------------------- | ------------------------------------------------------------------------------------------------------- | ----------------------------------------- | - | ---- | ---- |  | - | ---- | -- |  | - | --- | -- | -
|                       |                                                                                                         | Year Ended December 31,                   |  
|                       |                                                                                                         |                                           |  
|                       |                                                                                                         | 2005                                      |   |      | 2004 |  |   | 2003 |   
|                       |                                                                                                         |                                           |   |      |      |  |   |      |   
|                       |                                                                                                         | (In millions)                             |  
|Non-cash transactions: |                                                                                                         |                                           |   |      |      |  |   |      |    |  |   |    
|                       | Reclassification of investments in debt securities to short-term                                        |                                           | $ | 30   |      |  | $ | 26   |    |  | $ | 29  |   
|                       | Prepurchase of miles from affinity card provider to
    US Airways for which AWA has liability (Note 8) |                                           |   | 325  |      |  |   |     |    |  |   |    |   
|                       | Receivable from US Airways for affinity card provider
    prepurchase of miles                          |                                           |   | (325 | )    |  |   |     |    |  |   |    |   
|                       | One-time payment from affinity card provider paid to
    US Airways (Note 8)                            |                                           |   | 130  |      |  |   |     |    |  |   |    |   
|                       | Receivable from US Airways for affinity card provider
    one-time payment                              |                                           |   | (130 | )    |  |   |     |    |  |   |    |   
|                       | Loan from Airbus to US Airways Group for which AWA has
    joint and severable liability (Note 8)       |                                           |   | 186  |      |  |   |     |    |  |   |    |   
|                       | Receivable from US Airways Group for Airbus Loan                                                        |                                           |   | (186 | )    |  |   |     |    |  |   |    |   
|                       | Conversion of 7.25% notes into common stock of
    US Airways Group                                     |                                           |   | 87   |      |  |   |     |    |  |   |    |   
|                       | Cancellation of convertible notes                                                                       |                                           |   |     |      |  |   |     |    |  |   | (1  | ) 
|                       | Cancellation of 10.75% senior unsecured notes related to
    sale of NLG investment                     |                                           |   |     |      |  |   |     |    |  |   | (10 | ) 
|                       | Notes payable issued for equipment purchase deposits                                                    |                                           |   | 9    |      |  |   | 17   |    |  |   | 5   |   
|                       | Notes payable canceled under the aircraft purchase agreement                                            |                                           |   | (21  | )    |  |   | (7   | )  |  |   | (7  | ) 
|                       | Payment in kind notes issued, net of returns                                                            |                                           |   |     |      |  |   | 9    |    |  |   | 9   |   
|Cash transactions:     |                                                                                                         |                                           |   |      |      |  |   |      |    |  |   |    
|                       |                                                                                                         | Interest paid, net of amounts capitalized |   |      | 48   |  |   |      | 24 |  |   |     | 17 |  
|                       |                                                                                                         | Income taxes paid (refunded)              |   |      |     |  |   |      |   |  |   |     | (2 | )



|    |                           
|--- | --------------------------
|16. | Related Party Transactions





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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|    |                                                
|--- | -----------------------------------------------
|17. | Valuation and Qualifying Accounts (in millions)

|                                                |                              |            |   |     |           |  |   |           |         |  |           |    |  |  |   |     | 
|----------------------------------------------- | ---------------------------- | ---------- | - | --- | --------- |  | - | --------- | ------- |  | --------- | -- |  |  | - | --- | 
|                                                |                              | Balance at |   |     |           |  |   |           | Balance | 
|                                                |                              | Beginning  |   |     |           |  |   |           | at End  | 
|Description                                     |                              | of Period  |   |     | Additions |  |   | Deduction |         |  | of Period |   
|                                                |                              |            |   |     |           |  |   |           |         |  |           |   
|Allowance for doubtful receivables:             |                              |            |   |     |           |  |   |           |         |  |           |    |  |  |   |    
|                                                | Year ended December 31, 2005 |            | $ | 1   |           |  | $ | 2         |         |  | $         | 1  |  |  | $ | 2   | 
|                                                |                              |            |   |     |           |  |   |           |         |  |           |   
|                                                | Year ended December 31, 2004 |            | $ | 6   |           |  | $ | 1         |         |  | $         | 6  |  |  | $ | 1   | 
|                                                |                              |            |   |     |           |  |   |           |         |  |           |   
|                                                | Year ended December 31, 2003 |            | $ | 7   |           |  | $ | 1         |         |  | $         | 2  |  |  | $ | 6   | 
|                                                |                              |            |   |     |           |  |   |           |         |  |           |   
|Allowance for obsolescence:                     |                              |            |   |     |           |  |   |           |         |  |           |    |  |  |   |    
|                                                | Year ended December 31, 2005 |            | $ | 15  |           |  | $ | 8         |         |  | $         |   |  |  | $ | 23  | 
|                                                |                              |            |   |     |           |  |   |           |         |  |           |   
|                                                | Year ended December 31, 2004 |            | $ | 12  |           |  | $ | 3         |         |  | $         |   |  |  | $ | 15  | 
|                                                |                              |            |   |     |           |  |   |           |         |  |           |   
|                                                | Year ended December 31, 2003 |            | $ | 9   |           |  | $ | 3         |         |  | $         |   |  |  | $ | 12  | 
|                                                |                              |            |   |     |           |  |   |           |         |  |           |   
|Valuation allowance on deferred tax asset, net: |                              |            |   |     |           |  |   |           |         |  |           |    |  |  |   |    
|                                                | Year ended December 31, 2005 |            | $ | 127 |           |  | $ | 157       |         |  | $         |   |  |  | $ | 284 | 
|                                                |                              |            |   |     |           |  |   |           |         |  |           |   
|                                                | Year ended December 31, 2004 |            | $ | 96  |           |  | $ | 55        |         |  | $         | 24 |  |  | $ | 127 | 
|                                                |                              |            |   |     |           |  |   |           |         |  |           |   
|                                                | Year ended December 31, 2003 |            | $ | 79  |           |  | $ | 39        |         |  | $         | 22 |  |  | $ | 96  | 
|                                                |                              |            |   |     |           |  |   |           |         |  |           |   
|Leased aircraft return provision:               |                              |            |   |     |           |  |   |           |         |  |           |    |  |  |   |    
|                                                | Year ended December 31, 2005 |            | $ | 32  |           |  | $ | 2         |         |  | $         | 34 |  |  | $ |    | 
|                                                |                              |            |   |     |           |  |   |           |         |  |           |   
|                                                | Year ended December 31, 2004 |            | $ | 27  |           |  | $ | 7         |         |  | $         | 2  |  |  | $ | 32  | 
|                                                |                              |            |   |     |           |  |   |           |         |  |           |   
|                                                | Year ended December 31, 2003 |            | $ | 22  |           |  | $ | 9         |         |  | $         | 4  |  |  | $ | 27  | 
|                                                |                              |            |   |     |           |  |   |           |         |  |           |   



|    |                                     
|--- | ------------------------------------
|18. | Quarterly Financial Data (Unaudited)



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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)




|                                                               |  |               |     |     |               |   |     |               |  |   |               |     |  |   |     |  
|-------------------------------------------------------------- |  | ------------- | --- | --- | ------------- | - | --- | ------------- |  | - | ------------- | --- |  | - | --- | -
|                                                               |  | 1st Quarter   |     |     | 2nd Quarter   |  
|                                                               |  |               |     |     |               |  
|                                                               |  | (As adjusted) |     |     | (As reported) |   |     | (As adjusted) |  |   | (As reported) |    
|2005                                                           |  |               |     |     |               |   |     |               |  |   |               |     |  |   |     |  
|Operating revenues                                             |  | $             | 733 | (1) |               | $ | 723 |               |  | $ | 842           | (2) |  | $ | 833 |  
|Operating expenses                                             |  |               | 687 | (1) |               |   | 672 |               |  |   | 827           | (2) |  |   | 801 |  
|Operating income                                               |  |               | 46  |     |               |   | 51  |               |  |   | 15            |     |  |   | 32  |  
|Nonoperating expenses, net                                     |  |               | (17 | )   |               |   | (17 | )             |  |   | (17           | )   |  |   | (17 | )
|Income tax expense                                             |  |               |    |     |               |   |    |               |  |   |              |     |  |   |    |  
|Income before cumulative effect of change in accounting policy |  |               | 29  |     |               |   | 34  |               |  |   | (2            | )   |  |   | 15  |  

|                                                             |  |               |     |     |               |   |     |               |  |   |      |   |  |  |  | 
|------------------------------------------------------------ |  | ------------- | --- | --- | ------------- | - | --- | ------------- |  | - | ---- | - |  |  |  | 
|                                                             |  | 3rd Quarter   |     |     | 4th Quarter   |   |     |              
|                                                             |  |               |     |     |               |   |     |              
|                                                             |  | (As adjusted) |     |     | (As reported) |   |     | (As reported) |  |   |     
|2005                                                         |  |               |     |     |               |   |     |               |  |   |      |   |  |  |  | 
|Operating revenues                                           |  | $             | 846 |     |               | $ | 846 |               |  | $ | 833  |   |  |  |  | 
|Operating expenses                                           |  |               | 916 | (3) |               |   | 904 |               |  |   | 944  |   |  |  |  | 
|Operating loss                                               |  |               | (70 | )   |               |   | (58 | )             |  |   | (111 | ) |  |  |  | 
|Nonoperating income (expenses), net                          |  |               | (13 | )   |               |   | (13 | )             |  |   | (28  | ) |  |  |  | 
|Income tax expense                                           |  |               |    |     |               |   |    |               |  |   |     |   |  |  |  | 
|Loss before cumulative effect of change in accounting policy |  |               | (83 | )   |               |   | (71 | )             |  |   | (139 | ) |  |  |  | 

|                                                             |  |              |     |     |                |   |     |              |  |   |                |     |  |   |     |  
|------------------------------------------------------------ |  | ------------ | --- | --- | -------------- | - | --- | ------------ |  | - | -------------- | --- |  | - | --- | -
|                                                             |  | 1st Quarter  |     |     | 2nd Quarter    |  
|                                                             |  |              |     |     |                |  
|                                                             |  | (Pro forma   |     |     | (As previously |   |     | (Pro forma   |  |   | (As previously |    
|                                                             |  | as adjusted) |     |     | reported)      |   |     | as adjusted) |  |   | reported)      |    
|2004                                                         |  |              |     |     |                |   |     |              |  |   |                |     |  |   |     |  
|Operating revenues                                           |  | $            | 658 | (4) |                | $ | 649 |              |  | $ | 705            | (5) |  | $ | 694 |  
|Operating expenses                                           |  |              | 647 | (4) |                |   | 633 |              |  |   | 691            | (5) |  |   | 667 |  
|Operating income                                             |  |              | 11  |     |                |   | 16  |              |  |   | 14             |     |  |   | 27  |  
|Nonoperating expenses                                        |  |              | (17 | )   |                |   | (17 | )            |  |   | (15            | )   |  |   | (15 | )
|Income tax expense                                           |  |              |    |     |                |   |    |              |  |   |               |     |  |   |    |  
|Loss before cumulative effect of change in accounting policy |  |              | (6  | )   |                |   | (1  | )            |  |   | (1             | )   |  |   | 12  |  

|                                                               |  |              |     |     |                |   |     |              |  |   |                |     |  |   |     |  
|-------------------------------------------------------------- |  | ------------ | --- | --- | -------------- | - | --- | ------------ |  | - | -------------- | --- |  | - | --- | -
|                                                               |  | 3rd Quarter  |     |     | 4th Quarter    |  
|                                                               |  |              |     |     |                |  
|                                                               |  | (Pro forma   |     |     | (As previously |   |     | (Pro forma   |  |   | (As previously |    
|                                                               |  | as adjusted) |     |     | reported)      |   |     | as adjusted) |  |   | reported)      |    
|2004                                                           |  |              |     |     |                |   |     |              |  |   |                |     |  |   |     |  
|Operating revenues                                             |  | $            | 688 | (6) |                | $ | 678 |              |  | $ | 696            | (7) |  | $ | 579 |  
|Operating expenses                                             |  |              | 712 | (6) |                |   | 687 |              |  |   | 756            | (7) |  |   | 617 |  
|Operating income                                               |  |              | (24 | )   |                |   | (9  | )            |  |   | (60            | )   |  |   | (38 | )
|Nonoperating expenses, net                                     |  |              | (19 | )   |                |   | (19 | )            |  |   | (18            | )   |  |   | (30 | )
|Income tax expense                                             |  |              |    |     |                |   |    |              |  |   |               |     |  |   |    |  
|Income before cumulative effect of change in accounting policy |  |              | (43 | )   |                |   | (28 | )            |  |   | (78            | )   |  |   | (68 | )

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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)







|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Reflects reclassification of $2 million and $8 million
    related to the sale of frequent flier miles and related
    marketing services to affinity partners from Other
    expenses to Mainline passenger and Other
    revenues. Reflects $5 million additional maintenance
    expense, resulting from the accounting policy change from the
    deferral method for maintenance costs to the direct expense
    method.                                                                                                                                                                                                                                                                                                                                                 
|   
|(2) | Reflects reclassification of $2 million and $7 million
    related to the sale of frequent flier miles and related
    marketing services to affinity partners from Other
    expenses to Mainline passenger and Other
    revenues. Reflects $17 million additional maintenance
    expense, resulting from the accounting policy change from the
    deferral method for maintenance costs to the direct expense
    method.                                                                                                                                                                                                                                                                                                                                                
|   
|(3) | Reflects $12 million additional maintenance expense,
    resulting from the accounting policy change from the deferral
    method for maintenance costs to the direct expense method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(4) | Reflects reclassification of $2 million and $7 million
    related to the sale of frequent flier miles and related
    marketing services to affinity partners from Other
    expenses to Mainline passenger and Other
    revenues. Reflects $5 million additional pro forma
    maintenance expense presented for comparative purposes,
    resulting from the accounting policy change from the deferral
    method for maintenance costs to the direct expense method.                                                                                                                                                                                                                                                                                                    
|   
|(5) | Reflects reclassification of $2 million and $9 million
    related to the sale of frequent flier miles and related
    marketing services to affinity partners from Other
    expenses to Mainline passenger and Other
    revenues. Reflects $13 million additional pro forma
    maintenance expense presented for comparative purposes,
    resulting from the accounting policy change from the deferral
    method for maintenance costs to the direct expense method.                                                                                                                                                                                                                                                                                                   
|   
|(6) | Reflects reclassification of $2 million and $8 million
    related to the sale of frequent flier miles and related
    marketing services to affinity partners from Other
    expenses to Mainline passenger and Other
    revenues. Reflects $15 million additional pro forma
    maintenance expense presented for comparative purposes,
    resulting from the accounting policy change from the deferral
    method for maintenance costs to the direct expense method.                                                                                                                                                                                                                                                                                                   
|   
|(7) | Reflects reclassification of $1 million and $7 million
    related to the sale of frequent flier miles and related
    marketing services to affinity partners from Other
    expenses to Mainline passenger and Other
    revenues, reclassification of $109 million of Express
    operating expenses from operating revenues to operating expenses
    and reclassification of $12 million net loss related to
    fuel hedging activity for settled and
    mark-to-market changes
    from nonoperating to operating expenses. Reflects
    $10 million additional pro forma maintenance expense
    presented for comparative purposes, resulting from the
    accounting policy change from the deferral method for
    maintenance costs to the direct expense method.



|                                                            |  |                              |    |   |             |   |     |             |  |   |     |  
|----------------------------------------------------------- |  | ---------------------------- | -- | - | ----------- | - | --- | ----------- |  | - | --- | -
|                                                            |  | Year Ended December 31, 2005 |   
|                                                            |  |                              |   
|                                                            |  | 1st Quarter                  |    |   | 2nd Quarter |   |     | 3rd Quarter | 
|                                                            |  |                              |    |   |             |   |     |             | 
|Net income (loss) using the deferral method                 |  | $                            | 34 |   |             | $ | 15  |             |  | $ | (71 | )
|Effect of change to direct expense method                   |  |                              | (5 | ) |             |   | (18 | )           |  |   | (15 | )
|                                                            |  |                              |    |   |             |   |     |             | 
|Pro forma net income (loss) using the direct expense method |  | $                            | 29 |   |             | $ | (3  | )           |  | $ | (86 | )
|                                                            |  |                              |    |   |             |   |     |             | 

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America West Airlines, Inc.


Notes to Consolidated Financial
Statements  (Continued)


|                                                            |  |                              |    |   |             |   |     |             |  |   |             |   |  |       |     |   |  |   |      |  
|----------------------------------------------------------- |  | ---------------------------- | -- | - | ----------- | - | --- | ----------- |  | - | ----------- | - |  | ----- | --- | - |  | - | ---- | -
|                                                            |  | Year Ended December 31, 2004 |   
|                                                            |  |                              |   
|                                                            |  | 1st Quarter                  |    |   | 2nd Quarter |   |     | 3rd Quarter |  |   | 4th Quarter |   |  | Total |    
|                                                            |  |                              |    |   |             |   |     |             |  |   |             |   |  |       |    
|Net income (loss) using the deferral method                 |  | $                            | (1 | ) |             | $ | 12  |             |  | $ | (28         | ) |  | $     | (68 | ) |  | $ | (85  | )
|Effect of change to direct expense method                   |  |                              | (7 | ) |             |   | (15 | )           |  |   | (19         | ) |  |       | (12 | ) |  |   | (53  | )
|                                                            |  |                              |    |   |             |   |     |             |  |   |             |   |  |       |    
|Pro forma net income (loss) using the direct expense method |  | $                            | (8 | ) |             | $ | (3  | )           |  | $ | (47         | ) |  | $     | (80 | ) |  | $ | (138 | )
|                                                            |  |                              |    |   |             |   |     |             |  |   |             |   |  |       |    



|    |                                           
|--- | ------------------------------------------
|19. | Operating Segments and Related Disclosures



202



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|         |                                                                    
|-------- | -------------------------------------------------------------------
|Item 8C. | Financial Statements and Supplementary Data of
    US Airways, Inc.

Managements Annual Report on Internal Control over
Financial Reporting


13a-15(f) 15d-15(f)




| |   |                                                                                                                                                                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of the assets of US Airways;                                                                                                                                                                                       
|
| |  | provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that receipts and expenditures of US Airways are being made
    only in accordance with authorizations of management and
    directors of US Airways; and
|
| |  | provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of
    US Airways assets that could have a material effect
    on the financial statements.                                                                                                                                       









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Report of Independent Registered Public Accounting Firm
















204



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##### Table of Contents











205



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##### Table of Contents



Report of Independent Registered Public Accounting Firm












90-7,


206



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##### Table of Contents











207



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US Airways, Inc.


Statements of Operations


(in millions)


|                                  |                                 |                                    |      |       |       |                     |   |     |              |       |             |              |       |       |              |           |       |       |   |   |       |       |       |  
|--------------------------------- | ------------------------------- | ---------------------------------- | ---- | ----- | ----- | ------------------- | - | --- | ------------ | ----- | ----------- | ------------ | ----- | ----- | ------------ | --------- | ----- | ----- | - | - | ----- | ----- | ----- | -
|                                  |                                 | Successor                          |      |       |       |                    
|                                  |                                 | Company                            |      |       |       | Predecessor Company |  
|                                  |                                 |                                    |      |       |       |                     |  
|                                  |                                 | Three Months                       |      |       |       | Nine Months         |   |     |              |       | Nine Months |              |       |       | Three Months |          
|                                  |                                 | Ended                              |      |       |       | Ended               |   |     | Year Ended   |       |             | Ended        |       |       |              | Ended     |      
|                                  |                                 | December 31,                       |      |       |       | September 30,       |   |     | December 31, |       |             | December 31, |       |       |              | March 31, |      
|                                  |                                 | 2005                               |      |       |       | 2005                |   |     | 2004         |       |             | 2003         |       |       |              | 2003      |      
|                                  |                                 |                                    |      |       |       |                     |   |     |              |       |             |              |       |       |              |           |      
|Operating revenues                |                                 |                                    |      |       |       |                     |   |     |              |       |             |              |       |       |              |           |       |       |   |   |       |      
|                                  | Mainline passenger              |                                    | $    | 1,123 |       |                     |   | $   | 3,738        |       |             | $            | 4,969 |       |              | $         | 3,819 |       |   |   | $     | 1,124 |      
|                                  | Express passenger               |                                    |      | 442   |       |                     |   |     | 1,178        |       |             |              | 1,378 |       |              |           | 967   |       |   |   |       | 241   |      
|                                  | Cargo                           |                                    |      | 25    |       |                     |   |     | 71           |       |             |              | 132   |       |              |           | 97    |       |   |   |       | 35    |      
|                                  | Other                           |                                    |      | 166   |       |                     |   |     | 470          |       |             |              | 594   |       |              |           | 367   |       |   |   |       | 112   |      
|                                  |                                 |                                    |      |       |       |                     |   |     |              |       |             |              |       |       |              |           |      
|                                  |                                 | Total operating revenues           |      |       | 1,756 |                     |   |     |              | 5,457 |             |              |       | 7,073 |              |           |       | 5,250 |   |   |       |       | 1,512 |  
|Operating expenses                |                                 |                                    |      |       |       |                     |   |     |              |       |             |              |       |       |              |           |       |       |   |   |       |      
|                                  | Aircraft fuel and related taxes |                                    |      | 375   |       |                     |   |     | 1,111        |       |             |              | 991   |       |              |           | 574   |       |   |   |       | 197   |      
|                                  | Salaries and related costs      |                                    |      | 329   |       |                     |   |     | 1,070        |       |             |              | 2,169 |       |              |           | 1,848 |       |   |   |       | 562   |      
|                                  | Express expenses                |                                    |      | 490   |       |                     |   |     | 1,371        |       |             |              | 1,572 |       |              |           | 987   |       |   |   |       | 282   |      
|                                  | Aircraft rent                   |                                    |      | 98    |       |                     |   |     | 293          |       |             |              | 399   |       |              |           | 298   |       |   |   |       | 101   |      
|                                  | Aircraft maintenance            |                                    |      | 81    |       |                     |   |     | 252          |       |             |              | 299   |       |              |           | 250   |       |   |   |       | 70    |      
|                                  | Other rent and landing fees     |                                    |      | 87    |       |                     |   |     | 280          |       |             |              | 396   |       |              |           | 301   |       |   |   |       | 99    |      
|                                  | Selling expenses                |                                    |      | 67    |       |                     |   |     | 257          |       |             |              | 360   |       |              |           | 293   |       |   |   |       | 83    |      
|                                  | Special items, net              |                                    |      | 15    |       |                     |   |     |             |       |             |              |      |       |              |           | 34    |       |   |   |       |      |      
|                                  | Depreciation and amortization   |                                    |      | 37    |       |                     |   |     | 153          |       |             |              | 220   |       |              |           | 153   |       |   |   |       | 63    |      
|                                  | Government compensation         |                                    |      |      |       |                     |   |     |             |       |             |              |      |       |              |           | (212  | )     |   |   |       |      |      
|                                  | Other                           |                                    |      | 248   |       |                     |   |     | 812          |       |             |              | 1,015 |       |              |           | 766   |       |   |   |       | 257   |      
|                                  |                                 |                                    |      |       |       |                     |   |     |              |       |             |              |       |       |              |           |      
|                                  |                                 | Total operating expenses           |      |       | 1,827 |                     |   |     |              | 5,599 |             |              |       | 7,421 |              |           |       | 5,292 |   |   |       |       | 1,714 |  
|                                  |                                 |                                    |      |       |       |                     |   |     |              |       |             |              |       |       |              |           |      
|                                  |                                 | Operating loss                     |      |       | (71   | )                   |   |     |              | (142  | )           |              |       | (348  | )            |           |       | (42   | ) |   |       |       | (202  | )
|Nonoperating income (expense)     |                                 |                                    |      |       |       |                     |   |     |              |       |             |              |       |       |              |           |       |       |   |   |       |      
|                                  | Interest income                 |                                    |      | 11    |       |                     |   |     | 15           |       |             |              | 12    |       |              |           | 15    |       |   |   |       | 2     |      
|                                  | Interest expense, net           |                                    |      | (65   | )     |                     |   |     | (222         | )     |             |              | (236  | )     |              |           | (164  | )     |   |   |       | (73   | )    
|                                  | Reorganization items, net       |                                    |      |      |       |                     |   |     | 636          |       |             |              | (32   | )     |              |           |      |       |   |   |       | 1,888 |      
|                                  | Other, net                      |                                    |      | 5     |       |                     |   |     | (9           | )     |             |              | 19    |       |              |           | 37    |       |   |   |       | (2    | )    
|                                  |                                 |                                    |      |       |       |                     |   |     |              |       |             |              |       |       |              |           |      
|                                  |                                 | Nonoperating income (expense), net |      |       | (49   | )                   |   |     |              | 420   |             |              |       | (237  | )            |           |       | (112  | ) |   |       |       | 1,815 |  
|                                  |                                 |                                    |      |       |       |                     |   |     |              |       |             |              |       |       |              |           |      
|Income (loss) before income taxes |                                 |                                    | (120 | )     |       |                     |   | 278 |              |       |             | (585         | )     |       |              | (154      | )     |       |   |   | 1,613 |      
|                                  | Income tax provision (benefit)  |                                    |      |      |       |                     |   |     | (2           | )     |             |              | (7    | )     |              |           | 6     |       |   |   |       |      |      
|                                  |                                 |                                    |      |       |       |                     |   |     |              |       |             |              |       |       |              |           |      
|Net income (loss)                 |                                 | $                                  | (120 | )     |       |                     | $ | 280 |              |       | $           | (578         | )     |       | $            | (160      | )     |       |   | $ | 1,613 |      
|                                  |                                 |                                    |      |       |       |                     |   |     |              |       |             |              |       |       |              |           |      



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US Airways, Inc.


Balance Sheets


December 31, 2005 and 2004


(in millions, except share and per share amounts)


|                                            |                                                              |                                                   |              |                                             |       |             |       |       |       |       |       |       | 
|------------------------------------------- | ------------------------------------------------------------ | ------------------------------------------------- | ------------ | ------------------------------------------- | ----- | ----------- | ----- | ----- | ----- | ----- | ----- | ----- | 
|                                            |                                                              | Successor                                         |              |                                             |       | Predecessor |      
|                                            |                                                              | Company                                           |              |                                             |       | Company     |      
|                                            |                                                              |                                                   |              |                                             |       |             |      
|                                            |                                                              | 2005                                              |              |                                             |       | 2004        |      
|                                            |                                                              |                                                   |              |                                             |       |             |      
|ASSETS                                     
|Current assets                              |                                                              |                                                   |              |                                             |       |             |       |       |      
|                                            | Cash and cash equivalents                                    |                                                   | $            | 462                                         |       |             |       | $     | 734   |      
|                                            | Short-term investments                                       |                                                   |              | 132                                         |       |             |       |       |      |      
|                                            | Restricted cash                                              |                                                   |              | 8                                           |       |             |       |       | 99    |      
|                                            | Accounts receivable, net                                     |                                                   |              | 227                                         |       |             |       |       | 247   |      
|                                            | Materials and supplies, net                                  |                                                   |              | 109                                         |       |             |       |       | 147   |      
|                                            | Prepaid expenses and other                                   |                                                   |              | 213                                         |       |             |       |       | 136   |      
|                                            |                                                              |                                                   |              |                                             |       |             |      
|                                            |                                                              | Total current assets                              |              |                                             | 1,151 |             |       |       |       | 1,363 |      
|Property and equipment                      |                                                              |                                                   |              |                                             |       |             |       |       |      
|                                            | Flight equipment                                             |                                                   |              | 1,492                                       |       |             |       |       | 3,084 |      
|                                            | Ground property and equipment                                |                                                   |              | 205                                         |       |             |       |       | 348   |      
|                                            | Less accumulated depreciation and amortization               |                                                   |              | (28                                         | )     |             |       |       | (283  | )    
|                                            |                                                              |                                                   |              |                                             |       |             |      
|                                            |                                                              |                                                   | 1,669        |                                             |       |             |       | 3,149 |      
|                                            | Equipment purchase deposits                                  |                                                   |              | 32                                          |       |             |       |       | 138   |      
|                                            |                                                              |                                                   |              |                                             |       |             |      
|                                            |                                                              | Total property and equipment                      |              |                                             | 1,701 |             |       |       |       | 3,287 |      
|Other assets                                |                                                              |                                                   |              |                                             |       |             |       |       |      
|                                            | Goodwill                                                     |                                                   |              | 732                                         |       |             |       |       | 2,490 |      
|                                            | Other intangibles, net                                       |                                                   |              | 541                                         |       |             |       |       | 494   |      
|                                            | Restricted cash                                              |                                                   |              | 563                                         |       |             |       |       | 527   |      
|                                            | Other assets, net                                            |                                                   |              | 120                                         |       |             |       |       | 89    |      
|                                            |                                                              |                                                   |              |                                             |       |             |      
|                                            |                                                              | Total other assets                                |              |                                             | 1,956 |             |       |       |       | 3,600 |      
|                                            |                                                              |                                                   |              |                                             |       |             |      
|                                            |                                                              |                                                   | Total assets |                                             | $     | 4,808       |       |       |       | $     | 8,250 |      
|                                            |                                                              |                                                   |              |                                             |       |             |      
|                                            |                                                             
|LIABILITIES AND STOCKHOLDERS DEFICIT      
|Current liabilities                         |                                                              |                                                   |              |                                             |       |             |       |       |      
|                                            | Current maturities of debt and capital leases                |                                                   | $            | 117                                         |       |             |       | $     | 721   |      
|                                            | Accounts payable                                             |                                                   |              | 276                                         |       |             |       |       | 253   |      
|                                            | Payables to related parties, net                             |                                                   |              | 336                                         |       |             |       |       | 68    |      
|                                            | Air traffic liability                                        |                                                   |              | 570                                         |       |             |       |       | 615   |      
|                                            | Accrued compensation and vacation                            |                                                   |              | 144                                         |       |             |       |       | 154   |      
|                                            | Accrued taxes                                                |                                                   |              | 133                                         |       |             |       |       | 102   |      
|                                            | Other accrued expenses                                       |                                                   |              | 657                                         |       |             |       |       | 486   |      
|                                            |                                                              |                                                   |              |                                             |       |             |      
|                                            |                                                              | Total current liabilities                         |              |                                             | 2,233 |             |       |       |       | 2,399 |      
|Noncurrent liabilities and deferred credits |                                                              |                                                   |              |                                             |       |             |       |       |      
|                                            | Long-term debt and capital leases, net of current maturities |                                                   |              | 1,855                                       |       |             |       |       |      |      
|                                            | Deferred gains and credits                                   |                                                   |              | 215                                         |       |             |       |       | 44    |      
|                                            | Postretirement benefits other than pensions                  |                                                   |              | 189                                         |       |             |       |       |      |      
|                                            | Employee benefit liabilities and other                       |                                                   |              | 449                                         |       |             |       |       | 230   |      
|                                            |                                                              |                                                   |              |                                             |       |             |      
|                                            |                                                              | Total noncurrent liabilities and deferred credits |              |                                             | 2,708 |             |       |       |       | 274   |      
|Liabilities subject to compromise           |                                                              |                                                   |             |                                             |       |             |       | 6,078 |      
|Commitments and contingencies               |                                                              |                                                   |              |                                             |       |             |       |       |      
|Stockholders deficit                       |                                                              |                                                   |              |                                             |       |             |       |       |      
|                                            | Common stock, $1 par, 1,000 shares issued and outstanding    |                                                   |              |                                            |       |             |       |       |      |      
|                                            | Additional paid-in capital                                   |                                                   |              | 1                                           |       |             |       |       | 349   |      
|                                            | Accumulated deficit                                          |                                                   |              | (134                                        | )     |             |       |       | (738  | )    
|                                            | Deferred compensation                                        |                                                   |              |                                            |       |             |       |       | (14   | )    
|                                            | Accumulated other comprehensive loss                         |                                                   |              |                                            |       |             |       |       | (98   | )    
|                                            |                                                              |                                                   |              |                                             |       |             |      
|                                            |                                                              | Total stockholders deficit                       |              |                                             | (133  | )           |       |       |       | (501  | )    
|                                            |                                                              |                                                   |              |                                             |       |             |      
|                                            |                                                              |                                                   |              | Total liabilities and stockholders deficit |       | $           | 4,808 |       |       |       | $     | 8,250 | 
|                                            |                                                              |                                                   |              |                                             |       |             |      



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US Airways, Inc.


Statements of Cash Flows


(in millions)


|                                                     |                                                                                                                                              |                                                                          |                                                                                       |                                                                                      |     |                     |    |      |              |      |             |              |      |     |              |           |      |     |     |     |       |       |        |      |      |  
|---------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | ------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------ | --- | ------------------- | -- | ---- | ------------ | ---- | ----------- | ------------ | ---- | --- | ------------ | --------- | ---- | --- | --- | --- | ----- | ----- | ------ | ---- | ---- | -
|                                                     |                                                                                                                                              | Successor                                                                |                                                                                       |                                                                                      |     |                    
|                                                     |                                                                                                                                              | Company                                                                  |                                                                                       |                                                                                      |     | Predecessor Company |   
|                                                     |                                                                                                                                              |                                                                          |                                                                                       |                                                                                      |     |                     |   
|                                                     |                                                                                                                                              | Three Months                                                             |                                                                                       |                                                                                      |     | Nine Months         |    |      |              |      | Nine Months |              |      |     | Three Months |          
|                                                     |                                                                                                                                              | Ended                                                                    |                                                                                       |                                                                                      |     | Ended               |    |      | Year Ended   |      |             | Ended        |      |     |              | Ended     |     
|                                                     |                                                                                                                                              | December 31,                                                             |                                                                                       |                                                                                      |     | September 30,       |    |      | December 31, |      |             | December 31, |      |     |              | March 31, |     
|                                                     |                                                                                                                                              | 2005                                                                     |                                                                                       |                                                                                      |     | 2005                |    |      | 2004         |      |             | 2003         |      |     |              | 2003      |     
|                                                     |                                                                                                                                              |                                                                          |                                                                                       |                                                                                      |     |                     |    |      |              |      |             |              |      |     |              |           |     
|Cash flows from operating activities                 |                                                                                                                                              |                                                                          |                                                                                       |                                                                                      |     |                     |    |      |              |      |             |              |      |     |              |           |      |     |     |     |       |      
|                                                     | Net income (loss)                                                                                                                            |                                                                          | $                                                                                     | (120                                                                                 | )   |                     |    | $    | 280          |      |             | $            | (578 | )   |              | $         | (160 | )   |     |     | $     | 1,613 |       
|                                                     | Adjustments to reconcile net income (loss) to net cash provided
    by (used for) operating activities before reorganization items,
    net: |                                                                          |                                                                                       |                                                                                      |     |                     |    |      |              |      |             |              |      |     |              |           |      |     |     |     |       |       |       
|                                                     |                                                                                                                                              | Fresh start adjustments                                                  |                                                                                       |                                                                                      |    |                     |    |      |              | (697 | )           |              |      | 17  |              |           |      |    |     |     |       |       | (2,549 | )   
|                                                     |                                                                                                                                              | Depreciation and amortization                                            |                                                                                       |                                                                                      | 37  |                     |    |      |              | 158  |             |              |      | 223 |              |           |      | 161 |     |     |       |       | 66     |     
|                                                     |                                                                                                                                              | Non-cash impairments and other special items                             |                                                                                       |                                                                                      |    |                     |    |      |              |     |             |              |      |    |              |           |      |    |     |     |       |       | 555    |     
|                                                     |                                                                                                                                              | Gains on curtailments of postretirement benefits other than
    pensions |                                                                                       |                                                                                      |    |                     |    |      |              | (255 | )           |              |      |    |              |           |      |    |     |     |       |       |       |     
|                                                     |                                                                                                                                              | Gains on dispositions of property                                        |                                                                                       |                                                                                      | 1   |                     |    |      |              | (2   | )           |              |      |    |              |           |      |    |     |     |       |       | (4     | )   
|                                                     |                                                                                                                                              | Amortization of deferred gains and credits                               |                                                                                       |                                                                                      | (14 | )                   |    |      |              | (66  | )           |              |      | (79 | )            |           |      | (66 | )   |     |       |       | (10    | )   
|                                                     |                                                                                                                                              | Stock-based compensation                                                 |                                                                                       |                                                                                      |    |                     |    |      |              | 10   |             |              |      | 50  |              |           |      | 124 |     |     |       |       |       |     
|                                                     |                                                                                                                                              | Other                                                                    |                                                                                       |                                                                                      | 6   |                     |    |      |              | (8   | )           |              |      | 3   |              |           |      | 4   |     |     |       |       | 88     |     
|                                                     |                                                                                                                                              | Changes in certain assets and liabilities:                               |                                                                                       |                                                                                      |     |                     |    |      |              |      |             |              |      |     |              |           |      |     |     |     |       |       |        |     
|                                                     |                                                                                                                                              |                                                                          | Decrease (increase) in receivables                                                    |                                                                                      |     | 65                  |    |      |              |      | (42         | )            |      |     | (5           | )         |      |     | 40  |     |       |       |        | (10  | )   
|                                                     |                                                                                                                                              |                                                                          | Decrease (increase) in materials and supplies, prepaid expenses,
    and other assets |                                                                                      |     | (1                  | )  |      |              |      | (25         | )            |      |     | (42          | )         |      |     | 28  |     |       |       |        | (7   | )   
|                                                     |                                                                                                                                              |                                                                          | Increase (decrease) in air traffic liability                                          |                                                                                      |     | (77                 | )  |      |              |      | 175         |              |      |     | (15          | )         |      |     | (89 | )   |       |       |        | 140  |     
|                                                     |                                                                                                                                              |                                                                          | Increase (decrease) in accounts payable and accrued expenses                          |                                                                                      |     | (15                 | )  |      |              |      | 89          |              |      |     | 287          |           |      |     | 6   |     |       |       |        | (100 | )   
|                                                     |                                                                                                                                              |                                                                          | Increase in payable to affiliates                                                     |                                                                                      |     | 154                 |    |      |              |      | 53          |              |      |     |             |           |      |     |    |     |       |       |        |     |     
|                                                     |                                                                                                                                              |                                                                          | Increase (decrease) in postretirement benefits other than
    pensions, noncurrent    |                                                                                      |     | (10                 | )  |      |              |      | 8           |              |      |     | 44           |           |      |     | 60  |     |       |       |        | 29   |     
|                                                     |                                                                                                                                              |                                                                          |                                                                                       |                                                                                      |     |                     |    |      |              |      |             |              |      |     |              |           |     
|                                                     |                                                                                                                                              |                                                                          |                                                                                       | Net cash provided by (used for) operating activities before
    reorganization items |     |                     | 26 |      |              |      |             | (322         | )    |     |              | (95       | )    |     |     | 108 |       |       |        |      | (189 | )
|                                                     |                                                                                                                                              |                                                                          | Reorganization items, net                                                             |                                                                                      |     | (33                 | )  |      |              |      | (92         | )            |      |     | (11          | )         |      |     |    |     |       |       |        | (90  | )   
|                                                     |                                                                                                                                              |                                                                          |                                                                                       |                                                                                      |     |                     |    |      |              |      |             |              |      |     |              |           |     
|Net cash provided by (used for) operating activities |                                                                                                                                              |                                                                          | (7                                                                                    | )                                                                                    |     |                     |    | (414 | )            |      |             | (106         | )    |     |              | 108       |      |     |     |     | (279  | )    
|                                                     |                                                                                                                                              |                                                                          |                                                                                       |                                                                                      |     |                     |    |      |              |      |             |              |      |     |              |           |     
|Cash flows from investing activities                 |                                                                                                                                              |                                                                          |                                                                                       |                                                                                      |     |                     |    |      |              |      |             |              |      |     |              |           |      |     |     |     |       |      
|                                                     | Purchases of property and equipment                                                                                                          |                                                                          |                                                                                       | (5                                                                                   | )   |                     |    |      | (136         | )    |             |              | (198 | )   |              |           | (201 | )   |     |     |       | (7    | )     
|                                                     | Proceeds from sales of property                                                                                                              |                                                                          |                                                                                       | 36                                                                                   |     |                     |    |      | 153          |      |             |              | 18   |     |              |           | 19   |     |     |     |       | 2     |       
|                                                     | Decrease (increase) in short-term investments                                                                                                |                                                                          |                                                                                       | (132                                                                                 | )   |                     |    |      |             |      |             |              | 358  |     |              |           | (290 | )   |     |     |       | (19   | )     
|                                                     | Decrease (increase) in restricted cash and investments                                                                                       |                                                                          |                                                                                       | 125                                                                                  |     |                     |    |      | (69          | )    |             |              | (76  | )   |              |           | 24   |     |     |     |       | (57   | )     
|                                                     | Proceeds from repayment of parent company loans                                                                                              |                                                                          |                                                                                       |                                                                                     |     |                     |    |      |             |      |             |              |     |     |              |           |     |     |     |     |       | 237   |       
|                                                     | Other                                                                                                                                        |                                                                          |                                                                                       |                                                                                     |     |                     |    |      |             |      |             |              |     |     |              |           | 32   |     |     |     |       | (8    | )     
|                                                     |                                                                                                                                              |                                                                          |                                                                                       |                                                                                      |     |                     |    |      |              |      |             |              |      |     |              |           |     
|Net cash provided by (used for) investing activities |                                                                                                                                              |                                                                          | 24                                                                                    |                                                                                      |     |                     |    | (52  | )            |      |             | 102          |      |     |              | (416      | )    |     |     |     | 148   |      
|                                                     |                                                                                                                                              |                                                                          |                                                                                       |                                                                                      |     |                     |    |      |              |      |             |              |      |     |              |           |     
|Cash flows from financing activities                 |                                                                                                                                              |                                                                          |                                                                                       |                                                                                      |     |                     |    |      |              |      |             |              |      |     |              |           |      |     |     |     |       |      
|                                                     | Proceeds from issuance of debt                                                                                                               |                                                                          |                                                                                       |                                                                                     |     |                     |    |      | 140          |      |             |              | 240  |     |              |           | 52   |     |     |     |       | 1,081 |       
|                                                     | Proceeds from issuance of debtor-in-possession financings                                                                                    |                                                                          |                                                                                       |                                                                                     |     |                     |    |      | 125          |      |             |              |     |     |              |           |     |     |     |     |       | 131   |       
|                                                     | Proceeds from sale lease back transactions                                                                                                   |                                                                          |                                                                                       | 503                                                                                  |     |                     |    |      | 58           |      |             |              |     |     |              |           |     |     |     |     |       |      |       
|                                                     | Advance from parent company                                                                                                                  |                                                                          |                                                                                       |                                                                                     |     |                     |    |      |             |      |             |              |     |     |              |           | 34   |     |     |     |       |      |       
|                                                     | Repayments of debt and capital lease obligations                                                                                             |                                                                          |                                                                                       | (434                                                                                 | )   |                     |    |      | (215         | )    |             |              | (425 | )   |              |           | (50  | )   |     |     |       | (466  | )     
|                                                     |                                                                                                                                              |                                                                          |                                                                                       |                                                                                      |     |                     |    |      |              |      |             |              |      |     |              |           |     
|Net cash provided by (used for) financing activities |                                                                                                                                              |                                                                          | 69                                                                                    |                                                                                      |     |                     |    | 108  |              |      |             | (185         | )    |     |              | 36        |      |     |     |     | 746   |      
|                                                     |                                                                                                                                              |                                                                          |                                                                                       |                                                                                      |     |                     |    |      |              |      |             |              |      |     |              |           |     
|Net increase (decrease) in cash and cash equivalents |                                                                                                                                              |                                                                          | 86                                                                                    |                                                                                      |     |                     |    | (358 | )            |      |             | (189         | )    |     |              | (272      | )    |     |     |     | 615   |      
|Cash and cash equivalents at beginning of period     |                                                                                                                                              |                                                                          | 376                                                                                   |                                                                                      |     |                     |    | 734  |              |      |             | 923          |      |     |              | 1,195     |      |     |     |     | 580   |      
|                                                     |                                                                                                                                              |                                                                          |                                                                                       |                                                                                      |     |                     |    |      |              |      |             |              |      |     |              |           |     
|Cash and cash equivalents at end of period           |                                                                                                                                              | $                                                                        | 462                                                                                   |                                                                                      |     |                     | $  | 376  |              |      | $           | 734          |      |     | $            | 923       |      |     |     | $   | 1,195 |      
|                                                     |                                                                                                                                              |                                                                          |                                                                                       |                                                                                      |     |                     |    |      |              |      |             |              |      |     |              |           |     



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##### Table of Contents



US Airways, Inc.


Statements of Stockholders Equity (Deficit)


Three Years Ended December 31, 2005


(in millions)


|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |   |      |     |  |   |        |       |  |   |       |     |       |  
|-------------------------------------------------------------------------------- | -------------------------------------------------------------------------- | -------------------------- | - | ------- |  | - | ----------- | ---------- | - | ------- | ------ | ---------------------------- | ------------ | ---------- | --------- | ---------- | ---------- | --------- | ---- | ---- | --------- | - | ------------- | ----- |  | ------ | ------ | -- | - | - | ---- | --- |  | - | ------ | ----- |  | - | ----- | --- | ----- | -
|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        | Accumulated Other            |              |            |           |            |           
|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        | Comprehensive Income (Loss), |              |            |           |            |           
|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        | Net of Income Tax Effect     |              |            |           |            |           
|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |           
|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        | Unrealized                   |              |            |           |            |            |          
|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        | Gain                         |              | Unrealized |           |            | Adjustment |           |      |      |           |  
|                                                                                 |                                                                            |                            |   |         |  |   |             | Receivable |   |         |        |                              | (Loss) on    |            | Gain      |            |            | for       |      |      |           |   |              
|                                                                                 |                                                                            |                            |   |         |  |   |             | from       |   |         |        |                              | Available-   |            | (Loss) on |            |            | Minimum   |      |      |           |   | Comprehensive |      
|                                                                                 |                                                                            | Common                     |   | Paid-in |  |   | Accumulated |            |   | Parent  |        |                              | Deferred     |            |           | for-Sale   |            | Cash Flow |      |      | Pension   |   |               |       |  | Income |       
|                                                                                 |                                                                            | Stock                      |   | Capital |  |   | Deficit     |            |   | Company |        |                              | Compensation |            |           | Securities |            | Hedges    |      |      | Liability |   |               | Total |  |        | (Loss) |   
|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |   
|Predecessor Company:                                                             |                                                                            |                            |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |   |      |     |  |   |        |       |  |   |       |    
|Balance as of December 31, 2002                                                  |                                                                            | $                          |  |         |  | $ | 2,661       |            |   | $       | (4,485 | )                            |              | $          | (2,262    | )          |            | $         |     |      |           | $ |              |       |  | $      | 10     |    |   | $ | (880 | )   |  | $ | (4,956 | )     |  |   |       |    
|Unrealized loss on fuel cash flow hedges, net of
    reclassification adjustment |                                                                            |                            |  |         |  |   |            |            |   |         |       |                              |              |            |          |            |            |           |     |      |           |   |              |       |  |        | (11    | )  |   |   |     |     |  |   | (11    | )     |  | $ | (11   | )  
|Termination of pilot pension plan                                                |                                                                            |                            |  |         |  |   |            |            |   |         |       |                              |              |            |          |            |            |           |     |      |           |   |              |       |  |        |       |    |   |   | 85   |     |  |   | 85     |       |  |   | 85    |    
|Net income                                                                       |                                                                            |                            |  |         |  |   |            |            |   |         | 1,613  |                              |              |            |          |            |            |           |     |      |           |   |              |       |  |        |       |    |   |   |     |     |  |   | 1,613  |       |  |   | 1,613 |    
|Reorganization adjustments:                                                      |                                                                            |                            |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |   |      |     |  |   |        |       |  |   |       |    
|                                                                                 | Adjustments to stockholders deficit in connection with
    reorganization |                            |   |        |  |   |             | (2,481     | ) |         |        | 2,872                        |              |            |           | 2,025      |            |           |      |     |           |   |               |      |  |        |        | 1  |   |   |      | 795 |  |   |        | 3,212 |  |   |       | 796 |      
|                                                                                 | Repayment of parent companys loan                                         |                            |   |        |  |   |             |           |   |         |        |                             |              |            |           | 237        |            |           |      |     |           |   |               |      |  |        |        |   |   |   |      |    |  |   |        | 237   |  |   |       |     |      
|                                                                                 | Deferred compensation related to labor groups                              |                            |   |        |  |   |             | 169        |   |         |        |                             |              |            |           |           |            |           |      | (169 | )         |   |               |      |  |        |        |   |   |   |      |    |  |   |        |      |  |   |       |    |      
|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |  
|                                                                                 |                                                                            | Total comprehensive income |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |   |      |     |  |   |        |       |  |   |       | $   | 2,483 |  
|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |  
|Balance as of March 31, 2003                                                     |                                                                            | $                          |  |         |  | $ | 349         |            |   | $       |       |                              |              | $          |          |            |            | $         | (169 | )    |           | $ |              |       |  | $      |       |    |   | $ |     |     |  | $ | 180    |       |  |   |       |    
|Amortization of deferred compensation                                            |                                                                            |                            |  |         |  |   |            |            |   |         |       |                              |              |            |          |            |            |           | 124  |      |           |   |              |       |  |        |       |    |   |   |     |     |  |   | 124    |       |  |   |       |    
|Unrealized gain on fuel cash flow hedges, net of
    reclassification adjustment |                                                                            |                            |  |         |  |   |            |            |   |         |       |                              |              |            |          |            |            |           |     |      |           |   |              |       |  |        | 31     |    |   |   |     |     |  |   | 31     |       |  | $ | 31    |    
|Minimum pension liability change                                                 |                                                                            |                            |  |         |  |   |            |            |   |         |       |                              |              |            |          |            |            |           |     |      |           |   |              |       |  |        |       |    |   |   | (86  | )   |  |   | (86    | )     |  |   | (86   | )  
|Net loss                                                                         |                                                                            |                            |  |         |  |   |            |            |   |         | (160   | )                            |              |            |          |            |            |           |     |      |           |   |              |       |  |        |       |    |   |   |     |     |  |   | (160   | )     |  |   | (160  | )  
|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |  
|                                                                                 |                                                                            | Total comprehensive loss   |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |   |      |     |  |   |        |       |  |   |       | $   | (215  | )
|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |  
|Balance as of December 31, 2003                                                  |                                                                            |                            |  |         |  |   | 349         |            |   |         | (160   | )                            |              |            |          |            |            |           | (45  | )    |           |   |              |       |  |        | 31     |    |   |   | (86  | )   |  |   | 89     |       |  |   |       |    
|Amortization of deferred compensation                                            |                                                                            |                            |  |         |  |   |            |            |   |         |       |                              |              |            |          |            |            |           | 31   |      |           |   |              |       |  |        |       |    |   |   |     |     |  |   | 31     |       |  |   |       |    
|Unrealized loss on fuel cash flow hedges, net                                    |                                                                            |                            |  |         |  |   |            |            |   |         |       |                              |              |            |          |            |            |           |     |      |           |   |              |       |  |        | (9     | )  |   |   |     |     |  |   | (9     | )     |  | $ | (9    | )  
|Minimum pension liability change                                                 |                                                                            |                            |  |         |  |   |            |            |   |         |       |                              |              |            |          |            |            |           |     |      |           |   |              |       |  |        |       |    |   |   | (34  | )   |  |   | (34    | )     |  |   | (34   | )  
|Net loss                                                                         |                                                                            |                            |  |         |  |   |            |            |   |         | (578   | )                            |              |            |          |            |            |           |     |      |           |   |              |       |  |        |       |    |   |   |     |     |  |   | (578   | )     |  |   | (578  | )  
|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |  
|                                                                                 |                                                                            | Total comprehensive loss   |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |   |      |     |  |   |        |       |  |   |       | $   | (621  | )
|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |  
|Balance as of December 31, 2004                                                  |                                                                            | $                          |  |         |  | $ | 349         |            |   | $       | (738   | )                            |              | $          |          |            |            | $         | (14  | )    |           | $ |              |       |  | $      | 22     |    |   | $ | (120 | )   |  | $ | (501   | )     |  |   |       |    
|Amortization of deferred compensation                                            |                                                                            |                            |  |         |  |   |            |            |   |         |       |                              |              |            |          |            |            |           | 10   |      |           |   |              |       |  |        |       |    |   |   |     |     |  |   | 10     |       |  |   |       |    
|Unrealized loss on fuel cash flow hedges, net                                    |                                                                            |                            |  |         |  |   |            |            |   |         |       |                              |              |            |          |            |            |           |     |      |           |   |              |       |  |        | (17    | )  |   |   |     |     |  |   | (17    | )     |  | $ | (17   | )  
|Minimum pension liability change                                                 |                                                                            |                            |  |         |  |   |            |            |   |         |       |                              |              |            |          |            |            |           |     |      |           |   |              |       |  |        |       |    |   |   | 29   |     |  |   | 29     |       |  |   | 29    |    
|Net income                                                                       |                                                                            |                            |  |         |  |   |            |            |   |         | 280    |                              |              |            |          |            |            |           |     |      |           |   |              |       |  |        |       |    |   |   |     |     |  |   | 280    |       |  |   | 280   |    
|Fresh-start adjustments:                                                         |                                                                            |                            |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |   |      |     |  |   |        |       |  |   |       |    
|                                                                                 | Adjustments to stockholders deficit in connection with
    fresh-start    |                            |   |        |  |   |             | (348       | ) |         |        | 444                          |              |            |           |           |            |           |      | 4    |           |   |               |      |  |        |        | (5 | ) |   |      | 91  |  |   |        | 186   |  |   |       | 86  |      
|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |  
|                                                                                 |                                                                            | Total comprehensive income |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |   |      |     |  |   |        |       |  |   |       | $   | 378   |  
|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |  
|Successor Company:                                                               |                                                                            |                            |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |   |      |     |  |   |        |       |  |   |       |    
|Balance as of September 30, 2005                                                 |                                                                            | $                          |  |         |  | $ | 1           |            |   | $       | (14    | )                            |              | $          |          |            |            | $         |     |      |           | $ |              |       |  | $      |       |    |   | $ |     |     |  | $ | (13    | )     |  |   |       |    
|Net loss                                                                         |                                                                            |                            |  |         |  |   |            |            |   |         | (120   | )                            |              |            |          |            |            |           |     |      |           |   |              |       |  |        |       |    |   |   |     |     |  |   | (120   | )     |  |   | (120  | )  
|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |  
|                                                                                 |                                                                            | Total comprehensive loss   |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |   |      |     |  |   |        |       |  |   |       | $   | (120  | )
|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |  
|Balance as of December 31, 2005                                                  |                                                                            | $                          |  |         |  | $ | 1           |            |   | $       | (134   | )                            |              | $          |          |            |            | $         |     |      |           | $ |              |       |  | $      |       |    |   | $ |     |     |  | $ | (133   | )     |  |   |       |    
|                                                                                 |                                                                            |                            |   |         |  |   |             |            |   |         |        |                              |              |            |           |            |            |           |      |      |           |   |               |       |  |        |        |    |   |  



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US Airways, Inc.


Notes to the Financial Statements




|   |                                               
|-- | ----------------------------------------------
|1. | Chapter 11 reorganization and merger agreement

04-13819-SSM 04-13823-SSM).




New equity investments


Public stock offering


GE Merger MOU




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The GE Merger MOU provided for continued use by
    US Airways Group of certain leased Airbus, Boeing and
    regional jet aircraft, the modification of monthly lease rates,
    and the return to GECC of certain other leased Airbus and Boeing
    aircraft.                                                                                                                                                     
|
| |  | GECC provided a bridge facility of approximately
    $56 million for use by US Airways Group during the
    pendency of the Chapter 11 proceedings. US Airways
    paid an affiliate of General Electric (GE)
    $125 million in cash on September 30, 2005 in exchange
    for retirement of the bridge facility, forgiveness and release
    of US Airways from certain prepetition obligations,
    deferral of

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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | certain payment obligations, and amendments to maintenance
    agreements. The payment was funded through the issuance of
    7% Senior Convertible Notes due 2020, as discussed in more
    detail below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | In June 2005, GECC purchased and immediately leased back to
    US Airways Group: (a) the assets securing the credit
    facility obtained from GE in 2001 (the 2001 GE Credit
    Facility) and the liquidity facility obtained from GE in
    2003 in connection with US Airways Groups emergence
    from the first bankruptcy (the 2003 GE Liquidity
    Facility), and other GE obligations, consisting of 11
    Airbus aircraft and 28 spare engines and engine stands; and
    (b) ten regional jet aircraft previously debt financed by
    GECC. The proceeds from the sale leaseback transaction of
    approximately $633 million were used to pay down balances
    due to GE by US Airways Group under the 2003
    GE Liquidity Facility in full, the GECC mortgage-debt
    financed CRJ aircraft in full, and a portion of the 2001
    GE Credit Facility. The 2001 GE Credit Facility was
    amended to allow certain additional borrowings up to
    $28 million.

Airbus MOU




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | On September 27, 2005, US Airways and AWA entered into
    two loan agreements with Airbus Financial Services
    (AFS), as Initial Lender and Loan Agent, Wells
    Fargo Bank Northwest, National Association, as Collateral Agent,
    and US Airways Group, as guarantor, with commitments in
    initial aggregate amounts of up to $161 million and up to
    $89 million (the Airbus $161 Million Loan
    and the Airbus $89 Million Loan and,
    collectively, the Airbus Loans). The Airbus Loans
    bear interest at a rate of LIBOR plus a margin, subject to
    adjustment. The outstanding principal amount of the Airbus
    $89 Million Loan will be forgiven in writing on
    December 31, 2010, or an earlier date, if on that date the
    outstanding principal amount of, accrued interest on, and all
    other amounts due under the Airbus $161 Million Loan have
    been paid in full.                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | Airbus has rescheduled US Airways Groups
    A320-family and
    A330-200 delivery
    commitments and has agreed to provide backstop financing for a
    substantial number of aircraft, subject to certain terms and
    conditions, on an order of 20 A350 aircraft. US Airways
    Groups
    A320-family aircraft
    are now scheduled for delivery in 2009 and 2010. US Airways
    Groups A330-200
    aircraft are scheduled for delivery in 2009 and 2010 and A350
    aircraft deliveries are currently scheduled to occur beginning
    in 2011. The Airbus MOU also eliminates cancellation penalties
    on US Airways Groups orders for the ten
    A330-200 aircraft,
    provided that US Airways Group has met certain predelivery
    payment obligations under the A350 order. In connection
    with the restructuring of aircraft firm orders, US Airways
    and America West Holdings were required to pay an aggregate
    non-refundable restructuring fee which was paid by means of
    set-off against existing equipment purchase deposits of
    US Airways Group and America West Holdings held by Airbus.
    US Airways recorded its restructuring fee of
    $39 million as a reorganization item in the third quarter
    of 2005. AWAs restructuring fee was $50 million.

Restructuring of the ATSB Loan
Guarantees


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US Airways, Inc.


Notes to the Financial
Statements  (Continued)








New Convertible Notes


Restructuring of Affinity Credit Card Partner
Agreement co-branded co-branded






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US Airways, Inc.


Notes to the Financial
Statements  (Continued)


co-branded co-branded


co-branded co-branded




Asset Based Financings and Sales




|   |                                                                         
|-- | ------------------------------------------------------------------------
|2. | Basis of presentation and summary of significant accounting
    policies



|    |                                               
|--- | ----------------------------------------------
|(a) | Nature of operations and operating environment





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US Airways, Inc.


Notes to the Financial
Statements  (Continued)








|    |                                           
|--- | ------------------------------------------
|(b) | Basis of presentation and use of estimates





90-7, 90-7).


90-7


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US Airways, Inc.


Notes to the Financial
Statements  (Continued)






|    |                                            
|--- | -------------------------------------------
|(c) | Cash equivalents and short-term investments



available-for




|    |                
|--- | ---------------
|(d) | Restricted cash





|    |                            
|--- | ---------------------------
|(e) | Materials and supplies, net





|    |                       
|--- | ----------------------
|(f) | Property and equipment





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US Airways, Inc.


Notes to the Financial
Statements  (Continued)








|    |                                    
|--- | -----------------------------------
|(g) | Goodwill and other intangibles, net

90-7




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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|                                   |       |              |     |     |              |   |   |      |  |   |     |     |  |   |    |    | 
|---------------------------------- | ----- | ------------ | --- | --- | ------------ | - | - | ---- |  | - | --- | --- |  | - | -- | -- | 
|                                   |       | December 31, |     |     | December 31, |  
|                                   |       | 2005         |     |     | 2004         |  
|                                   |       |              |     |     |              |  
|                                   |       | Cost         |     |     | A/A          |   |   | Cost |  |   | A/A |    
|                                   |       |              |     |     |              |   |   |      |  |   |     |    
|Airport take-off and landing slots |       | $            | 411 |     |              | $ | 4 |      |  | $ | 425 |     |  | $ | 30 |   
|Airport gate leasehold rights      |       |              | 52  |     |              |   | 4 |      |  |   | 32  |     |  |   | 10 |   
|Capitalized software costs         |       |              |    |     |              |   |  |      |  |   | 50  |     |  |   | 38 |   
|                                   |       |              |     |     |              |   |   |      |  |   |     |    
|                                   | Total |              | $   | 463 |              |   | $ | 8    |  |   | $   | 507 |  |   | $  | 78 | 
|                                   |       |              |     |     |              |   |   |      |  |   |     |    










|    |                  
|--- | -----------------
|(h) | Other assets, net





|    |                          
|--- | -------------------------
|(i) | Frequent traveler program





|    |                                 
|--- | --------------------------------
|(j) | Derivative financial instruments



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)








e-commerce




|    |                                
|--- | -------------------------------
|(k) | Deferred gains and credits, net







|    |                  
|--- | -----------------
|(l) | Passenger revenue



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)
















|    |                         
|--- | ------------------------
|(m) | Stock-based compensation





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US Airways, Inc.


Notes to the Financial
Statements  (Continued)










|    |                             
|--- | ----------------------------
|(n) | Maintenance and repair costs





|    |                 
|--- | ----------------
|(o) | Selling expenses





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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|    |                 
|--- | ----------------
|(p) | Express expenses



|                                |  |              |     |  |                     |   |       |              |  |             |              |  |              |           |     |  |  |   |     | 
|------------------------------- |  | ------------ | --- |  | ------------------- | - | ----- | ------------ |  | ----------- | ------------ |  | ------------ | --------- | --- |  |  | - | --- | 
|                                |  | Successor    |     |  |                    
|                                |  | Company      |     |  | Predecessor Company |  
|                                |  |              |     |  |                     |  
|                                |  | Three Months |     |  | Nine Months         |   |       |              |  | Nine Months |              |  | Three Months |          
|                                |  | Ended        |     |  | Ended               |   |       | Year Ended   |  |             | Ended        |  |              | Ended     |    
|                                |  | December 31, |     |  | September 30,       |   |       | December 31, |  |             | December 31, |  |              | March 31, |    
|                                |  | 2005         |     |  | 2005                |   |       | 2004         |  |             | 2003         |  |              | 2003      |    
|                                |  |              |     |  |                     |   |       |              |  |             |              |  |              |           |    
|Aircraft fuel and related taxes |  | $            | 19  |  |                     | $ | 54    |              |  | $           | 21           |  |              | $         |    |  |  | $ |    | 
|Salaries and related costs      |  |              | 10  |  |                     |   | 32    |              |  |             | 26           |  |              |           | 8   |  |  |   | 3   | 
|Capacity purchases              |  |              | 388 |  |                     |   | 1,058 |              |  |             | 1,267        |  |              |           | 862 |  |  |   | 241 | 
|Other rent and landing fees     |  |              | 1   |  |                     |   | 5     |              |  |             | 3            |  |              |           |    |  |  |   |    | 
|Aircraft rent                   |  |              | 9   |  |                     |   | 21    |              |  |             | 15           |  |              |           |    |  |  |   |    | 
|Selling expenses                |  |              | 12  |  |                     |   | 34    |              |  |             | 34           |  |              |           | 23  |  |  |   | 8   | 
|Aircraft maintenance            |  |              | 3   |  |                     |   | 9     |              |  |             | 1            |  |              |           |    |  |  |   |    | 
|Depreciation and amortization   |  |              |    |  |                     |   | 5     |              |  |             | 3            |  |              |           |    |  |  |   |    | 
|Other expenses                  |  |              | 48  |  |                     |   | 153   |              |  |             | 202          |  |              |           | 94  |  |  |   | 30  | 
|                                |  |              |     |  |                     |   |       |              |  |             |              |  |              |           |    
|Express expenses                |  | $            | 490 |  |                     | $ | 1,371 |              |  | $           | 1,572        |  |              | $         | 987 |  |  | $ | 282 | 
|                                |  |              |     |  |                     |   |       |              |  |             |              |  |              |           |    



|    |                           
|--- | --------------------------
|(q) | Variable interest entities





|    |                                 
|--- | --------------------------------
|(r) | Recent accounting pronouncements





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US Airways, Inc.


Notes to the Financial
Statements  (Continued)










3.     Emergence from bankruptcy




|    |                                
|--- | -------------------------------
|(a) | Emergence and claims resolution

Debtors-in






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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




PBGC Claim


Agreements with ALPA


225



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)








|    |                                              
|--- | ---------------------------------------------
|(b) | Fresh-start reporting and purchase accounting

90-7.


|                                                                                 |                      |   |    |     | 
|-------------------------------------------------------------------------------- | -------------------- | - | -- | --- | 
|Fair value of common shares issued to US Airways
    Groups unsecured creditors |                      | $ | 96 |    
|Estimated merger costs                                                           |                      |   | 21 |    
|                                                                                 |                      |   |   
|                                                                                 | Total purchase price |   | $  | 117 | 
|                                                                                 |                      |   |   

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US Airways, Inc.


Notes to the Financial
Statements  (Continued)








|                        |  |   |        |  
|----------------------- |  | - | ------ | -
|Current assets          |  | $ | 922    |  
|Property and equipment  |  |   | 2,271  |  
|Other intangible assets |  |   | 548    |  
|Other assets            |  |   | 778    |  
|Goodwill                |  |   | 732    |  
|Liabilities assumed     |  |   | (5,250 | )
|                        |  |   |       
|                        |  | $ | 1      |  
|                        |  |   |       

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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|                                           |                                             |   |     |     |  
|------------------------------------------ | ------------------------------------------- | - | --- | --- | -
|Goodwill reported as of September 30, 2005 |                                             | $ | 584 |    
|                                           | Property and equipment                      |   |     | 23  |  
|                                           | Other assets                                |   |     | 23  |  
|                                           | Air traffic liability                       |   |     | 11  |  
|                                           | Other accrued expenses                      |   |     | 49  |  
|                                           | Deferred gains and credits                  |   |     | 50  |  
|                                           | Postretirement benefits other than pensions |   |     | (10 | )
|                                           | Employee benefit liabilities and other      |   |     | 2   |  
|                                           |                                             |   |    
|Goodwill reported as of December 31, 2005  |                                             | $ | 732 |    
|                                           |                                             |   |    





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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|                                               |                                                              |                                                   |       |        |              |   |        |                |       |   |               |        |        |           |     |      |      |   |       |       |       | 
|---------------------------------------------- | ------------------------------------------------------------ | ------------------------------------------------- | ----- | ------ | ------------ | - | ------ | -------------- | ----- | - | ------------- | ------ | ------ | --------- | --- | ---- | ---- | - | ----- | ----- | ----- | 
|                                               |                                                              | Predecessor                                       |       |        | Debt         |   |        | Fresh-start    |       |   | Purchase      |        |        | Successor |    
|                                               |                                                              | Company                                           |       |        | Discharge(a) |   |        | Adjustments(b) |       |   | Accounting(c) |        |        | Company   |    
|                                               |                                                              |                                                   |       |        |              |   |        |                |       |   |               |        |        |           |    
|ASSETS                                        
|Current assets                                 |                                                              |                                                   |       |        |              |   |        |                |       |   |               |        |        |           |     |      |      |   |       |      
|                                               | Cash and cash equivalents                                    |                                                   | $     | 276    |              |   | $      |               |       |   | $             |       |        |           | $   |     |      |   | $     | 276   |      
|                                               | Restricted cash                                              |                                                   |       | 87     |              |   |        |               |       |   |               |       |        |           |     |     |      |   |       | 87    |      
|                                               | Receivables, net                                             |                                                   |       | 288    |              |   |        |               |       |   |               | 4      |        |           |     |     |      |   |       | 292   |      
|                                               | Materials and supplies, net                                  |                                                   |       | 156    |              |   |        |               |       |   |               | (50    | )      |           |     |     |      |   |       | 106   |      
|                                               | Prepaid expenses and other                                   |                                                   |       | 158    |              |   |        |               |       |   |               | 4      |        |           |     | (1   | )    |   |       | 161   |      
|                                               |                                                              |                                                   |       |        |              |   |        |                |       |   |               |        |        |           |    
|                                               |                                                              | Total current assets                              |       |        | 965          |   |        |                |      |   |               |        | (42    | )         |     |      | (1   | ) |       |       | 922   | 
|Property and equipment, net                    |                                                              |                                                   | 2,425 |        |              |   |       |                |       |   | (154          | )      |        |           |    |      |      |   | 2,271 |      
|Other assets                                   |                                                              |                                                   |       |        |              |   |        |                |       |   |               |        |        |           |     |      |      |   |       |      
|Goodwill                                       |                                                              |                                                   | 2,490 |        |              |   |       |                |       |   | (1,680        | )      |        |           | (78 | )    |      |   | 732   |      
|Other intangibles, net                         |                                                              |                                                   | 473   |        |              |   |       |                |       |   | 75            |        |        |           |    |      |      |   | 548   |      
|Restricted cash                                |                                                              |                                                   | 608   |        |              |   |       |                |       |   |              |        |        |           |    |      |      |   | 608   |      
|Other assets, net                              |                                                              |                                                   | 82    |        |              |   |       |                |       |   | 88            |        |        |           |    |      |      |   | 170   |      
|                                               |                                                              |                                                   |       |        |              |   |        |                |       |   |               |        |        |           |    
|                                               |                                                              | Total other assets                                |       |        | 3,653        |   |        |                |      |   |               |        | (1,517 | )         |     |      | (78  | ) |       |       | 2,058 | 
|                                               |                                                              |                                                   |       |        |              |   |        |                |       |   |               |        |        |           |    
|                                               |                                                              | $                                                 | 7,043 |        |              | $ |       |                |       | $ | (1,713        | )      |        | $         | (79 | )    |      | $ | 5,251 |      
|                                               |                                                              |                                                   |       |        |              |   |        |                |       |   |               |        |        |           |    
|                                              
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
|Current liabilities                            |                                                              |                                                   |       |        |              |   |        |                |       |   |               |        |        |           |     |      |      |   |       |      
|                                               | Current maturities of debt and capital leases                |                                                   | $     | 914    |              |   | $      | (79            | )     |   | $             | (567   | )      |           | $   |     |      |   | $     | 268   |      
|                                               | Accounts payable                                             |                                                   |       | 261    |              |   |        | 58             |       |   |               | (7     | )      |           |     |     |      |   |       | 312   |      
|                                               | Payable (receivable) to related parties, net                 |                                                   |       | (225   | )            |   |        | 250            |       |   |               | (2     | )      |           |     |     |      |   |       | 23    |      
|                                               | Air traffic liability                                        |                                                   |       | 790    |              |   |        |               |       |   |               | (20    | )      |           |     | (124 | )    |   |       | 646   |      
|                                               | Accrued compensation and wages                               |                                                   |       | 136    |              |   |        | 1              |       |   |               |       |        |           |     | 20   |      |   |       | 157   |      
|                                               | Accrued taxes                                                |                                                   |       | 158    |              |   |        |               |       |   |               |       |        |           |     | (14  | )    |   |       | 144   |      
|                                               | Other accrued expenses                                       |                                                   |       | 551    |              |   |        | 177            |       |   |               | 65     |        |           |     | 3    |      |   |       | 796   |      
|                                               |                                                              |                                                   |       |        |              |   |        |                |       |   |               |        |        |           |    
|                                               |                                                              | Total current liabilities                         |       |        | 2,585        |   |        |                | 407   |   |               |        | (531   | )         |     |      | (115 | ) |       |       | 2,346 | 
|Noncurrent liabilities and deferred credits    |                                                              |                                                   |       |        |              |   |        |                |       |   |               |        |        |           |     |      |      |   |       |      
|                                               | Long-term debt and capital leases, net of current maturities |                                                   |       | 49     |              |   |        | 1,489          |       |   |               | 532    |        |           |     |     |      |   |       | 2,070 |      
|                                               | Deferred gains and credits                                   |                                                   |       | 150    |              |   |        | 255            |       |   |               | (176   | )      |           |     |     |      |   |       | 229   |      
|                                               | Postretirement benefits other than pensions                  |                                                   |       |       |              |   |        | 1,446          |       |   |               | (1,247 | )      |           |     |     |      |   |       | 199   |      
|                                               | Employee benefit liabilities and other                       |                                                   |       | 224    |              |   |        | 192            |       |   |               | (45    | )      |           |     | 35   |      |   |       | 406   |      
|                                               |                                                              |                                                   |       |        |              |   |        |                |       |   |               |        |        |           |    
|                                               |                                                              | Total noncurrent liabilities and deferred credits |       |        | 423          |   |        |                | 3,382 |   |               |        | (936   | )         |     |      | 35   |   |       |       | 2,904 | 
|Liabilities subject to compromise              |                                                              |                                                   | 4,826 |        |              |   | (4,826 | )              |       |   |              |        |        |           |    |      |      |   |      |      
|Stockholders equity (deficit)                 |                                                              |                                                   |       |        |              |   |        |                |       |   |               |        |        |           |     |      |      |   |       |      
|                                               | Common stock                                                 |                                                   |       |       |              |   |        |               |       |   |               |       |        |           |     |     |      |   |       |      |      
|                                               | Additional paid- in capital                                  |                                                   |       | 348    |              |   |        | 96             |       |   |               | (443   | )      |           |     |      |      |   |       | 1     |      
|                                               | Accumulated deficit                                          |                                                   |       | (1,141 | )            |   |        | 941            |       |   |               | 199    |        |           |     | 1    |      |   |       |      |      
|                                               | Deferred compensation                                        |                                                   |       | (4     | )            |   |        |               |       |   |               | 4      |        |           |     |     |      |   |       |      |      
|                                               | Accumulated other comprehensive income (loss)                |                                                   |       | 6      |              |   |        |               |       |   |               | (6     | )      |           |     |     |      |   |       |      |      
|                                               |                                                              |                                                   |       |        |              |   |        |                |       |   |               |        |        |           |    
|                                               |                                                              | Total stockholders equity (deficit)              |       |        | (791         | ) |        |                | 1,037 |   |               |        | (246   | )         |     |      | 1    |   |       |       | 1     | 
|                                               |                                                              |                                                   |       |        |              |   |        |                |       |   |               |        |        |           |    
|                                               |                                                              | $                                                 | 7,043 |        |              | $ |       |                |       | $ | (1,713        | )      |        | $         | (79 | )    |      | $ | 5,251 |      
|                                               |                                                              |                                                   |       |        |              |   |        |                |       |   |               |        |        |           |    

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US Airways, Inc.


Notes to the Financial
Statements  (Continued)







|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Reflects the discharge or reclassification of estimated
    liabilities subject to compromise. Most of these obligations are
    only entitled to receive such distributions of cash and common
    stock as provided for under the Plan of Reorganization. A
    portion of the estimated liabilities subject to compromise was
    restructured and will continue, as restructured, to be
    liabilities of the Successor Company.
|   
|(b) |  | Includes adjustments to reflect assets and liabilities at fair
    value and the write-off of the Predecessor Companys equity
    accounts.                                                                                                                                                                                                                                                                                         
|   
|(c) |  | In conjunction with the merger and application of purchase
    accounting, US Airways adjusted certain balances to conform
    its accounting policies to those of America West Holdings.                                                                                                                                                                                                                                            



|    |                          
|--- | -------------------------
|(c) | Reorganization items, net

90-7


|                                                     |  |                     |        |   |                   |   |              |                |  |   |        |  
|---------------------------------------------------- |  | ------------------- | ------ | - | ----------------- | - | ------------ | -------------- |  | - | ------ | -
|                                                     |  | Predecessor Company |       
|                                                     |  |                     |       
|                                                     |  | Nine Months         |        |   |                   |   | Three Months |               
|                                                     |  | Ended               |        |   | Year Ended        |   |              | Ended          | 
|                                                     |  | September 30, 2005  |        |   | December 31, 2004 |   |              | March 31, 2003 | 
|                                                     |  |                     |        |   |                   |   |              |                | 
|Curtailment of postretirement benefits(a)            |  | $                   | 1,420  |   |                   | $ |             |                |  | $ |       |  
|Termination of pension plans(b)                      |  |                     | 801    |   |                   |   |             |                |  |   | 386    |  
|Discharge of liabilities(c)                          |  |                     | 75     |   |                   |   |             |                |  |   | 3,655  |  
|Aircraft order cancellation penalties & reversals(d) |  |                     | 30     |   |                   |   | (7           | )              |  |   |       |  
|Interest income on accumulated cash                  |  |                     | 7      |   |                   |   | 4            |                |  |   | 2      |  
|Damage and deficiency claims(e)                      |  |                     | 2      |   |                   |   | (2           | )              |  |   | (1,892 | )
|Revaluation of assets and liabilities(f)             |  |                     | (1,498 | ) |                   |   |             |                |  |   | (1,106 | )
|Severance including benefits(g)                      |  |                     | (96    | ) |                   |   |             |                |  |   |       |  
|Professional fees                                    |  |                     | (57    | ) |                   |   | (27          | )              |  |   | (51    | )
|Airbus equipment deposits and credits, net(h)        |  |                     | (35    | ) |                   |   |             |                |  |   |       |  
|Restructured aircraft financings(i)                  |  |                     | (5     | ) |                   |   |             |                |  |   | 946    |  
|Write-off of deferred compensation                   |  |                     | (4     | ) |                   |   |             |                |  |   |       |  
|Loss on aircraft abandonment(j)                      |  |                     |       |   |                   |   |             |                |  |   | (9     | )
|Other                                                |  |                     | (4     | ) |                   |   |             |                |  |   | (43    | )
|                                                     |  |                     |        |   |                   |   |              |                | 
|                                                     |  | $                   | 636    |   |                   | $ | (32          | )              |  | $ | 1,888  |  
|                                                     |  |                     |        |   |                   |   |              |                | 






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | In January 2005, the Bankruptcy Court approved settlement
    agreements between US Airways and its unions and the
    court-appointed Section 1114 Committee, representing
    retirees other than those represented by the IAM and TWU, to
    begin the significant curtailment of postretirement medical
    benefits. US Airways recognized a gain of $183 million
    in connection with this curtailment in the first quarter of
    2005. Upon the emergence from bankruptcy and effectiveness of
    the Plan of

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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | Reorganization, an additional gain of $1.24 billion was
    recognized as the liability associated with the postretirement
    medical benefits was reduced to fair market value. See also
    Note 7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(b) |  | Also in January 2005, US Airways terminated three defined
    benefit plans related to the flight attendants, mechanics and
    certain other employees (see Note 7). The PBGC was
    appointed trustee of the plans upon termination. US Airways
    recognized a curtailment gain of $24 million and a
    $91 million minimum pension liability adjustment in
    connection with the terminations in the first quarter of 2005.
    Upon the effective date of the Plan of Reorganization and in
    connection with the settlement with the PBGC, the remaining
    liabilities associated with these plans were written off, net of
    settlement amounts.                                                               
|   
|    |  | Effective March 31, 2003, US Airways terminated its
    qualified and nonqualified pilot defined benefit pension plans.
    The PBGC was appointed trustee of the qualified plan effective
    with the termination. US Airways recognized a gain in
    connection with the termination which is partially offset by the
    estimate of the PBGC claim.                                                                                                                                                                                                                                                                                                                                                                        
|   
|(c) |  | Reflects the discharge of trade accounts payable and other
    liabilities upon emergence from bankruptcy. Most of these
    obligations were only entitled to receive such distributions of
    cash and common stock as provided for under the plan of
    reorganization in each of the bankruptcies. A portion of the
    liabilities subject to compromise in the bankruptcies were
    restructured and continued, as restructured, to be liabilities
    of the Successor Company.                                                                                                                                                                                                                                        
|   
|(d) |  | As a result of US Airways bankruptcy filing in
    September 2004, US Airways was not able to secure the
    financing necessary to take on-time delivery of three scheduled
    regional jet aircraft and therefore accrued penalties of
    $3 million until delivery of these aircraft was made to a
    US Airways Express affiliate in August 2005. Offsetting
    these penalties is the reversal of $33 million in penalties
    recorded by US Airways in the nine months ended
    December 31, 2003 due to its intention not to take delivery
    of certain aircraft scheduled for future delivery. In connection
    with the Airbus MOU, the accrual for these penalties was
    reversed (see also Notes 1 and 4).
|   
|    |  | As the result of US Airways bankruptcy filing in
    September 2004, it failed to meet the conditions precedent for
    continued financing of regional jets and was not able to take
    delivery of scheduled aircraft and therefore incurred penalties
    of $7 million in the fourth quarter of 2004.                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(e) |  | Damage and deficiency claims are largely a result of
    US Airways election to either restructure, abandon or
    reject aircraft debt and leases during the bankruptcy
    proceedings. As a result of the confirmation of the Plan of
    Reorganization and the effectiveness of the merger, these claims
    were withdrawn and the accruals reversed.                                                                                                                                                                                                                                                                                                                                                                     
|   
|(f) |  | As of September 30, 2005, US Airways recorded
    $1.5 billion of adjustments to reflect assets and
    liabilities at fair value, including an initial net write-down
    of goodwill of $1.82 billion. Goodwill of $584 million
    was recorded to reflect the excess of the estimated fair value
    of liabilities and equity over identifiable assets. Subsequent
    to September 30, 2005, US Airways recorded an
    additional $148 million of goodwill to reflect adjustments
    to the fair value of certain assets and liabilities. See
    Note 3(b) for a description of changes in goodwill during
    the fourth quarter of 2005.                                                                              
|   
|    |  | As of March 31, 2003, US Airways recorded
    $1.11 billion of adjustments to reflect assets and
    liabilities at fair value (including a $1.12 billion
    liability increase related to the revaluation of
    US Airways remaining defined benefit pension plans
    and postretirement benefit plans and a $333 million
    write-up of gates,
    slots and routes) and the write-off of the Predecessor
    Companys equity accounts. In addition, goodwill of
    $2.41 billion was recorded to reflect the excess of the
    estimated fair value of liabilities and equity over identifiable
    assets.                                                                                                            
|   
|    |  | Subsequent to March 31, 2003, US Airways recorded an
    additional $62 million of adjustments to reflect assets and
    liabilities at fair value, including a $281 million
    decrease to property and equipment, net, a $121 million
    decrease to long-term debt, net of current maturities, a
    $13 million increase to                                                                                                                                                                                                                                                                                                                                                                                                

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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | deferred gains and credits, net, a $54 million increase to
    other intangibles, net, a $15 million decrease to employee
    benefit liabilities and other and a $6 million decrease to
    accounts payable. In addition, a $6 million adjustment was
    made to paid-in capital reflecting a reallocation of
    US Airways Group equity as a result of additional fair
    value adjustments to assets at certain US Airways Group
    subsidiaries other than US Airways.
|   
|(g) |  | In connection with filing for bankruptcy on September 12,
    2004, US Airways achieved cost-savings agreements with its
    principal collective bargaining groups. In connection with the
    new labor agreements, approximately 5,000 employees across
    several of US Airways labor groups were involuntarily
    terminated or participated in voluntary furlough and termination
    programs.                                                                       
|   
|(h) |  | In connection with the Airbus MOU, US Airways was required
    to pay a restructuring fee of $39 million, which was paid
    by means of offset against existing equipment deposits held by
    Airbus. US Airways also received credits from Airbus
    totaling $4 million in 2005, primarily related to equipment
    deposits. See also Note 1.                                                                                                                            
|   
|(i) |  | The GE Merger MOU provided for the continued use of certain
    leased Airbus, Boeing and regional jet aircraft, the
    modification of monthly lease rates and the return of certain
    other leased Airbus and Boeing aircraft. The GE Merger MOU also
    provided for the sale-leaseback of assets securing various GE
    obligations. In connection with these transactions,
    US Airways recorded a net loss of $5 million.                                         
|   
|    |  | In connection with the first bankruptcy, US Airways
    restructured aircraft debt and lease agreements related to 119
    aircraft including the conversion of 52 mortgages to operating
    leases. The restructured terms generally provide for shorter
    lease periods and lower lease rates.                                                                                                                                                                            
|   
|(j) |  | For the three months ended March 31, 2003, reorganization
    items includes expenses related to seven aircraft that were
    legally abandoned as part of the first bankruptcy. Related
    aircraft liabilities were adjusted for each aircrafts
    expected allowed collateral value.                                                                                                                                                                                     



|    |                                  
|--- | ---------------------------------
|(d) | Liabilities subject to compromise

90-7


|                                                   |                                         |   |       |       | 
|-------------------------------------------------- | --------------------------------------- | - | ----- | ----- | 
|Debt and capital leases                            |                                         | $ | 2,400 |      
|Postretirement and other employee related expenses |                                         |   | 2,858 |      
|Other accrued expenses                             |                                         |   | 565   |      
|Accounts payable                                   |                                         |   | 162   |      
|Aircraft-related accruals and deferrals            |                                         |   | 93    |      
|                                                   |                                         |   |      
|                                                   | Total Liabilities Subject to Compromise |   | $     | 6,078 | 
|                                                   |                                         |   |      

232



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)


4.     Unusual items




|    |                   
|--- | ------------------
|(a) | Special items, net



|                                      |  |                    |    |     |                     |   |    |     
|------------------------------------- |  | ------------------ | -- | --- | ------------------- | - | -- | ----
|                                      |  | Successor Company  |    |     | Predecessor Company |  
|                                      |  |                    |    |     |                     |  
|                                      |  | Three Months Ended |    |     | Nine Months Ended   |  
|                                      |  | December 31, 2005  |    |     | December 31, 2003   |  
|                                      |  |                    |    |     |                     |  
|Transition and merger integration     |  | $                  | 15 | (a) |                     | $ |   |     
|Aircraft order cancellation penalty   |  |                    |   |     |                     |   | 35 | (b) 
|Employee severance including benefits |  |                    |   |     |                     |   | (1 | )(c)
|                                      |  |                    |    |     |                     |  
|                                      |  | $                  | 15 |     |                     | $ | 34 |     
|                                      |  |                    |    |     |                     |  






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | In connection with the merger with America West Holdings,
    US Airways incurred $15 million of transition and
    merger integration costs in the fourth quarter of 2005. These
    items included $7 million in insurance premiums related to
    policies for former officers and directors, $5 million for
    severance, retention payments and stock awards, $1 million
    of aircraft livery costs, $1 million of programming service
    expense and $1 million in other expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(b) |  | During the quarter ended June 30, 2003, US Airways
    recorded a $35 million charge in connection with its
    intention not to take delivery of certain aircraft scheduled for
    future delivery. In connection with the Airbus MOU,
    $33 million of this charge was reversed as a reorganization
    item in 2005 (see Notes 1 and 3(c)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(c) |  | In September 2001, US Airways announced that in connection
    with its reduced flight schedule it would terminate or furlough
    approximately 11,000 employees across all employee groups.
    Approximately 10,200 of the affected employees were terminated
    or furloughed on or prior to January 1, 2002. Substantially
    all the remaining affected employees were terminated or
    furloughed by May 2002. US Airways headcount
    reduction was largely accomplished through involuntary
    terminations/furloughs. In connection with this headcount
    reduction, US Airways offered a voluntary leave program to
    certain employee groups. Voluntary leave program participants
    generally received extended benefits, such as medical, dental
    and life insurance, but did not receive any furlough pay
    benefit. In accordance with Emerging Issues Task Force Issue
    No. 94-3,
    US Airways recorded a pretax charge of $75 million
    representing the involuntary severance pay and the benefits for
    affected employees during the third quarter of 2001. In the
    fourth quarter of 2001, US Airways recognized a
    $10 million charge representing the estimated costs of
    extended benefits for those employees who elected to take
    voluntary leave and a $2 million reduction in accruals
    related to the involuntary severance as a result of employees
    electing to accept voluntary furlough. During the quarters ended
    June 30, 2003 and 2002, the US Airways recognized
    $1 million and $3 million, respectively, in reductions
    to severance pay and benefit accruals related to the involuntary
    termination or furlough of certain employees.



|    |                        
|--- | -----------------------
|(b) | Government compensation

12-month


233



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)






|    |                              
|--- | -----------------------------
|(c) | Gain on sale of Hotwire, Inc.



5.     Financial instruments




|    |        
|--- | -------
|(a) | General







|    |                                    
|--- | -----------------------------------
|(b) | Fair value of financial instruments



234



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|                                                    |  |                   |        |   |                   |   |        |          |  |   |            |   |  |   |     |  
|--------------------------------------------------- |  | ----------------- | ------ | - | ----------------- | - | ------ | -------- |  | - | ---------- | - |  | - | --- | -
|                                                    |  | December 31, 2005 |        |   | December 31, 2004 |  
|                                                    |  |                   |        |   |                   |  
|                                                    |  | Carrying          |        |   | Estimated         |   |        | Carrying |  |   | Estimated  |  
|                                                    |  | Amount            |        |   | Fair Value        |   |        | Amount   |  |   | Fair Value |  
|                                                    |  |                   |        |   |                   |   |        |          |  |   |            |  
|Cash equivalents                                    |  | $                 | 432    |   |                   | $ | 432    |          |  | $ | 700        |   |  | $ | 700 |  
|Short-term investments(a)                           |  |                   | 132    |   |                   |   | 132    |          |  |   |           |   |  |   |    |  
|Restricted cash                                     |  |                   | 571    |   |                   |   | 571    |          |  |   | 626        |   |  |   | 626 |  
|Notes receivable(b)                                 |  |                   |       |   |                   |   |       |          |  |   | 3          |   |  |   | 3   |  
|SHC Stock Options(c)                                |  |                   | 10     |   |                   |   | 10     |          |  |   | 10         |   |  |   | 10  |  
|Long-term debt (excludes capital lease obligations) |  |                   | (1,926 | ) |                   |   | (1,926 | )        |  |   | (3,198     | ) |  |   | (d  | )






|    |  |                                                                                                                                                                                                                                                                                   
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Classified as available for sale in accordance with
    SFAS 115. See also Note 2(c).                                                                                                                                                                                             
|   
|(b) |  | Carrying amount included in receivables, net on the balance
    sheets.                                                                                                                                                                                                           
|   
|(c) |  | Carrying amount included in other assets, net on the balance
    sheets.                                                                                                                                                                                                          
|   
|(d) |  | As a result of the Chapter 11 filing, the fair value of the
    debt outstanding could not be reasonably determined as of
    December 31, 2004. In connection with bankruptcy emergence
    in September 2005, the carrying amount of debt was adjusted to
    fair market value.

6.     Debt, including capital lease
obligations




|                                                                                                                                    |  |              |       |  |              |   |       | 
|----------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ----- |  | ------------ | - | ----- | 
|                                                                                                                                    |  | December 31, |       |  | December 31, |  
|                                                                                                                                    |  | 2005         |       |  | 2004         |  
|                                                                                                                                    |  |              |       |  |              |  
|Secured                                                                                                                             |  |              |       |  |              |   |       | 
|Equipment notes payable, variable interest rates of 6.20% to
    9.22%, averaging 8.50% as of December 31, 2005                     |  | $            | 1,240 |  |              | $ | 1,948 | 
|US Airways East Citibank Loan (formerly ATSB loan),
    variable interest rate of 10.10%, installments due 2006 through
    2010(a) |  |              | 551   |  |              |   | 718   | 
|Slot financing, interest rate of 8%, installments due through
    2015(b)                                                           |  |              | 50    |  |              |   |      | 
|Capital lease obligations, interest rate of 8%, installments due
    through 2021(c)                                                |  |              | 46    |  |              |   | 49    | 
|GE Credit Facility, variable interest rate of 8.30%,
    installments due 2006 to 2010(d)                                           |  |              | 28    |  |              |   | 354   | 
|GE Liquidity Facility(d)                                                                                                            |  |              |      |  |              |   | 158   | 
|GE Bridge Facility(d)                                                                                                               |  |              |      |  |              |   | 20    | 
|Airbus Loans, variable interest rate of 9.96%, installments due
    2008 to 2010(e)                                                 |  |              | 186   |  |              |   |      | 

235



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)


|                                                                                        |                                                 |              |       |      |              |   |       |        |  
|--------------------------------------------------------------------------------------- | ----------------------------------------------- | ------------ | ----- | ---- | ------------ | - | ----- | ------ | -
|                                                                                        |                                                 | December 31, |       |      | December 31, |  
|                                                                                        |                                                 | 2005         |       |      | 2004         |  
|                                                                                        |                                                 |              |       |      |              |  
|Unsecured                                                                               |                                                 |              |       |      |              |   |       |       
|Note payable to PBGC, interest rate of 6%, interest only
    payments until due 2012(f) |                                                 |              | 10    |      |              |   |      |       
|                                                                                        |                                                 |              |       |      |              |  
|Total long-term debt and capital lease obligations                                      |                                                 |              | 2,111 |      |              |   | 3,247 |       
|                                                                                        | Less: Unamortized discount on debt              |              |       | (139 | )            |   |       | (126   | )
|                                                                                        | Obligations classified as subject to compromise |              |       |     |              |   |       | (2,400 | )
|                                                                                        | Current maturities                              |              |       | (117 | )            |   |       | (721   | )
|                                                                                        |                                                 |              |       |      |              |  
|Long-term debt and capital lease obligations, net of current
    maturities             |                                                 | $            | 1,855 |      |              | $ |      |       
|                                                                                        |                                                 |              |       |      |              |  






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | In connection with the consummation of the merger, on
    September 27, 2005, US Airways, as borrower, entered
    into the US Airways ATSB Loan with the ATSB. Also on
    September 27, 2005, AWA entered into an Amended and
    Restated Loan Agreement (the AWA ATSB Loan). The
    ATSB Loans amended and restated the previously outstanding loans
    of both US Airways and AWA, each guaranteed in part by the
    ATSB. On October 19, 2005, $539 million of
    US Airways ATSB Loan, of which $525 million was
    guaranteed by the ATSB, was sold by the lender by order of the
    ATSB to 13 fixed income investors. Due to the sale on
    October 19, 2005, the ATSB no longer guarantees any portion
    of the loan and has no interest in any of US Airways
    debt. As a result of the sale of the loan, the principal amounts
    bear interest as a rate per annum equal to LIBOR plus
    600 basis points, payable on a quarterly basis, and are no
    longer subject to payment of the quarterly guarantee fee. All
    other terms associated with this loan remain unchanged. As a
    result of the sale of the loan, the US Airways ATSB Loan is
    now referred to as the US Airways Citibank Loan, and had an
    outstanding balance of $551 million at December 31,
    2005.
|   
|    |  | Ninety percent of the US Airways Citibank Loan
    (Tranche A), the previously guaranteed portion of the loan,
    was originally funded through a participating lenders
    commercial paper conduit program and bears interest at a rate
    equal to the conduit providers weighted average cost
    related to the issuance of certain commercial paper notes and
    other short term borrowings plus 0.30%, provided that portions
    of Tranche A that are held by the US Airways Citibank
    Loan or by an assignee and no longer subject to such commercial
    paper conduit program bear interest at LIBOR plus 40 basis
    points, and portions of Tranche A that are under certain
    circumstances assigned free of the ATSB guarantee bear interest
    at LIBOR plus 6.0%. Ten percent of the US Airways Citibank
    Loan (Tranche B) bears interest at the greater of the
    Tranche A interest rate plus 6.0% and LIBOR plus 6.0%, as
    compared with the previous rate of LIBOR plus 4.0%. The
    US Airways Citibank loan also reschedules amortization
    payments for US Airways with semi-annual payments beginning
    on March 31, 2007 and continuing through September 30,
    2010.                                                                                            
|   
|    |  | The US Airways Citibank Loan requires certain prepayments
    from the proceeds of specified asset sales by US Airways
    Group and the other loan parties, and US Airways Group is
    required to maintain consolidated unrestricted cash and cash
    equivalents, less: (a) the amount of all outstanding
    advances by credit card processors and clearing houses in excess
    of 20% of the air traffic liabilities;
    (b) $250 million presumed necessary to fund a
    subsequent tax trust (to the extent not otherwise funded by
    US Airways Group); (c) $35 million presumed
    necessary to post collateral to clearing houses (to the extent
    not posted); and (d) any unrestricted cash or cash
    equivalents held in unperfected accounts; in an amount (subject
    to partial reduction under certain circumstances upon                                                                                                                                                                                                                                                                                                                                                                                                                                                               

236



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | mandatory prepayments made with the net proceeds of future
    borrowings and issuances of capital stock) not less than:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|    |  |  $525 million from September 27, 2005
    through March 2006;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  |  $500 million through September 2006;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|    |  |  $475 million through March 2007;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|    |  |  $450 million through September 2007;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|    |  |  $400 million through March 2008;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|    |  |  $350 million through September 2008; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|    |  |  $300 million through September 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|    |  | US Airways was required to pay down the principal of its
    loan with the first $125 million of net proceeds from
    specified asset sales identified in connection with its
    Chapter 11 proceedings, whether completed before or after
    emergence. US Airways then retains the next
    $83 million of net proceeds from specified assets sales,
    and must prepay the principal of the loan with 60% of net
    proceeds in excess of an aggregate of $208 million from
    specified asset sales. Any such asset sales proceeds up to
    $275 million are to be applied to the outstanding principal
    balance in order of maturity, and any such asset sales proceeds
    in excess of $275 million are to be applied to the
    outstanding principal balance on a pro rata across all
    maturities in accordance with the loans early amortization
    provisions. As a result, semi-annual payments are now scheduled
    to begin on September 30, 2007, instead of March 31,
    2007, as originally scheduled in the loan agreement.
    US Airways made prepayments totaling $156 million in
    connection with these specified asset sales completed during
    2005.
|   
|(b) |  | In September 2005, US Airways entered into an agreement to
    sell and leaseback certain of its commuter slots at Ronald
    Reagan Washington National Airport and New York LaGuardia
    Airport. US Airways continues to hold the right to
    repurchase the slots anytime after the second anniversary of the
    slot sale-leaseback transaction. These transactions were
    accounted for as secured financings. Installments are due
    monthly through 2015 at a rate of 8%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(c) |  | Capital lease obligations consist principally of certain airport
    maintenance and facility leases which expire in 2018 and 2021.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(d) |  | General Electric together with its affiliates (collectively,
    GE) finances or leases a substantial portion of
    US Airways aircraft prior to the most recent
    Chapter 11 filing. In addition, in November 2001,
    US Airways obtained a $404 million credit facility
    from GE (the GE Credit Facility), which was secured
    by collateral including 11 A320-family aircraft and 28 spare
    engines. In connection with the first bankruptcy,
    US Airways reached a settlement with GE that resolved
    substantially all aircraft, aircraft engine and loan-related
    issues, and provided US Airways with additional financing
    from GE in the form of a liquidity facility of up to
    $360 million that bore interest at the rate of LIBOR plus
    4.25% (the GE Liquidity Facility). Most obligations
    to GE are cross-defaulted to the US Airways GE Liquidity
    Facility, GE regional jet leases and GE regional jet mortgage
    financings.                                                                                                                                                                                                       
|   
|    |  | In November 2004, US Airways reached a comprehensive
    agreement with GE and its affiliates, as described in a Master
    Memorandum of Understanding (GE Master MOU), that
    was approved by the Bankruptcy Court on December 16, 2004.
    The GE Master MOU, together with the transactions contemplated
    by the term sheets attached to the GE Master MOU, provided
    short-term liquidity, reduced debt, lower aircraft ownership
    costs, enhanced engine maintenance services and operating leases
    for new regional jets, while preserving the vast majority of
    US Airways mainline fleet owned or otherwise financed
    by GE. In connection with the merger, US Airways and
    America West Holdings renegotiated certain of their respective
    existing agreements, and entered into new agreements, with GE.
    These agreements are set forth in a comprehensive agreement with
    GE and certain of its affiliates in a Master Merger Memorandum
    of Understanding, referred to as the GE Merger MOU,                                                                                                                                                 

237



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | that was approved by the Bankruptcy Court in June 2005. In part,
    the GE Merger MOU modified and supplemented the agreements
    reached between US Airways and GE in the GE Master MOU,
    which was further amended by an amendment dated
    September 9, 2005. The amendment provided that, in lieu of
    the issuance to an affiliate of GE of a convertible note in the
    amount of $125 million, US Airways Group would pay
    cash in the amount of $125 million. The $125 million
    was paid to GE before September 30, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|    |  | The bridge facility entered into between US Airways and GE
    pursuant to the GE Master MOU on December 20, 2004 (the
    GE Bridge Facility) continued in effect during the
    pendency of the Chapter 11 cases. The GE Bridge Facility
    provided for a loan in the amount of up to approximately
    $56 million, which was drawn down in 2004 and 2005. The GE
    Bridge Facility bore interest at the rate of LIBOR plus 4.25%
    and matured on the date US Airways Group emerged from the
    Chapter 11 cases, and was settled in cash by
    US Airways by September 30, 2005 in connection with
    the $125 million payment.                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|    |  | In June 2005, GE purchased the assets securing the GE Credit
    Facility in a sale-leaseback transaction. The sale proceeds
    realized from the sale-leaseback transaction were applied to
    repay the 2003 GE Liquidity Facility, the mortgage financing
    associated with the CRJ aircraft and a portion of the 2001 GE
    Credit Facility. The balance of the GE Credit Facility was
    amended to allow additional borrowings of $21 million in
    July 2005, which resulted in a total principal balance
    outstanding thereunder of $28 million. The operating leases
    are cross-defaulted with all other GE obligations, other than
    excepted obligations, and are subject to agreed upon return
    conditions.                                                                                                                                                                                                                                                                                                                                             
|   
|(e) |  | On September 27, 2005, US Airways and AWA entered into
    two loan agreements with Airbus Financial Services
    (AFS), an affiliate of Airbus, with commitments in
    initial aggregate amounts of up to $161 million and up to
    $89 million. The Airbus loans bear interest at a rate of
    LIBOR plus a margin, subject to adjustment during the term of
    the loans under certain conditions and have been recorded as an
    obligation of US Airways Group. Amounts drawn upon the
    Airbus loans are drawn first upon the Airbus $161 million
    loan until it has been drawn in its full amount, in which event
    the remaining portion of the $250 million total commitment
    is drawn upon the Airbus $89 million loan.                                                                                                                                                                                                                                                                                                                                    
|   
|    |  | On September 27, 2005, all of the Airbus $161 million
    loan and $14 million of the Airbus $89 million loan
    were drawn and are available for use for general corporate
    purposes. At December 31, 2005, a total of
    $186 million was drawn under the Airbus loans. The
    remaining portion of the Airbus loans is payable in multiple
    draws upon the occurrence of certain conditions, including the
    taking of delivery of certain aircraft, on the due dates for
    certain amounts owing to AFS or its affiliates to refinance such
    amounts, after payment of certain invoices for goods and
    services provided by AFS or its affiliates, or upon receipt by
    AFS of certain amounts payable in respect of existing aircraft
    financing transactions. The full amount of the Airbus loans is
    expected to be available by the end of 2006. US Airways and
    AWA are jointly and severally liable for the Airbus loans;
    accordingly, the full amount outstanding under the loans is
    reflected in financial statements of US Airways.
|   
|    |  | The amortization payments under the Airbus $161 million
    loan will become due in equal quarterly installments of
    $13 million beginning on March 31, 2008, with the
    final installment due on December 31, 2010. The outstanding
    principal amount of the Airbus $89 million loan will be
    forgiven in writing December 31, 2010, or an earlier date,
    if on that date the outstanding principal amount of, accrued
    interest on, and all other amounts due under the Airbus
    $161 million loan have been paid in full and
    US Airways and AWA comply with the aircraft delivery
    schedule.                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(f) |  | In connection with US Airways Groups emergence from
    bankruptcy in September 2005, it reached a settlement with the
    PBGC related to the termination of three of its defined benefit
    pension plans which included the issuance of a $10 million
    note which matures in 2012 and bears interest at 6% payable
    annually in arrears.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

238



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|           |  |   |       | 
|---------- |  | - | ----- | 
|2006       |  | $ | 117   | 
|2007       |  |   | 152   | 
|2008       |  |   | 252   | 
|2009       |  |   | 297   | 
|2010       |  |   | 299   | 
|Thereafter |  |   | 994   | 
|           |  |   |      
|           |  | $ | 2,111 | 
|           |  |   |      





7.     Employee pension and benefit
plans






|    |                                                           
|--- | ----------------------------------------------------------
|(a) | Defined benefit and other postretirement benefit
    plans





239



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##### Table of Contents



US Airways, Inc.


Notes to the Financial
Statements  (Continued)




90-7,


106-2,




240



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##### Table of Contents



US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|                                                         |                                  |                                  |   |                     |                               |           |               |        |              |                     |       |             |                |   |     |               |   |   |       |        |     |   |       |      |     |  
|-------------------------------------------------------- | -------------------------------- | -------------------------------- | - | ------------------- | ----------------------------- | --------- | ------------- | ------ | ------------ | ------------------- | ----- | ----------- | -------------- | - | --- | ------------- | - | - | ----- | ------ | --- | - | ----- | ---- | --- | -
|                                                         |                                  | Defined Benefit Pension Plans(1) |   |                     | Other Postretirement Benefits |          
|                                                         |                                  |                                  |   |                     |                               |          
|                                                         |                                  | Successor                        |   |                     |                               | Successor |               |        |             
|                                                         |                                  | Company                          |   | Predecessor Company |                               |           | Company       |        |              | Predecessor Company |      
|                                                         |                                  |                                  |   |                     |                               |           |               |        |              |                     |      
|                                                         |                                  | Three Months                     |   | Nine Months         |                               |           |               |        | Three Months |                     |       | Nine Months |                |   |    
|                                                         |                                  | Ended                            |   | Ended               |                               |           | Year Ended    |        |              | Ended               |       |             | Ended          |   |     | Year Ended    |  
|                                                         |                                  | Dec. 31, 2005                    |   | Sept. 30, 2005      |                               |           | Dec. 31, 2004 |        |              | Dec. 31, 2005       |       |             | Sept. 30, 2005 |   |     | Dec. 31, 2004 |  
|                                                         |                                  |                                  |   |                     |                               |           |               |        |              |                     |       |             |                |   |     |               |  
|Fair value of plan assets at the beginning of the period |                                  | $                                |  |                     |                               | $         | 1,706         |        |              | $                   | 1,634 |             |                | $ |    |               |   | $ |      |        |     | $ |      |     
|                                                         |                                  | Actual return on plan assets     |   |                     |                              |           |               |        | 98           |                     |       |             | 166            |   |     |               |  |   |       |        |    |   |       |      |    |  
|                                                         |                                  | Employer contributions           |   |                     |                              |           |               |        | 1            |                     |       |             | 29             |   |     |               |  |   |       |        | 51  |   |       |      | 51  |  
|                                                         |                                  | Plan participants contributions |   |                     |                              |           |               |        |             |                     |       |             |               |   |     |               |  |   |       |        | 23  |   |       |      | 16  |  
|                                                         |                                  | Gross benefits paid              |   |                     |                              |           |               |        | (44          | )                   |       |             | (123           | ) |     |               |  |   |       |        | (74 | ) |       |      | (67 | )
|                                                         |                                  | Assets transferred to the PBGC   |   |                     |                              |           |               |        | (1,761       | )                   |       |             |               |   |     |               |  |   |       |        |    |   |       |      |    |  
|                                                         |                                  |                                  |   |                     |                               |           |               |        |              |                     |       |             |                |   |     |               |   |  
|Fair value of plan assets at end of period               |                                  |                                  |  |                     |                               |           |              |        |              |                     | 1,706 |             |                |   |    |               |   |   |      |        |     |   |      |     
|                                                         |                                  |                                  |   |                     |                               |           |               |        |              |                     |       |             |                |   |     |               |   |  
|Benefit obligation at the beginning of the period        |                                  |                                  |  |                     |                               |           | 2,690         |        |              |                     | 2,550 |             |                |   | 229 |               |   |   | 1,367 |        |     |   | 1,651 |     
|                                                         | Service cost                     |                                  |   |                    |                               |           |               | 1      |              |                     |       | 40          |                |   |     | 1             |   |   |       | 8      |     |   |       | 39   |    
|                                                         | Interest cost                    |                                  |   |                    |                               |           |               | 6      |              |                     |       | 152         |                |   |     | 3             |   |   |       | 22     |     |   |       | 88   |    
|                                                         | Plan participants contributions |                                  |   |                    |                               |           |               |       |              |                     |       |            |                |   |     |              |   |   |       | 23     |     |   |       | 16   |    
|                                                         | Plan amendments                  |                                  |   |                    |                               |           |               |       |              |                     |       |            |                |   |     |              |   |   |       | (1,089 | )   |   |       |     |    
|                                                         | Actuarial (gain) loss            |                                  |   |                    |                               |           |               | 59     |              |                     |       | 71          |                |   |     | (4            | ) |   |       | (16    | )   |   |       | (360 | )  
|                                                         | Curtailment/settlement gains(2)  |                                  |   |                    |                               |           |               | (2,712 | )            |                     |       |            |                |   |     |              |   |   |       | (12    | )   |   |       |     |    
|                                                         | Gross benefits paid              |                                  |   |                    |                               |           |               | (44    | )            |                     |       | (123        | )              |   |     |              |   |   |       | (74    | )   |   |       | (67  | )  
|                                                         |                                  |                                  |   |                     |                               |           |               |        |              |                     |       |             |                |   |     |               |   |  
|Benefit obligation at end of the period                  |                                  |                                  |  |                     |                               |           |              |        |              |                     | 2,690 |             |                |   | 229 |               |   |   | 229   |        |     |   | 1,367 |     
|                                                         |                                  |                                  |   |                     |                               |           |               |        |              |                     |       |             |                |   |     |               |   |  

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US Airways, Inc.


Notes to the Financial
Statements  (Continued)


|                          |                                           |                                  |   |                     |                               |               |         |              |               |                     |             |                |  |   |               |    |   |   |      |   |  |   |        |      |  
|------------------------- | ----------------------------------------- | -------------------------------- | - | ------------------- | ----------------------------- | ------------- | ------- | ------------ | ------------- | ------------------- | ----------- | -------------- |  | - | ------------- | -- | - | - | ---- | - |  | - | ------ | ---- | -
|                          |                                           | Defined Benefit Pension Plans(1) |   |                     | Other Postretirement Benefits |              
|                          |                                           |                                  |   |                     |                               |              
|                          |                                           | Successor                        |   |                     |                               | Successor     |         |              |              
|                          |                                           | Company                          |   | Predecessor Company |                               |               | Company |              |               | Predecessor Company |            
|                          |                                           |                                  |   |                     |                               |               |         |              |               |                     |            
|                          |                                           | Three Months                     |   | Nine Months         |                               |               |         | Three Months |               |                     | Nine Months |                |  |  
|                          |                                           | Ended                            |   | Ended               |                               | Year Ended    |         |              | Ended         |                     |             | Ended          |  |   | Year Ended    |   
|                          |                                           | Dec. 31, 2005                    |   | Sept. 30, 2005      |                               | Dec. 31, 2004 |         |              | Dec. 31, 2005 |                     |             | Sept. 30, 2005 |  |   | Dec. 31, 2004 |   
|                          |                                           |                                  |   |                     |                               |               |         |              |               |                     |             |                |  |   |               |   
|Funded status of the plan |                                           |                                  |  |                     |                               |               |        |              |               |                     | (984        | )              |  |   | (229          | )  |   |   | (229 | ) |  |   | (1,367 | )   
|                          | Unrecognized actuarial (gain)/ loss       |                                  |   |                    |                               |               |         |             |               |                     |             | 105            |  |   |               | (4 | ) |   |      |  |  |   |        | (329 | )
|                          | Unrecognized prior service cost (benefit) |                                  |   |                    |                               |               |         |             |               |                     |             |               |  |   |               |   |   |   |      |  |  |   |        | (71  | )
|                          | Contributions for October to December     |                                  |   |                    |                               |               |         |             |               |                     |             | 1              |  |   |               | 10 |   |   |      |  |  |   |        | 15   |  
|                          |                                           |                                  |   |                     |                               |               |         |              |               |                     |             |                |  |   |               |    |   |  
|Net liability recognized  |                                           | $                                |  |                     |                               | $             |        |              |               | $                   | (878        | )              |  | $ | (223          | )  |   | $ | (229 | ) |  | $ | (1,752 | )   
|                          |                                           |                                  |   |                     |                               |               |         |              |               |                     |             |                |  |   |               |    |   |  



|                                         |  |                                  |   |             |                               |          |           |  |          |                     |      |           |  |   |          |   |  |   |      |   |  |   |        |  
|---------------------------------------- |  | -------------------------------- | - | ----------- | ----------------------------- | -------- | --------- |  | -------- | ------------------- | ---- | --------- |  | - | -------- | - |  | - | ---- | - |  | - | ------ | -
|                                         |  | Defined Benefit Pension Plans(1) |   |             | Other Postretirement Benefits |         
|                                         |  |                                  |   |             |                               |         
|                                         |  | Successor                        |   | Predecessor |                               |          | Successor |  |          |                    
|                                         |  | Company                          |   | Company     |                               |          | Company   |  |          | Predecessor Company |     
|                                         |  |                                  |   |             |                               |          |           |  |          |                     |     
|                                         |  | Dec. 31,                         |   | Sept. 30,   |                               | Dec. 31, |           |  | Dec. 31, |                     |      | Sept. 30, |  |   | Dec. 31, |  
|                                         |  | 2005                             |   | 2005        |                               | 2004     |           |  | 2005     |                     |      | 2005      |  |   | 2004     |  
|                                         |  |                                  |   |             |                               |          |           |  |          |                     |      |           |  |   |          |  
|Accrued benefit cost                     |  | $                                |  |             |                               | $        |          |  |          | $                   | (878 | )         |  | $ | (223     | ) |  | $ | (229 | ) |  | $ | (1,752 | )
|Adjustment for minimum pension liability |  |                                  |  |             |                               |          |          |  |          |                     | (120 | )         |  |   |         |   |  |   |     |   |  |   |       |  
|Accumulated other comprehensive loss     |  |                                  |  |             |                               |          |          |  |          |                     | 120  |           |  |   |         |   |  |   |     |   |  |   |       |  
|                                         |  |                                  |   |             |                               |          |           |  |          |                     |      |           |  |   |          |   |  |  
|Net amount recognized                    |  | $                                |  |             |                               | $        |          |  |          | $                   | (878 | )         |  | $ | (223     | ) |  | $ | (229 | ) |  | $ | (1,752 | )
|                                         |  |                                  |   |             |                               |          |           |  |          |                     |      |           |  |   |          |   |  |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | For plans with accumulated benefit obligations in excess of plan
    assets, the aggregate projected benefit obligations, accumulated
    benefit obligations and plan assets were $2.70 billion,
    $2.68 billion and $1.72 billion, respectively, as of
    September 30, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(2) | In 2005, US Airways recognized curtailments and settlements
    related to the termination of its remaining material defined
    benefit pension plans. These curtailments and settlements were
    recognized in accordance with SFAS No. 88,
    Employers Accounting for Settlements and
    Curtailments of Defined Benefit Pension Plans and for
    Termination Benefits. In 2005, US Airways recognized
    curtailments related to the significant redesign of the other
    post retirement benefit plans (primarily medical and dental
    benefits). These curtailments were recognized in accordance with
    SFAS No. 106, Employers Accounting for
    Postretirement Benefits Other Than Pensions.



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|                              |  |                 |       |  |                               |  |       |               |  |  |       | 
|----------------------------- |  | --------------- | ----- |  | ----------------------------- |  | ----- | ------------- |  |  | ----- | 
|                              |  | Defined Benefit |       |  |                              
|                              |  | Pension Plans   |       |  | Other Postretirement Benefits | 
|                              |  |                 |       |  |                               | 
|                              |  | Predecessor     |       |  | Successor                     |  |       | Predecessor   | 
|                              |  | Company         |       |  | Company                       |  |       | Company       | 
|                              |  |                 |       |  |                               |  |       |               | 
|                              |  | Dec. 31, 2004   |       |  | Dec. 31, 2005                 |  |       | Dec. 31, 2004 | 
|                              |  |                 |       |  |                               |  |       |               | 
|Discount rate                 |  |                 | 6.00% |  |                               |  | 5.30% |               |  |  | 6.00% | 
|Rate of compensation increase |  |                 | 3.73% |  |                               |  | n.a.  |               |  |  |      | 





|                                            |  |             |    |  |             |   |    |  
|------------------------------------------- |  | ----------- | -- |  | ----------- | - | -- | -
|                                            |  | 1% Increase |    |  | 1% Decrease |  
|                                            |  |             |    |  |             |  
|Effect on total service and interest costs  |  | $           |   |  |             | $ |   |  
|Effect on postretirement benefit obligation |  | $           | 10 |  |             | $ | (8 | )



|                               |  |                               |      |           |                               |  |              |                     |  |             |                |   |  |               |      |   |  |  |      |  
|------------------------------ |  | ----------------------------- | ---- | --------- | ----------------------------- |  | ------------ | ------------------- |  | ----------- | -------------- | - |  | ------------- | ---- | - |  |  | ---- | -
|                               |  | Defined Benefit Pension Plans |      |           | Other Postretirement Benefits | 
|                               |  |                               |      |           |                               | 
|                               |  |                               |      | Successor |                               |  |             
|                               |  | Predecessor Company           |      |           | Company                       |  |              | Predecessor Company | 
|                               |  |                               |      |           |                               |  |              |                     | 
|                               |  | Nine Months                   |      |           |                               |  | Three Months |                     |  | Nine Months |                |   | 
|                               |  | Ended                         |      |           | Year Ended                    |  |              | Ended               |  |             | Ended          |   |  | Year Ended    |     
|                               |  | Sept. 30, 2005                |      |           | Dec. 31, 2004                 |  |              | Dec. 31, 2005       |  |             | Sept. 30, 2005 |   |  | Dec. 31, 2004 |     
|                               |  |                               |      |           |                               |  |              |                     |  |             |                |   |  |               |     
|Discount rate                  |  |                               | 6.00 | %         |                               |  | 6.00         | %                   |  |             | 5.30           | % |  |               | 5.80 | % |  |  | 6.19 | %
|Expected return on plan assets |  |                               | 7.33 | %         |                               |  | 8.00         | %                   |  |             |               |   |  |               |     |   |  |  |     |  
|Rate of compensation increase  |  |                               | 3.73 | %         |                               |  | 3.73         | %                   |  |             |               |   |  |               |     |   |  |  |     |  

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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|                               |                    |                     |      |   |               |   |             |               |  |              |                |   |  |   |        |   | 
|------------------------------ | ------------------ | ------------------- | ---- | - | ------------- | - | ----------- | ------------- |  | ------------ | -------------- | - |  | - | ------ | - | 
|                               |                    | Predecessor Company |     
|                               |                    |                     |     
|                               |                    | Nine Months         |      |   |               |   | Nine Months |               |  | Three Months |               
|                               |                    | Ended               |      |   | Year Ended    |   |             | Ended         |  |              | Ended          |  
|                               |                    | Sept. 30, 2005      |      |   | Dec. 31, 2004 |   |             | Dec. 31, 2003 |  |              | March 31, 2003 |  
|                               |                    |                     |      |   |               |   |             |               |  |              |                |  
|Service cost                   |                    | $                   | 1    |   |               | $ | 40          |               |  | $            | 27             |   |  | $ | 27     |  
|Interest cost                  |                    |                     | 6    |   |               |   | 152         |               |  |              | 113            |   |  |   | 89     |  
|Expected return on plan assets |                    |                     | (5   | ) |               |   | (128        | )             |  |              | (89            | ) |  |   | (69    | )
|Amortization of:               |                    |                     |      |   |               |   |             |               |  |              |                |   |  |   |        |  
|                               | Prior service cost |                     |      |  |               |   |             |              |  |              |                |  |  |   |        | 1 | 
|                               | Actuarial loss     |                     |      |  |               |   |             |              |  |              |                |  |  |   |        | 1 | 
|                               |                    |                     |      |   |               |   |             |               |  |              |                |  
|Net periodic cost              |                    |                     | 2    |   |               |   | 64          |               |  |              | 51             |   |  |   | 49     |  
|Curtailment/settlement gains   |                    |                     | (801 | ) |               |   |            |               |  |              |               |   |  |   | (1,391 | )
|Fresh start loss               |                    |                     |     |   |               |   |            |               |  |              |               |   |  |   | 1,004  |  
|                               |                    |                     |      |   |               |   |             |               |  |              |                |  
|Total periodic cost            |                    | $                   | (799 | ) |               | $ | 64          |               |  | $            | 51             |   |  | $ | (338   | )
|                               |                    |                     |      |   |               |   |             |               |  |              |                |  



|                             |                       |               |   |   |                     |   |        |               |   |             |               |     |              |               |    |     |   |   |     |     |  
|---------------------------- | --------------------- | ------------- | - | - | ------------------- | - | ------ | ------------- | - | ----------- | ------------- | --- | ------------ | ------------- | -- | --- | - | - | --- | --- | -
|                             |                       | Successor     |   |   |                    
|                             |                       | Company       |   |   | Predecessor Company |  
|                             |                       |               |   |   |                     |  
|                             |                       | Three Months  |   |   | Nine Months         |   |        |               |   | Nine Months |               |     | Three Months |              
|                             |                       | Ended         |   |   | Ended               |   |        | Year Ended    |   |             | Ended         |     |              | Ended         |   
|                             |                       | Dec. 31, 2005 |   |   | Sept. 30, 2005      |   |        | Dec. 31, 2004 |   |             | Dec. 31, 2003 |     |              | Mar. 31, 2003 |   
|                             |                       |               |   |   |                     |   |        |               |   |             |               |     |              |               |   
|Service cost                 |                       | $             | 1 |   |                     | $ | 8      |               |   | $           | 39            |     |              | $             | 30 |     |   | $ | 11  |    
|Interest cost                |                       |               | 3 |   |                     |   | 22     |               |   |             | 88            |     |              |               | 76 |     |   |   | 29  |    
|Amortization of:             |                       |               |   |   |                     |   |        |               |   |             |               |     |              |               |    |     |   |   |     |    
|                             | Prior service cost    |               |   |  |                     |   |        | (76           | ) |             |               | (13 | )            |               |    | (10 | ) |   |     | (10 | )
|                             | Actuarial (gain)/loss |               |   |  |                     |   |        | (11           | ) |             |               | (9  | )            |               |    |    |   |   |     | 6   |  
|                             |                       |               |   |   |                     |   |        |               |   |             |               |     |              |               |   
|Net periodic cost            |                       |               | 4 |   |                     |   | (57    | )             |   |             | 105           |     |              |               | 96 |     |   |   | 36  |    
|Curtailment/settlement gains |                       |               |  |   |                     |   | (183   | )             |   |             |              |     |              |               |   |     |   |   |    |    
|Fresh start (gain) loss      |                       |               |  |   |                     |   | (1,247 | )             |   |             |              |     |              |               |   |     |   |   | 118 |    
|                             |                       |               |   |   |                     |   |        |               |   |             |               |     |              |               |   
|Total periodic cost          |                       | $             | 4 |   |                     | $ | (1,487 | )             |   | $           | 105           |     |              | $             | 96 |     |   | $ | 154 |    
|                             |                       |               |   |   |                     |   |        |               |   |             |               |     |              |               |   



244



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|             |  |                      |    |  |                  |   |   | 
|------------ |  | -------------------- | -- |  | ---------------- | - | - | 
|             |  | Other Postretirement |    |  |                 
|             |  | Benefits before      |    |  |                 
|             |  | Medicare Subsidy     |    |  | Medicare Subsidy |  
|             |  |                      |    |  |                  |  
|2006         |  | $                    | 27 |  |                  | $ |  | 
|2007         |  |                      | 25 |  |                  |   |  | 
|2008         |  |                      | 24 |  |                  |   |  | 
|2009         |  |                      | 22 |  |                  |   | 1 | 
|2010         |  |                      | 20 |  |                  |   | 1 | 
|2011 to 2015 |  |                      | 76 |  |                  |   | 2 | 



|                  |  |  |     |  
|----------------- |  |  | --- | -
|Equity securities |  |  | 49  | %
|Debt securities   |  |  | 42  |  
|Real estate       |  |  | 8   |  
|Other             |  |  | 1   |  
|                  |  |  |    
|Total             |  |  | 100 | %
|                  |  |  |    





|    |                                   
|--- | ----------------------------------
|(b) | Defined contribution pension plans





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US Airways, Inc.


Notes to the Financial
Statements  (Continued)






|    |                        
|--- | -----------------------
|(c) | Postemployment benefits





|    |                                     
|--- | ------------------------------------
|(d) | Employee stock ownership plan (ESOP)

3 4




|    |                     
|--- | --------------------
|(e) | Profit sharing plans





246



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)






|   |             
|-- | ------------
|8. | Income Taxes







|                                    |                |              |   |                     |  |   |              |    |             |              |    |              |           |   |   |   |  |   |   |   | 
|----------------------------------- | -------------- | ------------ | - | ------------------- |  | - | ------------ | -- | ----------- | ------------ | -- | ------------ | --------- | - | - | - |  | - | - | - | 
|                                    |                | Successor    |   |                    
|                                    |                | Company      |   | Predecessor Company
|                                    |                |              |   |                    
|                                    |                | Three Months |   | Nine Months         |  |   |              |    | Nine Months |              |    | Three Months
|                                    |                | Ended        |   | Ended               |  |   | Year Ended   |    |             | Ended        |    |              | Ended    
|                                    |                | December 31, |   | September 30,       |  |   | December 31, |    |             | December 31, |    |              | March 31,
|                                    |                | 2005         |   | 2005                |  |   | 2004         |    |             | 2003         |    |              | 2003     
|                                    |                |              |   |                     |  |   |              |    |             |              |    |              |          
|Current provision:                  |                |              |   |                     |  |   |              |    |             |              |    |              |           |   |   |   |  |   |   |  
|                                    | Federal        |              | $ |                    |  |   | $            |   |             |              | $  | (3           | )         |   | $ | 3 |  |   | $ |  | 
|                                    | State          |              |   |                    |  |   |              | (2 | )           |              |    | (3           | )         |   |   | 3 |  |   |   |  | 
|                                    |                |              |   |                     |  |   |              |    |             |              |    |              |           |   |  
|                                    | Total current  |              |   |                    |  |   |              | (2 | )           |              |    | (6           | )         |   |   | 6 |  |   |   |  | 
|                                    |                |              |   |                     |  |   |              |    |             |              |    |              |           |   |  
|Deferred provision:                 |                |              |   |                     |  |   |              |    |             |              |    |              |           |   |   |   |  |   |   |  
|                                    | Federal        |              |   |                    |  |   |              |   |             |              |    | (1           | )         |   |   |  |  |   |   |  | 
|                                    | State          |              |   |                    |  |   |              |   |             |              |    |             |           |   |   |  |  |   |   |  | 
|                                    |                |              |   |                     |  |   |              |    |             |              |    |              |           |   |  
|                                    | Total deferred |              |   |                    |  |   |              |   |             |              |    | (1           | )         |   |   |  |  |   |   |  | 
|                                    |                |              |   |                     |  |   |              |    |             |              |    |              |           |   |  
|Provision (credit) for income taxes |                | $            |  |                     |  | $ | (2           | )  |             | $            | (7 | )            |           | $ | 6 |   |  | $ |  |  
|                                    |                |              |   |                     |  |   |              |    |             |              |    |              |           |   |  

247



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|                                                                                     |  |              |     |   |                     |   |      |              |  |             |              |   |              |           |      |   |  |   |      |  
|------------------------------------------------------------------------------------ |  | ------------ | --- | - | ------------------- | - | ---- | ------------ |  | ----------- | ------------ | - | ------------ | --------- | ---- | - |  | - | ---- | -
|                                                                                     |  | Successor    |     |   |                    
|                                                                                     |  | Company      |     |   | Predecessor Company |  
|                                                                                     |  |              |     |   |                     |  
|                                                                                     |  | Three Months |     |   | Nine Months         |   |      |              |  | Nine Months |              |   | Three Months |          
|                                                                                     |  | Ended        |     |   | Ended               |   |      | Year Ended   |  |             | Ended        |   |              | Ended     |     
|                                                                                     |  | December 31, |     |   | September 30,       |   |      | December 31, |  |             | December 31, |   |              | March 31, |     
|                                                                                     |  | 2005         |     |   | 2005                |   |      | 2004         |  |             | 2003         |   |              | 2003      |     
|                                                                                     |  |              |     |   |                     |   |      |              |  |             |              |   |              |           |     
|Deferred tax provision (benefit), exclusive of the other
    components listed below |  | $            | (56 | ) |                     | $ | 723  |              |  | $           | (206         | ) |              | $         | 399  |   |  | $ | 200  |  
|Increase (decrease) in the valuation allowance for deferred tax
    assets           |  |              | 56  |   |                     |   | (723 | )            |  |             | 205          |   |              |           | (399 | ) |  |   | (200 | )
|                                                                                     |  |              |     |   |                     |   |      |              |  |             |              |   |              |           |     
|Total                                                                                |  | $            |    |   |                     | $ |     |              |  | $           | (1           | ) |              | $         |     |   |  | $ |     |  
|                                                                                     |  |              |     |   |                     |   |      |              |  |             |              |   |              |           |     



|                                                                 |  |              |     |   |                     |   |      |              |  |             |              |   |              |           |      |   |  |   |      |  
|---------------------------------------------------------------- |  | ------------ | --- | - | ------------------- | - | ---- | ------------ |  | ----------- | ------------ | - | ------------ | --------- | ---- | - |  | - | ---- | -
|                                                                 |  | Successor    |     |   |                    
|                                                                 |  | Company      |     |   | Predecessor Company |  
|                                                                 |  |              |     |   |                     |  
|                                                                 |  | Three Months |     |   | Nine Months         |   |      |              |  | Nine Months |              |   | Three Months |          
|                                                                 |  | Ended        |     |   | Ended               |   |      | Year Ended   |  |             | Ended        |   |              | Ended     |     
|                                                                 |  | December 31, |     |   | September 30,       |   |      | December 31, |  |             | December 31, |   |              | March 31, |     
|                                                                 |  | 2005         |     |   | 2005                |   |      | 2004         |  |             | 2003         |   |              | 2003      |     
|                                                                 |  |              |     |   |                     |   |      |              |  |             |              |   |              |           |     
|Tax provision (credit) computed at federal statutory rate        |  | $            | (42 | ) |                     | $ | 97   |              |  | $           | (205         | ) |              | $         | (54  | ) |  | $ | 564  |  
|Book expenses not deductible for tax purposes                    |  |              | (3  | ) |                     |   | 615  |              |  |             | 1            |   |              |           | 11   |   |  |   | (200 | )
|State income tax provision, net of federal benefit               |  |              |    |   |                     |   | (1   | )            |  |             | (2           | ) |              |           | 3    |   |  |   |     |  
|Increase (decrease) in the federal valuation allowance           |  |              | 45  |   |                     |   | (753 | )            |  |             | 181          |   |              |           | (140 | ) |  |   | (371 | )
|Reduction in net operating losses from discharge of indebtedness |  |              |    |   |                     |   | 40   |              |  |             |             |   |              |           | 180  |   |  |   |     |  
|Expiration of investment and foreign tax credits                 |  |              |    |   |                     |   |     |              |  |             | 5            |   |              |           | 19   |   |  |   |     |  
|Other                                                            |  |              |    |   |                     |   |     |              |  |             | 13           |   |              |           | (13  | ) |  |   | 7    |  
|                                                                 |  |              |     |   |                     |   |      |              |  |             |              |   |              |           |     
|Provision (credit) for income taxes                              |  | $            |    |   |                     | $ | (2   | )            |  | $           | (7           | ) |              | $         | 6    |   |  | $ |     |  
|                                                                 |  |              |     |   |                     |   |      |              |  |             |              |   |              |           |     
|Effective tax rate                                               |  |              |    | % |                     |   | (1   | )%           |  |             | 1            | % |              |           | 4    | % |  |   |     | %
|                                                                 |  |              |     |   |                     |   |      |              |  |             |              |   |              |           |     

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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|                          |                                                   |                                        |   |      |      |  |   |       |     | 
|------------------------- | ------------------------------------------------- | -------------------------------------- | - | ---- | ---- |  | - | ----- | --- | 
|                          |                                                   | 2005                                   |   |      | 2004 | 
|                          |                                                   |                                        |   |      |      | 
|Deferred tax assets:      |                                                   |                                        |   |      |      |  |   |      
|                          | Employee benefits                                 |                                        | $ | 266  |      |  | $ | 1,154 |    
|                          | Net operating loss carryforwards                  |                                        |   | 309  |      |  |   | 299   |    
|                          | Other deferred tax assets                         |                                        |   | 185  |      |  |   | 179   |    
|                          | AMT credit carryforward                           |                                        |   | 25   |      |  |   | 25    |    
|                          | Leasing transactions                              |                                        |   |     |      |  |   | 9     |    
|                          | Valuation allowance                               |                                        |   | (156 | )    |  |   | (822  | )  
|                          |                                                   |                                        |   |      |      | 
|                          |                                                   | Net deferred tax assets                |   |      | 629  |  |   |       | 844 | 
|                          |                                                   |                                        |   |      |      | 
|Deferred tax liabilities: |                                                   |                                        |   |      |      |  |   |      
|                          | Depreciation and amortization                     |                                        |   | 364  |      |  |   | 641   |    
|                          | Sale and leaseback transactions and deferred rent |                                        |   | 145  |      |  |   | 112   |    
|                          | Leasing transactions                              |                                        |   | 28   |      |  |   |      |    
|                          | Other deferred tax liabilities                    |                                        |   | 123  |      |  |   | 105   |    
|                          |                                                   |                                        |   |      |      | 
|                          |                                                   | Total deferred tax liabilities         |   |      | 660  |  |   |       | 858 | 
|                          |                                                   |                                        |   |      |      | 
|                          |                                                   | Net deferred tax liabilities           |   |      | 31   |  |   |       | 14  | 
|                          |                                                   |                                        |   |      |      | 
|                          |                                                   | Less: current deferred tax liabilities |   |      |     |  |   |       |    | 
|                          |                                                   |                                        |   |      |      | 
|                          |                                                   | Noncurrent deferred tax liabilities    |   | $    | 31   |  |   | $     | 14  | 
|                          |                                                   |                                        |   |      |      | 



12-month






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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|                          |  |              |      |                     |               |   |      |              |  |   |              |   |  |              |      |   |  |   |       | 
|------------------------- |  | ------------ | ---- | ------------------- | ------------- | - | ---- | ------------ |  | - | ------------ | - |  | ------------ | ---- | - |  | - | ----- | 
|                          |  |              |      | Predecessor Company |              
|                          |  |              |      |                     |              
|                          |  | Three Months |      |                     | Nine Months   |   |      | Year         |  |   | Nine Months  |   |  | Three Months |     
|                          |  | Ended        |      |                     | Ended         |   |      | Ended        |  |   | Ended        |   |  | Ended        |     
|                          |  | DSuccessor1, |      |                     | September 30, |   |      | December 31, |  |   | December 31, |   |  | March 31,    |     
|                          |  | Company      |      |                     | 2005          |   |      | 2004         |  |   | 2003         |   |  | 2003         |     
|                          |  |              |      |                     |               |   |      |              |  |   |              |   |  |              |     
|Pretax book income (loss) |  | $            | (120 | )                   |               | $ | 278  |              |  | $ | (585         | ) |  | $            | (154 | ) |  | $ | 1,613 | 
|Taxable income (loss)     |  |              | 226  |                     |               |   | (418 | )            |  |   | (558         | ) |  |              | 149  |   |  |   | 262   | 



9.     Commitments and
contingencies




|    |                                                                      
|--- | ---------------------------------------------------------------------
|(a) | Commitments to purchase flight equipment and maintenance
    services



| |                            
| | ---------------------------
| | Airbus Purchase Commitments



A320-family


A330-200




| |                             
| | ----------------------------
| | Embraer Purchase Commitments



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)






| |                                
| | -------------------------------
| | Bombardier Purchase Commitments

CRJ-700




| |                               
| | ------------------------------
| | Engine Maintenance Commitments





|    |       
|--- | ------
|(b) | Leases



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|                              |                                        |      |    |    |      |   |    |    | 
|----------------------------- | -------------------------------------- | ---- | -- | -- | ---- | - | -- | -- | 
|                              |                                        | 2005 |    |    | 2004 |  
|                              |                                        |      |    |    |      |  
|Ground property               |                                        | $    | 32 |    |      | $ | 34 |   
|Less accumulated amortization |                                        |      | (1 | )  |      |   | (3 | ) 
|                              |                                        |      |    |    |      |  
|                              | Total Net Book Value of Capital Leases |      | $  | 31 |      |   | $  | 31 | 
|                              |                                        |      |    |    |      |  



|           |                                                        |                |    |     |                  |   |       |       |  
|---------- | ------------------------------------------------------ | -------------- | -- | --- | ---------------- | - | ----- | ----- | -
|           |                                                        | Capital Leases |    |     | Operating Leases |  
|           |                                                        |                |    |     |                  |  
|2006       |                                                        | $              | 5  |     |                  | $ | 761   |      
|2007       |                                                        |                | 5  |     |                  |   | 691   |      
|2008       |                                                        |                | 5  |     |                  |   | 664   |      
|2009       |                                                        |                | 5  |     |                  |   | 602   |      
|2010       |                                                        |                | 5  |     |                  |   | 551   |      
|Thereafter |                                                        |                | 55 |     |                  |   | 3,936 |      
|           |                                                        |                |    |     |                  |  
|           | Total minimum lease payments                           |                |    | 80  |                  |   |       | 7,205 |  
|           | Less sublease rental receipts                          |                |    |    |                  |   |       | (708  | )
|           |                                                        |                |    |     |                  |  
|           | Total minimum lease payments                           |                |    | 80  |                  |   | $     | 6,497 |  
|           |                                                        |                |    |     |                  |  
|           | Less amount representing interest                      |                |    | (34 | )                |   |       |       |  
|           |                                                        |                |    |     |                  |  
|           | Present value of future minimum capital lease payments |                |    | 46  |                  |   |       |       |  
|           | Less current obligations under capital leases          |                |    | (5  | )                |   |       |       |  
|           |                                                        |                |    |     |                  |  
|           | Long-term obligations under capital leases             |                | $  | 41  |                  |   |       |       |  
|           |                                                        |                |    |     |                  |  







|                              |  |      |     |   |      |   |     |  
|----------------------------- |  | ---- | --- | - | ---- | - | --- | -
|                              |  | 2005 |     |   | 2004 |  
|                              |  |      |     |   |      |  
|Flight equipment              |  | $    | 283 |   |      | $ | 491 |  
|Less accumulated amortization |  |      | (3  | ) |      |   | (14 | )
|                              |  |      |     |   |      |  
|                              |  | $    | 280 |   |      | $ | 477 |  
|                              |  |      |     |   |      |  



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)










|    |                                          
|--- | -----------------------------------------
|(c) | Regional jet capacity purchase agreements







|    |                  
|--- | -----------------
|(d) | Legal proceedings



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)


04-13819-SSM 03-13823-SSM)








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US Airways, Inc.


Notes to the Financial
Statements  (Continued)












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US Airways, Inc.


Notes to the Financial
Statements  (Continued)






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US Airways, Inc.


Notes to the Financial
Statements  (Continued)










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US Airways, Inc.


Notes to the Financial
Statements  (Continued)






|    |           
|--- | ----------
|(e) | Guarantees















|    |                             
|--- | ----------------------------
|(f) | Concentration of credit risk



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




10.     Accumulated other
comprehensive income (loss), net








|                                                        |                                   |                                                                                          |    |    |              |   |             |              |     |              |           |     |     |   |     |     |     |  
|------------------------------------------------------- | --------------------------------- | ---------------------------------------------------------------------------------------- | -- | -- | ------------ | - | ----------- | ------------ | --- | ------------ | --------- | --- | --- | - | --- | --- | --- | -
|                                                        |                                   | Predecessor Company                                                                      |   
|                                                        |                                   |                                                                                          |   
|                                                        |                                   | Nine Months                                                                              |    |    |              |   | Nine Months |              |     | Three Months |          
|                                                        |                                   | Ended                                                                                    |    |    | Year Ended   |   |             | Ended        |     |              | Ended     |    
|                                                        |                                   | September 30,                                                                            |    |    | December 31, |   |             | December 31, |     |              | March 31, |    
|                                                        |                                   | 2005                                                                                     |    |    | 2004         |   |             | 2003         |     |              | 2003      |    
|                                                        |                                   |                                                                                          |    |    |              |   |             |              |     |              |           |    
|Fuel cash flow hedges:                                  |                                   |                                                                                          |    |    |              |   |             |              |     |              |           |     |     |   |     |    
|                                                        |                                   | Reclassification adjustment for gains included in net
    income(loss) during the period |    | $  | (17          | ) |             | $            | (75 | )            |           | $   | (14 | ) |     | $   | (16 | )
|                                                        |                                   | Change in fair value of hedges                                                           |    |    |             |   |             |              | 66  |              |           |     | 45  |   |     |     | 5   |  
|                                                        |                                   |                                                                                          |    |    |              |   |             |              |     |              |           |    
|                                                        |                                   | Unrealized gain (loss), net of reclassification adjustment                               |    |    | (17          | ) |             |              | (9  | )            |           |     | 31  |   |     |     | (11 | )
|Unrealized gain (loss) on available-for-sale securities |                                   |                                                                                          |   |    |              |   |            |              |     |              |          |     |     |   |    |    
|Minimum pension liability adjustment                    |                                   |                                                                                          | 29 |    |              |   | (34         | )            |     |              | (86       | )   |     |   | 85  |    
|Adjustments in connection with reorganization           |                                   |                                                                                          | 86 |    |              |   |            |              |     |              |          |     |     |   | 796 |    
|                                                        |                                   |                                                                                          |    |    |              |   |             |              |     |              |           |    
|                                                        | Other comprehensive income (loss) |                                                                                          | $  | 98 |              |   | $           | (43          | )   |              | $         | (55 | )   |   | $   | 870 |    
|                                                        |                                   |                                                                                          |    |    |              |   |             |              |     |              |           |    

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US Airways, Inc.


Notes to the Financial
Statements  (Continued)






|    |                           
|--- | --------------------------
|11. | Related party transactions



|                 |  |              |      |   |      |   |     |  
|---------------- |  | ------------ | ---- | - | ---- | - | --- | -
|                 |  | December 31, |     
|                 |  |              |     
|                 |  | 2005         |      |   | 2004 |  
|                 |  |              |      |   |      |  
|US Airways Group |  | $            | (269 | ) |      | $ | (53 | )
|AWA              |  |              | (20  | ) |      |   |    |  
|Piedmont         |  |              | (19  | ) |      |   | (17 | )
|PSA              |  |              | (12  | ) |      |   | (6  | )
|MSC              |  |              | (16  | ) |      |   | 8   |  
|                 |  |              |      |   |      |  
|Total            |  | $            | (336 | ) |      | $ | (68 | )
|                 |  |              |      |   |      |  



|    |               
|--- | --------------
|(a) | Parent company







|    |                                         
|--- | ----------------------------------------
|(b) | Airline subsidiaries of US Airways Group





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US Airways, Inc.


Notes to the Financial
Statements  (Continued)












|    |                                    
|--- | -----------------------------------
|(c) | Other US Airways Group subsidiaries







|    |    
|--- | ---
|(d) | RSA



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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|    |                                               
|--- | ----------------------------------------------
|12. | Stockholders equity and dividend restrictions







|    |                                           
|--- | ------------------------------------------
|13. | Operating segments and related disclosures





|              |  |              |       |  |                     |   |       |              |  |             |              |  |              |           |       |  |  |   |       | 
|------------- |  | ------------ | ----- |  | ------------------- | - | ----- | ------------ |  | ----------- | ------------ |  | ------------ | --------- | ----- |  |  | - | ----- | 
|              |  | Successor    |       |  |                    
|              |  | Company      |       |  | Predecessor Company |  
|              |  |              |       |  |                     |  
|              |  | Three Months |       |  | Nine Months         |   |       |              |  | Nine Months |              |  | Three Months |          
|              |  | Ended        |       |  | Ended               |   |       | Year Ended   |  |             | Ended        |  |              | Ended     |      
|              |  | December 31, |       |  | September 30,       |   |       | December 31, |  |             | December 31, |  |              | March 31, |      
|              |  | 2005         |       |  | 2005                |   |       | 2004         |  |             | 2003         |  |              | 2003      |      
|              |  |              |       |  |                     |   |       |              |  |             |              |  |              |           |      
|United States |  | $            | 1,502 |  |                     | $ | 4,513 |              |  | $           | 5,225        |  |              | $         | 4,456 |  |  | $ | 1,314 | 
|Foreign       |  |              | 254   |  |                     |   | 944   |              |  |             | 1,848        |  |              |           | 794   |  |  |   | 198   | 
|              |  |              |       |  |                     |   |       |              |  |             |              |  |              |           |      
|Total         |  | $            | 1,756 |  |                     | $ | 5,457 |              |  | $           | 7,073        |  |              | $         | 5,250 |  |  | $ | 1,512 | 
|              |  |              |       |  |                     |   |       |              |  |             |              |  |              |           |      



|    |                         
|--- | ------------------------
|14. | Stock-based compensation





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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




A-1 A-1


|                    |  |               |          |          |                |   |      |          |          |  |                |   |  |   |      | 
|------------------- |  | ------------- | -------- | -------- | -------------- | - | ---- | -------- | -------- |  | -------------- | - |  | - | ---- | 
|                    |  |               |          | Weighted |                |   |      |          | Weighted | 
|                    |  |               |          | Avg.     |                |   |      |          | Avg.     | 
|                    |  | Stock Options |          |          | Exercise Price |   |      | Warrants |          |  | Exercise Price |  
|                    |  |               |          |          |                |   |      |          |          |  |                |  
|Granted             |  |               |         |          |                | $ |     |          |          |  | 2,227,576      |   |  | $ | 7.42 | 
|Canceled            |  |               |         |          |                |   |     |          |          |  | (11,050        | ) |  |   | 7.42 | 
|                    |  |               |          |          |                |   |      |          |          |  |                |  
|Balance at 12/31/03 |  |               |         |          |                |   |     |          |          |  | 2,216,526      |   |  |   | 7.42 | 
|Granted             |  |               | 466,640  |          |                |   | 1.53 |          |          |  | 49,200         |   |  |   | 7.42 | 
|Canceled            |  |               | (109,250 | )        |                |   | 1.51 |          |          |  | (147,236       | ) |  |   | 7.42 | 
|                    |  |               |          |          |                |   |      |          |          |  |                |  
|Balance at 12/31/04 |  |               | 357,390  |          |                |   | 1.54 |          |          |  | 2,118,490      |   |  |   | 7.42 | 
|Granted             |  |               |         |          |                |   |     |          |          |  |               |   |  |   |     | 
|Canceled            |  |               | (357,390 | )        |                |   | 1.57 |          |          |  | (2,118,490     | ) |  |   | 7.42 | 
|                    |  |               |          |          |                |   |      |          |          |  |                |  
|Balance at 9/27/05  |  |               |         |          |                | $ |     |          |          |  |               |   |  | $ |     | 
|                    |  |               |          |          |                |   |      |          |          |  |                |  





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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|                        |  |                     |         |             |              |  |         | 
|----------------------- |  | ------------------- | ------- | ----------- | ------------ |  | ------- | 
|                        |  | Predecessor Company |        
|                        |  |                     |        
|                        |  |                     |         | Nine Months |             
|                        |  | Year Ended          |         |             | Ended        | 
|                        |  | December 31,        |         |             | December 31, | 
|                        |  | 2004                |         |             | 2005         | 
|                        |  |                     |         |             |              | 
|Stock volatility        |  |                     | 65%     |             |              |  | 65%     | 
|Risk free interest rate |  |                     | 2.9%    |             |              |  | 2.2%    | 
|Expected life           |  |                     | 4 Years |             |              |  | 3 Years | 
|Dividend yield          |  |                     |        |             |              |  |        | 













|    |                           
|--- | --------------------------
|15. | 2003 Fresh-start reporting

90-7.


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US Airways, Inc.


Notes to the Financial
Statements  (Continued)






|    |                                                    
|--- | ---------------------------------------------------
|16. | Supplemental information to statement of cash flows



|                          |                                                             |              |   |     |               |  |   |              |  |             |              |     |              |           |   |     |   |  |   |    | 
|------------------------- | ----------------------------------------------------------- | ------------ | - | --- | ------------- |  | - | ------------ |  | ----------- | ------------ | --- | ------------ | --------- | - | --- | - |  | - | -- | 
|                          |                                                             | Three Months |   |     | Nine Months   |  |   |              |  | Nine Months |              |     | Three Months |          
|                          |                                                             | Ended        |   |     | Ended         |  |   | Year Ended   |  |             | Ended        |     |              | Ended     |  
|                          |                                                             | December 31, |   |     | September 30, |  |   | December 31, |  |             | December 31, |     |              | March 31, |  
|                          |                                                             | 2005         |   |     | 2005          |  |   | 2004         |  |             | 2003         |     |              | 2003      |  
|                          |                                                             |              |   |     |               |  |   |              |  |             |              |     |              |           |  
|Noncash transactions:     |                                                             |              |   |     |               |  |   |              |  |             |              |     |              |           |   |     |   |  |   |   
|                          | Equipment acquired through issuance of debt                 |              | $ |    |               |  | $ | 99           |  |             | $            | 345 |              |           | $ | 30  |   |  | $ |   | 
|                          | Proceeds from sale leaseback transaction used to repay debt |              |   |    |               |  |   | 633          |  |             |              |    |              |           |   |    |   |  |   |   | 
|                          | Debt assumed by purchaser in sale of flight equipment       |              |   |    |               |  |   | 167          |  |             |              |    |              |           |   |    |   |  |   |   | 
|                          | Equipment deposits used to repay debt and penalties         |              |   |    |               |  |   | 22           |  |             |              |    |              |           |   |    |   |  |   |   | 
|                          | Receivable from US Airways Group for Airbus loans           |              |   | 186 |               |  |   |             |  |             |              |    |              |           |   |    |   |  |   |   | 
|Supplemental information: |                                                             |              |   |     |               |  |   |              |  |             |              |     |              |           |   |     |   |  |   |   
|                          | Interest paid during the period                             |              | $ | 40  |               |  | $ | 200          |  |             | $            | 160 |              |           | $ | 126 |   |  | $ | 72 | 
|                          | Income taxes refunded (paid) during the period              |              |   |    |               |  |   |              |  |             |              | 12  |              |           |   | (18 | ) |  |   | 2  | 

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US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|    |                                                                 
|--- | ----------------------------------------------------------------
|17. | Valuation and qualifying accounts and reserves (in
    millions)

|                                                       |  |            |     |           |         |   |    |          |  |            |             |   |       |           |     |   |       |         |    |           |  |   |      |      |  |   |    | 
|------------------------------------------------------ |  | ---------- | --- | --------- | ------- | - | -- | -------- |  | ---------- | ----------- | - | ----- | --------- | --- | - | ----- | ------- | -- | --------- |  | - | ---- | ---- |  | - | -- | 
|                                                       |  |            |     |           |         |   |    |          |  | Sales,     |             |   |       |           |    
|                                                       |  |            |     | Additions |         |   |    |          |  |            | Retire-     |   |       |           |     |  
|                                                       |  | Balance at |     |           | Charged |   |    |          |  | Write-offs |             |   | ments |           |     |   |       | Balance |   
|                                                       |  | Beginning  |     |           | to      |   |    |          |  | (Net of    |             |   | and   |           |     |   |       | at End  |   
|                                                       |  | of Period  |     |           | Expense |   |    | Payments |  |            | Recoveries) |   |       | transfers |     |   | Other |         |    | of Period | 
|                                                       |  |            |     |           |         |   |    |          |  |            |             |   |       |           |     |   |       |         |    |           | 
|Three months ended December 31, 2005                   |  |            |     |           |         |   |    |          |  |            |             |   |       |           |     |   |       |         |    |           |  |   |      |      |  |   |    | 
|Allowance for obsolescence of inventories              |  | $          |    |           |         | $ | 1  |          |  | $          |            |   |       | $         |    |   |       | $       |   |           |  | $ |     |      |  | $ | 1  | 
|Allowance for uncollectible accounts                   |  |            | 8   |           |         |   | 2  |          |  |            |            |   |       |           | (2  | ) |       |         |   |           |  |   |     |      |  |   | 8  | 
|Reserves for workforce reduction(a)                    |  |            | 53  |           |         |   | (3 | )        |  |            | (24         | ) |       |           |    |   |       |         |   |           |  |   |     |      |  |   | 26 | 
|Nine months ended September 30, 2005                   |  |            |     |           |         |   |    |          |  |            |             |   |       |           |     |   |       |         |    |           |  |   |      |      |  |   |    | 
|Allowance for obsolescence of inventories              |  |            | 13  |           |         |   | 5  |          |  |            |            |   |       |           |    |   |       |         | (1 | )         |  |   | (17  | )(b) |  |   |   | 
|Allowance for uncollectible accounts                   |  |            | 22  |           |         |   | 5  |          |  |            |            |   |       |           | (19 | ) |       |         |   |           |  |   |     |      |  |   | 8  | 
|Reserves for workforce reduction(a)                    |  |            | 9   |           |         |   | 78 |          |  |            | (58         | ) |       |           |    |   |       |         |   |           |  |   | 24   | (c)  |  |   | 53 | 
|Year ended December 31, 2004                           |  |            |     |           |         |   |    |          |  |            |             |   |       |           |     |   |       |         |    |           |  |   |      |      |  |   |    | 
|Allowance for obsolescence of inventories              |  |            | 5   |           |         |   | 8  |          |  |            |            |   |       |           |    |   |       |         |   |           |  |   |     |      |  |   | 13 | 
|Allowance for uncollectible accounts                   |  |            | 17  |           |         |   | 7  |          |  |            |            |   |       |           | (2  | ) |       |         |   |           |  |   |     |      |  |   | 22 | 
|Reserves for workforce reduction(a)                    |  |            | 10  |           |         |   | 5  |          |  |            | (6          | ) |       |           |    |   |       |         |   |           |  |   |     |      |  |   | 9  | 
|Nine months ended December 31, 2003                    |  |            |     |           |         |   |    |          |  |            |             |   |       |           |     |   |       |         |    |           |  |   |      |      |  |   |    | 
|Allowance for obsolescence of inventories              |  |            |    |           |         |   | 5  |          |  |            |            |   |       |           |    |   |       |         |   |           |  |   |     |      |  |   | 5  | 
|Allowance for uncollectible accounts                   |  |            | 18  |           |         |   | 6  |          |  |            |            |   |       |           | (7  | ) |       |         |   |           |  |   |     |      |  |   | 17 | 
|Reserves for workforce reduction(a)                    |  |            | 46  |           |         |   | 3  |          |  |            | (39         | ) |       |           |    |   |       |         |   |           |  |   |     |      |  |   | 10 | 
|Three months ended March 31, 2003                      |  |            |     |           |         |   |    |          |  |            |             |   |       |           |     |   |       |         |    |           |  |   |      |      |  |   |    | 
|Allowance for obsolescence of inventories              |  |            | 104 |           |         |   | 2  |          |  |            |            |   |       |           |    |   |       |         |   |           |  |   | (106 | )(b) |  |   |   | 
|Allowance for uncollectible accounts                   |  |            | 17  |           |         |   | 2  |          |  |            |            |   |       |           | (1  | ) |       |         |   |           |  |   |     |      |  |   | 18 | 
|Reserves for workforce reduction(a)                    |  |            | 78  |           |         |   |   |          |  |            | (32         | ) |       |           |    |   |       |         |   |           |  |   |     |      |  |   | 46 | 
|Reserves for future rent payments  parked aircraft(a) |  |            | 68  |           |         |   |   |          |  |            |            |   |       |           |    |   |       |         |   |           |  |   | (68  | )    |  |   |   | 






|    |  |                                                                                                                                                                             
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | See Notes 3(c) and 4.                                                                                                                                                       
|   
|(b) |  | Allowance for obsolescence of inventories eliminated upon
    adoption of fresh-start reporting. See Notes 3(b) and 15.                                                     
|   
|(c) |  | In connection with purchase accounting, US Airways accrued
    severance and benefits related to planned reductions in force
    for its non union employees. See Note 3(b).

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##### Table of Contents



US Airways, Inc.


Notes to the Financial
Statements  (Continued)




|    |                                                                       
|--- | ----------------------------------------------------------------------
|18. | Selected quarterly financial information (in millions)
    (unaudited)

|                        |  |                     |       |           |         |   |       |         |  |   |         |   |  |   |       |  
|----------------------- |  | ------------------- | ----- | --------- | ------- | - | ----- | ------- |  | - | ------- | - |  | - | ----- | -
|                        |  |                     |       | Successor |        
|                        |  | Predecessor Company |       |           | Company |  
|                        |  |                     |       |           |         |  
|                        |  | First               |       |           | Second  |   |       | Third   |  |   | Fourth  |  
|                        |  | Quarter             |       |           | Quarter |   |       | Quarter |  |   | Quarter |  
|                        |  |                     |       |           |         |   |       |         |  |   |         |  
|2005                    |  |                     |       |           |         |   |       |         |  |   |         |   |  |   |       |  
|Operating revenues      |  | $                   | 1,622 |           |         | $ | 1,953 |         |  | $ | 1,882   |   |  | $ | 1,756 |  
|Operating income (loss) |  | $                   | (182  | )         |         | $ | 59    |         |  | $ | (19     | ) |  | $ | (71   | )
|Net income (loss)       |  | $                   | (259  | )         |         | $ | (44   | )       |  | $ | 584     |   |  | $ | (120  | )

|                        |  |                     |       |   |  |   |       |  |  |   |       |   |  |   |       |  
|----------------------- |  | ------------------- | ----- | - |  | - | ----- |  |  | - | ----- | - |  | - | ----- | -
|                        |  | Predecessor Company |      
|                        |  |                     |      
|2004                    |  |                     |       |   |  |   |       |  |  |   |       |   |  |   |       |  
|Operating revenues      |  | $                   | 1,684 |   |  | $ | 1,947 |  |  | $ | 1,788 |   |  | $ | 1,654 |  
|Operating income (loss) |  | $                   | (146  | ) |  | $ | 85    |  |  | $ | (158  | ) |  | $ | (128  | )
|Net income (loss)       |  | $                   | (181  | ) |  | $ | 35    |  |  | $ | (214  | ) |  | $ | (218  | )





|    |                 
|--- | ----------------
|19. | Subsequent event



| |                         
| | ------------------------
| | Purchase of 757 aircraft

757-200


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##### Table of Contents








|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure








|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

10-K


Disclosure Controls and Procedures




Changes in Internal Control over Financial Reporting




Limitation on the effectiveness of controls.









|         |                  
|-------- | -----------------
|Item 9B. | Other Information



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##### Table of Contents






PART III


10-K, 10-K,







|         |                                                    
|-------- | ---------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrants

10-K.


S-K. www.usairways.com. 8-K 10-K









|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

10-K.







|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters

10-K.







|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions



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##### Table of Contents



10-K.







|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accountant Fees and Services

10-K.





PART IV







|         |                                           
|-------- | ------------------------------------------
|Item 15. | Exhibits and Financial Statement Schedules

Consolidated Financial Statements






| |   |                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------
| |  | Consolidated Statements of Operations for the years ended
    December 31, 2005, 2004 and 2003                    
|
| |  | Consolidated Balance Sheets as of December 31, 2005 and 2004                                                      
|
| |  | Consolidated Statements of Cash Flows for the years ended
    December 31, 2005, 2004 and 2003                    
|
| |  | Consolidated Statements of Stockholders Equity (Deficit)
    for the years ended December 31, 2005, 2004 and 2003







| |   |                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------
| |  | Consolidated Statements of Operations for the years ended
    December 31, 2005, 2004 and 2003                    
|
| |  | Consolidated Balance Sheets as of December 31, 2005 and 2004                                                      
|
| |  | Consolidated Statements of Cash Flows for the years ended
    December 31, 2005, 2004 and 2003                    
|
| |  | Consolidated Statements of Stockholders Equity (Deficit)
    for the years ended December 31, 2005, 2004 and 2003
|
| |  | Notes to Consolidated Financial Statements                                                                        





| |   |                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Statements of Operations for the three months ended
    December 31, 2005 (Successor Company), the nine months
    ended September 30, 2005, the year ended December 31,
    2004, the nine months ended December 31, 2003 and the three
    months ended March 31, 2003 (Predecessor Company)
|
| |  | Balance Sheets as of December 31, 2005 (Successor Company)
    and December 31, 2004 (Predecessor Company)                                                                                                                                                                                    
|
| |  | Statements of Cash Flows for the three months ended
    December 31, 2005 (Successor Company), the nine months
    ended September 30, 2005, the year ended December 31,
    2004, the nine months ended December 31, 2003 and the three
    months ended March 31, 2003 (Predecessor Company)
|
| |  | Statements of Stockholders Equity (Deficit) for the three
    years ended December 31, 2005, 2004 and 2003                                                                                                                                                                                   
|
| |  | Notes to Financial Statements                                                                                                                                                                                                                                                                 

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##### Table of Contents



Consolidated Financial Statement Schedules




Exhibits


S-K. S-K,


|        |   |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------- | - | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |            
|Number  |   | Description
|        |   |            
|        | 2 | .1          |  | Agreement and Plan of Merger, dated May 19, 2005, by and
    among US Airways Group and America West Holdings
    Corporation (incorporated by reference to Exhibit 2.1 to
    US Airways Groups Registration Statement on
    Form S-4 filed on June 28, 2005) (Pursuant to
    item 601(b)(2) of Regulation S-K promulgated by the
    SEC, the exhibits and schedules to the Agreement and Plan of
    Merger have been omitted. Such exhibits and schedules are
    described in the Agreement and Plan of Merger. US Airways
    Group hereby agrees to furnish to the SEC, upon its request, any
    or all of such omitted exhibits or schedules) (Registration
    No. 333-126162).
|        | 2 | .2          |  | Letter Agreement, dated July 7, 2005 by and among
    US Airways Group, America West Holdings Corporation,
    Barbell Acquisition Corp., ACE Aviation America West Holdings,
    Inc., Eastshore Aviation, LLC, Par Investment Partners, L.P.,
    Peninsula Investment Partners, L.P. and Wellington Management
    Company, LLP (incorporated by reference to Exhibit 2.2 to
    Amendment No. 1 to US Airways Groups
    Registration Statement on Form S-4 filed on August 8,
    2005) (Registration No. 333-126162).                                                                                                                                                                
|        | 2 | .3          |  | Joint Plan of Reorganization of US Airways, Inc. and Its
    Affiliated Debtors and Debtors-in-Possession.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | 2 | .4          |  | Findings of Fact, Conclusions of Law and Order Under 11 USC
    Sections 1129(a)and (b)of Fed. R. Bankr. P. 3020
    Confirming the Joint Plan of Reorganization of US Airways,
    Inc. and Its Affiliated Debtors and Debtors-in-Possession.                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | 2 | .5          |  | Agreement and Plan of Merger, dated as of December 19,
    1996, by and among America West Holdings Corporation
    (America West Holdings), AWA (AWA) and
    AWA Merger, Inc., with an effective date and time as of midnight
    on December 31, 1996 (incorporated by reference to
    Exhibit 2.1 to America West Holdings Registration
    Statement on Form 8-B dated January 13, 1997)
    (Registration No. 001-12649).                                                                                                                                                                                                                                                       
|        | 3 | .1          |  | Amended and Restated Certificate of Incorporation of
    US Airways Group, effective as of September 27, 2005
    (incorporated by reference to Exhibit 3.1 to
    US Airways Groups Current Report on Form 8-K
    filed on October 3, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        | 3 | .2          |  | Amended and Restated Bylaws of US Airways Group, effective
    as of September 27, 2005 (incorporated by reference to
    Exhibit 3.2 to US Airways Groups Current Report
    on Form 8-K filed on October 3, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 3 | .3          |  | Restated Certificate of Incorporation of AWA (incorporated by
    reference to Exhibit 2.1 to America West Holdings
    Registration Statement on Form 8-B dated January 13,
    1997) (Registration No. 001-12649).                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 3 | .4          |  | Bylaws of AWA (incorporated by reference to Exhibit 3.2 to
    AWAs Annual Report on Form 10-K for the year ended
    December 31, 2004).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | 3 | .5          |  | Certificate of Incorporation of America West Holdings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        | 3 | .6          |  | Bylaws of America West Holdings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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|        |   |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------- | - | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |            
|Number  |   | Description
|        |   |            
|        | 3 | .7          |  | Amended and Restated Certificate of Incorporation of
    US Airways, effective as of March 31, 2003
    (incorporated by reference to Plan Exhibit C-2 to the First
    Amended Joint Plan of Reorganization of US Airways Group
    and Its Affiliated Debtors and Debtors-in-Possession, As
    Modified (incorporated by reference to Exhibit 2.1 to
    US Airways Current Report on Form 8-K dated
    March 18, 2003).                                                                                            
|        | 3 | .8          |  | Amended and restated By-Laws of US Airways, effective as of
    March 31, 2003 (incorporated by reference to
    Exhibit 3.1 to US Airways Quarterly Report on
    Form 10-Q for the quarter ended March 31, 2003)                                                                                                                                                                                                                                                                                                      
|        | 4 | .1          |  | Indenture, dated as of July 30, 2003, between AWA and
    U.S. Bank National Association, as trustee and not in its
    individual capacity, for AWA Senior Exchangeable Notes due 2023
    (incorporated by reference to Exhibit 4.1 to America West
    Holdings and AWAs Quarterly Report on Form 10-Q
    for the quarter ended September 30, 2003).                                                                                                                                                               
|        | 4 | .2          |  | Form of AWA Senior Exchangeable Note due 2023 (incorporated by
    reference to Exhibit 4.2 to America West Holdings and
    AWAs Quarterly Report on Form 10-Q for the quarter
    ended September 30, 2003).                                                                                                                                                                                                                                                                                                         
|        | 4 | .3          |  | Indenture, dated as of September 30, 2005, between
    US Airways Group, the guarantors listed therein and
    U.S. Bank National Association, as trustee (incorporated by
    reference to Exhibit 4.1 to US Airways Groups
    Current Report on Form 8-K Filed on October 31, 2005).                                                                                                                                                                                                                                 
|        | 4 | .4          |  | Registration Rights Agreement, dated as of July 30, 2003,
    with respect to shares of Class B Common Stock underlying
    the AWA Senior Exchangeable Notes due 2023 (incorporated by
    reference to Exhibit 4.3 to America West Holdings and
    AWAs Quarterly Report on Form 10-Q for the quarter
    ended September 30, 2003).                                                                                                                                                                                
|        | 4 | .5          |  | Guarantee and Exchange Agreement, dated as of July 30,
    2003, between America West Holdings Corporation and
    U.S. Bank, National Association, as exchange agent and
    trustee and not in its individual capacity, for AWA Inc. Senior
    Exchangeable Notes due 2023 (incorporated by reference to
    Exhibit 4.4 to America West Holdings and AWAs
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2003).                                                                         
|        | 4 | .6          |  | Guarantee and Exchange Agreement Supplement No. 1, dated as
    of September 27, 2005, among America West Holdings
    Corporation, US Airways Group and U.S. Bank National
    Association (incorporated by reference to Exhibit 10.2 to
    US Airways Groups Current Report on Form 8-K
    filed on October 3, 2005).                                                                                                                                                                                               
|        | 4 | .7          |  | Stock Option Agreement, dated as of December 31, 1996,
    between America West Holdings and AWA (incorporated by reference
    to Exhibit 4.5 to America West Holdings Registration
    Statement on Form 8-B dated January 13, 1997)
    (Registration No. 001-12649).                                                                                                                                                                                                                                                
|        | 4 | .8          |  | Registration Rights Agreement dated as of August 25, 1994,
    among AWA, AmWest Partners, L.P. and other holders (incorporated
    by reference to Exhibit 4.6 to the AWAs Current
    Report on Form 8-K dated August 25, 1994).                                                                                                                                                                                                                                                                                      
|        | 4 | .9          |  | Assumption of Certain Obligations Under Registration Rights
    Agreement executed by America West Holdings for the benefit of
    TPG Partners, L.P., TPG Parallel I, L.P., Air
    Partners II, L.P., Continental Airlines, Inc., Mesa
    Airlines, Inc., Lehman Brothers, Inc., Belmont Capital
    Partners II, L.P. and Belmont Fund, L.P. (incorporated by
    reference to Exhibit 4.7 to America West Holdings
    Registration Statement on Form 8-B dated January 13,
    1997) (Registration No. 001-12649).
|        | 4 | .10         |  | Form of Pass Through Trust Agreement, dated as of
    November 26, 1996, between AWA and Fleet National Bank, as
    Trustee (incorporated by reference to Exhibit 4.1 to
    AWAs Current Report on Form 8-K dated
    November 26, 1996).                                                                                                                                                                                                                                                                             
|        | 4 | .11         |  | Form of Pass Through Trust Agreement, dated as of June 17,
    1997, between AWA and Fleet National Bank, as Trustee
    (incorporated by reference to Exhibit 4.5 to AWAs
    Registration Statement on Form S-3 dated June 4, 1997)
    (Registration No. 333-27351).                                                                                                                                                                                                                                                 

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|        |   |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------- | - | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |            
|Number  |   | Description
|        |   |            
|        | 4 | .12         |  | Forms of Pass Through Trust Agreements, dated as of
    October 6, 1998, between AWA and Wilmington Trust Company,
    as Trustee (incorporated by reference to Exhibits 4.4, 4.5,
    4.6, 4.7, 4.8 and 4.9 to AWAs Registration Statement on
    Form S-4 dated March 25, 1999) (Registration
    No. 333-71615).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 4 | .13         |  | Pass Through Trust Agreements, dated as of September 21,
    1999, between AWA and Wilmington Trust Company, as Trustee, made
    with respect to the formation of AWA Pass Through Trusts,
    Series 1999-1G-S, 1999-1G-O, 1999-1C-S and 1999-1C-O and
    the issuance of 7.93% Initial Pass Through Certificates
    Series 1999-1G-S and 1999-1G-O, the issuance of 8.54%
    Initial Pass Through Certificates, Series 1999-1C-S and
    1999-1C-O, the issuance of 7.93% Exchange Pass Through
    Certificates, Series 1999-1G-S and 1999 1G-O, and the
    issuance of 8.54% Exchange Pass Through Certificates,
    Series 1999-1C-S and 1999-1C-O (incorporated by reference
    to AWAs Quarterly Report on Form 10-Q for the period
    ended September 30, 1999).                                                   
|        | 4 | .14         |  | Insurance and Indemnity Agreement, dated as of
    September 21, 1999, among AWA, Ambac Assurance Corporation
    as Policy Provider and Wilmington Trust Company as Subordination
    Agent and Trustee under the Pass Through Trust 1999-1G-O
    (incorporated by reference to Exhibits 4.15 to AWAs
    Registration Statement on Form S-4 dated March 16,
    2000) (Registration No. 333-93393).                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 4 | .15         |  | Pass Through Trust Agreement, dated as of July 7, 2000,
    between AWA, and Wilmington Trust Company, as Trustee, made with
    respect to the formation of AWA Pass Through Trust,
    Series 2000-1G-0, 2000-1G-S, 2000-1C-O and 2000-1C-S, the
    issuance of 8.057% Initial Pass Through Certificates, Series
    2000-1G-O and 2000-1G-S, the issuance of 9.244% Initial Pass
    Through Certificates, Series 2000-1C-O and 2000-1C-S, the
    issuance of 8.057% Exchange Pass Through Certificates,
    Series 2000-1G-O and 2000-1G-S and the issuance of 9.244%
    Exchange Pass Through Certificates, Series 2000-1C-O and
    2000-1C-S (incorporated by reference to Exhibits 4.3, 4.4,
    4.5 and 4.6 to AWAs Registration Statement on
    Form S-4 dated September 12, 2002) (Registration
    No. 333-44930).
|        | 4 | .16         |  | Insurance and Indemnity Agreement, dated as of July 7,
    2000, among AWA, Ambac Assurance Corporation as Policy Provider
    and Wilmington Trust company as Subordination Agent and Trustee
    under the Pass Through Trust 2000-1G (incorporated by reference
    to Exhibits 4.15 to AWAs Registration Statement on
    Form S-4 dated September 12, 2002) (Registration
    No. 333-44930).                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | 4 | .17         |  | Insurance and Indemnity Agreement (Series G), dated as of
    May 17, 2001, among AWA, Ambac Assurance Corporation as
    Policy Provider and Wilmington Trust company as Subordination
    Agent (incorporated by reference to Exhibit 4.20 to
    AWAs Registration Statement on Form S-4 dated
    February 14, 2002) (Registration No. 333-69356).                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 4 | .18         |  | Indenture, dated as of January 18, 2002, between America
    West Holdings Corporation and Wilmington Trust Company, as
    Trustee and not in its individual capacity, for America West
    Holdings Corporation 7.5% Convertible Senior Notes due 2009
    (incorporated by reference to Exhibit 4.15 to America West
    Holdings and AWAs Current Report on Form 8-K
    dated January 31, 2002).                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 4 | .19         |  | Supplemental Indenture No. 1, dated as of
    September 27, 2005, among America West Holdings
    Corporation, US Airways Group, Inc. and Wilmington Trust
    Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 4 | .20         |  | Form of America West Holdings Corporation 7.5% Convertible
    Senior Notes due 2009 (incorporated by reference to
    Exhibit 4.16 to America West Holdings and AWAs
    Current Report on Form 8-K dated January 31, 2002).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 4 | .21         |  | Registration Rights Agreement, dated January 18, 2002, with
    respect to shares of Class B Common Stock underlying the
    America West Holdings Corporation 7.5% Convertible Senior
    Notes due 2009 (incorporated by reference to Exhibit 4.17
    to America West Holdings and AWAs Current Report on
    Form 8-K dated January 31, 2002).                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 4 | .22         |  | Guaranty, dated as of January 18, 2002, by AWA, in favor of
    the Holders and the Trustee under the Indenture dated
    January 18, 2002 (incorporated by reference to
    Exhibit 4.18 to America West Holdings and AWAs
    Current Report on Form 8-K dated January 31, 2002).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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##### Table of Contents



|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                    
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 4  | .23         |  | Warrant Registration Rights Agreement between America West
    Holdings Corporation and certain warrant recipients
    (incorporated by reference to Exhibit 4.21 to America West
    Holdings and AWAs Current Report on Form 8-K
    dated January 31, 2002).                                                                                                                                                  
|        | 4  | .24         |  | Indenture, dated as of September 30, 2005, between
    US Airways Group, the guarantors listed therein and
    U.S. Bank National Association, as trustee (incorporated by
    reference to Exhibit 4.1 to US Airways Groups
    Current Report on Form 8-K filed on October 3, 2005).                                                                                                                            
|        | 4  | .25         |  | Registration Rights Agreement, dated as of September 30,
    2005, between US Airways Group, AWA and US Airways, as
    guarantors, and the initial purchaser named therein
    (incorporated by reference to Exhibit 4.2 to
    US Airways Groups Current Report on Form 8-K
    filed on October 3, 2005).                                                                                                      
|        | 4  | .26         |  | US Airways Group Warrant to Purchase Common Stock, dated
    September 27, 2005, issued to AFS Cayman Limited
    (incorporated by reference to Exhibit 10.2 to
    US Airways Groups Current Report on Form 8-K
    filed on October 3, 2005).                                                                                                                                                                   
|        | 10 | .1          |  | Loan Agreement dated March 31, 2003 among US Airways
    and Phoenix American Financial Services, Inc., Bank of America,
    N.A. and the Air Transportation Stabilization Board
    (incorporated by reference to Exhibit 10.5 to
    US Airways Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2003).                                                                                        
|        | 10 | .2          |  | Amendment No. 1 dated December 18, 2003 to Loan
    Agreement dated March 31, 2003 among US Airways and
    Phoenix American Financial Services, Inc., Bank of America, N.A.
    and the Air Transportation Stabilization Board (incorporated by
    reference to Exhibit 10.1 to US Airways
    Quarterly Report on Form 10-Q for the quarter ended
    March 31, 2004).                                         
|        | 10 | .3          |  | Amendment No. 2 dated March 12, 2004 to Loan Agreement
    dated March 31, 2003 among US Airways and Phoenix
    American Financial Services, Inc., Bank of America, N.A. and the
    Air Transportation Stabilization Board. (incorporated by
    reference to Exhibit 10.2 to US Airways
    Quarterly Report on Form 10-Q for the quarter ended
    March 31, 2004).                                           
|        | 10 | .4          |  | Amendment No. 3 dated May 21, 2004 to Loan Agreement
    dated March 31, 2004 among US Airways and Phoenix
    American Financial Services, Inc., Bank of America, N.A. and the
    Air Transportation Stabilization Board (incorporated by
    reference to Exhibit 10.1 to US Airways
    Quarterly Report on Form 10-Q for the quarter ended
    June 30, 2004).                                               
|        | 10 | .5          |  | Amendment No. 4 dated July 13, 2004 to Loan Agreement
    dated March 31, 2004 among US Airways and Phoenix
    American Financial Services, Inc., Bank of America, N.A. and the
    Air Transportation Stabilization Board (incorporated by
    reference to Exhibit 10.2 to US Airways
    Quarterly Report for the quarter ended June 30, 2004).                                                               
|        | 10 | .6          |  | Amendment No. 5 dated December 28, 2004 to Loan
    Agreement dated March 31, 2004 among US Airways and
    Phoenix American Financial Services, Inc., Bank of America, N.A.
    and the Air Transportation Stabilization Board (incorporated by
    reference to Exhibit 10.6 to US Airways Groups
    Registration Statement on Form S-4 filed with the SEC on
    June 28, 2005) (Registration No. 333-126162).
|        | 10 | .7          |  | Final Order (I) Authorizing Debtors Use of Cash
    Collateral and (II) Providing Adequate Protection Pursuant
    to Bankruptcy Rules 4001(b) and 4001(d) (incorporated by
    reference to Exhibit 99.1 to US Airways Groups
    Current Report on Form 8-K dated October 14, 2004).                                                                                                                           
|        | 10 | .8          |  | Motion to Authorize and Approve (1) The Primary
    Tranche A Lender Assignment, (2) The Alternate
    Tranche A Lender Assignment, and (3) Amendment
    No. 5 to the Loan Agreement pursuant to 11 U.S.C.
    Sections 105, 363, 1108, and Bankruptcy Rules 4001 and
    6004 (incorporated by reference to Exhibit 99.1 to
    US Airways Groups Current Report on Form 8-K
    dated December 28, 2004).      
|        | 10 | .9          |  | Order Approving (1) The Primary Tranche A Lender
    Assignment, (2) The Alternate Tranche A Lender
    Assignment, and (3) Amendment No. 5 to Loan Agreement
    pursuant to 11 U.S.C. Sections 105, 363, 1108, and
    Bankruptcy Rules 4001 and 6004 (incorporated by reference
    to Exhibit 99.2 to US Airways Groups Current
    Report on Form 8-K dated December 28, 2004).                              

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|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------- | -- | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .10         |  | Master Memorandum of Understanding among US Airways Group,
    US Airways, and General Electric Capital Corporation acting
    through its agent GE Capital Aviation Services, Inc. and
    General Electric Company, GE Transportation Component
    (incorporated by reference to Exhibit 10.9 to
    US Airways Groups Annual Report on Form 10-K/A
    for the year ended December 31, 2004).*                                                                                                                                                  
|        | 10 | .11         |  | First Supplemental Order (I). Authorizing Debtors Use
    of Cash Collateral (II). Providing Adequate Protection
    Pursuant to Bankruptcy Rules 4001(b). and 4001(d).
    (incorporated by reference to Exhibit 99.1 to
    US Airways Groups Current Report on Form 8-K
    dated January 13, 2005).                                                                                                                                                                                                                                            
|        | 10 | .12         |  | Master Merger Memorandum of Understanding, dated as of
    June 13, 2005, among US Airways, US Airways
    Group, America West Holdings Corporation, AWA, General Electric
    Capital Corporation, acting through its agent GE Commercial
    Aviation Services LLC, GE Engine Services, Inc.,
    GE Engine Services  Dallas, LP and General
    Electric Company, GE Transportation Component (incorporated by
    reference to Exhibit 10.9 to US Airways Groups
    Quarterly Report on Form 10-Q/A for the quarter ended
    June 30, 2005).*
|        | 10 | .13         |  | A319/A320/A321 Purchase Agreement dated as of October 31,
    1997 between US Airways Group and AVSA, S.A.R.L., an
    affiliate of aircraft manufacturer Airbus Industrie G.I.E.
    (incorporated by reference to Exhibit 10.1 to
    US Airways Groups Quarterly Report on Form 10-Q
    for the quarter ended September 30, 1997).*                                                                                                                                                                                                             
|        | 10 | .14         |  | Amendment No. 1 dated as of June 10, 1998 to
    A319/A320/A321 Purchase Agreement dated October 31, 1997
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.2 to US Airways
    Groups Annual Report on Form 10-K for the year ended
    December 31, 1998).*                                                                                                                                                                                                                                            
|        | 10 | .15         |  | Amendment No. 2 dated as of January 19, 1999 to
    A319/A320/A321 Purchase Agreement dated October 31, 1997
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.3 to US Airways
    Groups Annual Report on Form 10-K for the year ended
    December 31, 1998).*                                                                                                                                                                                                                                         
|        | 10 | .16         |  | Amendment No. 3 dated as of March 31, 1999 to
    A319/A320/A321 Purchase Agreement dated October 31, 1997
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.1 to US Airways
    Groups Quarterly Report on Form 10-Q for the quarter
    ended September 30, 1999).*                                                                                                                                                                                                                                    
|        | 10 | .17         |  | Amendment No. 4 dated as of August 31, 1999 to
    A319/A320/A321 Purchase Agreement dated October 31, 1997
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.2 to US Airways
    Groups Quarterly Report on Form 10-Q for the quarter
    ended September 30, 1999).*                                                                                                                                                                                                                                   
|        | 10 | .18         |  | Amendment No. 5 dated as of October 29, 1999 to
    A319/A320/A321 Purchase Agreement dated October 31, 1997
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.6 to US Airways
    Groups Annual Report on Form 10-K for the year ended
    December 31, 1999).*                                                                                                                                                                                                                                         
|        | 10 | .19         |  | Amendment No. 6 dated as of April 19, 2000 to
    A319/A320/A321 Purchase Agreement dated October 31, 1997
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.1 to US Airways
    Groups Quarterly Report on Form 10-Q for the quarter
    ended March 31, 2000).*                                                                                                                                                                                                                                        
|        | 10 | .20         |  | Amendment No. 7 dated as of June 29, 2000 to
    A319/A320/A321 Purchase Agreement dated October 31, 1997
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.1 to US Airways
    Groups Quarterly Report on Form 10-Q for the quarter
    ended June 30, 2000).*                                                                                                                                                                                                                                          
|        | 10 | .21         |  | Amendment No. 8 dated as of November 27, 2000 to
    A319/A320/A321 Purchase Agreement dated October 31, 1997
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.9 to US Airways
    Groups Annual Report on Form 10-K for the year ended
    December 31, 2000).*                                                                                                                                                                                                                                        

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|        |    |             |  |                                                                                                                                                                                                                                                                                                                       
|------- | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .22         |  | Amendment No. 9 dated as of December 29, 2000 to
    A319/A320/A321 Purchase Agreement dated October 31, 1997
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.10 to US Airways
    Groups Annual Report on Form 10-K for the year ended
    December 31, 2000).*        
|        | 10 | .23         |  | Amendment No. 10 dated as of April 9, 2001 to
    A319/A320/A321 Purchase Agreement dated October 31, 1997
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.1 to US Airways
    Groups Quarterly Report on Form 10-Q for the quarter
    ended March 31, 2001).*         
|        | 10 | .24         |  | Amendment No. 11 dated as of July 17, 2002 to
    A319/A320/A321 Purchase Agreement dated October 31, 1997
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.1 to US Airways
    Groups Quarterly Report on Form 10-Q for the quarter
    ended June 30, 2002).*          
|        | 10 | .25         |  | Amendment No. 12 dated as of March 29, 2003 to
    A319/A320/A321 Purchase Agreement dated October 31, 1997
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.1 to US Airways
    Groups Quarterly Report on Form 10-Q for the quarter
    ended March 31, 2003).*        
|        | 10 | .26         |  | Amendment No. 13 dated August 30, 2004 to the Airbus
    A319/A320/A321 Purchase Agreement dated October 31, 1997
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.2 to US Airways
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2004).*     
|        | 10 | .27         |  | Amendment No. 14 dated December 22, 2004 to the Airbus
    A319/A320/A321 Purchase Agreement dated October 31, 1997
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.4 to US Airways
    Groups Quarterly Report on Form 10-Q for the quarter
    ended March 31, 2005).*
|        | 10 | .28         |  | Amendment No. 15 dated January 17, 2005 to the Airbus
    A319/A320/A321 Purchase Agreement dated October 31, 1997
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.5 to US Airways
    Groups Quarterly Report on Form 10-Q for the quarter
    ended March 31, 2005).* 
|        | 10 | .29         |  | A330/A340 Purchase Agreement dated as of November 24, 1998
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.4 to US Airways
    Groups Annual Report on Form 10-K for the year ended
    December 31, 1998).*                                                            
|        | 10 | .30         |  | Amendment No. 1 dated as of March 23, 2000 to
    A330/A340 Purchase Agreement dated November 24, 1998
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.2 to US Airways
    Groups Quarterly Report on Form 10-Q for the quarter
    ended March 31, 2000).*             
|        | 10 | .31         |  | Amendment No. 2 dated as of June 29, 2000 to A330/A340
    Purchase Agreement dated November 24, 1998 between
    US Airways Group and AVSA, S.A.R.L. (incorporated by
    reference to Exhibit 10.2 to US Airways Groups
    Quarterly Report on Form 10-Q for the quarter ended
    June 30, 2000).*               
|        | 10 | .32         |  | Amendment No. 3 dated as of November 27, 2000 to
    A330/A340 Purchase Agreement dated November 24, 1998
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.14 to US Airways
    Groups Annual Report on Form 10-K for the year ended
    December 31, 2000).*            
|        | 10 | .33         |  | Amendment No. 4 dated as of September 20, 2001 to
    A330/A340 Purchase Agreement dated November 24, 1998
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.16 to US Airways
    Groups Annual Report on Form 10-K for the year ended
    December 31, 2001).*           
|        | 10 | .34         |  | Amendment No. 5 dated as of July 17, 2002 to A330/A340
    Purchase Agreement dated November 24, 1998 between
    US Airways Group and AVSA, S.A.R.L. (incorporated by
    reference to Exhibit 10.2 to US Airways Groups
    Quarterly Report on Form 10-Q for the quarter ended
    June 30, 2002).*               

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|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                
|------- | -- | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .35         |  | Amendment No. 6 dated as of March 29, 2003 to
    A330/A340 Purchase Agreement dated November 24, 1998
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.2 to US Airways
    Groups Quarterly Report on Form 10-Q for the quarter
    ended March 31, 2003).*                                      
|        | 10 | .36         |  | Amendment No. 7 dated August 30, 2004 to the Airbus
    A330/A340 Purchase Agreement dated November 24, 1998
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.3 to US Airways
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2004).*                                   
|        | 10 | .37         |  | Amendment No. 8 dated December 22, 2004 to the Airbus
    A330/A340 Purchase Agreement dated as of November 24, 1998
    between US Airways Group and AVSA, S.A.R.L. (incorporated
    by reference to Exhibit 10.6 to US Airways
    Groups Quarterly Report on Form 10-Q/A for the
    quarter ended March 31, 2005).*                      
|        | 10 | .38         |  | Amendment No. 9 dated November 24, 1998 to the Airbus
    A330/A340 Purchase Agreement between US Airways Group and
    AVSA, S.A.R.L. (incorporated by reference to Exhibit 10.7
    to US Airways Groups Quarterly Report on
    Form 10-Q for the quarter ended March 31, 2005).*                                                          
|        | 10 | .39         |  | Letter Agreement dated December 17, 2004 between
    US Airways Group and US Airways and Airbus North
    America Sales Inc. (incorporated by reference to
    Exhibit 99.2 to US Airways Groups Current Report
    on Form 8-K dated February 3, 2005).                                                                                      
|        | 10 | .40         |  | Form of Airbus A350 Purchase Agreement, dated as of
    September 27, 2005, among AVSA, S.A.R.L. and
    US Airways, AWA and US Airways Group (incorporated by
    reference to Exhibit 10.165 to US Airways Groups
    Registration Statement on Form S-1/A filed on
    September 27, 2005) (Registration No. 333-126226).                  
|        | 10 | .41         |  | Embraer Aircraft Purchase Agreement dated as of May 9, 2003
    between US Airways Group and Empresa Brasileira de
    Aeronautica S.A. (incorporated by reference to Exhibit 10.1
    to US Airways Groups Quarterly Report on
    Form 10-Q for the quarter ended June 30, 2003).*                                                          
|        | 10 | .42         |  | Amendment No. 1 dated as of November 4, 2003 to
    Embraer Aircraft Purchase Agreement dated as of May 9, 2003
    between US Airways Group and Empresa Brasileira de
    Aeronautica S.A. (incorporated by reference to
    Exhibit 10.22 to US Airways Groups Annual Report
    on Form 10-K for the year ended December 31, 2003).*       
|        | 10 | .43         |  | Amendment No. 2 dated as of November 21, 2003 to
    Embraer Aircraft Purchase Agreement dated as of May 9, 2003
    between US Airways Group and Empresa Brasileira de
    Aeronautica S.A. (incorporated by reference to
    Exhibit 10.23 to US Airways Groups Annual Report
    on Form 10-K for the year ended December 31, 2003).*      
|        | 10 | .44         |  | Amendment No. 3 dated as of February 9, 2004 to
    Embraer Aircraft Purchase Agreement dated as of May 9, 2003
    between US Airways Group and Empresa Brasileira de
    Aeronautica S.A. (incorporated by reference to Exhibit 10.4
    to US Airways Groups Quarterly Report on
    Form 10-Q for the quarter ended March 31, 2004).*     
|        | 10 | .45         |  | Amendment No. 4 dated as of August 4, 2004 to Embraer
    Aircraft Purchase Agreement dated as of May 9, 2003 between
    US Airways Group and Empresa Brasileira de Aeronautica S.A.
    (incorporated by reference to Exhibit 10.4 to
    US Airways Groups Quarterly Report on Form 10-Q
    for the quarter ended September 30, 2004).*   
|        | 10 | .46         |  | Amendment No. 5 dated as of September 3, 2004 to
    Embraer Aircraft Purchase Agreement dated as of May 9, 2003
    between US Airways Group and Empresa Brasileira de
    Aeronautica S.A. (incorporated by reference to Exhibit 10.5
    to US Airways Groups Quarterly Report on
    Form 10-Q for the quarter ended September 30, 2004).*
|        | 10 | .47         |  | Amendment No. 6 dated as of January 25, 2005 to
    Embraer Aircraft Purchase Agreement dated as of May 9, 2003
    between US Airways Group and Empresa Brasileira de
    Aeronautica S.A. (incorporated by reference to Exhibit 10.9
    to US Airways Groups Quarterly Report on
    Form 10-Q for the quarter ended March 31, 2005).*     

277



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|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                      
|------- | -- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .48         |  | Amendment No. 1 dated January 6, 2004 to the Letter
    Agreement DCT-022/03 dated May 9, 2003 between
    US Airways Group and Empresa Brasileira de Aeronautica S.A.
    (incorporated by reference to Exhibit 10.5 to
    US Airways Groups Quarterly Report on Form 10-Q
    for the quarter ended March 31, 2004).*                                            
|        | 10 | .49         |  | Post-Petition Purchase Agreement Modification and Aircraft
    Financing Term Sheet between US Airways, Embraer-Empresa
    Brasileira de Aeronautica S.A., dated December 16, 2004
    (incorporated by reference to Exhibit 10.8 of
    US Airways Groups Quarterly Report on Form 10-Q
    for the quarter ended March 31, 2005).                                
|        | 10 | .50         |  | Bombardier CRJ Aircraft Master Purchase Agreement dated as of
    May 9, 2003 between US Airways Group and Bombardier,
    Inc. (incorporated by reference to Exhibit 10.2 to
    US Airways Groups Quarterly Report on Form 10-Q
    for the quarter ended June 30, 2003).*                                                                                        
|        | 10 | .51         |  | Contract Change Order 1 dated January 27, 2004 to
    Bombardier CRJ Aircraft Master Purchase Agreement dated as of
    May 9, 2003 between US Airways Group and Bombardier,
    Inc. (incorporated by reference to Exhibit 10.6 to
    US Airways Groups Quarterly Report on Form 10-Q
    for the quarter ended March 31, 2004).*                                 
|        | 10 | .52         |  | Contract Change Order 2 dated February 9, 2004 to
    Bombardier CRJ Aircraft Master Purchase Agreement dated as of
    May 9, 2003 between US Airways Group and Bombardier,
    Inc. (incorporated by reference to Exhibit 10.7 to
    US Airways Groups Quarterly Report on Form 10-Q
    for the quarter ended March 31, 2004).*                                 
|        | 10 | .53         |  | Contract Change Order 3 dated February 26, 2004 to
    Bombardier CRJ Aircraft Master Purchase Agreement dated as of
    May 9, 2003 between US Airways Group and Bombardier,
    Inc. (incorporated by reference to Exhibit 10.8 to
    US Airways Groups Quarterly Report on Form 10-Q
    for the quarter ended March 31, 2004).*                                
|        | 10 | .54         |  | Registration Rights Agreement made and entered into as of
    March 31, 2003 by and between US Airways Group and
    ATSB Securities Trust u/a/d March 31, 2003 (incorporated by
    reference to Exhibit 10.2 to US Airways Groups
    Registration Statement on Form 8-A filed on May 14,
    2003) (Registration No. 000-50288).                                 
|        | 10 | .55         |  | First Amendment dated as of June 25, 2003 to the
    Registration Rights Agreement made and entered into as of
    March 31, 2003 by and between US Airways Group and
    ATSB Securities Trust u/a/d March 31, 2003 (incorporated by
    reference to Exhibit 10.6 to US Airways Groups
    Quarterly Report on Form 10-Q for the quarter ended
    June 30, 2003).
|        | 10 | .56         |  | Registration Rights Agreement made and entered into as of
    March 31, 2003 by and between US Airways Group and
    General Electric Capital Corporation (incorporated by reference
    to Exhibit 10.3 to US Airways Groups
    Registration Statement on Form 8-A filed on May 14,
    2003) (Registration No. 000-50288).                                       
|        | 10 | .57         |  | Registration Rights Agreement made and entered into as of
    March 31, 2003 by and between US Airways Group and
    Bank of America, N.A. (incorporated by reference to
    Exhibit 10.4 to US Airways Groups Registration
    Statement on Form 8-A filed on May 14, 2003)
    (Registration No. 000-50288).                                                      
|        | 10 | .58         |  | US Airways Funded Executive Defined Contribution Plan
    (incorporated by reference to Exhibit 10.1 to
    US Airways Annual Report on Form 10-K for the
    year ended December 31, 2003).                                                                                                                                                                       
|        | 10 | .59         |  | First Amendment to the US Airways Funded Executive Defined
    Contribution Plan dated January 26, 2004 (incorporated by
    reference to Exhibit 10.4 to US Airways
    Quarterly Report for the quarter ended June 30, 2004).                                                                                                                                    
|        | 10 | .60         |  | Second Amendment to the US Airways Funded Executive Defined
    Contribution Plan (incorporated by reference to
    Exhibit 10.5 to US Airways Quarterly Report for
    the quarter ended June 30, 2004).                                                                                                                                                          
|        | 10 | .61         |  | Third Amendment to the US Airways Funded Executive Defined
    Contribution Plan (incorporated by reference to
    Exhibit 10.6 to US Airways Quarterly Report for
    the quarter ended June 30, 2004).                                                                                                                                                           

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|        |    |             |  |                                                                                                                                                                                                                                                                                                                    
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .62         |  | US Airways Unfunded Executive Defined Contribution Plan
    (incorporated by reference to Exhibit 10.2 to
    US Airways Annual Report on Form 10-K for the
    year ended December 31, 2003).                                                                                                                   
|        | 10 | .63         |  | First Amendment to the US Airways Unfunded Executive
    Defined Contribution Plan dated January 26, 2004
    (incorporated by reference to Exhibit 10.7 to
    US Airways Quarterly Report for the quarter ended
    June 30, 2004).                                                                            
|        | 10 | .64         |  | Second Amendment to the US Airways Unfunded Executive
    Defined Contribution Plan (incorporated by reference to
    Exhibit 10.8 to US Airways Quarterly Report for
    the quarter ended June 30, 2004).                                                                                                      
|        | 10 | .65         |  | Third Amendment to the US Airways Unfunded Executive
    Defined Contribution Plan (incorporated by reference to
    Exhibit 10.9 to US Airways Quarterly Report for
    the quarter ended June 30, 2004).                                                                                                       
|        | 10 | .66         |  | Employment Agreement between US Airways Group and
    US Airways and its President and Chief Executive Officer
    effective May 19, 2004 (incorporated by reference to
    Exhibit 10.6 to US Airways Quarterly Report for
    the quarter ended September 30, 2004).                                           
|        | 10 | .67         |  | Letter Agreement, dated as of September 27, 2005, between
    US Airways Group and Bruce R. Lakefield (incorporated by
    reference to Exhibit 10.2 to US Airways Groups
    Current Report on Form 8-K filed on October 3,
    2005).                                                                          
|        | 10 | .68         |  | Employment Agreement, dated as of September 27, 2005,
    between US Airways Group and Elizabeth K. Lanier
    (incorporated by reference to Exhibit 10.5 to
    US Airways Groups Current Report on Form 8-K
    filed on October 3, 2005).                                                                     
|        | 10 | .69         |  | Employment Agreement, dated as of September 27, 2005,
    between US Airways Group and Alan W. Crellin (incorporated
    by reference to Exhibit 10.3 to US Airways
    Groups Current Report on Form 8-K filed on
    October 3, 2005).                                                                         
|        | 10 | .70         |  | Employment Agreement, dated as of September 27, 2005,
    between US Airways Group and Jerrold A. Glass (incorporated
    by reference to Exhibit 10.4 to US Airways
    Groups Current Report on Form 8-K filed on
    October 3, 2005).                                                                        
|        | 10 | .71         |  | Agreement between US Airways and its Senior Vice
    President  Marketing with respect to certain
    employment arrangements effective July 25, 2002
    (incorporated by reference to Exhibit 10.18 to Amendment
    No. 1 to US Airways Annual Report on
    Form 10-K for the year ended December 31, 2003).
|        | 10 | .72         |  | US Airways Group 2005 Equity Incentive Plan (incorporated
    by reference to Exhibit 10.1 to US Airways
    Groups Current Report on Form 8-K filed on
    October 3, 2005).                                                                                                                                    
|        | 10 | .73         |  | Stock Unit Award Agreement, dated as of September 27, 2005,
    between US Airways Group and W. Douglas Parker
    (incorporated by reference to Exhibit 10.6 to
    US Airways Groups Current Report on Form 8-K
    filed on October 3, 2005).                                                                 
|        | 10 | .74         |  | Form of Stock Unit Agreement under US Airways Groups
    2005 Equity Incentive Plan.                                                                                                                                                                                                                             
|        | 10 | .75         |  | Form of Stock Appreciation Rights Award Agreement under
    US Airways Groups 2005 Equity Incentive Plan.                                                                                                                                                                                                        
|        | 10 | .76         |  | Form of Indemnity Agreement (incorporated by reference to
    Exhibit 10.1 to US Airways Groups Current Report
    on Form 8-K filed on October 6, 2005).                                                                                                                                                        
|        | 10 | .77         |  | Amended and Restated America West 1994 Incentive Equity Plan
    (incorporated by reference to Exhibit 10.21 to AWAs
    Quarterly Report on Form 10-Q for the quarter ended
    March 31, 2001).                                                                                                                
|        | 10 | .78         |  | 2002 Incentive Equity Plan (incorporated by reference to
    Appendix A to America West Holdings Proxy Statement on Schedule
    14A filed on April 17, 2002).                                                                                                                                                    
|        | 10 | .79         |  | Performance-Based Award Plan (as Amended and Restated effective
    November 2, 2005).                                                                                                                                                                                                                            
|        | 10 | .80         |  | Form of Offer Letter (incorporated by reference to
    Exhibit 10.47 to America West Holdings and AWAs
    Annual Report on Form 10-K for the year ended
    December 31, 2004).                                                                                                                                

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|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                            
|------- | -- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .81         |  | Form of Change of Control and Severance Benefit Agreement for
    Vice Presidents (incorporated by reference to Exhibit 10.48 to
    America West Holdings and AWAs Annual Report on
    Form 10-K for the year ended December 31, 2004).                                                                                                                                                                               
|        | 10 | .82         |  | Form of Change of Control and Severance Benefit Agreement for
    Senior Vice Presidents (incorporated by reference to
    Exhibit 10.49 to America West Holdings and America
    West Airlines, Inc.s Annual Report on Form 10-K for
    the year ended December 31, 2004).                                                                                                                                            
|        | 10 | .83         |  | Summary of Director Compensation and Benefits.                                                                                                                                                                                                                                                                                                                                                                            
|        | 10 | .84         |  | Form of Letter Agreement for Directors Travel
    (incorporated by reference to Exhibit 10.32 to America West
    America West Holdings and AWAs Annual Report on
    Form 10-K for the period ended December 31,
    2003).                                                                                                                                                                                           
|        | 10 | .85         |  | Employment Agreement, dated February 24, 2004, by and among
    America West Holdings Corporation, AWA and W. Douglas Parker
    (incorporated by reference to Exhibit 10.53 to America West
    Holdings and America West Airlines, Inc.s Annual
    Report on Form 10-K for the year ended December 31,
    2004).                                                                                                    
|        | 10 | .86         |  | Annual Incentive Bonus Plan (incorporated by reference to
    Exhibit 10.1 to America West Holdings and America
    West Airlines, Inc.s Quarterly Report for the quarter
    ending March 31, 2005).                                                                                                                                                                                                                   
|        | 10 | .87         |  | US Airways Group, Inc. Incentive Compensation Plan
    (incorporated by reference to Exhibit 10.1 to
    US Airways Groups Current Report on Form 8-K
    filed January 23, 2006).                                                                                                                                                                                                                                       
|        | 10 | .88         |  | Investment Agreement, dated as of March 15, 2005 among
    Wexford Capital LLC, Republic US Airways America West
    Holdings Inc., US Airways Group and US Airways
    (incorporated by reference to Exhibit 10.3 to
    US Airways Groups Quarterly Report on
    Form 10-Q/A for the quarter ended March 31, 2005).*                                                                                                   
|        | 10 | .89         |  | Investment Agreement, dated as of May 19, 2005, by and
    among Peninsula Investment Partners, L.P., US Airways,
    US Airways Group, Inc. and its successors and America West
    Holdings Corporation (incorporated by reference to
    Exhibit 10.3 to the Current Report on Form 8-K filed
    by America West Holdings Corporation on May 25, 2005).                                                                
|        | 10 | .90         |  | Investment Agreement, dated as of May 19, 2005, by and
    among ACE Aviation America West Holdings, Inc., US Airways,
    US Airways Group, Inc. and its successors and America West
    Holdings Corporation (incorporated by reference to
    Exhibit 10.4 to the Current Report on Form 8-K filed
    by America West Holdings Corporation on May 25, 2005).                                                           
|        | 10 | .91         |  | Investment Agreement, dated as of May 19, 2005, by and
    among Par Investment Partners, L.P., US Airways,
    US Airways Group, Inc. and its successors and America West
    Holdings Corporation (incorporated by reference to
    Exhibit 10.2 to the Current Report on Form 8-K filed
    by America West Holdings Corporation on May 25, 2005).                                                                      
|        | 10 | .92         |  | Investment Agreement, dated as of May 19, 2005, by and
    among Eastshore Aviation, LLC, US Airways, US Airways
    Group, Inc. and its successors and America West Holdings
    Corporation (incorporated by reference to Exhibit 10.1 to
    the Current Report on Form 8-K filed by America West
    Holdings Corporation on May 25, 2005).                                                                            
|        | 10 | .93         |  | Investment Agreement, dated May 27, 2005, by and among
    Wellington Investment Management Company, LLP, America West
    Holdings Corporation and US Airways Group (incorporated by
    reference to Exhibit 10.1 to the Current Report on
    Form 8-K filed by America West Holdings Corporation on
    June 2, 2005).                                                                                                 
|        | 10 | .94         |  | Investment Agreement, dated July 7, 2005, among Tudor
    Proprietary Trading, L.L.C. and certain investors listed on
    Schedule 1 thereto for which Tudor Investment Corp. acts as
    investment advisor, US Airways Group and America West
    Holdings Corporation (incorporated by reference to
    Exhibit 10.1 to the Current Report on Form 8-K filed
    by America West Holdings Corporation on July 13, 2005).
|        | 10 | .95         |  | Voting Agreement, dated May 19, 2005, among TPG Partners,
    L.P., TPG Parallel I, L.P., Air Partners II, L.P. and
    US Airways Group (incorporated by reference to
    Exhibit 2.1 to the Current Report on Form 8-K filed by
    America West Holdings Corporation on May 25, 2005).                                                                                                                                  

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|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .96         |  | Letter Agreement dated September 16, 2005 by and among
    US Airways Group, America West Holdings Corporation,
    Barbell Acquisition Corp., ACE Aviation America West Holdings,
    Inc., Eastshore Aviation, LLC, Par Investment Partners, L.P.,
    Peninsula Investment Partners, L.P. and Wellington Management
    Company, LLP.                                                                                                                                                                                                                                                                                                                              
|        | 10 | .97         |  | Junior Secured Debtor-in-Possession Credit Facility Agreement
    dated as of February 18, 2005 among US Airways, as
    Debtor and Debtor-in-Possession under Chapter 11 of the
    Bankruptcy Code as Borrower, US Airways Group, PSA
    Airlines, Inc., and Material Services, Inc., Debtors and
    Debtors-in-Possession under Chapter 11 of the Bankruptcy
    Code as Guarantors, and Eastshore Aviation, LLC, as Lender
    (incorporated by reference to Exhibit 99 to US Airways
    Groups Current Report on Form 8-K dated
    February 28, 2005).                                                                                                      
|        | 10 | .98         |  | Amendment No. 1 dated as of May 19, 2005 to Junior
    Secured Debtor-in-Possession Credit Facility Agreement dated as
    of February 18, 2005 among US Airways, as Debtor and
    Debtor-in-Possession under Chapter 11 of the Bankruptcy
    Code as Borrower, US Airways Group, PSA Airlines, Inc., and
    Material Services, Inc., Debtors and Debtors-in-Possession under
    Chapter 11 of the Bankruptcy Code as Guarantors, and
    Eastshore Aviation, LLC, as Lender (incorporated by reference to
    Exhibit 10.105 to US Airways Groups Registration
    Statement on Form S-4 filed with the SEC on June 28,
    2005) (Registration No. 333-126162).
|        | 10 | .99         |  | Amended and Restated Participation Agreement, dated as of
    July 7, 2005, between America West Holdings Corporation and
    Par Investment Partners, L.P. (incorporated by reference to
    Exhibit 10.1 to the Current Report on Form 8-K filed
    by America West Holdings Corporation on July 13, 2005).                                                                                                                                                                                                                                                                                                                                                        
|        | 10 | .100        |  | Amended and Restated Participation Agreement, dated as of
    July 7, 2005, between America West Holdings Corporation and
    Peninsula Investment Partners, L.P. (incorporated by reference
    to Exhibit 10.1 to the Current Report on Form 8-K
    filed by America West Holdings Corporation on July 13,
    2005).                                                                                                                                                                                                                                                                                                                                              
|        | 10 | .101        |  | Assignment and First Amendment to America West Co-Branded Card
    Agreement, dated as of August 8, 2005, between AWA,
    US Airways Group and Juniper Bank. (incorporated by
    reference to Exhibit 10.110 to Amendment No. 2 to the
    Registration Statement on Form S-4 filed by US Airways
    Group on August 10, 2005) (Registration
    No. 333-126162).*                                                                                                                                                                                                                                                                                                 
|        | 10 | .102        |  | First Amendment to Merchant Services Bankcard Agreement, dated
    as of August 8, 2005, among AWA, JPMorgan Chase Bank, N.A.,
    and Chase Merchant Services, L.L.C. (incorporated by reference
    to Exhibit 10.111 to Amendment No. 2 to the
    Registration Statement on Form S-4 filed by US Airways
    Group on August 10, 2005) (Registration
    No. 333-126162).*                                                                                                                                                                                                                                                                                        
|        | 10 | .103        |  | America West Co-Branded Card Agreement, dated as of
    January 25, 2005, between AWA and Juniper Bank.
    (incorporated by reference to Exhibit 10.112 to Amendment
    No. 2 to the Registration Statement on Form S-4 filed
    by US Airways Group on August 10, 2005) (Registration
    No. 333-126162).*                                                                                                                                                                                                                                                                                                                                                       
|        | 10 | .104        |  | Merchant Services Bankcard Agreement, dated as of April 16,
    2003, between AWA, The Leisure Company, JPMorgan Chase Bank, and
    Chase Merchant Services L.L.C. (incorporated by reference to
    Exhibit 10.113 to Amendment No. 2 to the Registration
    Statement on Form S-4 filed by US Airways Group on
    August 10, 2005) (Registration No. 333-126162).*                                                                                                                                                                                                                                                                                               
|        | 10 | .105        |  | Airport Use Agreement, dated as of July 1, 1989, among the
    City of Phoenix, The Industrial Development Authority of the
    City of Phoenix, Arizona and AWA (Airport Use
    Agreement). (incorporated by reference to
    Exhibit 10-(D)(9) to AWAs Annual Report on
    Form 10-K for the year ended December 31, 1989).                                                                                                                                                                                                                                                                                                                                    
|        | 10 | .106        |  | First Amendment to Airport Use Agreement, dated as of
    August 1, 1990 (incorporated by reference to
    Exhibit 10-(D)(9) to AWAs Quarterly Report on
    Form 10-Q for the quarter ended September 30, 1990).                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 10 | .107        |  | Management Rights Agreement, dated as of August 25, 1994,
    between TPG Partners L.P., TPG Genpar, L.P. and AWA
    (incorporated by reference to Exhibit 10.47 to AWAs
    Registration Statement on Form S-1 dated August 23,
    1994, as amended) (Registration No. 333-54243).                                                                                                                                                                                                                                                                                                                                                                                

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|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                     
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .108        |  | Financing Agreement, dated as of April 1, 1998, between the
    Industrial Development Authority of the City of Phoenix, Arizona
    and AWA (incorporated by reference to Exhibit 10.29 to
    America West Holdings Quarterly Report on Form 10-Q
    for the quarter ended June 30, 1998).                                                                                                                                      
|        | 10 | .109        |  | Indenture of Trust, dated as of April 1, 1998, from the
    Industrial Development Authority of the City of Phoenix, Arizona
    to Norwest Bank, Arizona N.A. (incorporated by reference to
    Exhibit 10.30 to America West Holdings Quarterly
    Report on Form 10-Q for the quarter ended June 30,
    1998).                                                                                                                
|        | 10 | .110        |  | Second Amendment to Airport Use Agreement, dated as of
    August 25, 1995 (incorporated by reference to
    Exhibit 10.34 to AWAs Annual Report on Form 10-K
    for the year ended December 31, 1998).                                                                                                                                                                                                                           
|        | 10 | .111        |  | Indenture of Trust, dated as of June 1, 1999, from The
    Industrial Development Authority of the City of Phoenix, Arizona
    to Bank One Arizona, N.A. (incorporated by reference to
    Exhibit 10.35 to AWAs Quarterly Report on
    Form 10-Q for the quarter ended June 30, 1999).                                                                                                                                          
|        | 10 | .112        |  | Airbus A320/A319 Purchase Agreement, dated as of
    September 12, 1997, between AVSA S.A.R.L and AWA, including
    Letter Agreements Nos. 1-10 (incorporated by reference to
    Exhibit 10.26 to America West Holdings Quarterly
    Report on Form 10-Q for the quarter ended
    September 30, 1997).*                                                                                                                        
|        | 10 | .113        |  | Amendment No. 1, dated as of March 31, 1998, to the
    Airbus A320/A319 Purchase Agreement, dated as of
    September 12, 1997, between AVSA S.A.R.L. and AWA
    (incorporated by reference to Exhibit 10.28 to America West
    Holdings Quarterly Report on Form 10-Q for the
    quarter ended June 30, 1998).*                                                                                                               
|        | 10 | .114        |  | Amendment No. 2, dated as of December 9, 1998, to the
    Airbus A320/A319 Purchase Agreement, dated as of
    September 12, 1997, between AVSA S.A.R.L. and AWA
    (incorporated by reference to Exhibit 10.32 to AWAs
    Annual Report on Form 10-K for the year ended
    December 31, 1998).*                                                                                                                                
|        | 10 | .115        |  | Amendment No. 3, dated as of October 14, 1999, to the
    Airbus A320/319 Purchase Agreement, dated as of
    September 12, 1997, between AVSA, S.A.R.L. and AWA,
    including Letter Agreement Nos. 1-8 thereto (incorporated
    by reference to Exhibit 10.36 to America West
    Holdings and AWAs Annual Report on Form 10-K
    for the year ended December 31, 1999).*                                                    
|        | 10 | .116        |  | Amendment No. 4, dated as of July 1, 2000, to the
    Airbus A320/319 Purchase Agreement, dated as of
    September 12, 1997, between AVSA S.A.R.L. and AWA
    (incorporated by reference to Exhibit 10.38 to AWAs
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2000).*                                                                                                                              
|        | 10 | .117        |  | Amendment No. 5, dated as of October 12, 2000, to the
    Airbus A320/319 Purchase Agreement, dated as of
    September 12, 1997, between AVSA S.A.R.L. and AWA
    (incorporated by reference to Exhibit 10.39 to AWAs
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2000).*                                                                                                                          
|        | 10 | .118        |  | Amendment No. 7, dated July 30, 2004, to the A319/A320
    Purchase Agreement dated September 12, 1997, between AVSA,
    S.A.R.L. and AWA and Letter Agreement Nos. 2-8
    (incorporated by reference to Exhibit 10.15 to America West
    Holdings and AWAs Quarterly Report on Form 10-Q
    for the quarter ended September 30, 2004).*                                                                                      
|        | 10 | .119        |  | Amendment No. 9, dated as of September 27, 2005, to
    the Airbus A320/319 Purchase Agreement, dated as of
    September 12, 1997, between AWA and AVSA S.A.R.L Letter
    Agreement, dated as of September 27, 2005, between
    US Airways Group and Bruce R. Lakefield (incorporated by
    reference to Exhibit 10.8 to US Airways Groups
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2005).*   
|        | 10 | .120        |  | Amendment No. 10, dated as of September 27, 2005, to
    the Airbus A320/319 Purchase Agreement, dated as of
    September 12, 1997, between AWA and AVSA S.A.R.L. (Letter
    Agreement, dated as of September 27, 2005, between
    US Airways Group and Bruce R. Lakefield (incorporated by
    reference to Exhibit 10.9 to US Airways Groups
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2005).*

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|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------- | -- | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .121        |  | Amended and Restated V2500 Support Contract, dated as of
    October 7, 1998, between AWA and IAE International Aero
    Engines AG and Side Letters Nos. 1 and 2 thereto
    (incorporated by reference to Exhibit 10.20 to America West
    Holdings and AWAs Annual Report on Form 10-K
    for the year ended December 31, 1998).*                                                                                                                                           
|        | 10 | .122        |  | Side Letter No. 15, dated May 26, 2004, to the Amended
    and Restated V2500 Support Contract, dated October 7, 1998,
    between AWA and IAE International Aero Engines AG
    (incorporated by reference to Exhibit 10.16 to America West
    Holdings and AWAs Quarterly Report on Form 10-Q
    for the quarter ended September 30, 2004).*                                                                                                                                 
|        | 10 | .123        |  | Purchase Agreement, dated as of December 27, 2000, between
    America West Holdings, AWA and Continental Airlines, Inc.,
    including Letter Agreement (incorporated by reference to
    Exhibit 10.40 to America West Holdings and AWAs
    Annual Report on Form 10-K for the year ended
    December 31, 2000).                                                                                                                                                             
|        | 10 | .124        |  | Priority Distribution Agreement, dated as of August 25,
    1994, between TPG Partners, L.P., TPG Parallel I, L.P., Air
    Partners II, L.P., and Continental Airlines, Inc.
    (incorporated by reference to Exhibit 3 to
    Schedule 13D filed by TPG Partners, L.P. on
    September 6, 1994).                                                                                                                                                                               
|        | 10 | .125        |  | Disposition and Redevelopment Agreement, dated as of
    February 5, 2001, between AWA and the City of Phoenix, AZ
    (incorporated by reference to Exhibit 10.44 to AWAs
    Quarterly Report on Form 10-Q for the quarter ended
    March 31, 2001).                                                                                                                                                                                                                           
|        | 10 | .126        |  | Unsubordinated Ground Lease, dated as of February 5, 2001,
    between AWA and the City of Phoenix, AZ (incorporated by
    reference to Exhibit 10.45 to AWAs Quarterly Report
    on Form 10-Q for the quarter ended March 31, 2001).*                                                                                                                                                                                                                                          
|        | 10 | .127        |  | Code Share and Revenue Sharing Agreement, dated as of
    March 20, 2001, between AWA and Mesa Airlines, Inc.
    (incorporated by reference to Exhibit 10.46 to AWAs
    Quarterly Report on Form 10-Q for the quarter ended
    March 31, 2001).*                                                                                                                                                                                                                               
|        | 10 | .128        |  | $429,000,000 Loan Agreement, dated as of January 18, 2002,
    among AWA, Citibank, N.A., as Agent, KPMG Consulting, Inc., as
    Loan Administrator, Citibank, N.A., as Initial Lender and the
    Air Transportation Stabilization Board (incorporated by
    reference to Exhibit 10.51 to America West Holdings
    and AWAs Current Report on Form 8-K dated
    January 31, 2002).*                                                                                        
|        | 10 | .129        |  | Undertaking (regarding restrictions on transfer of Class A
    Common Stock), dated as of January 18, 2002, among America
    West Holdings Corporation, TPG Partners, L.P., TPG
    Parallel I, L.P. and Air Partners II, L.P. for the
    benefit of the Air Transportation Stabilization Board
    (incorporated by reference to Exhibit 10.53 to America West
    Holdings and AWAs Current Report on Form 8-K
    dated January 31, 2002).                                  
|        | 10 | .130        |  | Second Amendment to Code Share and Revenue Sharing Agreement, as
    amended, dated as of October 24, 2002, by and among AWA,
    Mesa Airlines, Inc., Freedom Airlines, Inc. and Air Midwest,
    Inc. (incorporated by reference to Exhibit 10.56 of America
    West Holdings and AWAs Annual Report on
    Form 10-K for the year ended December 31, 2002).                                                                                                                  
|        | 10 | .131        |  | Third Amendment to Code Share and Revenue Sharing Agreement
    dated as of January 29, 2003 among AWA, Mesa Airlines, Inc.
    and Freedom Airlines, Inc. (incorporated by reference to
    Exhibit 10.1 to America West Holdings and AWAs
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2003).                                                                                                                                                     
|        | 10 | .132        |  | Fourth Amendment to Code Share and Revenue Sharing Agreement and
    Release dated as of September 5, 2003 among AWA, Mesa
    Airlines, Inc., Air Midwest, Inc. and Freedom Airlines, Inc.
    (incorporated by reference to Exhibit 10.2 to America West
    Holdings and AWAs Amendment No. 1 to Quarterly
    Report on Form 10-Q for the quarter ended
    September 30, 2003).*                                                                                            
|        | 10 | .133        |  | Loan Agreement [Engines], dated as of September 3, 2004,
    among AWA, GECC, as administrative agent, original Series A
    lender and original Series B lender, Wells Fargo Bank
    Northwest, National Association (Wells Fargo), as
    security trustee and the lenders from time to time party thereto
    (incorporated by reference to Exhibit 10.1 to America West
    Holdings and AWAs Quarterly Report on Form 10-Q
    for the quarter ended September 30, 2004).

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|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                               
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .134        |  | Engine Mortgage and Security Agreement, dated as of
    September 3, 2004, between AWA and Wells Fargo
    (incorporated by reference to Exhibit 10.2 to America West
    Holdings and AWAs Quarterly Report on Form 10-Q
    for the quarter ended September 30, 2004).                                                                                                                                                    
|        | 10 | .135        |  | Mortgage and Security Agreement Supplement No. 1, dated
    September 10, 2004, of AWA (incorporated by reference to
    Exhibit 10.3 to America West Holdings and AWAs
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2004).                                                                                                                                                                    
|        | 10 | .136        |  | Subordinated Engine Mortgage and Security Agreement, dated as of
    September 3, 2004, between AWA and Wells Fargo
    (incorporated by reference to Exhibit 10.4 to America West
    Holdings and AWAs Quarterly Report on Form 10-Q
    for the quarter ended September 30, 2004).                                                                                                                                       
|        | 10 | .137        |  | Subordinated Mortgage and Security Agreement Supplement
    No. 1, dated September 10, 2004, of AWA (incorporated
    by reference to Exhibit 10.5 to America West Holdings
    and AWAs Quarterly Report on Form 10-Q for the
    quarter ended September 30, 2004).                                                                                                                                                       
|        | 10 | .138        |  | Security Trustee Agreement [Engines], dated as of
    September 3, 2004, among Wells Fargo, as security trustee
    and the beneficiaries named therein (incorporated by reference
    to Exhibit 10.6 to America West Holdings and
    AWAs Quarterly Report on Form 10-Q for the quarter
    ended September 30, 2004).                                                                                                   
|        | 10 | .139        |  | Payment and Indemnity Agreement [Engines], dated as of
    September 3, 2004, among AWA, certain beneficiaries listed
    on Schedule 1 and Wells Fargo (incorporated by reference to
    Exhibit 10.7 to America West Holdings and AWAs
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2004).                                                                                                   
|        | 10 | .140        |  | Restructure Letter Agreement [Engines], dated as of
    September 3, 2004, among AWA and GECC (incorporated by
    reference to Exhibit 10.8 to America West Holdings
    and AWAs Quarterly Report on Form 10-Q for the
    quarter ended September 30, 2004).                                                                                                                                                             
|        | 10 | .141        |  | Loan Agreement [Spare Parts], dated as of September 3,
    2004, among AWA, GECC, as administrative agent, original
    Series A lender and original Series B lender, Wells
    Fargo, as security trustee and the lenders from time to time
    party thereto (incorporated by reference to Exhibit 10.9 to
    America West Holdings and AWAs Quarterly Report on
    Form 10-Q for the quarter ended September 30, 2004).
|        | 10 | .142        |  | Spare Parts Mortgage and Security Agreement, dated as of
    September 3, 2004, between AWA and Wells Fargo
    (incorporated by reference to Exhibit 10.10 to America West
    Holdings and AWAs Quarterly Report on Form 10-Q
    for the quarter ended September 30, 2004).                                                                                                                                              
|        | 10 | .143        |  | Subordinated Spare Parts Mortgage and Security Agreement, dated
    as of September 3, 2004, between AWA and Wells Fargo
    (incorporated by reference to Exhibit 10.11 to America West
    Holdings and AWAs Quarterly Report on Form 10-Q
    for the quarter ended September 30, 2004).                                                                                                                                 
|        | 10 | .144        |  | Security Trustee Agreement [Spare Parts], dated as of
    September 3, 2004, among Wells Fargo, as security trustee
    and the beneficiaries named therein (incorporated by reference
    to Exhibit 10.12 to America West Holdings and
    AWAs Quarterly Report on Form 10-Q for the quarter
    ended September 30, 2004).                                                                                              
|        | 10 | .145        |  | Payment and Indemnity Agreement [Spare Parts], dated as of
    September 3, 2004, among AWA, certain beneficiaries listed
    on Schedule 1 and Wells Fargo (incorporated by reference to
    Exhibit 10.13 to America West Holdings and AWAs
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2004).                                                                                              
|        | 10 | .146        |  | Restructure Letter Agreement [Spare Parts], dated as of
    September 3, 2004, among AWA and GECC (incorporated by
    reference to Exhibit 10.14 to America West Holdings
    and AWAs Quarterly Report on Form 10-Q for the
    quarter ended September 30, 2004).                                                                                                                                                        
|        | 10 | .147        |  | $30,790,000 Senior Secured Term Loan Agreement, dated
    December 23, 2004, among FTCHP LLC, as Borrower, AWA, as
    Guarantor, Heritage Bank, SSB, as Administrative Agent and
    Citibank, N.A. (and other lenders named therein) as Lenders
    (incorporated by reference to Exhibit 10.41 to America West
    Holdings and AWAs Annual Report on Form 10-K
    for the year ended December 31, 2004).               

284



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|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------- | -- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .148        |  | Senior Secured Discount Note, dated December 23, 2004,
    issued by FTCHP LLC (incorporated by reference to
    Exhibit 10.42 to America West Holdings and AWAs
    Annual Report on Form 10-K for the year ended
    December 31, 2004).                                                                                                                                                                                                                                                                                                                               
|        | 10 | .149        |  | Unconditional Guaranty Agreement, dated December 23, 2004,
    by AWA in favor of Citibank, N.A. (incorporated by reference to
    Exhibit 10.43 to America West Holdings and AWAs
    Annual Report on Form 10-K for the year ended
    December 31, 2004).                                                                                                                                                                                                                                                                                                             
|        | 10 | .150        |  | Advisory Agreement, dated May 19, 2005, between America
    West America West Holdings Corporation and TPG Advisory, Inc.
    (incorporated by reference to Exhibit 10.1 to America West
    Holdings Current Report on Form 8-K filed on
    May 25, 2005).                                                                                                                                                                                                                                                                                                              
|        | 10 | .151        |  | Amended and Restated Loan Agreement, dated as of
    September 27, 2005, by and among US Airways,
    US Airways Group, the affiliates of US Airways party
    thereto, the lenders from time to time party thereto, Citibank,
    N.A., as Agent, Citicorp North America, Inc., as Govco
    Administrative Agent, Wilmington Trust Company, as Collateral
    Agent, and the Air Transportation Stabilization Board
    (incorporated by reference to Exhibit 10.1 to
    US Airways Groups Quarterly Report on Form 10-Q
    for the quarter ended September 30, 2005).
|        | 10 | .152        |  | Amended and Restated Loan Agreement, dated as of
    September 27, 2005, by and among AWA, US Airways
    Group, the other affiliates of AWA party thereto, the several
    lenders from time to time party thereto, Citibank, N.A., as
    Agent, Wilmington Trust Company, as Collateral Agent, and the
    Air Transportation Stabilization Board (incorporated by
    reference to Exhibit 10.2 to US Airways Groups
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2005).                                                                 
|        | 10 | .153        |  | Loan Agreement, dated as of September 27, 2005, by and
    among US Airways, AWA, US Airways Group, as guarantor,
    Airbus Financial Services, as Initial Lender and
    Loan Agent, and Wells Fargo Bank Northwest, National
    Association, as Collateral Agent, with commitments in an initial
    aggregate amount of $161,000,000 (incorporated by reference to
    Exhibit 10.3 to US Airways Groups Quarterly
    Report on Form 10-Q for the quarter ended
    September 30, 2005).                                                                            
|        | 10 | .154        |  | Loan Agreement, dated as of September 27, 2005, by and
    among US Airways, AWA, US Airways Group, as guarantor,
    Airbus Financial Services, as Initial Lender and
    Loan Agent, and Wells Fargo Bank Northwest, National
    Association, as Collateral Agent, with commitments in an initial
    aggregate amount of $89,000,000 (incorporated by reference to
    Exhibit 10.4 to US Airways Groups Quarterly
    Report on Form 10-Q for the quarter ended
    September 30, 2005).                                                                             
|        | 10 | .155        |  | Purchase Agreement, dated as of September 27, 2005, between
    US Airways Group and Merrill Lynch, Pierce,
    Fenner & Smith Incorporated (incorporated by reference
    to Exhibit 10.1 to US Airways Groups Current
    Report on Form 8-K filed on October 3, 2005).                                                                                                                                                                                                                                                                                                 
|        | 10 | .156        |  | Stockholders Agreement, dated as of September 27,
    2005, among US Airways Group and ACE Aviation America West
    Holdings Inc. (incorporated by reference to Exhibit 10.1 to
    US Airways Groups Current Report on Form 8-K
    filed on October 3, 2005).                                                                                                                                                                                                                                                                                                         
|        | 10 | .157        |  | Stockholders Agreement, dated as of September 27,
    2005, among US Airways Group and Eastshore Aviation LLC
    (incorporated by reference to Exhibit 10.2 to
    US Airways Groups Current Report on Form 8-K
    filed on October 3, 2005).                                                                                                                                                                                                                                                                                                                          
|        | 10 | .158        |  | Stockholders Agreement, dated as of September 27,
    2005, among US Airways Group and Par Investment Partners,
    L.P. (incorporated by reference to Exhibit 10.3 to
    US Airways Groups Current Report on Form 8-K
    filed on October 3, 2005).                                                                                                                                                                                                                                                                                                                   
|        | 10 | .159        |  | Stockholders Agreement, dated as of September 27,
    2005, among US Airways Group and Peninsula Investment
    Partners, L.P. (incorporated by reference to Exhibit 10.4
    to US Airways Groups Current Report on Form 8-K
    filed on October 3, 2005).                                                                                                                                                                                                                                                                                                             
|        | 10 | .160        |  | Stockholders Agreement, dated as of September 27,
    2005, among US Airways Group and the US Airways Group
    of investors named therein under the management of Wellington
    Management Company, LLP (incorporated by reference to
    Exhibit 10.5 to US Airways Groups Current Report
    on Form 8-K filed on October 3, 2005).                                                                                                                                                                                                                                  

285



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##### Table of Contents



|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                 
|------- | -- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .161        |  | Stockholders Agreement, dated as of September 27,
    2005, among US Airways Group, Tudor Proprietary Trading
    L.L.C. and the US Airways Group of investors named therein
    for which Tudor Investment Corp. acts as investment advisor
    (incorporated by reference to Exhibit 10.6 to
    US Airways Groups Current Report on Form 8-K
    filed on October 3, 2005).
|        | 18 | .1          |  | Letter from KPMG LLP regarding change in accounting
    principle.                                                                                                                                                                                                                                                                                                              
|        | 21 | .1          |  | Subsidiaries of US Airways Group (incorporated by reference
    to Exhibit 21.1 to US Airways Groups
    Registration Statement on Form S-1/A filed on
    September 27, 2005) (Registration No. 333-126226).                                                                                                                                                                  
|        | 23 | .1          |  | Consents of KPMG LLP, Independent Registered Public
    Accounting Firm of US Airways Group.                                                                                                                                                                                                                                                                                    
|        | 24 | .1          |  | Powers of Attorney, pursuant to which amendments to this Annual
    Report on Form 10-K may be filed, is included on the
    signature pages of this Annual Report on Form 10-K                                                                                                                                                                                                 
|        | 31 | .1          |  | Certification of US Airways Groups Chief Executive
    Officer pursuant to Rule 13a-14(a) under the Securities
    Exchange Act of 1934, as amended.                                                                                                                                                                                                                           
|        | 31 | .2          |  | Certification of US Airways Groups Chief Financial
    Officer pursuant to Rule 13a-14(a) under the Securities
    Exchange Act of 1934, as amended.                                                                                                                                                                                                                           
|        | 31 | .3          |  | Certification of AWAs Chief Executive Officer pursuant to
    Rule 13a-14(a) under the Securities Exchange Act of 1934,
    as amended.                                                                                                                                                                                                                                        
|        | 31 | .4          |  | Certification of AWAs Chief Financial Officer pursuant to
    Rule 13a-14(a) under the Securities Exchange Act of 1934,
    as amended.                                                                                                                                                                                                                                        
|        | 31 | .5          |  | Certification of US Airways Chief Executive Officer
    pursuant to Rule 13a-14(a) under the Securities Exchange
    Act of 1934, as amended.                                                                                                                                                                                                                                  
|        | 31 | .6          |  | Certification of US Airways Chief Financial Officer
    pursuant to Rule 13a-14(a) under the Securities Exchange
    Act of 1934, as amended.                                                                                                                                                                                                                                  
|        | 32 | .1          |  | Certification of US Airways Groups Chief Executive
    Officer and Chief Financial Officer pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                      
|        | 32 | .2          |  | Certification of AWAs Chief Executive Officer and Chief
    Financial Officer pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                   
|        | 32 | .3          |  | Certification of US Airways Chief Executive Officer
    and Chief Financial Officer pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                             






|  |                                                                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Portions of this exhibit have been omitted under a request for
    confidential treatment and filed separately with the United
    States Securities and Exchange Commission.



|  |                                                         
|- | --------------------------------------------------------
| | Management contract or compensatory plan or arrangement.

286



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##### Table of Contents






SIGNATURES






| |                       
| | ----------------------
| | US AIRWAYS GROUP, INC.



| |     |                      
| | --- | ---------------------
| | By: | /s/ W. Douglas Parker

| |                                                
| | -----------------------------------------------
| |                                                
| | W. Douglas Parker                              
| | Chairman, President and Chief Executive Officer





| |                            
| | ---------------------------
| | AMERICA WEST AIRLINES, INC.



| |     |                      
| | --- | ---------------------
| | By: | /s/ W. Douglas Parker

| |                                                
| | -----------------------------------------------
| |                                                
| | W. Douglas Parker                              
| | Chairman, President and Chief Executive Officer





| |                 
| | ----------------
| | US AIRWAYS, INC.



| |     |                      
| | --- | ---------------------
| | By: | /s/ W. Douglas Parker

| |                                                
| | -----------------------------------------------
| |                                                
| | W. Douglas Parker                              
| | Chairman, President and Chief Executive Officer



10-K


287



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##### Table of Contents





|                                           |  |                                                                                                    |  |                |  | 
|------------------------------------------ |  | -------------------------------------------------------------------------------------------------- |  | -------------- |  | 
|Signature                                  |  | Title                                                                                              |  | Date          
|                                           |  |                                                                                                    |  |               
|                                          
|/s/ W. Douglas ParkerW. Douglas Parker     |  | Chairman, President and Chief Executive Officer
    (Principal Executive Officer)                  |  | March 14, 2006
|                                          
|/s/ Derek J. KerrDerek J. Kerr             |  | Senior Vice President and Chief Financial Officer (Principal
    Financial and Accounting Officer) |  | March 14, 2006
|                                          
|/s/ Bruce R. LakefieldBruce R. Lakefield   |  | Director                                                                                           |  | March 14, 2006
|                                          
|/s/ Richard BartlettRichard Bartlett       |  | Director                                                                                           |  | March 14, 2006
|                                          
|/s/ Herbert M. BaumHerbert M. Baum         |  | Director                                                                                           |  | March 14, 2006
|                                          
|/s/ Richard C. KraemerRichard C. Kraemer   |  | Director                                                                                           |  | March 14, 2006
|                                          
|/s/ Cheryl G. KrongardCheryl G. Krongard   |  | Director                                                                                           |  | March 14, 2006
|                                          
|/s/ Robert A. MiltonRobert A. Milton       |  | Director                                                                                           |  | March 14, 2006
|                                          
|/s/ Hans MirkaHans Mirka                   |  | Director                                                                                           |  | March 14, 2006
|                                          
|/s/ Denise M. OLearyDenise M. OLeary     |  | Director                                                                                           |  | March 14, 2006
|                                          
|/s/ George M. PhilipGeorge M. Philip       |  | Director                                                                                           |  | March 14, 2006
|                                          
|/s/ Richard P. SchifterRichard P. Schifter |  | Director                                                                                           |  | March 14, 2006
|                                          
|/s/ Edward L. ShapiroEdward L. Shapiro     |  | Director                                                                                           |  | March 14, 2006
|                                          
|/s/ J. Steven WhislerJ. Steven Whisler     |  | Director                                                                                           |  | March 14, 2006

288



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##### Table of Contents



EXHIBIT INDEX


|        |    |             |  |                                                                                                                                                           
|------- | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .74         |  | Form of Stock Unit Agreement under US Airways Groups
    2005 Equity Incentive Plan.                                                                    
|        | 10 | .75         |  | Form of Stock Appreciation Rights Award Agreement under
    US Airways Groups 2005 Equity Incentive Plan.                                               
|        | 10 | .79         |  | Performance-Based Award Plan (as Amended and Restated effective
    November 2, 2005).                                                                   
|        | 10 | .83         |  | Summary of Director Compensation and Benefits.                                                                                                           
|        | 18 | .1          |  | Letter from KPMG LLP regarding change in accounting principle.                                                                                            
|        | 23 | .1          |  | Consents of KPMG LLP, Independent Registered Public Accounting
    Firm of US Airways Group.                                                              
|        | 31 | .1          |  | Certification of US Airways Groups Chief Executive
    Officer pursuant to Rule 13a-14(a) under the Securities
    Exchange Act of 1934, as amended.     
|        | 31 | .2          |  | Certification of US Airways Groups Chief Financial
    Officer pursuant to Rule 13a-14(a) under the Securities
    Exchange Act of 1934, as amended.     
|        | 31 | .3          |  | Certification of AWAs Chief Executive Officer pursuant to
    Rule 13a-14(a) under the Securities Exchange Act of 1934,
    as amended.                  
|        | 31 | .4          |  | Certification of AWAs Chief Financial Officer pursuant to
    Rule 13a-14(a) under the Securities Exchange Act of 1934,
    as amended.                  
|        | 31 | .5          |  | Certification of US Airways Chief Executive Officer
    pursuant to Rule 13a-14(a) under the Securities Exchange
    Act of 1934, as amended.            
|        | 31 | .6          |  | Certification of US Airways Chief Financial Officer
    pursuant to Rule 13a-14(a) under the Securities Exchange
    Act of 1934, as amended.            
|        | 32 | .1          |  | Certification of US Airways Groups Chief Executive
    Officer and Chief Financial Officer pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002.
|        | 32 | .2          |  | Certification of AWAs Chief Executive Officer and Chief
    Financial Officer pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002.             
|        | 32 | .3          |  | Certification of Airways Chief Executive Officer and Chief
    Financial Officer pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002.          






|  |                                                         
|- | --------------------------------------------------------
| | Management contract or compensatory plan or arrangement.