<PAGE>
                            UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C.  20549

                              FORM 10-Q

   [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                    SECURITIES EXCHANGE ACT OF 1934
             For the quarterly period ended March 31, 1997
                                or
   [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                    SECURITIES EXCHANGE ACT OF 1937
          For the transition period from           to
                                         ---------    ---------

                        US Airways Group, Inc.
                  (Commission file number: 1-8444)
                                and
                           US Airways, Inc.
                  (Commission file number: 1-8442)
     (Exact names of registrants as specified in their charters)

       Delaware                US Airways Group, Inc.  54-1194634
(State of incorporation        US Airways, Inc.        53-0218143
  of both registrants)    (I.R.S. Employer Identification Numbers)


                      US Airways Group, Inc.
           2345 Crystal Drive, Arlington, Virginia  22227
              (Address of principal executive offices)
                       (703) 872-5306
       (Registrant's telephone number, including area code)

                        US Airways, Inc.
           2345 Crystal Drive, Arlington, Virginia  22227
              (Address of principal executive offices)
                       (703) 872-7000
       (Registrant's telephone number, including area code)

     Indicate by check mark whether the registrants (1) have filed 
all reports required to be filed by Section 13 or 15(d) of the 
Securities Exchange Act of 1934 during the preceding 12 months (or 
for such shorter period that the registrants were required to file 
such reports), and (2) have been subject to such filing 
requirements for the past 90 days.

             Yes     X                   No
                 ---------                  ---------

     As of April 30, 1997, there were outstanding approximately 
65,275,000 shares of common stock of US Airways Group, Inc. and 
1,000 shares of common stock of US Airways, Inc.

     The registrant US Airways, Inc. meets the conditions set 
forth in General Instructions H(1)(a) and (b) of Form 10-Q and is 
therefore participating in the filing of this form with the 
reduced disclosure format.

<PAGE>
                        US Airways Group, Inc.
                                 and
                           US Airways, Inc.

                     Quarterly Report on Form 10-Q


                          Table of Contents



Part I. Financial Information                                 Page
                                                              ----

  Item 1A.  Financial Statements - US Airways Group, Inc.

    Condensed Consolidated Statements of Operations
      - Three Months Ended March 31, 1997 and 1996              1
    Condensed Consolidated Balance Sheets
      - March 31, 1997 and December 31, 1996                    2
    Condensed Consolidated Statements of Cash Flows
      - Three Months Ended March 31, 1997 and 1996              4
    Notes to Condensed Consolidated Financial Statements        6

  Item 1B.  Financial Statements - US Airways, Inc.

    Condensed Consolidated Statements of Operations
      - Three Months Ended March 31, 1997 and 1996              9
    Condensed Consolidated Balance Sheets
      - March 31, 1997 and December 31, 1996                   10
    Condensed Consolidated Statements of Cash Flows
      - Three Months Ended March 31, 1997 and 1996             12
Notes to Condensed Consolidated Financial Statements           14

  Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations                 15

Part II.  Other Information

  Item 1.  Legal Proceedings                                   23

  Item 6.  Exhibits and Reports on Form 8-K                    24

Signatures                                                     25

<PAGE>
US Airways Group, Inc.
Condensed Consolidated Statements of Operations
Three Months Ended March 31, 1997 and 1996 (unaudited)
(in thousands, except per share amounts)

                                           1997            1996
                                           ----            ----
Operating Revenues
  Passenger transportation             $1,896,855      $1,677,541
  Cargo and freight                        44,331          38,177
  Other                                   159,892         152,704
                                        ---------       ---------
    Total Operating Revenues            2,101,078       1,868,422

Operating Expenses
  Personnel costs                         756,691         750,206
  Aviation fuel                           225,029         182,016
  Commissions                             144,591         132,305
  Aircraft rent                           120,933         113,191
  Other rent and landing fees             100,343         100,350
  Aircraft maintenance                     96,881          99,973
  Depreciation and amortization            77,011          81,526
  Other, net                              403,971         398,063
                                        ---------       ---------
    Total Operating Expenses            1,925,450       1,857,630
                                        ---------       ---------
    Operating Income                      175,628          10,792

Other Income (Expense)
  Interest income                          23,842          13,519
  Interest expense                        (64,508)        (67,793)
  Interest capitalized                      2,775           1,449
  Equity in earnings of affiliates         13,418          11,262
  Other, net                               14,219            (476)
                                        ---------       ---------
    Other Income (Expense), Net           (10,254)        (42,039)
                                        ---------       ---------

Income (Loss) Before Taxes                165,374         (31,247)
  Provision for Income Taxes               12,716           1,046
                                        ---------       ---------

Net Income (Loss)                         152,658         (32,293)
  Preferred Dividend Requirement          (20,864)        (22,274)
                                        ---------       ---------

Net Income (Loss) Applicable to 
  Common Stockholders                  $  131,794      $  (54,567)
                                        =========       =========

Income (Loss) per Common Share
  Primary                              $     2.00      $    (0.86)
                                        =========       =========
  Fully-diluted                        $     1.45      $    (0.86)
                                        =========       =========

Shares Used for Computation (000)
  Primary                                  65,777          63,618
  Fully-diluted                           105,211          63,618



See accompanying Notes to Condensed Consolidated Financial 
Statements.

                                 1
<PAGE>
US Airways Group, Inc.
Condensed Consolidated Balance Sheets
March 31, 1997(unaudited) and December 31, 1996
(dollars in thousands, except per share amounts) 

                                         March 31,    December 31,
                                           1997           1996
                                           ----           ----
               ASSETS

Current Assets
  Cash and cash equivalents            $  868,848      $  950,966
  Short-term investments                  595,408         635,839
  Receivables, net                        450,825         337,025
  Materials and supplies, net             235,759         248,774
  Prepaid expenses and other              156,712         137,590
                                        ---------       ---------
    Total  Current Assets               2,307,552       2,310,194

Property and Equipment
  Flight equipment                      5,183,249       5,202,057
  Ground property and equipment         1,115,990       1,108,648
  Less accumulated depreciation and 
    amortization                       (2,517,494)     (2,470,337)
                                        ---------       ---------
                                        3,781,745       3,840,368
  Purchase deposits                        77,620          77,620
                                        ---------       ---------
    Total Property and Equipment, Net   3,859,365       3,917,988

Other Assets
  Goodwill, net                           490,498         494,511
  Other intangibles, net                  284,222         283,309
  Other assets, net                       529,286         525,409
                                        ---------       ---------
    Total Other Assets                  1,304,006       1,303,229
                                        ---------       ---------
                                       $7,470,923      $7,531,411
                                        =========       =========

   LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities
  Current maturities of long-term debt $   93,194      $   84,259
  Accounts payable                        387,578         438,951
  Traffic balances payable and
    unused tickets                        938,416         715,576
  Accrued aircraft rent                   427,713         510,752
  Other accrued expenses                  844,762       1,099,181
                                        ---------       ---------
    Total Current Liabilities           2,691,663       2,848,719

Long-term Debt, Net of 
    Current Maturities                  2,577,997       2,615,780

Deferred Credits and Other Liabilities
  Deferred gains, net                     352,944         359,748
  Postretirement benefits other
    than pensions, non-current          1,112,098       1,093,519
  Non-current employee  benefit
    liabilities and other                 545,968         439,308
                                        ---------       ---------
    Total Deferred Credits and 
      Other Liabilities                 2,011,010       1,892,575


                   (continued on following page)

                                 2
<PAGE>
US Airways Group, Inc.
Condensed Consolidated Balance Sheets
March 31, 1997(unaudited) and December 31, 1996  (Continued)
(dollars in thousands, except per share amounts)

                                         March 31,    December 31,
                                           1997           1996
                                           ----           ----

Commitments and Contingencies

Redeemable Cumulative Convertible
  Preferred Stock
    Series A, 358,000 shares issued,
      no par value                        358,000        358,000
    Series F, 30,000 shares issued,
      no par value                        300,000        300,000
    Series T, 10,000 shares issued,
      no par value                        100,719        100,719

Stockholders' Equity (Deficit)
  Series B cumulative convertible
    preferred stock, no par value,        213,128        213,128
    4,263,000 depositary shares issued
    (liquidation preference of $259,750
    as of March 31, 1997)
  Common stock, par value $1 per share,
    authorized 150,000,000 shares,         64,567         64,306
    issued and outstanding 64,567,000
    and 64,306,000 shares, respectively
  Paid-in capital                       1,390,906      1,386,557
  Retained earnings (deficit)          (2,109,579)    (2,117,838)
  Common stock held in treasury                 -              -
  Deferred compensation                   (92,279)       (95,326)
  Adjustment for minimum 
    pension liability                     (35,209)       (35,209)
                                        ---------      ---------
    Total Stockholders' Equity (Deficit) (568,466)      (584,382)
                                        ---------      ---------
                                       $7,470,923     $7,531,411
                                        =========      =========



See accompanying Notes to Condensed Consolidated Financial 
Statements.

                                  3
<PAGE>
US Airways Group, Inc.
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 1997 and 1996 (unaudited)
(in thousands)


                                            1997           1996
                                            ----           ----

Cash and cash equivalents
  beginning of period                     $950,966       $881,854
                                           -------        -------

Cash flows from operating activities
  Net income (loss)                        152,658        (32,293)
  Adjustments to reconcile net income
    (loss) to net cash provided by
    (used for) operating activities
      Depreciation and amortization         77,011         81,526
      Loss (gain) on disposition of
        property                           (14,052)         3,454
      Amortization of deferred gains
        and credits                         (6,921)        (6,915)
      Other                                   (263)         1,412
      Changes in certain assets
        and liabilities
          Decrease (increase) in
            receivables                   (113,800)      (121,247)
          Decrease (increase) in materials
            and supplies, prepaid expenses
            and pension assets             (10,907)       (15,481)
          Increase (decrease) in traffic
            balances payable and unused
            tickets                        222,840        226,838
          Increase (decrease) in accounts
            payable, accrued aircraft rent
            and other accrued expenses    (333,447)      (165,923)
          Increase (decrease) in post-
            retirement benefits other
            than pensions, non-current      18,579         18,803
                                           -------        -------
              Net cash provided by (used for)
                operating activities        (8,302)        (9,826)

Cash flows from investing activities
  Aircraft acquisitions and
    purchase deposits, net                  (5,538)        (3,385)
  Additions to other property              (38,133)       (29,693)
  Proceeds from disposition of property     40,523          3,555
  Decrease (increase) in 
    short-term investments                  35,710        (25,695)
  Decrease (increase) in restricted 
    cash and investments                     8,715            985
  Other                                      1,923        (11,903)
                                           -------        -------
              Net cash provided by
                (used for) investing
                activities                  43,200        (66,136)



                   (continued on following page)

                                 4
<PAGE>
US Airways Group, Inc.
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 1997 and 1996 (unaudited)  
(Continued)
(in thousands)


                                            1997           1996
                                            ----           ----

Cash flows from financing activities
  Issuance of debt                               -        103,002
  Reduction of debt                        (28,848)      (123,551)
  Issuance of common stock                   3,927            596
  Sale of treasury stock                     1,020              -
  Dividends paid on preferred stock        (93,115)             -
                                           -------        -------
              Net cash provided by
                (used for) financing
                activities                (117,016)       (19,953)
                                           -------        -------

Net increase (decrease) in cash
  and cash equivalents                     (82,118)       (95,915)
                                           -------        -------

Cash and cash equivalents end of period   $868,848       $785,939
                                           =======        =======


Noncash investing and financing activities

  Issuance of debt - refinancing of 
    debt secured by aircraft              $      -       $159,998
  Reduction of debt - refinancing of
    debt secured by aircraft              $      -       $154,422
  Issuance of debt - aircraft 
    acquisitions                          $      -       $  4,585
  Underwriter's fees - refinancing of
    debt secured by aircraft              $      -       $  2,488
  Treasury stock acquired for tax 
    withholding on employee stock grants  $  1,141       $      -
  Dividends declared on preferred stock,
    but not paid during period            $ 51,284       $      -

Supplemental Information

  Cash paid during the period for
    interest, net of amount capitalized   $  84,047      $ 93,804
  Net cash paid during the period
    for income taxes                      $   1,132      $    153


See accompanying Notes to Condensed Consolidated Financial 
Statements.

                                  5
<PAGE>
                      US Airways Group, Inc.
                Notes to Condensed Consolidated
                 Financial Statements (Unaudited)


1.  Basis of Presentation

     The accompanying Condensed Consolidated Financial Statements 
include the accounts of US Airways Group, Inc. ("US Airways Group" 
or the "Company") and its wholly-owned subsidiaries US Airways, 
Inc. ("US Airways"), Piedmont Airlines, Inc., PSA Airlines, Inc., 
Allegheny Airlines, Inc., USAir Leasing and Services, Inc., USAir 
Fuel Corporation, Material Services Company, Inc. and The OR 
Group, Inc. ( "OR Group").

     OR Group was a wholly-owned subsidiary of US Airways Group 
that was incorporated in February 1996 and dissolved in the fourth 
quarter of 1996. OR Group provided resource allocation consulting 
services and decision-making support systems to US Airways, which 
assumed these activities upon OR Group's dissolution.

     US Airways terminated its Airline Technical Services, LLC 
joint venture with a subsidiary of British Airways Plc, effective 
January 1997. No material charges resulted from its termination.

     Management believes that all adjustments necessary for a fair 
statement of results have been included in the Condensed 
Consolidated Financial Statements for the interim periods 
presented, which are unaudited. All significant intercompany 
accounts and transactions have been eliminated. The preparation of 
financial statements in conformity with generally accepted 
accounting principles requires management to make estimates and 
assumptions that affect the reported amounts of assets and 
liabilities and disclosure of contingent assets and liabilities at 
the date of the financial statements and the reported amounts of 
revenues and expenses during the reporting period. Actual results 
could differ from those estimates.

     Certain 1996 amounts have been reclassified to conform with 
1997 classifications.

     These interim period Condensed Consolidated Financial 
Statements should be read in conjunction with the Consolidated 
Financial Statements contained in the Company's Annual Report on 
Form 10-K for the year ended December 31, 1996.

2.  Income (Loss) Per Common Share

     For the three month period ended March 31, 1997, 
approximately 1,643,000 incremental shares of common stock were 
included in the calculation of fully-diluted income (loss) per 
common share as the result of applying the treasury stock method 
to outstanding stock options. For the same period, the effects of 
assuming conversion of the Company's outstanding preferred stock 
issuances were dilutive and therefore included in the calculation. 
The income and share effects of assuming conversion of the 
Company's outstanding preferred stock issuances were approximately 
$20,864,000 and 39,155,000 common stock shares, respectively.

3.  Redeemable Preferred Stock

     During the first quarter of 1997, the Company paid dividends 
totaling $93.1 million to holders of its Series A, Series F and 
Series T Preferred Stock (collectively the "Senior Preferred 
Stock") (see Note 7 to the Company's Annual Report on Form 10-K 
for the year ended December 31, 1996

                                6
<PAGE>
for a description of each series of Senior Preferred Stock), 
including all dividends in arrears (including penalty dividends on 
the deferred dividends) and regular quarterly dividends of $8.3 
million on its Series A Preferred Stock.

4.  Stockholders' Equity

     On March 26, 1997, the Company's board of directors declared 
dividends of $46.6 million on the Company's Series B Preferred 
Stock. After these dividends, which were paid April 17, 1997, the 
Company had paid all dividends in arrears on its Series B 
Preferred Stock. Also on March 26, 1997, the Company's board of 
directors declared regular quarterly dividends of $4.7 million on 
the Series B Preferred Stock, to be paid on May 15, 1997.

     On March 26, 1997, the Human Resource Committee of the 
Company's board of directors approved the 1997 Stock Incentive 
Plan of US Airways Group, Inc. ("1997 Plan"). Under this plan, the 
Company is authorized to grant stock options and restricted common 
stock awards provided that no more than 750,000 shares of the 
Company's common stock are issued as a result of such awards. As 
of March 31, 1997, 317,000 shares of the Company's common stock 
were reserved for the exercise of stock options granted under the 
1997 Plan. 

5.  Select Financial Information - USAM Investments

     USAM owns 11% of the Galileo International Partnership, 
approximately 11% of the Galileo Japan Partnership and 
approximately 21% of the Apollo Travel Services Partnership 
("ATS"). USAM accounts for these investments using the equity 
method. The following is summarized financial information for 
these partnerships (combined, in millions):

                                         Three Months Ended
                                               March 31,
                                         ------------------
                                            1997     1996
                                           -----    ------
                                              (Unaudited)

          Service revenues                 $414       $376
          Cost and expenses                 318        296
                                            ---        ----
          Net earnings                     $ 96       $ 80

     USAM received distributions from ATS of approximately $1.7 
million and $2.8 million, during the first three months of 1997 
and 1996, respectively.

6.  Subsequent Events

     On May 8, 1997, US Airways announced that it will reduce 
flying on some of its most unprofitable routes and close excess 
facilities. The actions are part of its plan to ensure that it has 
the strongest possible foundation as decisions are made about the 
Company's ultimate strategic direction. 

     The announced actions include:

     *  Removing 22 excess aircraft from the fleet with US
        Airways' last five F28-4000 aircraft removed from its
        fleet by the end of summer 1997 and 17 older DC-9-30
        aircraft to be retired in the coming months;

                                7
<PAGE>
     *  Ending unprofitable jet service to nine cities and
        eliminating other routes that have not been profitable;
     *  Reducing capacity (ASMs) beginning this summer, resulting
        in a year-over-year decrease of approximately 6.5% by
        Summer 1998;
     *  Closing the flight crew base in Los Angeles for pilots and
        flight attendants, starting in July of 1997 and completing
        the process by February 1998;
     *  Consolidating reservations operations by closing
        reservations centers in Utica, NY and Nashville, TN
        effective in October 1997 (US Airways maintains
        reservations centers in seven other cities), and;
     *  Closing maintenance facilities at Greensboro and Winston-
        Salem, NC (except for a landing gear shop) and Roanoke, VA
        beginning in September 1997 with a complete closure by the
        end of 1998 (maintenance work currently performed at these
        cities will be shifted to other locations).

     The company said it will work closely with union leaders and 
employee groups to minimize to the greatest degree possible the 
impact of changes in operations on individuals, although there are 
expected to be some employee furloughs.

     US Airways is currently unable to estimate the cost savings, 
revenue impact, or possible one-time charges associated with these 
actions. US Airways may incur expenses related to employee 
severance and asset dispositions, among other charges, related to 
these actions.





              (this space intentionally left blank)



                                 8
<PAGE>
US Airways, Inc.
Condensed Consolidated Statements of Operations
Three Months Ended March 31, 1997 and 1996 (unaudited)
(in thousands)


                                          1997             1996
                                          ----             ----


Operating Revenues
  Passenger transportation             $1,753,314      $1,551,579
  Cargo and freight                        43,301          37,308
  US Airways Express
    transportation revenues               144,571               -
  Other                                   149,167         150,728
                                        ---------       ---------
    Total Operating Revenues            2,090,353       1,739,615

Operating Expenses
  Personnel costs                         715,979         713,751
  Aviation fuel                           212,939         172,760
  Commissions                             135,701         123,535
  Aircraft rent                           106,207         102,415
  Other rent and landing fees              95,582          96,357
  Aircraft maintenance                     81,362          86,539
  Depreciation and amortization            73,172          77,738
  US Airways Express
    capacity purchases                    120,923               -
  Other, net                              374,351         375,430
                                        ---------       ---------
    Total Operating Expenses            1,916,216       1,748,525
                                        ---------       ---------

    Operating Income (Loss)               174,137          (8,910)

Other Income (Expense)
  Interest income                          23,759          13,410
  Interest expense                        (67,250)        (71,447)
  Interest capitalized                      2,775           1,449
  Equity in earnings of affiliates         13,418          11,262
  Other, net                               14,047            (402)
                                        ---------       ---------
    Other Income (Expense), Net           (13,251)        (45,728)
                                        ---------       ---------

Income (Loss) Before Taxes                160,886         (54,638)

  Provision for Income Taxes               17,257             292
                                        ---------       ---------

Net Income (Loss)                      $  143,629      $  (54,930)
                                        =========       =========


See accompanying Notes to Condensed Consolidated Financial 
Statements.

                                 9
<PAGE>

US Airways, Inc.
Condensed Consolidated Balance Sheets
March 31, 1997 (unaudited) and December 31, 1996
(dollars in thousands, except per share amount)

                                         March 31,    December 31,
                                           1997           1996
                                           ----           ----
      ASSETS

Current Assets
  Cash and cash equivalents            $  867,204      $  950,134
  Short-term investments                  595,408         635,839
  Receivables, net                        456,022         342,718
  Materials and supplies, net             201,495         211,184
  Prepaid expenses and other              151,495         129,380
                                        ---------       ---------
    Total Current Assets                2,271,624       2,269,255

Property and Equipment
  Flight equipment                      4,953,510       4,972,873
  Ground property and equipment         1,092,917       1,087,178
  Less accumulated depreciation
    and amortization                   (2,425,649)     (2,381,844)
                                        ---------       ---------
                                        3,620,778       3,678,207
  Purchase deposits                        77,620          77,620
                                        ---------       ---------
    Total Property and Equipment, Net   3,698,398       3,755,827

Other Assets
  Goodwill, net                           490,498         494,511
  Other intangibles, net                  284,189         283,274
  Other assets, net                       607,635         606,906
                                        ---------       ---------
    Total Other Assets                  1,382,322       1,384,691
                                        ---------       ----------
                                       $7,352,344      $7,409,773
                                        =========       =========

LIABILITIES AND STOCKHOLDER'S EQUITY  (DEFICIT) 

Current Liabilities
 Current maturities of long-term debt  $   93,104      $   84,171
  Accounts payable                        370,194         472,105
  Payable to parent company                71,133         159,383
  Traffic balances payable
    and unused tickets                    938,416         715,576
  Accrued aircraft rent                   423,504         495,662
  Other accrued expenses                  825,611       1,073,773
                                        ---------       ---------
    Total Current Liabilities           2,721,962       3,000,670

Long-term Debt, Net of 
  Current Maturities                    2,577,058       2,614,818


                 (continued on following page)

                                 10
<PAGE>
US Airways, Inc.
Condensed Consolidated Balance Sheets
March 31, 1997 (unaudited) and December 31, 1996  (Continued)
(dollars in thousands, except per share amount)


                                          March 31,   December 31,
                                            1997         1996
                                            ----         ----

Deferred Credits and Other Liabilities
  Deferred gains, net                     349,981         356,583
  Postretirement benefits other
    than pensions, non-current          1,111,848       1,093,269
  Non-current employee benefit
    liabilities and other                 533,021         429,588
                                        ---------       ---------
      Total Deferred Credits and
        Other Liabilities               1,994,850       1,879,440

Commitments and Contingencies

Stockholder's Equity (Deficit)
  Common stock, par value $1 per
    share, authorized 1,000 shares,
    issued and outstanding
    1,000 shares                                1               1
  Paid-in capital                       2,416,131       2,416,131
  Retained earnings (deficit)          (2,322,449)     (2,466,078)
  Adjustment for minimum 
    pension liability                     (35,209)        (35,209)
                                        ---------       ---------
      Total Stockholder's 
        Equity (Deficit)                   58,474         (85,155)
                                        ---------       ---------
                                       $7,352,344      $7,409,773
                                        =========       =========


See accompanying Notes to Condensed Consolidated Financial 
Statements.

                                11
<PAGE>
US Airways, Inc.
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 1997 and 1996 (unaudited)
(in thousands)


                                            1997           1996
                                            ----           -----

Cash and cash equivalents
  beginning of period                    $950,134        $879,613
                                          -------         -------

Cash flows from operating activities
     Net income (loss)                    143,629         (54,930)
     Adjustments to reconcile net
       income (loss) to net cash
       provided by (used for)
       operating activities
         Depreciation and amortization     73,172          77,738
         Loss (gain) on disposition
           of property                    (14,082)          3,466
         Amortization of deferred
           gains and credits               (6,602)         (6,603)
         Other                               (500)         (3,448)
           Changes in certain assets
             and liabilities
               Decrease (increase) in
                 receivables             (113,304)       (122,925)
               Decrease (increase) in
                 materials and supplies,
                 prepaid expenses and
                 pension assets           (16,085)        (11,564)
               Increase (decrease) in
                 traffic balances
                 payable and unused
                 tickets                  222,840         237,423
               Increase (decrease) in
                 accounts payable,
                 accrued aircraft rent
                 and other accrued
                 expenses                (407,155)       (150,880)
               Increase (decrease) in
                 postretirement
                 benefits other than
                 pensions, non-current     18,579          18,803
                                          -------         -------
                   Net cash provided by
                     (used for)
                     operating activities (99,508)        (12,920)

Cash flows from investing activities
  Aircraft acquisitions and purchase
    deposits, net                          (5,538)         (3,385)
  Additions to other property             (35,580)        (27,979)
     Proceeds from disposition
       of property                         40,175           3,483
     Decrease (increase) in
       short-term investments              35,710         (25,695)
     Decrease (increase) in restricted
       cash and investments                 8,715             985
     Other                                  1,923         (11,903)
                                          -------         -------
       Net cash provided by (used for)
         investing activities              45,405         (64,494)


                  (continued on following page)

                                 12
<PAGE>
US Airways, Inc.
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 1997 and 1996 (unaudited) (Continued)
(in thousands)


                                            1997          1996
                                            ----          ----

Cash flows from financing activities
  Issuance of debt                              -        103,002
  Reduction of debt                       (28,827)      (122,489)
                                          -------        -------
       Net cash provided by (used for)
         financing activities             (28,827)       (19,487)
                                          -------        -------

Net increase (decrease) in cash and
  cash equivalents                        (82,930)       (96,901)
                                          -------        -------

Cash and cash equivalents end of period  $867,204       $782,712
                                          =======        =======

Noncash investing and financing activities

  Issuance of debt - refinancing of
    debt secured by aircraft             $      -       $159,998
  Reduction of debt - refinancing of
    debt secured by aircraft             $      -       $154,422
  Reduction of parent company debt -
    aircraft acquisitions                $      -       $ 68,640
  Issuance of debt - aircraft
    acquisitions                         $      -       $  4,585
  Underwriter's fees - refinancing of
    debt secured by aircraft             $      -       $  2,488

Supplemental Information

  Cash paid during the period for
    interest, net of amount capitalized  $ 84,026       $ 92,643
  Net cash paid during the period
    for income taxes                     $  1,119       $    100



See accompanying Notes to Condensed Consolidated Financial 
Statements.

                               13
<PAGE>
                        US Airways, Inc.
               Notes to Condensed Consolidated
                 Financial Statements (Unaudited)


1.  Basis of Presentation

     The accompanying Condensed Consolidated Financial Statements 
include the accounts of US Airways, Inc. ("US Airways") and its 
wholly-owned subsidiary USAM Corp. ("USAM"). US Airways is a 
wholly-owned subsidiary of US Airways Group, Inc. ("US Airways 
Group").

     US Airways terminated its Airline Technical Services, LLC 
joint venture with a subsidiary of British Airways Plc, effective 
January 1997. No material charges resulted from its termination.

     Management believes that all adjustments necessary for a fair 
statement of results have been included in the Condensed 
Consolidated Financial Statements for the interim periods 
presented, which are unaudited. All significant intercompany 
accounts and transactions have been eliminated. The preparation of 
financial statements in conformity with generally accepted 
accounting principles requires management to make estimates and 
assumptions that affect the reported amounts of assets and 
liabilities and disclosure of contingent assets and liabilities at 
the date of the financial statements and the reported amounts of 
revenues and expenses during the reporting period. Actual results 
could differ from those estimates.

     Certain 1996 amounts have been reclassified to conform with 
1997 classifications.

     These interim period Condensed Consolidated Financial 
Statements should be read in conjunction with the Consolidated 
Financial Statements contained in US Airways' Annual Report on 
Form 10-K for the year ended December 31, 1996.

2.  Select Financial Information - USAM Investments

     Please refer to Note 5 in US Airways Group's "Notes to 
Condensed Consolidated Financial Statements" on Page 7 of this 
report.

3.  Subsequent Events

     Please refer to Note 6 in US Airways Group's "Notes to 
Condensed Consolidated Financial Statements" on Page 7 of this 
report.



               (this space intentionally left blank)

      
                             14
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations.


                           Overview

     Item 2 of this report should be read in conjunction with Item 
7 of US Airways Group, Inc.'s ("US Airways Group" or "the 
Company") and US Airways, Inc.'s ("US Airways") Annual Report to 
the United States Securities and Exchange Commission ("SEC") on 
Form 10-K for the year ended December 31, 1996. The information 
contained in Item 2 of this report does not represent a 
comprehensive management overview and analysis of the financial 
condition and results of operations of the Company and US Airways, 
but rather updates disclosures made in the aforementioned filing.

     The Company recognized net income of $152.7 million for the 
first quarter of 1997 on operating revenues of $2.10 billion. 
Income per common share for the quarter on a primary and fully-
diluted basis was $2.00 and $1.45, respectively (see Note 2 to the 
Company's Condensed Consolidated Financial Statements contained in 
Part I, Item 1A of this report for additional information related 
to the Company's income per common share calculations). The 
Company's operating income for the quarter was $175.6 million.

     US Airways recorded net income of $143.6 million for the 
first quarter of 1997. US Airways financial results, which include 
the financial results of its wholly-owned subsidiary USAM Corp. 
("USAM"), are significantly influenced by related party 
transactions as discussed under "Results of Operations" below.

     Except where noted, the following discussion relates 
primarily to the financial condition, results of operations and 
future prospects of US Airways. US Airways is the Company's 
principal subsidiary and accounted for approximately 92% of the 
Company's operating revenues for the first quarter of 1997 on a 
consolidated basis.

      Record First Quarter Financial and Operating Results

     The Company's operating revenues, operating income and net 
income for the first quarter of 1997 were all Company records for 
a first quarter. Historically, the Company's first quarter results 
have been its weakest during a fiscal year due primarily to 
seasonality of demand for air transportation and to a lesser 
extent weather factors. Operationally, the Company set first 
quarter records for revenue passengers flown, revenue passenger 
miles (the number of revenue passengers flown multiplied by the 
miles they flew or "RPMs") and passenger load factor. In addition, 
US Airways finished in the top tier in on-time performance among 
major domestic air carriers for the first quarter of 1997, as 
reported by the U.S. Department of Transportation ("DOT").

     The Company's record first quarter financial results are 
attributable to favorable domestic economic conditions, the 
absence of the 10% Federal excise tax on domestic air 
transportation ("ticket tax") for most of the quarter and 
relatively favorable weather conditions in the Eastern U.S. See 
also "Results of Operations" below. 

          Update on US Airways' Competitive Position

     Despite the Company's recent favorable financial results, the 
competitive threat posed by low cost, low fare air carriers and 
operations continues to grow. US Airways' cost structure continues 
to be the highest of all major domestic air carriers. Southwest 
Airlines, Inc. ("Southwest"), a

                                15
<PAGE>
 competitor with low costs of operations and a low fare structure, 
"Delta Express," the low cost, low fare product offered by Delta 
Airlines, Inc. ("Delta"), and ValuJet Airlines, Inc. ("ValuJet"), 
another low cost, low fare competitor, all have significant cost 
advantages over US Airways. Direct competition with low cost, low 
fare air carriers or operations has typically resulted in the 
dilution of yield realized by the Company's airline subsidiaries, 
depending on the number of markets affected.

     Southwest recently announced that it will add one-stop same-
plane transcontinental service between Baltimore/Washington 
International Airport ("BWI") and Oakland and Los Angeles 
beginning in June 1997 (see below and "Other Information" for 
recent developments regarding US Airways' operations at BWI). 
Southwest continues to expand operations in the Eastern U.S. - the 
Company is unable to predict the extent or rate at which Southwest 
will deploy additional resources in this region. The Eastern U.S. 
is the primary operating region of the Company's airline 
subsidiaries.

     The route network and capacity of Delta Express have remained 
relatively unchanged since January 1997. The Company is unable to 
predict where, when or to what extent, if any, Delta will expand 
Delta Express operations. Delta Express currently operates 
exclusively within the Eastern U.S.

     ValuJet recently announced plans to resume service to 
Charlotte effective May 15, 1997. Charlotte is home to US Airways' 
largest hub in terms of daily jet departures. ValuJet, which 
operated 51 aircraft prior to its service reduction during the 
summer of 1996, operated 15 aircraft as of December 31, 1996 and 
currently operates 25 aircraft. Prior to Valujet's service 
reduction, approximately 8% of US Airways' capacity (as measured 
by available seat miles or "ASMs") overlapped Valujet's route 
structure. The Company is unable to predict whether ValuJet's 
capacity in markets also served by US Airways will eventually 
match or exceed previous levels.

     The Company's senior management recently engaged in a series 
of presentations to the Company's employees to explain and 
emphasize its view that the Company must obtain a competitive cost 
structure in order to implement the strategy of becoming an 
effective global competitor. In particular, senior management 
identified reductions in personnel costs as being the key to the 
implementation of a competitive cost structure. In the 
presentations, senior management stated its view that a 
competitive cost structure was necessary in order for the Company 
to compete with low-cost air carriers such as Southwest, Delta 
Express and ValuJet, which have continued their rapid expansion in 
Eastern U.S. markets, and for the Company to be in a position to 
proceed with its planned purchase of approximately 400 Airbus 
Industrie ("Airbus") aircraft. The Company's senior management 
further indicated that the implications of not obtaining a 
competitive cost structure include: (i) downsizing BWI operations; 
(ii) reducing Florida service; (iii) terminating unprofitable 
east/west and north/south routes; (iv) reducing aircraft type and 
achieving aircraft fleet rationalization; (v) not affirming the 
order for Airbus aircraft; and (vi) making other operational 
changes to implement a "right-sizing" strategy. If and to the 
extent that the alternatives pursued include reducing certain 
operations, the Company could incur charges such as those related 
to any resulting decrease in value of certain assets employed in 
such operations. No final decisions have been made with respect to 
such alternatives and, accordingly, the Company cannot determine 
the amount of any such possible charges.

     On May 8, 1997, US Airways announced that it will reduce 
flying on some of its most unprofitable routes and close excess 
facilities. The actions are part of its plan to ensure that it has 
the strongest possible foundation as decisions are made about the 
Company's ultimate strategic direction.

                                16
<PAGE>

     The announced actions include:

     *  Removing 22 excess aircraft from the fleet with US
        Airways' last five F28-4000 aircraft removed from its
        fleet by the end of summer 1997 and 17 older DC-9-30
        aircraft to be retired in the coming months;
     *  Ending unprofitable jet service to nine cities and
        eliminating other routes that have not been profitable;
     *  Reducing capacity (ASMs) beginning this summer, resulting
        in a year-over-year decrease of approximately 6.5% by
        Summer 1998;
     *  Closing the flight crew base in Los Angeles for pilots and
        flight attendants, starting in July of 1997 and completing
        the process by February 1998;
     *  Consolidating reservations operations by closing
        reservations centers in Utica, NY and Nashville, TN
        effective in October 1997 (US Airways maintains
        reservations centers in seven other cities), and;
     *  Closing maintenance facilities at Greensboro and Winston-
        Salem, NC (except for a landing gear shop) and Roanoke, VA
        beginning in September 1997 with a complete closure by the
        end of 1998 (maintenance work currently performed at these
        cities will be shifted to other locations).

     The company said it will work closely with union leaders and 
employee groups to minimize to the greatest degree possible the 
impact of changes in operations on individuals, although there are 
expected to be some employee furloughs.

     US Airways is currently unable to estimate the cost savings, 
revenue impact, or possible one-time charges associated with these 
actions. US Airways may incur expenses related to employee 
severance and asset dispositions, among other charges, related to 
these actions.

    Resumption of Regular Dividend Payments on Preferred Stock

     On March 26, 1997, the Company paid dividends totaling $34.8 
million to holders of its Series A, Series F and Series T 
Preferred Stock (collectively the "Senior Preferred Stock") (see 
Note 7 and Note 8 to the Company's Annual Report on Form 10-K for 
the year ended December 31, 1996 for a description of each of the 
Company's outstanding preferred stock issuances). After these 
dividends, the Company had paid all dividends in arrears 
(including penalty dividends on the deferred dividends) on its 
Senior Preferred Stock. The Company also paid a regular quarterly 
dividend of $8.3 million on its Series A Preferred Stock on 
March 31, 1997.

     On March 26, 1997, the Company's board of directors declared 
dividends of $46.6 million on the Company's Series B Preferred 
Stock. After these dividends, which were paid on April 17, 1997, 
the Company had paid all dividends in arrears on its Series B 
Preferred Stock. Also on March 26, 1997, the Company's board of 
directors declared a regular quarterly dividend of $4.7 million on 
the Series B Preferred Stock, to be paid on May 15, 1997.

     Although the Company has resumed regular dividend payments on 
its outstanding preferred stock issuances, future dividend 
payments by the Company are primarily dependent on the Company's 
future financial performance and decisions by its board of 
directors. There can be no assurance that the Company's current 
positive financial performance will continue or if the Company 
will be able to maintain a capital surplus position based on its 
balance sheet, as defined under the laws of the State of Delaware.

                                17
<PAGE>
                      US Airways Shuttle

     On April 7, 1997, the Company exercised its right to commence 
a procedure to value Shuttle, Inc. ("Shuttle"), the owner of the 
US Airways Shuttle, in accordance with the agreement between the 
Company, lenders to Shuttle and Shuttle's stockholders. Following 
the establishment of such a value, the Company has an option to 
purchase Shuttle at the established value. If the Company declines 
to purchase Shuttle at the established value it will continue to 
have a right of first refusal with respect to a purchase of the 
assets or capital stock of Shuttle. Initiation of the valuation 
procedure does not represent a commitment by the Company to 
purchase Shuttle and there can be no assurance that any such 
purchase will occur. Any decision by the Company to purchase 
Shuttle either through the valuation procedure or the right of 
first refusal will be made based on prices and related business 
considerations.

     The US Airways Shuttle currently operates a fleet of 12 
Boeing 727-200 aircraft and provides high frequency service from 
New York to Boston and Washington, DC.

                      Other Information

     US Airways will move a majority of its international 
operations at BWI to Philadelphia effective June 15, 1997. These 
schedule adjustments are being made to further enhance the 
efficiency of US Airways' route network and take advantage of the 
traffic base and connection opportunities provided by US Airways' 
facilities at Philadelphia, US Airways' primary international 
gateway. These schedule adjustments will result in the elimination 
of approximately 240 full-time and part-time customer service and 
maintenance positions at BWI.

     US Airways will launch a second daily non-stop flight between 
Philadelphia and Paris on June 14, 1997. US Airways, which has 
filed with the DOT to serve London's Heathrow Airport from Boston, 
Charlotte, Philadelphia and Pittsburgh, continues to explore 
additional international opportunities. 

     On April 28, 1997, the Company filed a registration statement 
with the SEC providing for a public offering of the preferred 
stock currently held by an affiliate of British Airways Plc 
("British Airways"). The Company will not receive any proceeds 
from the offering and the sale of the securities will be carried 
out by British Airways. The Company's filing of the registration 
statement, which as of the date of this report had not been 
declared "effective" by the SEC,  is in response to a request made 
by British Airways under the provisions of an investment agreement 
between the Company and British Airways. This disclosure does not 
constitute an offer to sell or a solicitation of an offer to buy 
these securities. In addition, there can be no sale of these 
securities in any state in which an offer, solicitation or sale 
would be unlawful prior to registration or qualification under the 
laws of that state. 

Results of Operations

     The following section provides an overview of changes in 
certain components of the Company's results of operations (the 
Company's Condensed Consolidated Statements of Operations are 
contained in Part I, Item 1A of this report). See Exhibit 99 to 
this report for select US Airways operating and financial 
statistics (which also includes the definition of certain terms 
used below). All terms used in this section refer to US Airways' 
scheduled service operations except for unit operating cost, which 
also includes charter service.

                                18
<PAGE>
     The Company recorded net income of $152.7 million for the 
first quarter of 1997, an improvement of $185.0 million as 
compared to the first quarter of 1996. After preferred dividend 
requirement (the Company reflects dividends on all its outstanding 
preferred stock as if paid during the period for purposes of 
calculating income per common share), the Company earned $131.8 
million, or $2.00 per common share on a primary basis and $1.45 on 
a fully-diluted basis. See discussion under "Record First Quarter 
Financial and Operating Results" above. 

     US Airways' revenue passengers, RPMs, capacity (ASMs), and 
passenger load factor all increased quarter-over-quarter. With the 
exception of the capacity increase, these statistics improved 
primarily as a result of the factors discussed above under "Record 
First Quarter Financial and Operating Results." The quarter-over-
quarter capacity increase was due mainly to increased aircraft 
utilization during the first quarter of 1997. Aircraft utilization 
during the first quarter of 1996 was adversely affected by 
inclement weather.

     US Airways' yield was slightly lower quarter-over-quarter. 
The Company's airline subsidiaries are experiencing increased 
competitive pressure with the October 1996 launch of Delta 
Express, Southwest's late-October 1996 expansion into the 
Northeast U.S. Direct competition with low cost, low fare air 
carriers or operations has typically resulted in the dilution of 
yield realized by the Company's airline subsidiaries, depending on 
the number of markets affected. In addition, US Airways' average 
passenger journey increased resulting in an "averaging-down" of 
yield quarter-over-quarter.

     US Airways continues to be the highest cost major domestic 
air carrier. US Airways' unit operating cost was 12.35 cents for 
the first quarter of 1997 or 3.6% lower than for the first quarter 
of 1996 due primarily to increased capacity quarter-over-quarter.

     The Company recently disclosed (in a Current Report on Form 
8-K to the SEC dated April 23, 1997) that it expects US Airways' 
capacity to increase approximately 5% and US Airways' unit 
operating cost to decrease approximately 4% for the second quarter 
of 1997, as compared to the second quarter of 1996. The Company 
anticipates that US Airways' unit operating cost for full-year 
1997 will decrease approximately 3.5% versus full-year 1996. The 
Company's unit operating cost estimates are dependent on several 
factors, most notably future fuel costs. The Company also 
disclosed that it expects US Airways' yield to decrease 
approximately 3% - 4% for second quarter 1997 versus second 
quarter 1996 due primarily to the effects of the ticket tax (which 
was not present during the second quarter of 1996) and the fact 
that US Airways' average passenger journey continues to increase. 
However, see discussion under "Update on US Airways' Competitive 
Position" above related to US Airways' subsequent announcement 
that it would reduce flying on some of its most unprofitable 
routes and close excess facilities.

Operating Revenues

Passenger Transportation - US Airways' Passenger transportation 
revenues increased $201.7 million, or 13.0%, with the remainder of 
the $219.3 million increase attributable to passengers carried by 
the Company's regional airline subsidiaries. US Airways' increase 
is primarily the result of a 13.7% increase in scheduled service 
RPMs partially offset by a 0.6% decrease in yield. The main 
factors contributing to the Company's improved performance are 
discussed under "Record First Quarter Financial and Operating 
Results" above. In addition, the Company estimates that severe 
winter weather within the Eastern U.S. and the partial Federal 
Government shutdown adversely affected first quarter 1996 revenues 
by approximately $55 million.

                                 19
<PAGE>

Other Operating Revenues - Fees received for passenger handling 
and reservation services from franchised US Airways Express air 
carriers increased due to higher passenger volumes carried by 
these air carriers and a higher fee structure. In addition, US 
Airways revenues from frequent traveler program participation fees 
and reservation cancellation fees increased quarter-over-quarter. 
Wet lease revenues decreased approximately $8.8 million quarter-
over-quarter due to the phase-out of these arrangements during the 
first half of 1996. Increases or decreases in components of Other 
operating revenues are largely offset by related changes in Other 
operating expenses, net or other operating expense categories. US 
Airways' results include certain transactions with related parties 
that are eliminated at the US Airways Group level.

     US Airways' Operating Revenues include the line item "US 
Airways Express transportation revenues." Effective October 1, 
1996, US Airways began purchasing all of the capacity (ASMs) 
generated by the Company's three wholly-owned regional air 
carriers and, concurrently, recognizes the passenger 
transportation revenues that result from passengers being carried 
by these companies. The rate per ASM that US Airways pays is based 
on estimates of the costs incurred to produce the capacity. The 
program is designed to reflect the reality of US Airways' 
relationship with the Company's regional airline subsidiaries - US 
Airways controls the markets these air carriers operate in, the 
marketing programs and the fares charged. US Airways' revenues 
from this program are reclassified to Passenger transportation 
revenues and the related expenses eliminated during the 
consolidation of the Company's results of operations.

Operating Expenses

Personnel Costs - Personnel complement increases and expenses 
associated with stock appreciation rights ("SARs") were partially 
offset by interest rate driven decreases in pension and 
postretirement benefits expenses. US Airways recognized expenses 
of $5.5 million related to SARs in the first quarter of 1997. To 
the extent the fair market value of a share of its Common Stock 
exceeds $15, the Company recognizes compensation expense based on 
the number of SARs outstanding. During the first quarter of 1996, 
the Company recognized expenses of approximately $10.1 million 
related to restricted stock grants, sign-on bonuses, severance 
payments and other compensation related to management changes. US 
Airways had approximately 40,300 full-time equivalent employees as 
of March 31, 1997 versus 39,900 full-time equivalent employees as 
of March 31, 1996.

Aviation Fuel - US Airways' Aviation fuel expense increased $40.2 
million or 23.3% quarter-over-quarter. US Airways' fuel 
consumption increased 16 million gallons or 6.0% quarter-over-
quarter primarily due to increased aircraft utilization. US 
Airways' average cost of aviation fuel per gallon during the first 
quarter of 1997 was 75.44 cents versus 64.99 cents for the first 
quarter of 1996 (a 16.1% increase). Effective first quarter of 
1997, the Company classifies fuel taxes as an element of Aviation 
fuel expense. These expenses were previously an element of Other 
operating expense (prior period results have been restated for 
this reclassification). Aviation fuel prices are subject to market 
conditions and other factors that are generally outside of the 
Company's control. Fluctuations in the price of aviation fuel can 
have a dramatic effect on the Company's results of operations.

Commissions - Increased due to higher Passenger transportation 
revenues.

Aircraft Rent - Increased due primarily to a rent expense 
adjustment of $7.2 million recorded in the first quarter of 1997 
related to certain US Airways Fokker F28-4000 aircraft.

                               20
<PAGE>
Aircraft Maintenance - US Airways is beginning to realize savings 
associated with the "power-by-the-hour" maintenance contract 
covering certain jet engines it entered into during the fourth 
quarter of 1996.

Depreciation and Amortization - Decreased due mainly to certain 
ground equipment and other assets becoming fully depreciated.

Other Operating Expenses, Net - Expenses related to the wet lease 
arrangement with British Airways decreased $8.8 million (see also 
Other Operating Revenues above). This decrease was partially 
offset by increases in credit card expenses linked to higher 
Passenger transportation revenues. See also Aviation Fuel above 
related to fuel taxes.

     US Airways' Operating Expenses include the line item "US 
Airways Express capacity purchases." These expenses, which are 
eliminated during the consolidation of the Company's results of 
operations, are discussed under Operating Revenues above.

Other Income (Expense)

Interest Income - Increased due mainly to higher Cash and cash 
equivalents and Short-term investments balances.

Interest Expense - Decreased primarily as the result of less long-
term debt outstanding quarter-over-quarter and the effects of 
refinancing at a lower interest rate certain debt during the first 
quarter of 1996.

Equity in Earnings of Affiliates - Results for all three of USAM's 
computer reservation system investments improved primarily due to 
increases in airline industry passenger volumes quarter-over-
quarter.

Other, Net - Results for the first quarter of 1997 included gains 
totaling $16.6 million related to US Airways' sale of nine Boeing 
737-200 and one F28-4000 aircraft.

Provision for Income Taxes - Increased primarily due to increased 
income and an increase in the Company's effective tax rate as of a 
result of the Company's projected utilization of all remaining 
alternative minimum tax net operating loss carryforwards during 
1997.

     In February 1997, the Financial Accounting Standards Board 
adopted Statement No. 128, "Earnings per Share" ("SFAS 128"). This 
statement specifies new computation, presentation and disclosure 
requirements for reporting income per common share. The provisions 
of SFAS 128 preclude the Company from implementing the new 
standard prior to December 31, 1997, however, the Company believes 
that the implementation of SFAS 128 will not have a material 
impact on its income per common share disclosures for the first 
period affected or on prior period income per common share 
amounts, which must be restated to conform with the provisions of 
SFAS 128.

Liquidity and Capital Resources

     As of March 31, 1997, the Company's Cash and cash equivalents 
totaled $868.8 million and its Short-term investments totaled 
$595.4 million. As of March 31, 1997, US Airways also had $65.3 
million deposited in trust accounts to collateralize letters of 
credit and worker's compensation policies. These deposits are 
included in Other assets, net on the Company's Condensed 
Consolidated Balance Sheets (which are contained in Part I, Item 
1A of this report). 

                                21
<PAGE>
     As indicated in the Company's Condensed Consolidated 
Statements of Cash Flows (which are also contained in Part I, Item 
1A of this report), net cash used for operations during the first 
quarter of 1997 was $8.3 million which includes the remittance of 
ticket taxes to the Federal government and final profit sharing 
payments to certain employees (see following paragraph). The 
Company has historically experienced a net cash outflow related to 
operating activities during its first fiscal quarter due primarily 
to seasonality factors combined with the occurrence of significant 
semi-annual lease and debt payments due in the month of January. 
USAM received distributions totaling $1.7 million from its 
computer reservation systems investments during the first quarter 
of 1997, as reflected in the Other operating adjustments category.

     During the first quarter of 1997, US Airways remitted ticket 
taxes collected in 1996 of approximately $180 million to the 
Federal government. The Company also made profit sharing payments 
to employees totaling $129.1 million during first quarter 1997. 
These payments ended the Company's obligation for profit sharing 
under its 1992 Salary Reduction Plan (the related expenses were 
recognized by the Company during 1996 and earlier periods). 

     SAR exercises resulted in a cash outflow of $12.9 million 
during the first quarter of 1997. Future SAR exercises could have 
a material adverse effect on the Company's future cash outflows 
depending on the number and timing of SAR exercises and the fair 
market value of a share of the Company's Common Stock when 
exercises occur. As of March 31, 1997, approximately 2.8 million 
SARs granted under the 1992 Stock Option Plan remained 
outstanding. During April 1997, SAR exercises resulted in a cash 
outflow of $15.0 million.

     Investing activities during the first quarter of 1997 
included cash outflows of $43.7 million for the acquisition of 
assets and cash inflows of $40.5 million related to asset 
dispositions, primarily  US Airways' sale of nine 737-200 aircraft 
and one F28-4000 aircraft. Cash outflows related to the 
acquisition of assets include $6.0 million to purchase gates at 
Washington National Airport, $3.9 million to purchase four Douglas 
DC-9-30 aircraft upon expiration of the related operating leases, 
$9.3 million for hush kits, $7.0 million for third-party 
maintenance performed on certain subleased US Airways aircraft and 
approximately $17.5 million related to the purchase of rotables, 
other aircraft components (including items associated with US 
Airways' Aircraft Interior Upgrade and Standardization Program), 
computer equipment and various ground support and other equipment. 
The Company's Short-term investments decreased $35.7 million from 
the year-end 1996 level due to the Company's need to fulfill 
certain immediate operational needs (see discussion above 
regarding cash outflows related to ticket taxes and profit sharing 
payments). The net cash provided by investing activities during 
the first quarter of 1997 was $43.2 million.

     Net cash used by financing activities during the first 
quarter of 1997 was $117.0 million. The Company's subsidiaries 
made scheduled debt repayments of approximately $19.6 million and 
US Airways prepaid early capital lease obligations of $9.2 million 
associated with three DC-9-30 aircraft (and assumed title of the 
aircraft). In addition, the Company paid dividends totaling $93.1 
million to holders of its Senior Preferred Stock during the first 
quarter. The Company paid dividends of $46.6 million to holders of 
its Series B Preferred Stock on April 17, 1997. The annual 
dividend requirements of the Company's outstanding preferred stock 
issuances total approximately $79 million. See "Resumption of 
Regular Dividend Payments on Preferred Stock" above for additional 
information.

     US Airways has agreements with an affiliate of Airbus for the 
acquisition of up to 400 Airbus aircraft. The agreements with 
Airbus remain subject to US Airways achieving a competitive cost 
structure, but obligate US Airways to inform Airbus by September 
30, 1997 of whether or not it will proceed with the acquisition of 
the aircraft contemplated thereby. If an aircraft acquisition

                                 22
<PAGE>
agreement with Airbus is consummated, the Company's estimate of 
short-term and long-term capital expenditures and/or lease 
commitments will be materially affected. 

     As discussed under "US Airways Shuttle" above, the Company is 
investigating the purchase of Shuttle, Inc., the owner of the US 
Airways Shuttle. The Company's purchase of Shuttle, Inc. would 
result in a material capital expenditure.

     The Company expects to satisfy all of its short-term 
liquidity requirements, including dividend payments on preferred 
stock and the cost of US Airways' aircraft interior upgrade and 
standardization program, through a combination of cash on hand and 
cash generated from operations. However, the Company remains 
highly leveraged. The Company and US Airways require substantial 
working capital in order to meet scheduled debt and lease payments 
and to finance day-to-day operations. In addition, the Company 
currently does not have access to short-term credit or receivable 
sale facilities. Changes in certain factors that are generally 
outside the Company's control, such as an economic downturn, 
additional government regulation, intensified competition from low 
cost, low fare air carriers or operations (see related discussion 
above) and further increases in the cost of aviation fuel, could 
have a material adverse effect on the Company's liquidity, 
financial condition and results of operations. US Airways' high 
cost structure relative to its primary competitors results in the 
Company's results of operations and financial condition being 
particularly susceptible to adverse changes in general economic 
and market conditions.

     As of March 31, 1997, the Company's ratio of current assets 
to current liabilities was approximately 0.86 to 1 and the debt 
component of the Company's capitalization structure was greater 
than 100% (and also greater than 100% if the three series of 
mandatorily redeemable preferred stock are considered to be debt) 
due to a deficit in stockholders' equity.

     Certain information contained in "Management's Discussion and 
Analysis of Financial Condition and Results of Operations" should 
be considered "forward-looking information" which is subject to a 
number of risks and uncertainties. The preparation of forward-
looking information requires the use of estimates of future 
revenues, expenses, activity levels and economic and market 
conditions, many of which are outside the Company's control. Among 
the specific factors that could cause actual results to differ 
materially from those set forth in the forward-looking information 
are the following: labor costs, or, in the alternative, not 
putting in place a competitive cost structure, aviation fuel 
costs, competitive pressures on pricing particularly from low cost 
air carriers, weather conditions, consumer perceptions of the 
Company's product, demand for air transportation in the markets in 
which the Company operates and the risks listed from time to time 
in the Company's reports to the SEC. Other factors and assumptions 
not identified above are also involved in the preparation of 
forward-looking information, and the failure of such other factors 
and assumptions to be realized may also cause actual results to 
differ materially from those discussed. The Company assumes no 
obligation to update such estimates to reflect actual results, 
changes in assumptions or changes in other factors affecting such 
estimates.

Part II.  Other Information

Item 1.  Legal Proceedings

     There are no significant developments in the pending legal 
proceedings as previously reported on the Annual Report of US 
Airways Group, Inc. and US Airways, Inc. on Form 10-K for the year 
ended December 31, 1996, and no new material legal proceedings 
have commenced during the time period covered by this interim 
report.

                                23
<PAGE>
Item 6.  Exhibits and Reports on Form 8-K

A.  Exhibits

Designation                      Description

10             1997 Stock Incentive Plan of US Airways Group, Inc.

11             Computation of Primary and Fully-Diluted Earnings
               Per Share for the three months ended March 31, 1997
               and 1996 for US Airways Group, Inc.

27.1           Financial Data Schedule - US Airways Group, Inc.

27.2           Financial Data Schedule - US Airways, Inc.

99             Airline Operating Statistics for the three months
               ended March 31, 1997 and 1996 for US Airways, Inc.

B.  Reports on Form 8-K

Date of Report                 Subject of Report

March 20, 1997     Letter, dated March 14, 1997, from British
                   Airways Plc ("British Airways") to US Airways
                   Group, Inc. ("US Airways Group") giving notice
                   that British Airways' wholly-owned subsidiary,
                   BritAir Acquisition Corp. Inc. ("BritAir")
                   intends to sell in one or more underwritten
                   public offerings or privately negotiated
                   transactions all of the 9,919.8 shares of
                   Series T Cumulative Convertible Exchangeable
                   Senior Preferred Stock of US Airways Group
                   which are owned by BritAir.

April 7, 1997      US Airways Group exercised its right to
                   commence a procedure to value Shuttle, Inc.
                   ("Shuttle"), the owner of the US Airways
                   Shuttle, in accordance with standards set forth
                   in the agreement between US Airways Group,
                   lenders to the Shuttle and stockholders of the
                   Shuttle.

April 28, 1997     News release dated April 23, 1997 of US Airways
                   Group and US Airways, Inc. ("US Airways") with
                   consolidated statements of operations for both
                   companies for the three months ended March 31,
                   1997, and select operating results for US
                   Airways.

May 8, 1997        News release dated May 8, 1997 of US Airways
                   announcing that it will reduce flying on some
                   of its most unprofitable routes and close
                   excess facilities.



              (this space intentionally left blank)

                                24
<PAGE>

                            Signatures

     Pursuant to the requirements of the Securities Exchange Act 
of 1934, the registrants have duly caused this report to be signed 
on their behalf by the undersigned thereunto duly authorized.


                                    US Airways Group, Inc.
                                         (Registrant)


Date:  May 9, 1997            By:  /s/ James A. Hultquist
                                 ---------------------------
                                      James A. Hultquist
                                          Controller
                                (Principal Accounting Officer)


                                       US Airways, Inc.
                                         (Registrant)


Date:  May 9, 1997            By:  /s/ James A. Hultquist
                                 ---------------------------
                                      James A. Hultquist
                                          Controller
                                (Principal Accounting Officer)






            (this space intentionally left blank)


                               25