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11:

FORM 10-Q-QUARTERLY REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark one)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2000

or

[ ] 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.

State of Incorporation: Delaware

2345 Crystal Drive, Arlington, Virginia 22227
(Address of principal executive offices)

(703) 872-7000
(Registrant's telephone number, including area code)

(Commission file number: 1-8444)
(I.R.S. Employer Identification No: 54-1194634)

US Airways, Inc.

State of Incorporation: Delaware

2345 Crystal Drive, Arlington, Virginia 22227
(Address of principal executive offices)

(703) 872-7000
(Registrant's telephone number, including area code)

(Commission file number: 1-8442)
(I.R.S. Employer Identification No: 53-0218143)

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 October 31, 2000 there were outstanding approximately 67,036,000 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 in the reduced disclosure format permitted by
such Instructions.

US Airways Group, Inc.
and
US Airways, Inc.
Form 10-Q
Quarterly Period Ended September 30, 2000

Table of Contents



|Part I. Financial Information | Page                                                            
|----------------------------- | ----------------------------------------------------------------
|                              |                                                                 
|Item 1A.                      | Financial Statements-US Airways Group, Inc.                     
|                              |                                                                 
|                              | Condensed Consolidated Statements of Operations                 
|                              | - Three Months and Nine Months Ended September 30, 2000 and 1999
|                              | Condensed Consolidated Balance Sheets                           
|                              | - September 30, 2000 and December 31, 1999                      
|                              | Condensed Consolidated Statements of Cash Flows                 
|                              | - Nine Months Ended September 30, 2000 and 1999                 
|                              | Notes to Condensed Consolidated Financial Statements            
|                              |                                                                 
|Item 1B.                      | Financial Statements-US Airways, Inc.                           
|                              |                                                                 
|                              | Condensed Consolidated Statements of Operations                 
|                              | - Three Months and Nine Months Ended September 30, 2000 and 1999
|                              | Condensed Consolidated Balance Sheets                           
|                              | - September 30, 2000 and December 31, 1999                      
|                              | Condensed Consolidated Statements of Cash Flows                 
|                              | - Nine Months Ended September 30, 2000 and 1999                 
|                              | Notes to Condensed Consolidated Financial Statements            
|                              |                                                                 
|Item 2.                       | Management's Discussion and Analysis of Financial Condition and 
|                              | Results of Operations                                           
|                              |                                                                 
|Item 3.                       | Quantitative and Qualitative Disclosures about Market Risk      
|                              |                                                                 
|Part II. Other Information    |                                                                 
|                              |                                                                 
|Item 1.                       | Legal Proceedings                                               
|                              |                                                                 
|Item 6.                       | Exhibits and Reports on Form 8-K                                
|                              |                                                                 
|Signatures                    | 25                                                              





US Airways Group

|                                                                       |      | Three Months Ended |               | Nine Months Ended
|---------------------------------------------------------------------- | ---- | ------------------ | ------------- | -----------------
|                                                                       |      |                    | September 30, |                  
|                                                                       |      |                    |               |                  
|                                                                       |      |                    | 2000          |                  
|                                                                       |      |                    |               |                  
|Operating Revenues                                                     |      |                    |               |                  
|Passenger transportation                                               | $    | 2,142              |               |                  
|Cargo and freight                                                      |      | 42                 |               |                  
|Other                                                                  |      |                    | 197           |                  
|                                                                       |      |                    |               |                  
|Total Operating Revenues                                               |      | 2,381              |               |                  
|                                                                       |      |                    |               |                  
|Operating Expenses                                                     |      |                    |               |                  
|Personnel costs                                                        |      | 915                |               |                  
|Aviation fuel                                                          |      | 347                |               |                  
|Commissions                                                            |      | 90                 |               |                  
|Aircraft rent                                                          |      | 130                |               |                  
|Other rent and landing fees                                            |      | 116                |               |                  
|Aircraft maintenance                                                   |      | 125                |               |                  
|Other selling expenses                                                 |      | 105                |               |                  
|Depreciation and amortization                                          |      | 94                 |               |                  
|Other                                                                  |      | 454                |               |                  
|                                                                       |      |                    |               |                  
|Total Operating Expenses                                               |      | 2,376              |               |                  
|                                                                       |      |                    |               |                  
|Operating Income (Loss)                                                |      | 5                  |               |                  
|                                                                       |      |                    |               |                  
|Other Income (Expense)                                                 |      |                    |               |                  
|Interest income                                                        |      | 16                 |               |                  
|Interest expense                                                       |      | (65                | )             |                  
|Interest capitalized                                                   |      | 9                  |               |                  
|Gain on sale of investment                                             |      | -                  |               |                  
|Other, net                                                             |      | ( 2                | )             |                  
|                                                                       |      |                    |               |                  
|Other Income (Expense), Net                                            |      | ( 42               | )             |                  
|                                                                       |      |                    |               |                  
|Income (Loss) Before Taxes and                                         |      |                    |               |                  
|Cumulative Effect of Accounting Change                                 | ( 37 | )                  |               |                  
|Provision (Credit) for Income Taxes                                    | (7   | )                  |               |                  
|                                                                       |      |                    |               |                  
|Income (Loss) Before Cumulative                                        |      |                    |               |                  
|Effect of Accounting Change                                            |      | ( 30               | )             |                  
|Cumulative Effect of Accounting Change,                                |      |                    |               |                  
|Net of Applicable Income Taxes of   $63 Million                        |      | -                  |               |                  
|                                                                       |      |                    |               |                  
|Net Income (Loss)                                                      | $    | (30                | )             |                  
|                                                                       |      |                    |               |                  
|Earnings (Loss) per Common Share                                       |      |                    |               |                  
|Basic                                                                  |      |                    |               |                  
|Before Cumulative Effect of 
        Accounting Change                 | $    | (0.45              | )             |                  
|Cumulative Effect of Accounting 
        Change                        | $    | -                  |               |                  
|                                                                       |      |                    |               |                  
|Net Earnings (Loss) per Common 
        Share                          | $    | (0.45              | )             |                  
|                                                                       |      |                    |               |                  
|Diluted                                                                |      |                    |               |                  
|Before Cumulative Effect of 
        Accounting Change                 | $    | (0.45              | )             |                  
|Cumulative Effect of Accounting         Change                         | $    | -                  |               |                  
|                                                                       |      |                    |               |                  
|Net Earnings (Loss) per Common 
        Share                          | $    | (0.45              | )             |                  
|                                                                       |      |                    |               |                  
|Shares Used for Computation (000)                                      |      |                    |               |                  
|Basic                                                                  |      |                    | 67,056        |                  
|Diluted                                                                |      |                    | 67,056        |                  
|                                                                       |      |                    |               |                  
|See accompanying Notes to Condensed Consolidated Financial Statements. |      |                   
|                                                                       |      |                    |               |                  



1



US Airways Group, Inc.
Condensed Consolidated Balance Sheets
September 30, 2000 (unaudited) and December 31, 1999
(in millions)

|                                               |  |        |        | September 30, | December 31,
|---------------------------------------------- |  | ------ | ------ | ------------- | ------------
|                                               |  |        |        | 2000          | 1999        
|                                               |  |        |        |               |             
|ASSETS                                         |  |        |        |               |             
|Current Assets                                 |  |        |        |               |             
|Cash                                           |  |        | $      | 32            |             
|Cash equivalents                               |  |        |        | 498           |             
|Short-term investments                         |  |        |        | 692           |             
|Receivables, net                               |  |        |        | 468           |             
|Materials and supplies, net                    |  |        |        | 241           |             
|Deferred income taxes                          |  |        |        | 374           |             
|Prepaid expenses and other                     |  |        |        | 189           |             
|                                               |  |        |        |               |             
|Total Current Assets                           |  |        |        | 2,494         |             
|                                               |  |        |        |               |             
|Property and Equipment                         |  |        |        |               |             
|Flight equipment                               |  |        |        | 6,514         |             
|Ground property and equipment                  |  |        |        | 1,120         |             
|Less accumulated depreciation and amortization |  | (3,054 | )      |               | (2,919      
|                                               |  |        |        |               |             
|                                               |  |        |        |               | 4,580       
|Purchase deposits for flight equipment         |  |        | 263    |               |             
|                                               |  |        |        |               |             
|Total Property and Equipment                   |  |        |        | 4,843         |             
|Other Assets                                   |  |        |        |               |             
|Goodwill, net                                  |  |        |        | 556           |             
|Other intangibles, net                         |  |        |        | 325           |             
|Other assets, net                              |  |        |        | 741           |             
|                                               |  |        |        |               |             
|Total Other Assets                             |  |        |        | 1,622         |             
|                                               |  |        |        |               |             
|                                               |  |        |        |               |             
|                                               |  |        |        |               |             
|LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)   |  |        |        |              
|Current Liabilities                            |  |        |        |               |             
|Current maturities of long-term debt           |  |        | $      | 335           |             
|Accounts payable                               |  |        |        | 531           |             
|Traffic balances payable and unused tickets    |  |        | 1,151  |               |             
|Accrued aircraft rent                          |  |        |        | 207           |             
|Accrued salaries, wages and vacation           |  |        | 343    |               |             
|Other accrued expenses                         |  |        |        | 467           |             
|                                               |  |        |        |               |             
|Total Current Liabilities                      |  |        |        | 3,034         |             
|Noncurrent Liabilities                         |  |        |        |               |             
|Long-term debt, net of current maturities      |  |        | 2,432  |               |             
|Accrued aircraft rent                          |  |        |        | 252           |             
|Deferred gains, net                            |  |        |        | 570           |             
|Postretirement benefits other than pensions    |  |        | 1,384  |               |             
|Employee benefit liabilities and other         |  |        |        | 1,556         |             
|                                               |  |        |        |               |             
|Total Noncurrent Liabilities                   |  |        |        | 6,194         |             
|Commitments and Contingencies                  |  |        |        |               |             
|Stockholders' Equity (Deficit)                 |  |        |        |               |             
|Common stock                                   |  |        |        | 101           |             
|Paid-in capital                                |  |        |        | 2,241         |             
|Retained earnings (deficit)                    |  |        |        | (719          | )           
|Common stock held in treasury, at cost         |  |        | (1,805 | )             |             
|Deferred compensation                          |  |        |        | (87           | )           
|                                               |  |        |        |               |             
|Total Stockholders' Equity (Deficit)           |  |        | (269   | )             |             
|                                               |  |        |        |               |             
|                                               |  |        |        | $             | 8,959       
|                                               |  |        |        |               |             



See accompanying Notes to Condensed Consolidated Financial Statements.



2



US Airways Group, Inc.
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2000 and 1999 (unaudited)
(in millions)

|                                                                                |        |       |     |      |      |        |    |      | 2000   |   |    | 1999 | 
|------------------------------------------------------------------------------- | ------ | ----- | --- | ---- | ---- | ------ | -- | ---- | ------ | - | -- | ---- | 
|                                                                                |        |       |     |      |      |        |    |      |        |   |    |      | 
|Cash flows from operating activities                                            |        |       |     |      |      |        |   
|Net income (loss)                                                               |        |       |     | $    | (168 | )      | $  | 278  |       
|Adjustments to reconcile net income (loss) to net cash                          |        |       |     |      |     
|provided by (used for) operating activities                                     |        |       |     |      |     
|Depreciation and amortization                                                   |        | 277   |     |      | 250  |       
|Gains on dispositions of property                                               |        |       |     | (4   | )    |        | (5 | )   
|Gain on sale of investment                                                      |        |       |     |      | -    |        |    | (274 | )     
|Amortization of deferred gains and credits                                      |        |       | (31 | )    |      | (23    | ) 
|Cumulative effect of accounting change, net of          applicable income taxes | 103    |       |     | -    |     
|Other                                                                           |        |       |     |      |      |        |    | 18   |        |   | 37 |     
|Changes in certain assets and liabilities                                       |        |       |     |      |      |        |   
|Decrease (increase) in receivables                                              |        | (163  | )   |      | (113 | )     
|Decrease (increase) in materials and supplies, prepaid                          |        |       |     |     
|expenses and pension assets                                                     |        | 63    |     |      | 6    |       
|Decrease (increase) in deferred income taxes                                    |        | (95   | )   |      | 62   |       
|Increase (decrease) in traffic balances payable and              unused tickets | 349    |       |     | 181  |     
|Increase (decrease) in accounts payable and accrued              expenses       | 235    |       |     | 175  |     
|Increase (decrease) in postretirement benefits other                            |        |       |     |      |     
|than pensions, noncurrent                                                       |        | 61    |     |      | 80   |       
|                                                                                |        |       |     |      |      |        |    |      |        |   |    |      | 
|Net cash provided by (used for) operating 
                activities           | 645    |       |     | 654  |     
|                                                                                |        |       |     |      |      |        |    |      |        |   |    |      | 
|Cash flows from investing activities                                            |        |       |     |      |      |        |    |     
|Capital expenditures                                                            |        |       |     |      |      | (1,459 | )  |      | (1,066 | )
|Proceeds from dispositions of property                                          |        | 23    |     |      | 43   |       
|Proceeds from exercise of Sabre options                                         |        | 81    |     |      | -    |       
|Proceeds from sale of investment                                                |        | -     |     |      | 307  |       
|Decrease (increase) in short-term investments                                   | (72    | )     |     | (37  | )   
|Decrease (increase) in restricted cash and investments                          | 5      |       |     | -    |     
|Other                                                                           |        |       |     |      |      |        |    | 2    |        |   | 3  |     
|                                                                                |        |       |     |      |      |        |    |      |        |   |    |      | 
|Net cash provided by (used for) investing 
                activities           | (1,420 | )     |     | (750 | )   
|                                                                                |        |       |     |      |      |        |    |      |        |   |    |      | 
|Cash flows from financing activities                                            |        |       |     |      |      |       
|Proceeds from the sale-leaseback of aircraft                                    |        | 582   |     |      | 600  |       
|Proceeds from issuance of long-term debt                                        |        | 1,051 |     |      | 48   |       
|Principal payments on long-term debt                                            | (555   | )     |     | (102 | )   
|Purchases of Common Stock                                                       |        | (20   | )   |      | (670 | )     
|Sales of treasury stock                                                         |        | 1     |     |      | 5    |       
|                                                                                |        |       |     |      |      |        |    |      |        |   |    |      | 
|Net cash provided by (used for) financing 
                activities           | 1,059  |       |     | (119 | )   
|                                                                                |        |       |     |      |      |        |    |      |        |   |    |      | 
|Net increase (decrease) in Cash and Cash equivalents                            | 284    |       |     | (215 | )   
|                                                                                |        |       |     |      |      |        |    |      |        |   |    |      | 
|Cash and Cash equivalents at beginning of period                                |        | 246   |     |      | 612  |       
|                                                                                |        |       |     |      |      |        |    |      |        |   |    |      | 
|Cash and Cash equivalents at end of period                                      |        | $     | 530 |      | $    | 397    |   
|                                                                                |        |       |     |      |      |        |    |      |        |   |    |      | 
|                                                                                |        |       |     |      |      |        |    |      |        |   |    |      | 
|Supplemental Information                                                        |        |       |     |      |      |        |    |      |        |  
|Cash paid during the period for interest, net of 
     amount capitalized       | $      | 175   |     | $    | 142  |       
|Net cash paid (received) during the period for income      taxes                | $      | (51   | )   | $    | 57   |       
|                                                                                |        |       |     |      |      |        |    |      |        |   |    |      | 





See accompanying Notes to Condensed Consolidated Financial Statements.



3



US Airways Group, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)



1. Summary of Significant Accounting Policies

(a) 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. These interim period statements
should be read in conjunction with the Consolidated Financial Statements contained in the Company's and US Airways, Inc.'s (US Airways, the Company's principal operating subsidiary) Annual Report to the United States Securities and Exchange Commission
(SEC) on Form 10-K for the year ended December 31, 1999.

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 1999 amounts have been reclassified to conform with 2000 classifications.

(b) Frequent Traveler Program

In December 1999, the SEC issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB 101), which provides guidance on the recognition, presentation and disclosure of revenue in
financial statements. Although SAB 101 does not change existing accounting rules on revenue recognition, changes in accounting to apply the guidance in SAB 101 may be accounted for as a change in accounting principle. On January 1, 2000, the Company
changed its method of accounting for the sale of mileage credits in its Dividend Miles program from recognizing revenue when credits are sold, to deferring a portion of revenue attributable to future transportation and recognizing it as passenger revenue
when the service is provided. The remaining portion of sales proceeds will continue to be recognized immediately as a component of Other operating revenues. The Company believes the new method results in a better matching of revenue with the period in
which travel services are provided. In connection with the change, the Company recognized a $103 million, net of applicable income taxes, cumulative effect charge on January 1, 2000.









(this space intentionally left blank)



4





The pro forma amounts below are provided to show what US Airways Group would have reported if the new accounting policy had been in effect in periods prior to 2000.

|                                 |   |       | Three Months        |   |       | Nine Months        
|-------------------------------- | - | ----- | ------------------- | - | ----- | -------------------
|                                 |   |       | Ended September 30, |   |       | Ended September 30,
|                                 |   |       |                     |   |       | Pro Forma          
|                                 |   |       | 2000                |   |       | 1999               
|                                 |   |       |                     |   |       |                    
|Operating Revenues               |   |       |                     |   |       |                    
|Passenger transportation         | $ | 2,142 |                     | $ | 1,906 |                    
|Cargo and freight                |   | 42    |                     |   | 34    |                    
|Other                            |   | 197   |                     |   | 156   |                    
|                                 |   |       |                     |   |       |                    
|Total Operating Revenues         | $ | 2,381 |                     | $ | 2,096 |                    
|                                 |   |       |                     |   |       |                    
|Income (Loss) Before Cumulative  |   |       |                     |   |       |                    
|Effect of Accounting Change      | $ | (30   | )                   | $ | (88   | )                  
|                                 |   |       |                     |   |       |                    
|Earnings (Loss) Per Common Share |   |       |                     |   |       |                    
|Before Accounting Change         |   |       |                     |   |       |                    
|Basic                            | $ | (0.45 | )                   | $ | (1.23 | )                  
|Diluted                          | $ | (0.45 | )                   | $ | (1.23 | )                  





2. Earnings (Loss) per Common Share

Earnings per Common Share (EPS) is presented on both a basic and diluted basis in accordance with the provisions of Statement of Financial Accounting Standards No. 128, "Earnings per Share." Basic EPS is computed by
dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the maximum dilution that would result after giving effect to dilutive stock options. The following table presents the
computation of basic and diluted EPS (in millions, except per share amounts):

|                                                                 |    |       | Three         |    |       | Nine         
|---------------------------------------------------------------- | -- | ----- | ------------- | -- | ----- | -------------
|                                                                 |    |       | Months Ended  |    |       | Months Ended 
|                                                                 |    |       | September 30, |    |       | September 30,
|                                                                 |    |       | 2000          |    |       | 1999         
|Earnings (loss) applicable to common stockholders                |    |       |               |    |       |              
|before cumulative effect of accounting change                    | $  | (30   | )             | $  | (85   | )            
|                                                                 |    |       |               |    |       |              
|Common shares:                                                   |    |       |               |    |       |              
|Weighted average common shares 
    outstanding (basic)          | 67 |       |               | 72 |       |              
|Incremental shares related to 
    outstanding stock options (1) | -  |       |               | -  |       |              
|                                                                 |    |       |               |    |       |              
|Weighted average common shares 
    outstanding (diluted)        | 67 |       |               | 72 |       |              
|                                                                 |    |       |               |    |       |              
|EPS before accounting change - Basic                             | $  | (0.45 | )             | $  | (1.19 | )            
|EPS before accounting change - Diluted                           | $  | (0.45 | )             | $  | (1.19 | )            



(1) Option effect is antidilutive and therefore excluded for the three months ended September 30, 
     2000 and 1999 and the nine months ended September 30, 2000.

Note: EPS amounts may not recalculate due to rounding.

3. Comprehensive Income

Comprehensive income (loss) was $(30) million and $(84) million for the three months ended September 30, 2000 and 1999, respectively, and $(168) million and $101 million for the nine months ended September 30, 2000
and 1999, respectively. Comprehensive income encompasses net income and "other comprehensive income," which includes all other non-owner transactions and events that change stockholders' equity. Other comprehensive income is composed primarily of changes
in the fair value of the Company's equity investments.



5



4. Operating Segments and Related Disclosures

The Company has two reportable operating segments: US Airways and US Airways Express. The US Airways segment includes the operations of US Airways (excluding US Airways' wholly-owned subsidiaries) and the
former Shuttle, Inc. (Shuttle) (see below). The US Airways Express segment includes the operations of the Company's wholly-owned regional airlines and activity resulting from marketing agreements with two non-owned US Airways Express air carriers.
All Other (as presented in the table below) reflects the activity of subsidiaries other than those included in the Company's two reportable operating segments.

Effective July 1, 2000, Shuttle was merged into US Airways. The operations of the former Shuttle subsequent to June 30, 2000 are included in US Airways' consolidated financial statements. Shuttle was formerly a
wholly-owned subsidiary of US Airways Group.

Financial information for each reportable operating segment is set forth below (in millions):

|                                          |                                 |    | Three Months Ended |   |   | Nine Months Ended |  
|----------------------------------------- | ------------------------------- | -- | ------------------ | - | - | ----------------- | -
|                                          |                                 |    | September 30,      |   |   | September 30,     |  
|                                          |                                 |    | 2000               |   |   | 1999              |  
|Operating Revenues:                       |                                 |    |                    |   |   |                   |  
|                                          | US Airways external             | $  | 2,128              |   | $ | 1,888             |  
|                                          | US Airways intersegment         |    | 19                 |   |   | 17                |  
|                                          | US Airways Express external     |    | 232                |   |   | 203               |  
|                                          | US Airways Express intersegment | 12 |                    |   | 9 |                   |  
|                                          | All Other                       |    | 21                 |   |   | 11                |  
|                                          | Intersegment Elimination        |    | (31                | ) |   | (26               | )
|                                          |                                 |    |                    |   |   |                   |  
|                                          |                                 | $  | 2,381              |   | $ | 2,102             |  
|                                          |                                 |    |                    |   |   |                   |  
|Income (Loss) Before Taxes and Cumulative |                                 |    |                    |   |   |                   |  
|Effect of Accounting Change:              |                                 |    |                    |   |   |                   |  
|                                          | US Airways                      | $  | (73                | ) | $ | (131              | )
|                                          | US Airways Express              |    | 29                 |   |   | 29                |  
|                                          | All Other (1)                   |    | 7                  |   |   | (25               | )
|                                          |                                 |    |                    |   |   |                   |  
|                                          |                                 | $  | (37                | ) | $ | (127              | )
|                                          |                                 |    |                    |   |   |                   |  

(1) Nine months ended September 30, 1999 amount includes a $274 million gain on the sale of Galileo International, Inc. stock.

5. Long-Term Debt

On December 10, 1999, the Company entered into $500 million senior secured credit facilities (Facilities) with a syndicate of financial institutions. The Facilities are structured as a $250 million, 364-day revolving
loan facility, renewable annually for each of the next two years, and a $250 million, 3-year revolving loan facility. The Facilities are collateralized by a group of aircraft and slots. The Company has the right to prepay any loans or terminate the
commitment, in whole or in part, at any time without premium or penalty. On March 15, 2000, the Company received loan proceeds of $500 million from its Facilities. The effective interest rate for borrowing against the Facilities is a floating rate based
on the London Interbank Offered Rate (LIBOR). On May 4, 2000, the Company repaid the $500 million it had drawn against its Facilities.

In addition, during the first nine months of 2000 the Company borrowed $514 million to finance new Airbus aircraft deliveries.

In July 2000, the Philadelphia Authority for Industrial Development issued $71 million of special facility revenue bonds, the proceeds of which were provided to US Airways in the form of an unsecured loan. The loan has a
weighted average interest rate of 7.84% maturing in varying amounts through 2030. US Airways intends to utilize the proceeds to finance various



6



improvements at the Philadelphia International Airport where US Airways has significant operations. The bond proceeds are restricted to expenditures at the Philadelphia International Airport and unspent amounts are classified as a component of Other
assets, net in the balance sheets.

In September 2000, the City of Charlotte issued $35 million of special facility revenue bonds, the proceeds of which will be used to pay the cost of design, acquisition, construction and equipping of certain airport
related facilities to be leased to US Airways at the Charlotte/Douglas International Airport. Financing related to this airport construction is recorded as a component of long-term debt. The lease obligation has an interest rate of 7.75% and matures in 2028
 .

6. Commitments to Purchase Flight Equipment

As of September 30, 2000, the Company had 83 A320-family aircraft on firm order, 182 A320-family aircraft subject to reconfirmation prior to scheduled delivery and options for 63 additional A320-family aircraft. With
respect to the firm-order A320-family aircraft, 18 are expected to be delivered during the balance of 2000 and the remaining A320-family aircraft are expected to be delivered in the years 2001 through 2006. As of September 30, 2000, the Company had five
A330-300 aircraft on firm order and options for 20 additional A330-300 aircraft. With respect to the firm-order A330-300 aircraft, two are expected to be delivered during the balance of 2000 and the remaining A330-300 aircraft are expected to be delivered
in the years 2001 through 2004.

The minimum determinable payments associated with the Company's acquisition agreements for Airbus aircraft (including progress payments, payments at delivery, buyer-furnished equipment, spares, capitalized interest,
penalty payments, cancellation fees and/or nonrefundable deposits) were estimated at $692 million for the three months ended December 31, 2000, $1.15 billionin 2001, $587 million in 2002, $289 million in 2003 and $501 million thereafter.

7. Merger Agreement

On May 23, 2000, the Company entered into an Agreement and Plan of Merger with UAL Corporation (UAL), United Airlines' parent corporation, and Yellow Jacket Acquisition Corp., a wholly-owned subsidiary of UAL which
has been formed for the purpose of this merger, pursuant to which the merger subsidiary will be merged into US Airways Group. As a result, US Airways Group would be the surviving corporation and would become a wholly-owned subsidiary of UAL. In the
merger, all of the shares of US Airways Group common stock held by stockholders of the Company (other than US Airways Group, UAL Corporation and Yellow Jacket Acquisition Corp. and other than dissenting stockholders who perfect their appraisal
rights) will be converted into the right to receive the cash merger consideration of $60.00 per share. Consummation of the merger is subject to various conditions set forth in the Agreement and Plan of Merger, including, but not limited to, the receipt of
regulatory approvals and adoption of the merger agreement by the stockholders of US Airways Group. On October 12, 2000, the stockholders of US Airways Group adopted the merger agreement. This adoption resulted in the accelerated vesting of stock
option awards covering 1.9 million shares. The Company believes that efforts sufficient to satisfy the regulatory requirements can be concluded during the month of January, 2001 and that the merger will be completed promptly following satisfaction of such
requirements. However, the Company can provide no assurance that such requirements will be satisfied or, if satisfied, the date by which they will be satisfied.

If the merger between the Company and a subsidiary of UAL Corporation is consummated, the combined company may be required to divest some of its routes and slots for competitive reasons. To address the potential
competitive issues, the companies have entered into a Memorandum of Understanding with Robert Johnson, a Director of the Company, under which an entity formed by Mr. Johnson would buy certain assets from the Company and create a new airline to operate out
of Reagan National Airport. The Company would retain the routes formerly operated by US Airways Shuttle and the assets necessary to fly to its hubs at Pittsburgh, Charlotte and Philadelphia.



7



US Airways, Inc.
Condensed Consolidated Statements of Operations
Three Months and Nine Months Ended September 30, 2000 and 1999 (unaudited)
(in millions)

|                                |                                                       |     | Three Months Ended |   |   | Nine Months Ended |      
|------------------------------- | ----------------------------------------------------- | --- | ------------------ | - | - | ----------------- | -----
|                                |                                                       |     | September 30,      |   |   | September 30,     |      
|                                |                                                       |     | 2000               |   |   |                   | 1999 
|                                |                                                       |     |                    |   |   |                   |      
|Operating Revenues              |                                                       |     |                    |   |   |                   |      
|                                | Passenger transportation                              | $   | 1,967              |   |   | $                 | 1,663
|                                | US Airways Express transportation revenues            |     | 229                |   |   |                   | 198  
|                                | Cargo and freight                                     |     | 41                 |   |   |                   | 33   
|                                | Other                                                 |     | 139                |   |   |                   | 175  
|                                |                                                       |     |                    |   |   |                   |      
|                                | Total Operating Revenues                              |     | 2,376              |   |   |                   | 2,069
|                                |                                                       |     |                    |   |   |                   |      
|Operating Expenses              |                                                       |     |                    |   |   |                   |      
|                                | Personnel costs                                       |     | 863                |   |   |                   | 832  
|                                | Aviation fuel                                         |     | 329                |   |   |                   | 182  
|                                | Commissions                                           |     | 84                 |   |   |                   | 108  
|                                | Aircraft rent                                         |     | 115                |   |   |                   | 108  
|                                | Other rent and landing fees                           |     | 110                |   |   |                   | 100  
|                                | Aircraft maintenance                                  |     | 102                |   |   |                   | 107  
|                                | Other selling expenses                                |     | 97                 |   |   |                   | 92   
|                                | Depreciation and amortization                         |     | 89                 |   |   |                   | 83   
|                                | US Airways Express capacity     purchases             | 195 |                    |   |   | 162               |      
|                                | Other                                                 |     | 381                |   |   |                   | 402  
|                                |                                                       |     |                    |   |   |                   |      
|                                | Total Operating Expenses                              |     | 2,365              |   |   |                   | 2,176
|                                |                                                       |     |                    |   |   |                   |      
|                                | Operating Income (Loss)                               |     | 11                 |   |   |                   | (107 
|                                |                                                       |     |                    |   |   |                   |      
|Other Income (Expense)          |                                                       |     |                    |   |   |                   |      
|                                | Interest income                                       |     | 26                 |   |   |                   | 65   
|                                | Interest expense                                      |     | (64                | ) |   |                   | (48  
|                                | Interest capitalized                                  |     | 4                  |   |   |                   | 7    
|                                | Gain on sale of investment                            |     | -                  |   |   |                   | -    
|                                | Other, net                                            |     | (3                 | ) |   |                   | -    
|                                |                                                       |     |                    |   |   |                   |      
|                                | Other Income (Expense), Net                           | (37 | )                  |   |   | 24                |      
|                                |                                                       |     |                    |   |   |                   |      
|Income (Loss) Before Taxes and  |                                                       |     |                    |   |   |                   |      
|                                | Cumulative Effect of Accounting Change                | (26 | )                  |   |   | (83               | )    
|                                | Provision (Credit) for Income   Taxes                 |     | (3                 | ) |   |                   | (28  
|                                |                                                       |     |                    |   |   |                   |      
|Income (Loss) Before Cumulative |                                                       |     |                    |   |   |                   |      
|                                | Effect of Accounting Change                           |     | (23                | ) |   |                   | (55  
|Cumulative Effect of Accounting |                                                       |     |                    |   |   |                   |      
|                                | Change, Net of Applicable Income Taxes of $63 Million |     | -                  |   |   |                   | -    
|                                |                                                       |     |                    |   |   |                   |      
|Net Income (Loss)               | $                                                     | (23 | )                  |   | $ | (55               | )    
|                                |                                                       |     |                    |   |   |                   |      







See accompanying Notes to Condensed Consolidated Financial Statements.



8



US Airways, Inc.
Condensed Consolidated Balance Sheets
September 30, 2000 (unaudited) and December 31, 1999
(in millions)

|                                              |                                                |  |        | September 30, | December 31,
|--------------------------------------------- | ---------------------------------------------- |  | ------ | ------------- | ------------
|                                              |                                                |  |        | 2000          | 1999        
|                                              |                                                |  |        |               |             
|                                              | ASSETS                                         |  |        |               |             
|Current Assets                                |                                                |  |        |               |             
|                                              | Cash                                           |  |        | $             | 27          
|                                              | Cash equivalents                               |  |        |               | 463         
|                                              | Short-term investments                         |  |        |               | 692         
|                                              | Receivables, net                               |  |        |               | 466         
|                                              | Receivables from related parties, net          |  |        | 84            |             
|                                              | Materials and supplies, net                    |  |        |               | 220         
|                                              | Deferred income taxes                          |  |        |               | 363         
|                                              | Prepaid expenses and other                     |  |        | 160           |             
|                                              |                                                |  |        |               |             
|                                              | Total Current Assets                           |  |        |               | 2,475       
|Property and Equipment                        |                                                |  |        |               |             
|                                              | Flight equipment                               |  |        |               | 6,274       
|                                              | Ground property and equipment                  |  |        | 1,087         |             
|                                              | Less accumulated depreciation and amortization |  | (2,923 | )             |             
|                                              |                                                |  |        |               |             
|                                              |                                                |  |        |               | 4,438       
|                                              | Purchase deposits for flight equipment         |  | 121    |               |             
|                                              |                                                |  |        |               |             
|                                              | Total Property and Equipment                   |  |        | 4,559         |             
|Other Assets                                  |                                                |  |        |               |             
|                                              | Goodwill, net                                  |  |        |               | 555         
|                                              | Other intangibles, net                         |  |        |               | 325         
|                                              | Receivable from parent company                 |  | 90     |               |             
|                                              | Other assets, net                              |  |        |               | 859         
|                                              |                                                |  |        |               |             
|                                              | Total Other Assets                             |  |        |               | 1,829       
|                                              |                                                |  |        |               |             
|                                              |                                                |  |        | $             | 8,863       
|                                              |                                                |  |        |               |             
|LIABILITIES AND STOCKHOLDER'S EQUITY DEFICIT) |                                                |  |        |              
|Current Liabilities                           |                                                |  |        |               |             
|                                              | Current maturities of long-term debt           |  | $      | 323           |             
|                                              | Accounts payable                               |  |        |               | 503         
|                                              | Traffic balances payable and unused tickets    |  | 1,151  |               |             
|                                              | Accrued aircraft rent                          |  |        |               | 199         
|                                              | Accrued salaries, wages and vacation           |  |        | 338           |             
|                                              | Other accrued expenses                         |  |        |               | 473         
|                                              |                                                |  |        |               |             
|                                              | Total Current Liabilities                      |  |        |               | 2,987       
|Noncurrent Liabilities                        |                                                |  |        |               |             
|                                              | Long-term debt, net of current maturities      |  | 2,432  |               |             
|                                              | Accrued aircraft rent                          |  |        |               | 252         
|                                              | Deferred gains, net                            |  |        |               | 570         
|                                              | Postretirement benefits other than pensions    |  | 1,383  |               |             
|                                              | Employee benefit liabilities and other         |  |        | 1,631         |             
|                                              |                                                |  |        |               |             
|                                              | Total Noncurrent Liabilities                   |  |        | 6,268         |             
|Commitments and Contingencies                 |                                                |  |        |               |             
|Stockholder's Equity (Deficit)                |                                                |  |        |               |             
|                                              | Common stock                                   |  |        |               | -           
|                                              | Paid-in capital                                |  |        |               | 2,609       
|                                              | Retained earnings (deficit)                    |  | (739   | )             |             
|                                              | Receivable from parent company                 |  | (2,262 | )             |             
|                                              |                                                |  |        |               |             
|                                              | Total Stockholder's Equity (Deficit)           |  | (392   | )             |             
|                                              |                                                |  |        |               |             
|                                              |                                                |  |        | $             | 8,863       
|                                              |                                                |  |        |               |             



See accompanying Notes to Condensed Consolidated Financial Statements.



9



US Airways, Inc.
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2000 and 1999 (unaudited)
(in millions)



|                                                     |                                                                             |                                                                                        |                                                      |        |       |      |        |      |        |     |   | 2000 |     |   | 1999 | 
|---------------------------------------------------- | --------------------------------------------------------------------------- | -------------------------------------------------------------------------------------- | ---------------------------------------------------- | ------ | ----- | ---- | ------ | ---- | ------ | --- | - | ---- | --- | - | ---- | 
|                                                     |                                                                             |                                                                                        |                                                      |        |       |      |        |      |        |     |   |      |     |   |      | 
|Cash flows from operating activities                 |                                                                             |                                                                                        |                                                      |        |       |      |        |      |       
|                                                     | Net income (loss)                                                           |                                                                                        |                                                      |        |       | $    | (157   | )    | $      | 351 |  
|                                                     | Adjustments to reconcile net income (loss) to net cash                      |                                                                                        |                                                      |        |       |     
|                                                     |                                                                             | provided by (used for) operating activities                                            |                                                      |        |       |      |       
|                                                     | Depreciation and amortization                                               |                                                                                        |                                                      |        |       | 256  |        |      | 227    |    
|                                                     | Gains on dispositions of property                                           |                                                                                        |                                                      | (2     | )     |      | (5     | )   
|                                                     | Gain on sale of investment                                                  |                                                                                        |                                                      | -      |       |      | (274   | )   
|                                                     | Amortization of deferred gains and credits                                  |                                                                                        |                                                      | (31    | )     |      | (22    | )   
|                                                     | Cumulative effect of accounting change, net of 
    applicable income taxes | 103                                                                                    |                                                      |        | -     |     
|                                                     | Other                                                                       |                                                                                        |                                                      |        |       |      |        |      |        | (29 | ) |      | (83 | )
|                                                     | Changes in certain assets and liabilities                                   |                                                                                        |                                                      |        |       |      |        |      |       
|                                                     |                                                                             | Decrease (increase) in receivables                                                     |                                                      |        |       | (157 | )      |      | (116   | )  
|                                                     |                                                                             | Decrease (increase) in materials and supplies, prepaid
    expenses and pension assets | 2                                                    |        |       | 29   |       
|                                                     |                                                                             | Decrease (increase) in deferred income taxes                                           | (93                                                  | )      |       | 38   |       
|                                                     |                                                                             | Increase (decrease) in traffic balances payable and
    unused tickets                 |                                                      | 349    |       |      | 175    |     
|                                                     |                                                                             | Increase (decrease) in accounts payable and
    accrued expenses                       |                                                      | 299    |       |      | 241    |     
|                                                     |                                                                             | Increase (decrease) in postretirement benefits                                         |                                                      |        |       |      |        |     
|                                                     |                                                                             | other than pensions, noncurrent                                                        | 61                                                   |        |       | 79   |       
|                                                     |                                                                             |                                                                                        |                                                      |        |       |      |        |      |        |     |   |      |     |   |      | 
|                                                     |                                                                             | Net cash provided by (used for) operating activities                                   | 601                                                  |        |       | 640  |       
|                                                     |                                                                             |                                                                                        |                                                      |        |       |      |        |      |        |     |   |      |     |   |      | 
|Cash flows from investing activities                 |                                                                             |                                                                                        |                                                      |        |       |      |        |      |        |    
|                                                     | Capital expenditures                                                        |                                                                                        |                                                      |        |       |      |        |      | (1,352 | )   |   | (877 | )  
|                                                     | Proceeds from dispositions of property                                      |                                                                                        |                                                      |        | 18    |      |        | 43   |       
|                                                     | Proceeds from exercise of Sabre options                                     |                                                                                        |                                                      | 81     |       |      | -      |     
|                                                     | Proceeds from sale of investment                                            |                                                                                        |                                                      |        |       | -    |        |      | 307    |    
|                                                     | Decrease (increase) in short-term investments                               |                                                                                        |                                                      | (72    | )     |      | (37    | )   
|                                                     | Decrease (increase) in restricted cash and investments                      |                                                                                        | 5                                                    |        |       | -    |       
|                                                     | Funding of parent company's common stock purchases                          |                                                                                        | (20                                                  | )      |       | (670 | )     
|                                                     | Funding of parent company's aircraft purchase deposits                      | (81                                                                                    | )                                                    |        | (163  | )   
|                                                     | Other                                                                       |                                                                                        |                                                      |        |       |      |        |      |        |     | 4 |      |     | 3 |     
|                                                     |                                                                             |                                                                                        |                                                      |        |       |      |        |      |        |     |   |      |     |   |      | 
|                                                     |                                                                             |                                                                                        | Net cash provided by (used for) investing activities | (1,417 | )     |      | (1,394 | )   
|                                                     |                                                                             |                                                                                        |                                                      |        |       |      |        |      |        |     |   |      |     |   |      | 
|Cash flows from financing activities                 |                                                                             |                                                                                        |                                                      |        |       |      |        |      |        |    
|                                                     | Proceeds from the sale-leaseback of aircraft                                |                                                                                        |                                                      |        | 582   |      |        | 600  |       
|                                                     | Proceeds from issuance of long-term debt                                    |                                                                                        |                                                      |        | 1,051 |      |        | 36   |       
|                                                     | Principal payments on long-term debt                                        |                                                                                        |                                                      |        | (555  | )    |        | (102 | )     
|                                                     |                                                                             |                                                                                        |                                                      |        |       |      |        |      |        |     |   |      |     |   |      | 
|                                                     |                                                                             | Net cash provided by (used for) financing activities                                   | 1,078                                                |        |       | 534  |       
|                                                     |                                                                             |                                                                                        |                                                      |        |       |      |        |      |        |     |   |      |     |   |      | 
|Net increase (decrease) in Cash and Cash equivalents |                                                                             |                                                                                        | 262                                                  |        |       | (220 | )     
|                                                     |                                                                             |                                                                                        |                                                      |        |       |      |        |      |        |     |   |      |     |   |      | 
|Cash and Cash equivalents at beginning of period     |                                                                             | 228                                                                                    |                                                      |        | 604   |     
|                                                     |                                                                             |                                                                                        |                                                      |        |       |      |        |      |        |     |   |      |     |   |      | 
|Cash and Cash equivalents at end of period           |                                                                             | $                                                                                      | 490                                                  |        | $     | 384  |       
|                                                     |                                                                             |                                                                                        |                                                      |        |       |      |        |      |        |     |   |      |     |   |      | 
|Noncash investing and financing activities           |                                                                             |                                                                                        |                                                      |        |       |      |       
|                                                     | Reduction of parent company receivable-assignment of                        |                                                                                        |                                                      |        |       |     
|                                                     | aircraft purchase rights by parent company                                  |                                                                                        |                                                      | $      | 269   |      | $      | 166  |       
|                                                     |                                                                             |                                                                                        |                                                      |        |       |      |        |      |        |     |   |      |     |   |      | 
|                                                     |                                                                             |                                                                                        |                                                      |        |       |      |        |      |        |     |   |      |     |   |      | 
|Supplemental Information                             |                                                                             |                                                                                        |                                                      |        |       |      |        |      |        |     |  
|                                                     | Cash paid during the period for interest, net of amount
    capitalized     | $                                                                                      | 174                                                  |        | $     | 142  |       
|                                                     | Net cash paid (received) during the period for income
    taxes             | $                                                                                      | (53                                                  | )      | $     | 57   |       



See accompanying Notes to Condensed Consolidated Financial Statements.



10



US Airways, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

1. Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying Condensed Consolidated Financial Statements include the accounts of US Airways, Inc. (US Airways) and its wholly-owned subsidiaries US Airways Investment Management Company, Inc. and US Airways
Finance Company. US Airways is a wholly-owned subsidiary of US Airways Group, Inc. (US Airways Group). These interim period statements should be read in conjunction with the Consolidated Financial Statements contained in US Airways' Annual
Report to the United States Securities and Exchange Commission (SEC) on Form 10-K for the year ended December 31, 1999.

Effective July 1, 2000, Shuttle, Inc. (Shuttle) was merged into US Airways. The operations of the former Shuttle subsequent to June 30, 2000 are included in US Airways' consolidated financial statements. Shuttle was
formerly a wholly-owned subsidiary of US Airways Group.

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 1999 amounts have been reclassified to conform with 2000 classifications.

(b) Frequent Traveler Program

In December 1999, the SEC issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB 101), which provides guidance on the recognition, presentation and disclosure of revenue in
financial statements. Although SAB 101 does not change existing accounting rules on revenue recognition, changes in accounting to apply the guidance in SAB 101 may be accounted for as a change in accounting principle. On January 1, 2000, US 
Airways changed its method of accounting for the sale of mileage credits in its Dividend Miles program from recognizing revenue when credits are sold, to deferring a portion of revenue attributable to future transportation and recognizing it as passenger
revenue when the service is provided. The remaining portion of sales proceeds will continue to be recognized immediately as a component of Other operating revenues. US Airways believes the new method results in a better matching of revenue with the period
in which travel services are provided. In connection with the change, US Airways recognized a $103 million, net of applicable income taxes, cumulative effect charge on January 1, 2000.







(this space intentionally left blank)



11



(c) Pro Forma Information

The pro forma amounts below are provided to show what US Airways would have reported if the new accounting policy had been in effect in periods prior to 2000 and the Shuttle merger had occurred on January 1, 1999.

|                                       |                          |                          |       |     | Three Months        |       |           | Nine Months        
|-------------------------------------- | ------------------------ | ------------------------ | ----- | --- | ------------------- | ----- | --------- | -------------------
|                                       |                          |                          |       |     | Ended September 30, |       |           | Ended September 30,
|                                       |                          |                          |       |     |                     |       | Pro Forma |                    
|                                       |                          |                          |       |     | 2000                |       |           | 1999               
|Operating Revenues                     |                          |                          |       |     |                     |       |           |                    
|                                       | Passenger transportation | $                        | 1,967 |     | $                   | 1,740 |           | $                  
|                                       | US Airways Express       |                          |       |     |                     |       |           |                    
|                                       |                          | transportation revenues  |       | 229 |                     |       | 198       |                    
|                                       | Cargo and freight        |                          | 41    |     |                     | 33    |           |                    
|                                       | Other                    |                          |       | 139 |                     |       | 126       |                    
|                                       |                          |                          |       |     |                     |       |           |                    
|                                       |                          | Total Operating Revenues | 2,376 |     |                     | 2,097 |           |                    
|                                       |                          | Total Operating Expenses | 2,365 |     |                     | 2,208 |           |                    
|                                       |                          |                          |       |     |                     |       |           |                    
|                                       |                          | Operating Income (Loss)  | $     | 11  |                     | $     | (111      | )                  
|                                       |                          |                          |       |     |                     |       |           |                    
|Income (Loss) Before Cumulative Effect |                          |                          |       |     |                     |       |           |                    
|                                       | of Accounting Change     | $                        | (23   | )   | $                   | (58   | )         | $                  
|                                       |                          |                          |       |     |                     |       |           |                    



2. Comprehensive Income

Comprehensive income (loss) was $(23) million and $(55) million for the three months ended September 30, 2000 and 1999, respectively, and $(157) million and $174 million for the nine months ended September 30, 2000
and 1999, respectively. Comprehensive income encompasses net income and "other comprehensive income," which includes all other non-owner transactions and events that change stockholder's equity. Other comprehensive income is composed primarily of changes
in the fair value of US Airways' equity investments.

3. Operating Segments and Related Disclosures

US Airways has two reportable operating segments: US Airways and US Airways Express. The US Airways segment includes the operations of US Airways (excluding US Airways' wholly-owned subsidiaries). The US Airways
Express segment only includes certain revenues and expenses related to US Airways Group's wholly-owned regional airlines and from marketing agreements with two non-owned US Airways Express air carriers.

Financial information for each reportable operating segment is set forth below (in millions):

|                    |                    |   | Three Months Ended |  |   | Nine Months Ended
|------------------- | ------------------ | - | ------------------ |  | - | -----------------
|                    |                    |   | September 30,      |  |   | September 30,    
|                    |                    |   | 2000               |  |   | 1999             
|Operating Revenues: |                    |   |                    |  |   |                  
|                    | US Airways (1)     | $ | 2,147              |  | $ | 1,871            
|                    | US Airways Express |   | 229                |  |   | 198              
|                    |                    |   |                    |  |   |                  
|                    |                    | $ | 2,376              |  | $ | 2,069            
|                    |                    |   |                    |  |   |                  
|                    |                    |   |                    |  |   |                  



(table continued on following page)



12

|                                          |                    |   |     |   |   |      |   |   |      |   |  
|----------------------------------------- | ------------------ | - | --- | - | - | ---- | - | - | ---- | - | -
|Income (Loss) Before Taxes and            |                    |   |     |   |   |      |   |   |      |   |  
|Cumulative Effect of Accounting   Change: |                    |   |     |   |   |      |   |   |      |   |  
|                                          | US Airways (1)     | $ | (73 | ) | $ | (128 | ) | $ | (186 | ) | $
|                                          | US Airways Express |   | 34  |   |   | 36   |   |   | 92   |   |  
|                                          | All Other (2)      |   | 13  |   |   | 9    |   |   | 34   |   |  
|                                          |                    |   |     |   |   |      |   |   |      |   |  
|                                          |                    | $ | (26 | ) | $ | (83  | ) | $ | (60  | ) | $
|                                          |                    |   |     |   |   |      |   |   |      |   |  

(1) Amounts include activity of former Shuttle as of July 1, 2000.

(2) Nine months ended September 30, 1999 amount includes a $274 million gain on the sale of Galileo International, Inc. stock.

4. Related Party Transactions

US Airways provides various loans to US Airways Group including the advancing of funds to purchase US Airways Group's common stock which is recorded as a reduction of Stockholder's Equity. Interest, at market rates,
was accrued on these advances through September 30, 1999 at which time such advances became non-interest bearing. Interest income related to this receivable was $35 million and $91 million for the three and nine months ended September 30, 1999, respectively
 .

5. Long-Term Debt

Please refer to Note 5 in US Airways Group's Notes to Condensed Consolidated Financial Statements on page 6 of this report related to long-term debt.

6. Commitments to Purchase Flight Equipment

Please refer to Note 6 in US Airways Group's Notes to Condensed Consolidated Financial Statements on page 7 of this report related to commitments to purchase flight equipment.

7. Merger Agreement

Please refer to Note 7 in US Airways Group's Notes to Condensed Consolidated Financial Statements on page 7 of this report related to US Airways Group's merger agreement with UAL Corporation.

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

General Information

Part I, Item 2 of this report should be read in conjunction with Part II, 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, 1999. The information contained herein is not a comprehensive discussion 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.

Certain information contained herein should be considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 which is subject to a number of risks and uncertainties.
The preparation of forward-looking statements 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. Specific factors that could cause actual results
to differ materially from those set forth in the forward-looking statements include: economic conditions;



13



labor costs; financing costs; aviation fuel costs; the anticipated merger of the Company and a subsidiary of UAL Corporation (UAL); competitive pressures on pricing (particularly from lower-cost competitors); weather conditions; government legislation;
 consumer perceptions of the Company's products; demand for air transportation in the markets in which the Company operates; other operational matters discussed below and other risks and uncertainties 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 statements, 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.

Financial Overview

For the third quarter of 2000, the Company's operating revenues were $2.4 billion, operating income was $5 million, net loss was $30 million and diluted loss per common share was $0.45. For the comparative period in
1999, operating revenues were $2.1 billion, operating loss was $111 million, net loss was $85 million and diluted loss per common share was $1.19.

For the first nine months of 2000, the Company's operating revenues were $6.9 billion, operating income was $34 million, loss before cumulative effect of accounting change was $65 million and diluted loss per common share
before cumulative effect of accounting change was $0.97. For the comparative period in 1999, operating revenues were $6.5 billion, operating income was $257 million, income before cumulative effect of accounting change was $278 million and diluted
earnings per common share before cumulative effect of accounting change was $3.65. The Company's results for the nine months ended September 30, 1999 include certain nonrecurring and unusual items.

The major factors that influenced the Company's financial performance for the first nine months of 2000 included significantly higher fuel prices, severe weather along the Eastern United States (U.S.) in January and June,
reduced passenger traffic stemming from the then-threatened March 25, 2000 shutdown (see "Update on Strategic Objectives Progress" below), air traffic control delays and passenger apprehensions of flying on or around December 31, 1999. Factors affecting
results for the nine months ended September 30, 1999 include inclement weather, particularly Hurricane Floyd; pilot training constraints; air traffic control delays and cancellations; and aircraft shortages resulting from delays in aircraft returning from
regularly scheduled maintenance.

Update on Strategic Objectives Progress

The Company's actions continue to follow its five-point business plan:

- Achieve a competitive cost structure,
- Exploit the route network,
- Rationalize the fleet,
- Change the culture of the company,
- Become the "Carrier of Choice."

Since the end of 1999, the Company made additional progress related to its five-point business plan.

In recent years, US Airways has worked closely with its employees covered by collective bargaining agreements to create labor contracts that are mutually beneficial to US Airways and the employees. Through the end of
1999, US Airways had achieved this with all major employee groups except those represented by the Association of Flight Attendants (AFA), which represents US Airways' flight attendant employees. The AFA had publicly threatened that it would conduct



14



an organized strike campaign it had named "CHAOS" (Create Havoc Around Our System) if no agreement was reached by March 25, 2000, the end of a 30-day cooling off period. In response, US Airways announced that it would shut down its operations on
that date if an agreement was not reached. On March 25, 2000, US Airways reached a tentative agreement with the AFA, which was later ratified by the union membership on May 1, 2000. With this ratification, US Airways now believes that all labor contracts
with its major employee groups are cost competitive with other major U.S. network carriers.

US Airways continues to expand international service. A majority of transatlantic passengers originate their travel from the Eastern U.S., the Company's primary operating region. US Airways began to bolster
international operations to take advantage of its strategic position in 1996. From March to September 2000, US Airways received its first five A330-300 widebody aircraft. US Airways introduced three-class transatlantic service on the A330 when it was
placed into service on May 4th operating between Philadelphia and Paris. Since the end of 1999, US Airways added service between Charlotte and both Paris and Frankfurt on April 13th and May 11th, respectively, between Philadelphia and Manchester,
England on May 25th and between Pittsburgh and London's Gatwick Airport on July 17th. In addition, US Airways will resume daily nonstop service between Philadelphia and Amsterdam effective April 11, 2001 and will offer new service between
Philadelphia and Brussels beginning in May 2001.

Recently, US Airways announced new service to the Caribbean. In November 2000, US Airways will introduce service between Philadelphia and both Aruba and Santo Domingo, between New York LaGuardia and Nassau, between
Pittsburgh and Cancun and between Charlotte and St. Thomas.

With regards to rationalizing the fleet, the Company received 32 A320-family aircraft and 5 A330 aircraft into its fleet and retired seven DC-9-30 aircraft, one B727-200 aircraft and six B737-200 aircraft during the nine
months ended September 30, 2000. The Airbus aircraft are more fuel efficient, are less costly to maintain, have greater range capabilities and provide certain customer service advantages over the aircraft they replace. During 2000, the Company expects to
take delivery of 50 A320-family aircraft and seven A330 aircraft and retire 16 B737-200 aircraft, four B727-200 aircraft and 13 DC-9-30 aircraft.

UAL Corporation Acquisition

On May 23, 2000, the Company entered into an Agreement and Plan of Merger with UAL Corporation, United Airlines' parent corporation, and Yellow Jacket Acquisition Corp., a wholly-owned subsidiary of UAL which has been
formed for the purpose of this merger, pursuant to which the merger subsidiary will be merged into US Airways Group. As a result, US Airways Group would be the surviving corporation and would become a wholly-owned subsidiary of UAL. In the merger, all of
the shares of US Airways Group common stock held by stockholders of the Company (other than US Airways Group, UAL Corporation and Yellow Jacket Acquisition Corp. and other than dissenting stockholders who perfect their appraisal rights) will be converted
into the right to receive the cash merger consideration of $60.00 per share. Consummation of the merger is subject to various conditions set forth in the Agreement and Plan of Merger, including, but not limited to, the receipt of regulatory approvals and
adoption of the merger agreement by the stockholders of US Airways Group. On October 12, 2000, the stockholders of US Airways Group adopted the merger agreement. The Company believes that efforts sufficient to satisfy the regulatory requirements can
be concluded during the month of January, 2001 and that the merger will be completed promptly following satisfaction of such requirements. However, the Company can provide no assurance that such requirements will be satisfied or, if satisfied, the date by
which they will be satisfied.



15



If the merger between the Company and a subsidiary of UAL Corporation is consummated, the combined company may be required to divest some of its routes and slots for competitive reasons. To address the potential
competitive issues, the companies have entered into a Memorandum of Understanding with Robert Johnson, a Director of the Company, under which an entity formed by Mr. Johnson would buy certain assets from the Company and create a new airline to operate out
of Reagan National Airport. The Company would retain the routes formerly operated by US Airways Shuttle and the assets necessary to fly to its hubs at Pittsburgh, Charlotte and Philadelphia.

Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board (FASB) issued Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133). This Statement establishes accounting and reporting
standards for derivative instruments and hedging activities. SFAS 133 requires the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If the derivative is
a hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the
hedged item is recognized in earnings. The ineffective portion of a hedging derivative's change in fair value is immediately recognized in earnings. The Company plans to adopt SFAS 133 as amended effective January 1, 2001 and is currently assessing the
impact of this statement.

Other Information

In December 1999, the SEC issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB 101), which provides guidance on the recognition, presentation and disclosure of revenue in
financial statements. Although SAB 101 does not change existing accounting rules on revenue recognition, changes in accounting to apply the guidance in SAB 101 may be accounted for as a change in accounting principle. On January 1, 2000, the Company
changed its method of accounting for the sale of mileage credits in its Dividend Miles program from recognizing revenue when credits are sold, to deferring a portion of revenue attributable to future transportation and recognizing it as passenger revenue
when the service is provided. The remaining portion of sales proceeds will continue to be recognized immediately as a component of Other operating revenues. The Company believes the new method results in a better matching of revenue with the period in
which travel services are provided. In connection with the change, the Company recognized a $103 million, net of applicable income taxes, cumulative effect charge on January 1, 2000.

The Federal Aviation Administration has designated John F. Kennedy International Airport (Kennedy) and LaGuardia Airport (LaGuardia) in New York, O'Hare International Airport in Chicago (O'Hare) and Ronald Reagan
Washington National Airport in Washington, D.C. (Reagan National) as "high density traffic airports" and has limited the number of departure and arrival slots at those airports. In April 2000, legislation was enacted which eliminates slot restrictions
beginning in 2001 at O'Hare and in 2007 at LaGuardia and Kennedy. As a result of this legislation, the Company performed an evaluation in the second quarter 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" and determined that the slots are not currently impaired.

Among other things, the legislation encourages the development of air service to smaller communities from slot-controlled airports. In connection with this, several airlines announced increases in regional jet flights
from New York's LaGuardia airport to cities in the East, South and Midwest, which are served by the Company. The Company has been implementing a plan to increase service to such communities from LaGuardia. At this time, the Company cannot predict the
outcome of the announced plans. However, the Port Authority of New York and New Jersey,



16



which operates LaGuardia, implemented a freeze on new rush-hour flights effective October 1, 2000 due to delays stemming from concerns related to capacity constraints. On November 8, 2000, the Port Authority of New York and New Jersey with the
cooperation of the Federal Aviation Administration issued proposed rules to address those concerns. The Company is reviewing the proposed rules.

Regional jet aircraft add a great deal of flexibility to the US Airways system because they can operate effectively in markets too small for US Airways' jet service and with stage lengths too great for turboprop
aircraft. The number of regional aircraft operated by US Airways is limited by provisions in US Airways' pilot labor contract. Based on the scope of the limitations imposed by the agreement, US Airways can currently operate approximately 70 regional jets.
US Airways currently has service agreements with Mesa Airlines, Inc., Chautauqua Airlines, Inc. and, beginning December 2000, Trans States Airlines, Inc., under which these airlines may operate regional jets for US Airways. As of September 30, 2000,
these airlines flew 27 regional jets under these agreements. By the end of 2001, the Company anticipates that collectively these airlines will be operating 70 regional jets.

In July 1998, US Airways and American Airlines, Inc. (American) entered into agreements whereby participants of each airline's frequent traveler programs (FTPs) may redeem mileage credits for award travel on either
airline. Participants may also "pool" mileage credits between FTPs. Each company compensates the other when relieved of an obligation to provide a travel award. On August 24, 2000, American gave US Airways notice of its intent to terminate this
arrangement, effective as of August 23, 2001.

Results of Operations

The following section pertains to activity included in the Company's Condensed Consolidated Statements of Operations (which are contained in Part I, Item 1A of this report) and in "Selected US Airways Operating
and Financial Statistics" below. Except where noted, operating statistics referred to below are for scheduled service only.

The pro forma amounts presented herein for US Airways Group are adjusted to show what US Airways Group would have reported if the new accounting policy related to Dividend Miles revenue recognition had been in effect
in periods prior to 2000. The pro forma amounts and certain noted operating and financial statistics presented herein for US Airways are adjusted to show what US Airways would have reported if the new accounting policy related to Dividend Miles
revenue recognition had been in effect in periods prior to 2000 and the merger of Shuttle, Inc (Shuttle) had occurred on January 1, 1999. See Note 1 in Part I, Items 1A and 1B for additional information related to the revenue recognition change and the
Shuttle merger.

Three Months Ended September 30, 2000
Compared with the
Three Months Ended September 30, 1999

Operating Revenues-Passenger transportation revenues increased $273 million or $236 million on a pro forma basis. Passenger revenues for US Airways increased $227 million on a pro forma basis due to a 19.8% increase in revenue
passenger miles (RPMs) partially offset by a 5.6% decrease in yield. Passenger transportation revenues for the wholly-owned regional airlines increased $9 million due primarily to increased yields. Cargo and freight revenues increased 23.5% reflecting the
increased cargo carrying capability of the new Airbus aircraft. Other operating revenues were relatively flat. However, on a pro forma basis these revenues would have increased by $41 million. The increase is principally due to revenues generated from sales of capacity (available seat miles or ASMs) on Mesa
Airlines, Inc. (Mesa) and Chautauqua Airlines, Inc. (Chautauqua) and revenues from sales of fuel to affiliated third parties (rate-driven). The increased revenues resulting from



17



sales of capacity on Mesa and Chautauqua are partially offset by increased expenses recognized in the Other operating expenses category related to purchases of the capacity (see below).

Operating Expenses-Personnel costs increased 2.6% due to capacity driven increases in full time equivalents and flight hours and to certain wage and benefit increases partially offset by expenses recognized in the prior year period
related to lump sum payments made to certain employee groups. Aviation fuelincreased significantly due primarily to average fuel prices increasing 54.7% over their prior year level. Commissions decreased 24.4% due primarily to an October 1999 revision in the general commission rate paid to travel
agents from 8% to 5% and more internet bookings which are generally subject to lower commission rates. Aircraft rent increased 4.8% reflecting lease expense associated with Airbus aircraft delivered subsequent to September 30, 1999. Aircraft maintenance decreased 3.8% due to higher engine repair activities and unserviceable material expenses
in 1999. Otheroperating expenses increased marginally due to expenses from sales of fuel to affiliated third parties (rate-driven) and expenses related to purchases of capacity (ASMs) on Mesa and Chautauqua partially offset by lower expenses related to US
Airways information services management contract with Sabre, Inc. (Sabre).

Other Income (Expense)-Interest expense increased due to more debt outstanding, primarily in connection with new aircraft financing. See "Liquidity and Capital Resources" below.

Earnings (Loss) per Common Share-Third quarter 2000 loss per common share was less than the prior year reflecting a lower net loss partially offset by the effect of a lower share number stemming from the share repurchases that occurred mostly
in 1999.

Nine Months Ended September 30, 2000
Compared with the
Nine Months Ended September 30, 1999

Operating Revenues-Passenger transportation revenues increased $450 million or $346 million on a pro forma basis. Passenger revenues for US Airways increased $324 million on a pro forma basis due to an 11.2% increase in RPMs
partially offset by a 4.7% decrease in yield. Passenger transportation revenues related to the wholly-owned regional airlines increased $21 million reflecting favorable yield trends. Other operating revenues were relatively flat. However, on a pro forma basis these revenues would have increased by $119 million. The increase is principally due to revenues generated from sales of capacity (available seat miles or ASMs) on Mesa
and Chautauqua (Chautauqua agreement began in July 1999), revenues from sales of fuel to affiliated third parties (rate-driven) and an increase in frequent traveler mileage credits sold to partners. The increased revenues resulting from sales of capacity
on Mesa and Chautauqua are partially offset by increased expenses recognized in the Other operating expenses category related to purchases of the capacity (see below).

Operating Expenses- The Company's results for the nine months ended September 30, 1999 include certain activity categorized as nonrecurring and unusual items. The table below shows where these items were recorded in the Company's Condensed
Consolidated Statements of Operations (dollars in millions). The nonrecurring items recognized in Operating Expenses were credits to the respective expense line item. All credits were recognized in the second quarter except the credit to Other, net (first
quarter).







(this space intentionally left blank)



18





|Operating Expenses                             |                               |    
|---------------------------------------------- | ----------------------------- | ---
|                                               | Aircraft rent                 | $  
|                                               | Aircraft maintenance          |    
|                                               | Depreciation and amortization |    
|                                               |                               |    
|                                               |                               |    
|                                               |                               |    
|Other Income (Expense)                         |                               |    
|                                               | Gain on sale of investment    |    
|                                               | Other, net                    |    
|                                               |                               |    
|                                               |                               |    
|                                               |                               |    
|Amount reflected in Income (Loss) Before Taxes | $                             | 300
|                                               |                               |    



The credits to Aircraft rent and Aircraft maintenance reflect a partial reversal of previously accrued lease obligations and lease return provisions, respectively, related to US Airways' nonoperating BAe-146 aircraft. The
credit to Depreciation and amortization reflects the partial reversal of an accrual related to the abandonment of a maintenance facility. US Airways was able to sell certain leasehold improvements at the facility for an amount higher than anticipated when
the accrual was established. All of these expense credits are considered nonrecurring items because they relate to nonrecurring items disclosed in prior periods, principally 1994 for the BAe-146 activity and 1997 for the facilities-related credit. The
gain on the sale of investment resulted from the sale of a common stock investment in Galileo International, Inc. by US Airways Investment Management Company, Inc. The credit to Other, net reflects a $10 million gain which resulted from the sale of
approximately 30% of US Airways' interest in Equant n.v.

The Company's Personnel costs increased 6.4% due to capacity driven increases in full time equivalents, flight hours and certain wage rates partially offset by expenses recognized in the prior year period related
to lump sum payments made to certain employee groups. Aviation fuelincreased 84.5% due primarily to average fuel prices increasing 71.1% over their prior year level. Commissions decreased 24.9% due primarily to an October 1999 revision in the general commission rate paid to travel agents from
8% to 5% and more internet bookings which are generally subject to lower commission rates, if any. Aircraft rent increased 7.3%, excluding the effects of the prior period nonrecurring item, reflecting lease expense associated with Airbus aircraft delivered subsequent to September 30, 1999. Aircraft maintenance increased 3.3%, excluding
the effects of the prior period nonrecurring item, as the Company incurred additional expenses in successfully eliminating the backlog of aircraft waiting for scheduled maintenance. Other selling expenses increased 10.4% due to US Airways conducting an expanded advertising campaign dubbed "Win Back" targeted at passengers electing to fly other airlines as a result of past operational issues, and to higher credit card and
CRS fees. Depreciation and amortization increased 9.1%, excluding the effects of the prior period nonrecurring item, due to the purchase of new Airbus aircraft and higher depreciation expenses associated with reducing the remaining depreciable life of
certain DC-9-30 and B737-200 aircraft. Otheroperating expenses increased due to expenses from sales of fuel to affiliated third parties (rate-driven), expenses related to purchases of capacity (ASMs) on Mesa and Chautauqua (Chautauqua agreement began in July 1999) and increases in
capacity related expenses including passenger food and crew travel. These increases were partially offset by lower expenses associated with US Airways' information systems contract with Sabre. Expenses in 1999 related to the Sabre contract were
higher than normal due to a high number of scheduled data migration projects during that period.

Other Income (Expense)-Interest income increased due to higher investment balances than prior year. US Airways invested the proceeds of $500 million related to its senior secured credit facilities in interest-bearing cash equivalents for
the period March 15, 2000 to May 4, 2000, the repayment date. Interest expense increased due to more debt outstanding, including the $500 million senior secured credit facilities. Other, net includes a $10 million gain which resulted from the sale of approximately 30% of US Airways' interest in
Equant n.v. in the first quarter of 1999.



19



Provision (Credit) for Income Taxes-The Company's tax credit for the nine months ended September 30, 2000 was $11 million based on the loss before taxes of $76 million partially offset by cumulative permanent differences.

Earnings (Loss) per Common Share-Earnings per common share was adversely affected by lower net earnings and by the effect of a lower share number stemming from the share repurchases that occurred mostly in 1999.

Selected US Airways Operating and Financial Statistics (Note 1)

|                                                      |        |   | Three Months        |        |   |          |                     |      | Nine Months |          |      |        |       
|----------------------------------------------------- | ------ | - | ------------------- | ------ | - | -------- | ------------------- | ---- | ----------- | -------- | ---- | ------ | ------
|                                                      |        |   | Ended September 30, |        |   | Increase | Ended September 30, |      |             | Increase
|                                                      |        |   | 2000                |        |   | 1999     |                     |      | (Decrease)  | 2000     |      |        | 1999  
|Revenue passengers (thousands)* 
     (Note 13)       | 15,809 |   |                     | 14,369 |   |          | 10.0                | %    |             | 45,031   |      |        | 42,901
|Total RPMs (millions) (Notes 2 and 13)                | 12,890 |   |                     | 10,771 |   |          | 19.7                | %    |             | 34,892   |      |        | 31,409
|RPMs (millions)* (Note 13)                            | 12,879 |   |                     | 10,750 |   |          | 19.8                | %    |             | 34,849   |      |        | 31,343
|Total ASMs (millions) (Notes 3 and 13)                | 17,680 |   |                     | 15,084 |   |          | 17.2                | %    |             | 49,348   |      |        | 44,400
|ASMs (millions)* (Note 13)                            | 17,666 |   |                     | 15,056 |   |          | 17.3                | %    |             | 49,295   |      |        | 44,316
|Passenger load factor* (Notes 4 and 13)               | 72.9   | % |                     | 71.4   | % |          | 1.5                 | pts. | 70.7        | %        |      | 70.7   | %     
|Break-even load factor (Note 5)                       |        |   | 75.4                | %      |   | 76.6     | %                   |      | (1.2        | )pts.    | 73.0 | %      |       
|Yield* (Notes 6, 12 and 13)                           |        |   | 15.27               | c      |   | 16.18    | c                   |      | (5.6        | )%       |      | 16.41  | c     
|Passenger revenue per ASM* 
     (Notes 7, 12 and 13) | 11.13  | c |                     | 11.56  | c |          | (3.7                | )%   |             | 11.60    | c    |        | 12.18 
|Revenue per ASM (Notes 8, 12 and 13)                  | 12.15  | c |                     | 12.59  | c |          | (3.5                | )%   |             | 12.67    | c    |        | 13.22 
|Cost per ASM (Notes 9 and 13)                         |        |   | 12.28               | c      |   | 13.57    | c                   |      | (9.5        | )%       |      | 12.75  | c     
|Average passenger journey (miles)* 
     (Note 13)    | 815    |   |                     | 748    |   |          | 9.0                 | %    |             | 774      |      |        | 731   
|Average stage length (miles)*                         |        |   | 649                 |        |   | 626      |                     |      | 3.7         | %        |      | 637    |       
|Revenue aircraft miles (millions)*                    |        |   | 126                 |        |   | 109      |                     |      | 15.6        | %        |      | 355    |       
|Cost of aviation fuel per gallon (Note 10)            | 98.27  | c |                     | 63.53  | c |          | 54.7                | %    |             | 91.04    | c    |        | 53.21 
|Cost of aviation fuel per gallon,                     |        |   |                     |        |   |          |                     |      |             |          |      |        |       
|excluding fuel taxes (Note 11)                        | 91.33  | c |                     | 57.21  | c |          | 59.6                | %    |             | 84.45    | c    |        | 47.01 
|Gallons of aviation fuel consumed (millions)          | 335    |   |                     | 287    |   |          | 16.7                | %    |             | 929      |      |        | 848   
|Scheduled mileage completion factor*                  | 97.8   | % |                     | 95.3   | % |          | 2.5                 | pts. | 97.2        | %        |      | 96.3   | %     
|Number of aircraft in operating fleet                 |        |   |                     |        |   |          |                     |      |             |          |      |        |       
|at period-end (Note 13)                               |        |   | 416                 |        |   | 404      |                     |      | 3.0         | %        |      | 416    |       
|Full-time equivalent employees                        |        |   |                     |        |   |          |                     |      |             |          |      |        |       
|at period-end (Note 13)                               |        |   | 44,026              |        |   | 40,993   |                     |      | 7.4         | %        |      | 44,026 |       

c= cents

* Scheduled service only (excludes charter service).



|Note 1.  | Operating statistics include US Airways' "mainline" operations as well as the operations of    
|-------- | -----------------------------------------------------------------------------------------------
|         |                                                                                                
|         |                                                                                                
|         |                                                                                                
|         |                                                                                                
|         |                                                                                                
|Note 2.  |                                                                                                
|Note 3.  |                                                                                                
|         |                                                                                                
|Note 4.  |                                                                                                
|Note 5.  |                                                                                                
|         |                                                                                                
|Note 6.  |                                                                                                
|Note 7.  |                                                                                                
|Note 8.  |                                                                                                
|Note 9.  | Total Operating Expenses divided by ASMs (a measure of unit cost).                             
|Note 10. | Includes the base cost of aviation fuel, fuel taxes and transportation charges.                
|Note 11. | Includes the base cost of aviation fuel and transportation charges (excludes fuel taxes).      
|Note 12. | Effective January 1, 2000, US Airways changed its accounting policy related to Dividend        
|         |                                                                                                
|         |                                                                                                
|         |                                                                                                
|Note 13. | Includes the activity of the former Shuttle, Inc. on a pro forma basis as if it was merged into
|         |                                                                                                



20



Capacity (as measured by ASMs) increased 17.3% and 11.2% for the three and nine months ended September 30, 2000, respectively. RPMs increased 19.8% and 11.2% for the three and nine months ended September 30, 2000,
respectively. These increases resulted in a 72.9% and 70.7% passenger load factor, respectively. The increase in capacity reflects more aircraft, longer average stage lengths and improved operational performance. RPM growth in the first nine months of
2000 was adversely impacted by severe weather along the Eastern U.S. particularly in January and June, reduced passenger traffic stemming from the then-threatened March 25, 2000 shutdown, air traffic control delays and passenger apprehensions of flying on
or around December 31, 1999.

US Airways' unit revenue (revenue per ASM) fell 3.5% and 4.2% for the three and nine months ended September 30, 2000, respectively, reflecting marginally higher revenues on increased capacity. Its unit cost (cost per ASM)
decreased 9.5% and 1.7% for the three and nine months ended September 30, 2000, respectively, reflecting better operational performance, lower commission costs and increased capacity partially offset by significantly higher fuel costs. The impact of fuel
costs on unit cost was significant. Pro forma unit cost excluding fuel decreased by 15.5% and 7.6% compared to the prior year periods for the three and nine months ended September 30, 2000, respectively.

Liquidity and Capital Resources

As of September 30, 2000, the Company's Cash, Cash equivalents and Short-term investments totaled $1.2 billion. The Company's ratio of current assets to current liabilities (current ratio) was 0.8 (the Company's
Condensed Consolidated Balance Sheets are contained in Part I, Item 1A of this report). As of December 31, 1999, the Company's Cash, Cash equivalents and Short-term investments totaled $870 million and the current ratio was 0.8.

For the first nine months of 2000, the Company's operating activities provided net cash of $645 million (as presented in the Company's Condensed Consolidated Statements of Cash Flows, which are contained in Part I, Item
1A of this report) compared to $654 million for the first nine months of 1999. Operating cash flows during the first nine months of 2000 were adversely affected by the same factors that impacted financial results during that period (see discussion in
"Results of Operations").

For the first nine months of 2000, investing activities included cash outflows of $1.46 billion related to capital expenditures. Capital expenditures included $1.44 billion for new aircraft (including purchase deposits)
with the balance related to rotables, ground equipment (including training equipment) and miscellaneous assets. During January 2000, US Airways received $81 million related to its December 1999 exercise of Sabre options. The net cash used for investing
activities for the nine months ended September 30, 2000 was $1.42 billion. Investing activities during the first nine months of 1999 included cash outflows of $1.07 billion related to capital expenditures and cash inflows of $43million related to asset dispositions. Capital expenditures included $967million for aircraft and aircraft-related assets, including the purchase of 24 new Airbus A320-Family aircraft, the purchase of twelve aircraft that were previously
leased (including five nonoperating BAe-146 aircraft which were immediately sold) and purchase deposits related to new Airbus aircraft scheduled for future delivery. Net cash used for the first nine months of 1999 was $750 million.

Net cash provided by financing activities during the first nine months of 2000 was $1.06 billion. US Airways received proceeds of $500 million from its senior secured credit facilities (Facilities) in March 2000 and $514
million from mortgages of eight A320-family aircraft and five A330 aircraft. In addition, US Airways received $37 million from special facility revenue bond financings (see below) and $582 million from sale-leaseback transactions for 18 A320-family
aircraft. These proceeds were partially offset by the early January purchase of 0.6 million shares of Common Stock on the open market for $20 million, the $500 million repayment of the Facilities on May 4, 2000



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and scheduled principal repayments of long-term debt of $55 million. Net cash used for financing activities during the first nine months of 1999 was $119 million, including $670 million related to the Company's purchase of 12 million shares of its
common stock. Besides normal debt repayments, US Airways retired early certain debt with a principal amount of $46 million during the first nine months of 1999. These cash outflows were partially offset by sale-leaseback transactions for 18 of the new
Airbus aircraft purchased in the first nine months of 1999 generating proceeds of $600 million.

In July 2000, the Philadelphia Authority for Industrial Development issued $71 million of special facility revenue bonds, the proceeds of which were provided to US Airways in the form of an unsecured loan. US Airways
intends to utilize the proceeds to finance various improvements at the Philadelphia International Airport where US Airways has significant operations. The bond proceeds are restricted to expenditures at the Philadelphia International Airport and unspent
amounts are classified as a component of Other assets, net in the balance sheets.

In September 2000, the City of Charlotte issued $35 million of special facility revenue bonds, the proceeds of which will be used to pay the cost of design, acquisition, construction and equipping of certain airport
related facilities to be leased to US Airways at the Charlotte/Douglas International Airport.

In October 2000, US Airways filed a shelf registration statement to sell up to $1.2 billion in pass through certificates. In November 2000, US Airways completed an offering of enhanced equipment trust certificates for
$491 million. Simultaneously with this offering, US Airways completed a private placement transaction of enhanced equipment trust certificates totaling $157 million. The proceeds of this financing will be used to partially finance 23 A320-family aircraft
with expected delivery dates through February 2001. US Airways completed enhanced equipment trust certificate offerings in March 2000 and August 2000 for $282 million and $362 million, respectively.

The minimum determinable payments associated with the Company's acquisition agreements for Airbus aircraft (including progress payments, payments at delivery, buyer-furnished equipment, spares, capitalized interest,
penalty payments, cancellation fees and/or nonrefundable deposits) were estimated at $692 million for the three months ended December 31, 2000, $1.15 billion in 2001, $587 million in 2002, $289 million in 2003 and $501 million thereafter. See Note 6in Part I, Item 1A for additional information related to Airbus aircraft.

Updated Outlook

Year-over-year unit revenue performance for the fourth quarter of 2000 is expected to decline as pressure on yields continues. Year-over-year unit cost for the fourth quarter of 2000 is expected to be even with last
year's level or to decline slightly. US Airways anticipates paying $1.06 per gallon including taxes for the fourth quarter of 2000. Based on expected downward pressures on yield, higher fuel costs and other factors, US Airways expects to post a loss for
the fourth quarter of 2000.

Available seat miles are expected to increase 13% year-over-year for the fourth quarter of 2000. East-west capacity is expected to grow approximately 27% and Florida capacity will increase approximately 15%. Load factor
for the fourth quarter of 2000 is expected to increase by approximately 1.5 percentage points. US Airways expects to take delivery of 18 A320-family aircraft and two A330 aircraft in the fourth quarter of 2000, 23 A321 aircraft and two A330 aircraft in
2001, and 17 A320-family aircraft in 2002. US Airways expects to retire 20 DC9s, eight MD80s and one Boeing 737-200 aircraft in 2001. Based on these assumptions, US Airways' capacity is expected to increase 8% to 10% in 2001.



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Item 3.	Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the Company's disclosures related to certain market risks as reported under Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," in the Annual Report
of US Airways Group, Inc. and US Airways, Inc. to the U.S. Securities and Exchange Commission on Form 10-K for the year ended December 31, 1999 except as discussed below.

For the nine months ended September 30, 2000 and 1999, aviation fuel expenses represented 13.1% and 7.9%, respectively, of the Company's total operating expenses (as adjusted to exclude certain nonrecurring and unusual
items). Based upon the Company's nine months ended September 30, 2000 fuel consumption, a hypothetical 10% increase in the average price per gallon of aircraft fuel experienced in the nine months ended September 30, 2000 would increase the Company's
aviation fuel expense by $90 million. The change in market risk from December 31, 1999 is due primarily to the increase in fuel prices.

Part II. 	Other Information

Item 1. 	Legal Proceedings

In May 1995, the Company, US Airways and the Retirement Income Plan for Pilots of US Airways, Inc. were sued in federal district court for the District of Columbia by 481 active and retired pilots alleging that
defendants had incorrectly interpreted the plan provisions and erroneously calculated benefits under the Pilots Pension Plan. The plaintiffs sought damages in excess of $70 million. In May 1996, the court issued a decision granting US Airways' motion to
dismiss the majority of the complaint for lack of jurisdiction, deciding that the dispute must be resolved through the arbitration process under the Railway Labor Act because the Pilots Pension Plan was collectively bargained. In February 1999, the U.S.
Court of Appeals upheld the district court's decision originally granted in May 1996 in the defendants' favor. In May 1999, the plaintiffs filed a petition for certiorari with the U.S. Supreme Court. In October 1999, the U.S. Supreme Court denied the
plaintiff's petition for certiorari. The U.S. District Court has retained jurisdiction over one count of the complaint alleging violation of a disclosure requirement under ERISA. In August 2000, the U.S. District Court dismissed the remaining count
without prejudice, giving the plaintiff the right to reinstate their claims after completion of the arbitration proceedings. Certain of the plaintiffs have filed a claim before the US Airways Pilot Retirement Board requesting arbitration of their claim
for benefits which they believe were erroneously calculated. The Retirement Board is in the process of selecting an arbitrator to decide certain issues related to the plaintiffs' claims for benefits. The Company is unable to predict at this time the
ultimate resolution of these proceedings.

Commencing on May 24, 2000, the Company, along with several of its officers and directors and, in all suits other than one, UAL Corporation, have been named as defendants in eight putative class actions filed in the Court
of Chancery of the State of Delaware in and for the New Castle County (Court). The plaintiffs allege that they have been and will be damaged by the agreement reached between US Airways Group, UAL Corporation, and Robert Johnson with respect to the
acquisition by an entity to be established by Mr. Johnson of certain assets located at Reagan Washington National Airport that are to be divested by UAL Corporation upon consummation of the merger. The plaintiffs allege, among other things, that the
individual defendants have breached their duty of loyalty and their fiduciary duties in entering into the agreement with Mr. Johnson. On November 9, 2000, the Company entered into a memorandum of understanding to settle the class actions, subject to
consummation of the merger, negotiation of a definitive settlement agreement and Court approval of the settlement. There can be no assurance that the Court will approve the settlement as proposed.



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The Company was also named as a nominal defendant in a derivative action filed in the Court of Chancery based upon the same allegations. The derivative plaintiff brought causes of action for (i) breach of fiduciary duty;
(ii) gross mismanagement; and (iii) corporate waste of assets. The plaintiff in the derivative action seeks, among other things, declaratory and equitable relief, unspecified compensatory damages and attorney's fees.

There have been no other 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,
1999, and the Quarterly Report on Form 10-Q of both companies for the quarterly period ended June 30, 2000.

Item 6. 	Exhibits and Reports on Form 8-K

A. Exhibits

Designation                Description

27.1        Financial Data Schedule-US Airways Group
27.2        Financial Data Schedule-US Airways

B. Reports on Form 8-K

Date of Report                                        
   Subject of Report

|October 26, 2000   | Underwriting agreement filed as an Exhibit in connection with,
|------------------ | --------------------------------------------------------------
|                   |                                                               
|                   |                                                               
|                   |                                                               
|                   |                                                               
|                   |                                                               
|                   |                                                               
|                   |                                                               
|October 18, 2000   |                                                               
|                   |                                                               
|                   |                                                               
|                   |                                                               
|                   |                                                               
|October 10, 2000   |                                                               
|                   |                                                               
|                   |                                                               
|                   |                                                               
|September 12, 2000 | Certain forward-looking information was provided by US        
|                   |                                                               
|                   |                                                               
|                   |                                                               
|August 2, 2000     |                                                               
|                   |                                                               
|                   |                                                               
|                   |                                                               
|                   |                                                               
|                   |                                                               
|                   |                                                               



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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 hereunto duly authorized.



US Airways Group, Inc. (REGISTRANT)

Date: November 13, 2000                                      
    By:/s/ Anita P. Beier                                         
                                      Anita P. Beier
                                          
                                     Vice President and Controller
                                          
                                     (Chief Accounting Officer)

US Airways, Inc. (REGISTRANT)

Date: November 13, 2000                                      
    By:/s/ Anita P. Beier                                         
                                      Anita P. Beier
                                          
                                     Vice President and Controller
                                          
                                     (Chief Accounting Officer)



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