US Airways’ CEO Testifies Before Congress Regarding the State of the Airline Industry

TEMPE, Ariz., Jan. 24 /PRNewswire-FirstCall/ — US Airways announced that its Chairman and Chief Executive Officer, Doug Parker, will testify today at the Senate Commerce, Science and Transportation Committee hearing on “The State of the Airline Industry: the Potential Impact of Airline Mergers and Industry Consolidation,” calling upon the Senate to allow market forces to continue to bring about positive change for the airline industry. The hearing will begin at 10:00 am ET, Wednesday, January 24, in Room 253 of the Russell Senate Office Building.

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When Mr. Parker last addressed the Committee, shortly after the tragic events of September 11th, the airline industry was in a precipitous financial situation. At that time, Members of the Committee and others in Congress stood with the industry by demonstrating leadership and conviction in enacting legislation to provide much needed liquidity to our industry. The measures passed by Congress — direct cash transfers, the creation of a loan stabilization board, and relief on war risk insurance premiums, among other actions — enabled the industry to cover its basic operating expenses, including paying employees and serving communities at a time when commercial loans and financing were unavailable at any cost.

In his prepared testimony, Mr. Parker said, “All of us in the industry were grateful for the help of the nation. And we all knew that the industry, like America, had been changed forever. But none of us could have foreseen the severity and duration of the crisis that faced airlines. Since 2001 there have been 24 Chapter 11 filings and 5 liquidations, $35 billion in cumulative losses; and 154,000 airline industry employees who have lost their jobs. The severe impact of multiple shocks to the aviation industry caused the industry to repeatedly come back to Congress for help on a regular basis. While Congress did help, we also heard the message — and appropriately so — that federal support should be the exception, and not the rule — and that it was time, as an industry, that we got our own house in order. At America West — now US Airways — we took that message to heart.”

According to Mr. Parker’s testimony, aggressive cost management and consumer friendly policies and pricing allowed America West to return to profitability. The merger of America West and US Airways in 2005 further accelerated both profitability and benefits to employees and consumers. US Airways posted a profit excluding special items for the first three quarters of 2006, and is one of the only network carriers to project a profit for the fourth quarter.

“The frontline employees of US Airways and America West who sacrificed so much to turn around and then merge our companies will receive 2006 profit sharing payments in March. In fact, year-to-date through September 2006, our total accrual for profit sharing was $48 million. We fully anticipate that amount to increase after we report our fourth quarter results next week,” said Mr. Parker in his prepared testimony.

Consumers have benefited from popular fare reductions in diverse markets such as Augusta, GA; Huntsville, AL; Huntington, WV; Syracuse, NY, Willimington, NC; Harrisburg, PA; and most recently, Charlottesville, VA. In total, US Airways has lowered fares by as much as 83 percent in over 1,100 markets.

US Airways’ proposed merger with Delta Air Lines Inc. provides an opportunity to replicate and exceed the success of the America West/US Airways merger, and create one of the most financially stable airlines in the industry; an airline that can compete successfully against all carriers: low-cost, traditional, and international mega-carriers. All domestic airports that have US Airways or Delta service today will be served by the new Delta after the merger.

In his prepared remarks, Mr. Parker testified, “With the ability to lower costs, gain efficiencies and adjust flying to better align demand and capacity, we believe we can lower fares in dozens of new markets and communities, just as we are doing at US Airways today. Moreover, passengers will benefit from the ability to get to more destinations via more routings; it is far more likely that thanks to the new Delta more passengers will be able to get to their destination at a time convenient for them and at a price that is reasonable, than would be possible under either stand-alone Delta or US Airways.”

Mr. Parker pledged to the Committee members, “We will not furlough any frontline employees of Delta or US Airways as part of this merger. We will align the work group cost structures between current US Airways and Delta employees, and going forward we will move to the higher cost scale. In fact, the day after the merger closes Delta employees won’t notice any changes-not even a change to the name of the airline. Over time, we will seek to take the best practices from either Delta or US Airways and standardize them across the new combined airline. Our ultimate goal is to build a stronger and more secure future for all of our stakeholders.”

“The airline industry remains extremely fragmented with substantial levels of excess capacity. Even after the merger, and the announced capacity reductions, our industry will remain highly-competitive, and consumers will continue to enjoy high-service levels and low fares. We have put forth a fair and equitable proposal, which we have enhanced to make even more compelling, to merge with Delta while the carrier is still in bankruptcy, and to make the combination of Delta and US Airways into a stronger, more competitive carrier than either carrier can become on its own,” testified Mr. Parker.

Mr. Parker’s prepared remarks concluded, “Our industry stands at a crossroads. We can continue down the current path of boom and bust uncertainty, or we can chart a new course. The question that legislators and policymakers face is simple; shall we embrace change to better serve our customers, employees and communities, or are we content with a future of continued financial uncertainty and government bailouts? We believe — and our experience has proven — that we have to break with the failed policies of the past in order to provide a more sustainable future for all stakeholders.”

[A copy of Mr. Parker's testimony is available upon request.]

US Airways is the fifth largest domestic airline employing nearly 35,000 aviation professionals worldwide. US Airways, US Airways Shuttle and US Airways Express operate approximately 3,800 flights per day and serve more than 230 communities in the U.S., Canada, Europe, the Caribbean and Latin America. The new US Airways — the product of a merger between America West and US Airways in September 2005 — is a member of the Star Alliance, which provides connections for our customers to 841 destinations in 157 countries worldwide. This press release and additional information on US Airways can be found at http://www.usairways.com/. (LCCG)

FORWARD-LOOKING STATEMENTS

Certain of the statements contained herein should be considered “forward- looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,”"will,”"expect,”"intend,”"indicate,”"anticipate,”"believe,”"forecast,”"estimate,”"plan,”"guidance,”"outlook,”"could,”"should,”"continue” and similar terms used in connection with statements regarding the outlook of US Airways Group, Inc. (the “Company”). Such statements include, but are not limited to, statements about expected fuel costs, the revenue and pricing environment, the Company’s expected financial performance and operations, future financing plans and needs, overall economic conditions and the benefits of the business combination transaction involving America West Holdings Corporation and US Airways Group, including future financial and operating results and the combined companies’ plans, objectives, expectations and intentions. Other forward-looking statements that do not relate solely to historical facts include, without limitation, statements that discuss the possible future effects of current known trends or uncertainties or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. Such statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties that could cause the Company’s actual results and financial position to differ materially from the Company’s expectations. Such risks and uncertainties include, but are not limited to, the following: the impact of high fuel costs, significant disruptions in the supply of aircraft fuel and further significant increases to fuel prices; our high level of fixed obligations and our ability to obtain and maintain financing for operations and other purposes; our ability to achieve the synergies anticipated as a result of the merger and to achieve those synergies in a timely manner; our ability to integrate the management, operations and labor groups of US Airways Group and America West Holdings; labor costs and relations with unionized employees generally and the impact and outcome of labor negotiations; the impact of global instability, including the current instability in the Middle East, the continuing impact of the military presence in Iraq and Afghanistan and the terrorist attacks of September 11, 2001 and the potential impact of future hostilities, terrorist attacks, infectious disease outbreaks or other global events that affect travel behavior; reliance on automated systems and the impact of any failure or disruption of these systems; the impact of future significant operating losses; changes in prevailing interest rates; our ability to obtain and maintain commercially reasonable terms with vendors and service providers and our reliance on those vendors and service providers; security-related and insurance costs; changes in government legislation and regulation; our ability to use pre-merger NOLs and certain other tax attributes; competitive practices in the industry, including significant fare restructuring activities, capacity reductions and in court or out of court restructuring by major airlines; continued existence of prepetition liabilities; interruptions or disruptions in service at one or more of our hub airports; weather conditions; our ability to obtain and maintain any necessary financing for operations and other purposes; our ability to maintain adequate liquidity; our ability to maintain contracts that are critical to our operations; our ability to operate pursuant to the terms of our financing facilities (particularly the financial covenants); our ability to attract and retain customers; the cyclical nature of the airline industry; our ability to attract and retain qualified personnel; economic conditions; and other risks and uncertainties listed from time to time in our reports to the Securities and Exchange Commission. There may be other factors not identified above of which the Company is not currently aware that may affect matters discussed in the forward-looking statements, and may also cause actual results to differ materially from those discussed. All forward-looking statements are based on information currently available to the Company. The Company assumes no obligation to publicly update or revise any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting such estimates. Additional factors that may affect the future results of the Company are set forth in the section entitled “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the period ended Sept. 30, 2006, which is available at http://www.usairways.com/.

-LCC-

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US Airways

CONTACT: US Airways Media Relations, +1-480-693-5729

Web site: http://www.usairways.com/