US AIRWAYS GROUP INC (Form: 10-K, Received: 02/21/2008 06:03:58)

Passenger seated area

SPL[dB(A)]

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

Form 10-K


(Mark One)

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended December 31, 2007
or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from to

US Airways Group, Inc.

(Exact name of registrant as specified in its charter)

(Commission File No. 1-8444)


Delaware (State or other Jurisdiction of Incorporation or Organization)		54-1194634 (IRS Employer Identification No.)

111 West Rio Salado Parkway, Tempe, Arizona 85281

(Address of principal executive offices, including zip code)

(480) 693-0800

(Registrants telephone number, including area code)

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


Title of Each Class		Name of Each Exchange on Which Registered

Common Stock, $0.01 par value		New York Stock Exchange

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

US Airways, Inc.

(Exact name of registrant as specified in its charter)

(Commission File No. 1-8442)


Delaware (State or other Jurisdiction of Incorporation or Organization)		54-0218143 (IRS Employer Identification No.)

111 West Rio Salado Parkway, Tempe, Arizona 85281

(Address of principal executive offices, including zip code)

(480) 693-0800

(Registrants telephone number, including area code)

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

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement related to US Airways Group, Inc.’s 2008 Annual Meeting of Stockholders, which proxy statement will be filed under the Securities Exchange Act of 1934 within 120 days of the end of US Airways Group, Inc.’s fiscal year ended December 31, 2007, are incorporated by reference into Part III of this Annual Report on Form 10-K.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.


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

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.


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

Indicate by check mark whether each registrant: (1) has 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

US Airways Group, Inc.

Large accelerated filer þ

Accelerated filer o

Non-accelerated filer o

Smaller reporting company o

US Airways, Inc.

Large accelerated filer o

Accelerated filer o

Non-accelerated filer þ

Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


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

The aggregate market value of common stock held by non-affiliates of US Airways Group, Inc. as of June 30, 2007 was approximately $2.7 billion.

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.


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

As of February 15, 2008, there were 91,868,160 shares of US Airways Group, Inc. common stock outstanding.

As of February 15, 2008, US Airways, Inc. had 1,000 shares of common stock outstanding, all of which were held by US Airways Group, Inc.

US Airways Group, Inc.

US Airways, Inc.

Form 10-K

Year Ended December 31, 2007

Table of Contents


			Page

PART I
	Item 1.	Business		5
	Item 1A.	Risk Factors		16
	Item 1B.	Unresolved Staff Comments		24
	Item 2.	Properties		24
	Item 3.	Legal Proceedings		28
	Item 4.	Submission of Matters to a Vote of Security Holders		28

PART II
	Item 5.	Market for US Airways Group’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		29
	Item 6.	Selected Financial Data		30
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		34
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		65
	Item 8A.	Consolidated Financial Statements and Supplementary Data of US Airways Group, Inc.		67
	Item 8B.	Consolidated Financial Statements and Supplementary Data of US Airways, Inc.		127
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		180
	Item 9A.	Controls and Procedures		180
	Item 9B.	Other Information		180

PART III
	Item 10.	Directors, Executive Officers and Corporate Governance		180
	Item 11.	Executive Compensation		181
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		181
	Item 13.	Certain Relationships and Related Transactions and Director Independence		181
	Item 14.	Principal Accountant Fees and Services		181

PART IV
	Item 15.	Exhibits and Financial Statement Schedules		182
		SIGNATURES
EX-10.3
EX-10.4
EX-10.5
EX-10.18
EX-10.19
EX-10.45
EX-10.46
EX-10.47
EX-10.96
EX-10.106
EX-21.1
EX-23.1
EX-31.1
EX-31.2
EX-31.3
EX-31.4
EX-32.1
EX-32.2

This combined Annual Report on Form 10-K is filed by US Airways Group, Inc. (“US Airways Group”) and its wholly owned subsidiary US Airways, Inc. (“US Airways”). References in this Form 10-K to “we,” “us,” “our” and the “Company” refer to US Airways Group and its consolidated subsidiaries.

Note Concerning Forward-Looking Statements

Certain of the statements contained in this report 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,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” and “continue” and similar terms used in connection with statements regarding our outlook, expected fuel costs, the revenue environment, and our expected financial performance. These statements include, but are not limited to, statements about the benefits of the business combination transaction involving America West Holdings Corporation (“America West Holdings”) and US Airways Group, including future financial and operating results, our plans, objectives, expectations and intentions and other statements that are not historical facts. These statements are based upon the current beliefs and expectations of management and are subject to significant risks and uncertainties that could cause our actual results and financial position to differ materially from these statements. These risks and uncertainties include, but are not limited to, those described below under Item 1A. “Risk Factors” and the following:


	•	the impact of high fuel costs, significant disruptions in the supply of aircraft fuel and further significant increases to fuel prices;

	•	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, 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 high level of fixed obligations and our ability to obtain and maintain financing for operations and other purposes;

	•	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;

	•	competitive practices in the industry, including significant fare restructuring activities, capacity reductions and in court or out of court restructuring by major airlines;

	•	interruptions or disruptions in service at one or more of our hub airports;

	•	weather conditions;

	•	our ability to use pre-merger NOLs and certain other tax attributes;

	•	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.

All of the forward-looking statements are qualified in their entirety by reference to the factors discussed below under Item 1A. “Risk Factors.” There may be other factors not identified above, or in Item 1A, of which we are 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. We assume no obligation to publicly update any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these estimates other than as required by law. Any forward-looking statements speak only as of the date of this Form 10-K.

PART I


Item 1.	*Business*

Overview

US Airways Group, a Delaware corporation, is a holding company formed in 1982 and whose origins trace back to the formation of All American Aviation in 1939. US Airways Group’s principal executive offices are located at 111 West Rio Salado Parkway, Tempe, Arizona 85281. US Airways Group’s telephone number is (480) 693-0800, and its internet address is www.usairways.com. US Airways Group is a holding company whose primary business activity is the operation of a major network air carrier through its wholly owned subsidiaries US Airways, Piedmont Airlines, Inc. (“Piedmont”), PSA Airlines, Inc. (“PSA”), Material Services Company, Inc. (“MSC”), and Airways Assurance Limited. On September 12, 2004, US Airways Group and its domestic subsidiaries, US Airways, Piedmont, PSA and MSC (collectively, the “Debtors”), which at the time accounted for substantially all of the operations of US Airways Group, filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Eastern District of Virginia, Alexandria Division (the “Bankruptcy Court”). On May 19, 2005, US Airways Group signed a merger agreement with America West Holdings Corporation (“America West Holdings”) pursuant to which America West Holdings merged with a wholly owned subsidiary of US Airways Group. The merger agreement was amended by a letter of agreement on July 7, 2005. The merger became effective upon US Airways Group’s emergence from bankruptcy on September 27, 2005.

As a result of the merger, we operate the fifth largest airline in the United States as measured by domestic revenue passenger miles (“RPMs”) and available seat miles (“ASMs”). For the years ended December 31, 2007, 2006 and 2005, passenger revenues accounted for approximately 93%, 93% and 92%, respectively, of our operating revenues. Cargo revenues and other sources accounted for 7%, 7% and 8% of our operating revenues in 2007, 2006 and 2005, respectively. We have primary hubs in Charlotte, Philadelphia and Phoenix and secondary hubs/focus cities in Las Vegas, New York, Washington, D.C. and Boston. We are a low-cost carrier offering scheduled passenger service on approximately 3,800 flights daily to 230 communities in the continental United States, Hawaii, Alaska, Canada, the Caribbean, Latin America and Europe, making us the only U.S. based low-cost carrier with a significant international route presence. We are also the only low-cost carrier with an established East Coast route network, including the US Airways Shuttle service, with substantial presence at capacity constrained airports including New York’s LaGuardia Airport and the Washington, D.C. area’s Ronald Reagan Washington National Airport. We had approximately 58 million passengers boarding our mainline flights in 2007. During 2007, we provided regularly scheduled service or seasonal service at 137 airports. During 2007, the US Airways Express network served 201 airports in the United States, Canada, the Caribbean and Latin America, including approximately 82 airports also served by our mainline operation. During 2007, US Airways Express air carriers had approximately 27 million passengers boarding their planes. As of December 31, 2007, we operated 356 mainline jets and are supported by our regional airline subsidiaries and affiliates operating as US Airways Express, which operate approximately 232 regional jets and 104 turboprops.

On September 26, 2007, as part of the integration efforts following the merger of US Airways Group and America West Holdings, America West Airlines, Inc. (“AWA”) surrendered its Federal Aviation Administration (“FAA”) operating certificate. As a result, all mainline airline operations are now being conducted under US Airways’ FAA operating certificate. In connection with the combination of all mainline airline operations under one FAA operating certificate, US Airways Group contributed 100% of its equity interest in America West Holdings, the parent company of AWA, to US Airways. As a result, America West Holdings and AWA are now wholly owned subsidiaries of US Airways. In addition, AWA transferred substantially all of its assets and liabilities to US Airways. All off-balance sheet commitments of AWA were also transferred to US Airways. Pilots, flight attendants, and ground and maintenance employees continue to work under the terms of their respective collective bargaining agreements, including, in some cases, transition agreements reached in connection with the merger.

Our results are seasonal. Operating results are typically highest in the second and third quarters due to greater demand for air and leisure travel during the summer months and US Airways’ combination of business traffic and North-South leisure traffic in the eastern and western United States during those periods. For information regarding

operating revenue in US Airways Group’s and US Airways’ principal geographic areas, see Notes 15 and 12 to their respective financial statements included in Items 8A and 8B of this Form 10-K.

Material Services Company and Airways Assurance Limited operate in support of our airline subsidiaries in areas such as the procurement of aviation fuel and insurance.

Available Information

You may read and copy any materials US Airways Group or US Airways files with the Securities and Exchange Commission (“SEC”) at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. A copy of this Annual Report on Form 10-K, as well as other Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports are accessible free of charge at www.usairways.com and at the SEC’s website at www.sec.gov as soon as reasonably possible after the report is filed with or furnished to the SEC.

Airline Industry

A number of structural changes in the industry have taken shape over the past three years, including restructuring through the Chapter 11 process by four legacy carriers, including US Airways. While domestic capacity continues to rationalize through fleet reductions and the redeployment of aircraft to international markets, whether demand can remain at historically high levels in the face of rising fares is unclear.

Despite rising fuel costs throughout the year, the airline industry reported an annual profit in 2007, excluding special items and bankruptcy-related costs. While fares have increased over the prior year absorbing some of the fuel cost increase, they still remain at historically low levels on an inflation-adjusted basis.

As we begin 2008, the airline industry appears to be headed for another challenging period due to extremely high oil prices and a potential economic slowdown. Current fuel prices remain high by historical standards and significant increases in fuel price can materially and adversely affect operating costs within the industry. A softening economy also makes realizing increases in yield within the industry difficult.

Airline Operations

We operate a hub-and-spoke network with major hubs in Charlotte, Philadelphia and Phoenix and secondary hubs/focus cities in Las Vegas, New York, Washington, D.C. and Boston.

In 2007, we were able to increase service in certain markets. We added new transatlantic service from Philadelphia to Athens, Greece; Brussels, Belgium; and Zurich, Switzerland. Beginning in March 2008, we will start new service to London’s Heathrow Airport from Philadelphia. Finally, in 2007, we received approval for the right to fly to Beijing, China from our Philadelphia hub.

We continued to enhance our fleet in 2007. We took delivery of nine Embraer 190 aircraft during 2007 and expect to take delivery of the remaining 14 Embraer 190 aircraft in 2008 under our Amended and Restated Purchase Agreement with Embraer. We announced an agreement with Airbus S.A.S for the firm order of 60 A320 family aircraft, in addition to the 37 aircraft from the previous A319/A320 Purchase Agreement, which we plan to use to replace older Boeing 737 aircraft in the airline’s fleet. In addition, as part of that same order, we announced plans to add 32 widebody aircraft, which includes ten Airbus A330-200 aircraft and 22 Airbus A350 Xtra Wide Body (“XWB”) aircraft. We expect to use these aircraft for both replacements of older widebody aircraft in the fleet and to facilitate international growth. We are scheduled to begin taking delivery of the A320 family and A330 family of aircraft beginning in 2009 and the A350-XWB family of aircraft in 2014. Finally, we subsequently modified our agreement with Airbus to add five additional A330-200 aircraft to our existing order, and also agreed to terms with an aircraft lessor to lease two more A330-200 aircraft, bringing the total number of widebody aircraft we are set to take delivery of to 39.

Express Operations

Certain air carriers have code share arrangements with US Airways to operate under the trade name “US Airways Express.” Typically, under a code share arrangement, one air carrier places its designator code and sells tickets on the flights of another air carrier, which is referred to generically as its code share partner. US Airways Express carriers are an integral component of our operating network. US Airways relies heavily on feeder traffic from its US Airways Express partners, which carry passengers to US Airways’ hubs from low-density markets that are uneconomical for US Airways to serve with large jets. In addition, US Airways Express operators offer complementary service in existing US Airways mainline markets by operating flights during off-peak periods between US Airways mainline flights. During 2007, the US Airways Express network served 201 airports in the continental United States, Canada, the Caribbean and Latin America, including 82 airports also served by US Airways. During 2007, approximately 27 million passengers boarded US Airways Express air carriers’ planes, approximately 40% of whom connected to US Airways’ flights. Of these 27 million passengers, approximately 8 million were enplaned by our wholly owned regional airlines Piedmont and PSA, approximately 18 million were enplaned by third-party carriers operating under capacity purchase agreements and approximately 1 million were enplaned by carriers operating under prorate agreements, as described below.

The US Airways Express code share arrangements are in the form of either capacity purchase or prorate agreements. The capacity purchase agreements provide that all revenues, including passenger, mail and freight revenues, go to US Airways. In return, US Airways agrees to pay predetermined fees to these airlines for operating an agreed-upon number of aircraft, without regard to the number of passengers on board. In addition, these agreements provide that certain variable costs, such as airport landing fees, will be reimbursed 100% by US Airways. US Airways controls marketing, scheduling, ticketing, pricing and seat inventories. Under the prorate agreements, the prorate carriers pay certain service fees to US Airways and receive a prorated share of ticket revenue paid for connecting customers. US Airways is responsible for the pricing and marketing of connecting services to and from the prorate carrier. The prorate carrier is responsible for pricing and marketing the local, point to point markets, and is responsible for all costs incurred operating the aircraft. All US Airways Express carriers use US Airways’ reservation systems and have logos, service marks, aircraft paint schemes and uniforms similar to those of US Airways.

The following table sets forth US Airways Express code share agreements and the number and type of aircraft operated under those agreements at December 31, 2007.


		Number/Type
Carrier	Agreement Type	of Aircraft

PSA(1)	Capacity Purchase	49 regional jets
Piedmont(1)	Capacity Purchase	55 turboprops
Air Wisconsin Airlines Corporation	Capacity Purchase	70 regional jets
Mesa Airlines	Capacity Purchase	51 regional jets and 6 turboprops
Chautauqua Airlines, Inc.	Capacity Purchase	9 regional jets
Republic Airways(2)	Capacity Purchase	46 regional jets
Colgan Airlines, Inc.	Prorate	29 turboprops
Air Midwest, Inc.	Prorate	14 turboprops
Trans States Airlines, Inc.	Prorate	7 regional jets


(1)		PSA and Piedmont are wholly owned subsidiaries of US Airways Group.

(2)		We are committed to purchasing capacity from Republic Airways on an additional 11 regional jets in 2008.

Marketing and Alliance Agreements with Other Airlines

US Airways maintains alliance agreements with several leading domestic and international carriers to give customers a greater choice of destinations. Airline alliance agreements provide an array of benefits that vary by partner. By code sharing, each airline is able to offer additional destinations to its customers under its flight designator code without materially increasing operating expenses and capital expenditures. Frequent flyer

arrangements provide members with extended networks for earning and redeeming miles on partner carriers. Our US Airways Club members also have access to certain partner carriers’ airport lounges. We also benefit from the distribution strengths of each of the partner carriers.

In May 2004, US Airways joined the Star Alliance, the world’s largest airline alliance, with 19 member airlines serving approximately 897 destinations in 160 countries. Two additional international carriers based in Egypt and Turkey, respectively, are scheduled to join in 2008. Membership in the Star Alliance further enhances the value of US Airways’ domestic and international route network by allowing customers wide access to the global marketplace. Expanded benefits for customers include network expansion through code share service, frequent flyer program benefits, airport lounge access, convenient single-ticket pricing, one-stop check-in and coordinated baggage handling. US Airways also has bilateral marketing/code sharing agreements with Star Alliance members Lufthansa, Spanair, bmi, TAP Portugal, Asiana, Air New Zealand, and Singapore Airlines. Other international code sharing partners include Italy’s Air One, Royal Jordanian Airlines, EVA Airways and Virgin Atlantic Airways. Marketing/code sharing agreements are maintained with two smaller regional carriers in the Caribbean that operate collectively as the “GoCaribbean” network. Each of these code share agreements funnel international traffic onto US Airways’ domestic flights or support specific markets operated by US Airways in Europe and the Caribbean. Domestically, US Airways code shares with Hawaiian Airlines on intra-Hawaii flights.

In addition, US Airways has comprehensive marketing and code sharing agreements with United Airlines, a member of the Star Alliance, which began in July 2002. United, as well as its parent company, UAL Corporation, and certain of its affiliates, filed for protection under Chapter 11 of the Bankruptcy Code on December 9, 2002 and emerged on February 1, 2006. United assumed these marketing agreements in its bankruptcy proceedings. In February 2008, US Airways and United reached final agreement on amendments to the contracts governing their relationship, and approval of these agreements by the Bankruptcy Court is expected by the end of February.

Competition in the Airline Industry

Most of the markets in which we operate are highly competitive. Price competition occurs on a market-by-market basis through price discounts, changes in pricing structures, fare matching, target promotions and frequent flyer initiatives. Airlines typically use discount fares and other promotions to stimulate traffic during normally slack travel periods to generate cash flow and to maximize revenue per ASM. Discount and promotional fares are generally non-refundable and may be subject to various restrictions such as minimum stay requirements, advance ticketing, limited seating and change fees. We have often elected to match discount or promotional fares initiated by other air carriers in certain markets in order to compete in those markets. Most airlines will quickly match price reductions in a particular market. Our ability to compete on the basis of price is limited by our fixed costs and depends on our ability to maintain our operating costs.

We also compete on the basis of scheduling (frequency and flight times), availability of nonstop flights, on-time performance, type of equipment, cabin configuration, amenities provided to passengers, frequent flyer programs, the automation of travel agent reservation systems, on-board products, markets served and other services. We compete with both major full service airlines and low-cost airlines throughout our network of hubs and focus cities.

We believe the growth of low-fare low-cost competition will continue. Recent years have seen the entrance and growth of low-fare low-cost competitors in many of the markets in which we operate. These competitors include Southwest Airlines Co., AirTran Airways, Inc., Frontier Airlines, Inc. and JetBlue Airways. Some of these low cost carriers have lower operating cost structures than we have.

In addition, because we operate a significant number of flights in the eastern United States, our average trip distance, or stage length, is shorter than those of other major airlines. This makes us more susceptible than other major airlines to competition from surface transportation such as automobiles and trains.

Industry Regulation and Airport Access

Our airline subsidiaries operate under certificates of public convenience and necessity or certificates of commuter authority, both of which are issued by the Department of Transportation (the “DOT”). These certificates

may be altered, amended, modified or suspended by the DOT if the public convenience and necessity so require, or may be revoked for failure to comply with the terms and conditions of the certificates. As of September 26, 2007, US Airways and AWA are operating under a single certificate of public convenience and necessity in the name of US Airways.

Airlines are also regulated by the FAA, primarily in the areas of flight operations, maintenance, ground facilities and other operational and safety areas. Pursuant to these regulations, our airline subsidiaries have FAA-approved maintenance programs for each type of aircraft they operate. The programs provide for the ongoing maintenance of such aircraft, ranging from periodic routine inspections to major overhauls. From time to time, the FAA issues airworthiness directives and other regulations affecting our airline subsidiaries or one or more of the aircraft types they operate. In recent years, for example, the FAA has issued or proposed mandates relating to, among other things, enhanced ground proximity warning systems, fuselage pressure bulkhead reinforcement, fuselage lap joint inspection rework, increased inspections and maintenance procedures to be conducted on certain aircraft, increased cockpit security, fuel tank flammability reductions and domestic reduced vertical separation. Regulations of this sort tend to enhance safety and increase operating costs.

The DOT allows local airport authorities to implement procedures designed to abate special noise problems, provided such procedures do not unreasonably interfere with interstate or foreign commerce or the national transportation system. Certain locales, including Boston, Washington, D.C., Chicago, San Diego and San Francisco, among others, have established airport restrictions to limit noise, including restrictions on aircraft types to be used and limits on the number of hourly or daily operations or the time of these operations. In some instances these restrictions have caused curtailments in services or increases in operating costs, and these restrictions could limit the ability of our airline subsidiaries to expand their operations at the affected airports. Authorities at other airports may consider adopting similar noise regulations.

The airline industry is also subject to increasingly stringent federal, state and local laws aimed at protecting the environment. Future regulatory developments and actions could affect operations and increase operating costs for the airline industry, including our airline subsidiaries.

Our airline subsidiaries are obligated to collect a federal excise tax, commonly referred to as the “ticket tax,” on domestic and international air transportation. Our airline subsidiaries collect the ticket tax, along with certain other U.S. and foreign taxes and user fees on air transportation, and pass along the collected amounts to the appropriate governmental agencies. Although these taxes are not operating expenses of the Company, they represent an additional cost to our customers. There are a number of efforts in Congress to raise different portions of the various taxes imposed on airlines and their passengers.

The Aviation and Transportation Security Act (the “Aviation Security Act”) was enacted in November 2001. Under the Aviation Security Act, substantially all aspects of civil aviation security screening were federalized, and a new Transportation Security Administration (the “TSA”) under the DOT was created. TSA was then transferred to the Department of Homeland Security pursuant to the Homeland Security Act of 2002. The Aviation Security Act, among other matters, mandates improved flight deck security; carriage at no charge of federal air marshals; enhanced security screening of passengers, baggage, cargo, mail, employees and vendors; enhanced security training; fingerprint-based background checks of all employees and vendor employees with access to secure areas of airports pursuant to regulations issued in connection with the Aviation Security Act; and the provision of passenger data to U.S. Customs and Border Protection.

Funding for TSA is provided by a combination of air-carrier fees, passenger fees and taxpayer monies. The air-carrier fee, or Aviation Security Infrastructure Fee (“ASIF”), has an annual cap equivalent to the amount that an individual air carrier paid in calendar year 2000 for the screening of passengers and property. TSA may lift this cap at any time and set a new higher fee for air carriers. In 2005, TSA assessed additional ASIF liability on 43 air carriers, including US Airways, Piedmont, PSA and non-owned affiliates for whom US Airways pay ASIF. The passenger fee, which is collected by air carriers from their passengers, is currently set at $2.50 per flight segment but not more than $10.00 per round trip.

In 2007, we incurred expenses of $52 million for the ASIF, including amounts paid by US Airways Group’s wholly owned regional subsidiaries and amounts attributable to regional carriers. Implementation of the

requirements of the Aviation Security Act have resulted and will continue to result in increased costs for us and our passengers and has and will likely continue to result in service disruptions and delays. As a result of competitive pressure, US Airways and other airlines may be unable to recover all of these additional security costs from passengers through increased fares. In addition, we cannot forecast what new security and safety requirements may be imposed in the future or the costs or financial impact of complying with any such requirements.

Most major U.S. airports impose passenger facility charges. The ability of airlines to contest increases in these charges is restricted by federal legislation, DOT regulations and judicial decisions. With certain exceptions, air carriers pass these charges on to passengers. However, our ability to pass through passenger facility charges to our customers is subject to various factors, including market conditions and competitive factors. The current cap on passenger facility charges is $4.50; however, there is legislation in Congress to raise the cap on passenger facility charges to $7.00 per passenger.

At John F. Kennedy International Airport, LaGuardia, Newark Liberty International and Reagan National, which are designated “High Density Airports” by the FAA, there are restrictions that limit the number of departure and arrival slots available to air carriers during peak hours. In April 2000, legislation was enacted that eliminated slot restrictions in January 2007 at LaGuardia and Kennedy. On December 20, 2006, the FAA implemented an interim rule to maintain the number of hourly operations at LaGuardia until a final rule is adopted. The FAA proposed a comprehensive final rule for LaGuardia in August 2006. The proposed rule would require a minimum number of seats on certain operations to/from LaGuardia. Failure to comply with the minimum seat requirement would lead to the withdrawal of operating authority until compliance is achieved. The proposed rule also introduces a finite lifespan for “operating authorizations” of no more than ten years. The FAA intends to seek Congressional approval for the introduction of market based mechanisms for allocating expiring operating authorizations. We filed extensive comments with the FAA in December 2006 detailing the numerous concerns we have with the proposed rule. Other than making some technical corrections to the current operating restrictions at LaGuardia, no other action concerning the level of operations at LaGuardia was taken by the federal government in 2007. The DOT and FAA convened an Aviation Rulemaking Committee (“ARC”) to address congestion and delays in the New York region. While the short-term changes associated with the ARC relate to technical improvements to increase air space efficiency, we anticipate that the DOT will issue a proposed rulemaking addressing other issues discussed in the ARC, including technical operations issues and competition issues.

In addition, the government intends to cap operations at both Kennedy and Newark starting later in the first quarter of 2008. Thus, airlines will not be able to add flights at LaGuardia, Kennedy or Newark without acquiring operating rights from another carrier. In the future, takeoff and landing time restrictions and other restrictions on the use of various airports and their facilities may result in further curtailment of services by, and increased operating costs for, individual airlines, including our airline subsidiaries, particularly in light of the increase in the number of airlines operating at these airports.

The availability of international routes to domestic air carriers is regulated by agreements between the U.S. and foreign governments. Changes in U.S. or foreign government aviation policy could result in the alteration or termination of these agreements and affect our international operations. We could see significant changes in terms of air service between the United States and Europe as a result of the implementation of the U.S. and the EU Air Transport Agreement, generally referred to as Open Skies Agreement, which takes effect in March 2008. The Open Skies Agreement removes bilateral restrictions on the number of flights between the U.S. and EU.

The DOT has proposed several new initiatives concerning airline obligations toward passengers. These regulations involve increases in the denied boarding compensation that airlines must pay for passengers involuntarily denied travel. In addition, new regulations addressing how airlines handle irregular operations also are under consideration.

The industry also faces increased state government activity such as the recently implemented New York State Passenger Bill of Rights law that requires airlines to provide certain services to passengers on flights within the state that undergo extended on-board ground delays. Several other states have indicated a desire to move ahead with similar legislation.

Employees and Labor Relations

Our businesses are labor intensive. In 2007, wages, salaries and benefits represented approximately 23% of our operating expenses. As of December 31, 2007, we employed approximately 39,600 active full-time equivalent employees. Of this amount, US Airways employed approximately 34,400 active full-time equivalent employees including approximately 4,200 pilots, 7,300 flight attendants, 7,100 passenger service personnel, 7,500 fleet service personnel, 2,900 maintenance personnel and 5,400 personnel in administrative and various other job categories. US Airways Group’s remaining subsidiaries employed approximately 5,200 active full-time equivalent employees including approximately 900 pilots, 500 flight attendants, 2,400 passenger service personnel, 400 maintenance personnel and 1,000 personnel in administrative and various other job categories.

A large majority of the employees of the major airlines in the United States are represented by labor unions. As of December 31, 2007, approximately 85% of our active employees were represented by various labor unions.

Since the merger, we have been in the process of integrating the labor agreements of US Airways and AWA. Listed below are the integrated labor agreements and the status of the US Airways and AWA labor agreements that remain separate with their major domestic employee groups.


				Contract
Union	Class or Craft	Employees(1)		Amendable

Integrated labor agreements:
Airline Customer Service Employee Association — IBT and CWA (the “Association”)	Passenger Service		7,100		12/31/2011
Transport Workers Union (“TWU”)	Dispatch		200		12/31/2009
TWU	Flight Simulator Engineers		30		12/31/2011
TWU	Flight Crew Training Instructors		80		12/31/2011
US Airways:
Air Line Pilots Association (“ALPA”)	Pilots		2,700		12/31/2009	(2)
Association of Flight Attendants-CWA (“AFA”)	Flight Attendants		4,900		12/31/2011	(3)
International Association of Machinists & Aerospace Workers (“IAM”)	Mechanic and Related		2,100		12/31/2009	(4)
IAM	Fleet Service		4,500		12/31/2009	(5)
IAM	Maintenance Training Specialists		30		12/31/2009
AWA:
ALPA	Pilots		1,500		12/30/2006	(2)
AFA	Flight Attendants		2,400		05/04/2004	(3)
IAM	Mechanic and Related		800		10/07/2003	(4)
IAM	Fleet Service		3,000		06/12/2005	(5)
IAM	Stock Clerks		60		04/04/2008	(4)


(1)		Approximate number of active full-time equivalent employees covered by the contract as of December 31, 2007.

(2)		Pilots continue to work under the terms of their separate US Airways and AWA collective bargaining agreements.

(3)		In negotiations for a single labor agreement applicable to both US Airways and AWA. On December 15, 2005, the National Mediation Board recessed AFA’s separate contract negotiations with AWA indefinitely.

(4)		Mechanics and stock clerks continue to work under the terms of their separate US Airways and AWA collective bargaining agreements.

(5)		Fleet service agents continue to work under the terms of their separate US Airways and AWA collective bargaining agreements.

On November 14, 2007, the National Mediation Board notified the Company that an application for representation of the pilots of US Airways had been filed by the US Airline Pilots Association (“USAPA”). An investigation by the Board is now underway to determine whether USAPA, ALPA or neither union should be the certified representative of the pilots. We cannot predict the outcome of the investigation by the National Mediation Board or the effect, if any, on US Airways’ operational or financial performance.

There are few remaining unrepresented employee groups that could engage in organization efforts. We cannot predict the outcome of any future efforts to organize those remaining employees or the terms of any future labor agreements or the effect, if any, on US Airways’ operations or financial performance. For more discussion, see Item 1A. “Risk Factors, Risk Factors Relating to the Company and Industry Related Risks — Union disputes, employee strikes and other labor-related disruptions may adversely affect our operations. ”

Aviation Fuel

In 2007 and 2006, aviation fuel was our largest expense. The average cost of a gallon of aviation fuel for our mainline operations increased 6% from 2006 to 2007 after increasing 8% from 2005 to 2006. Because the operations of our airline are dependent upon aviation fuel, increases in aviation fuel costs could materially and adversely affect liquidity, results of operations and financial condition.

We maintain an active fuel hedging program. As part of our fuel hedging program, we have periodically entered into certain fixed price swaps, collar structures and other similar derivative contracts. As of December 31, 2007, we had entered into hedging transactions using costless collars, which establish an upper and lower limit on heating oil futures prices. These transactions are in place with respect to approximately 22% of our 2008 fuel consumption requirements. During 2007, 2006 and 2005, we recognized a net gain of $245 million, a net loss of $79 million and a net gain of $75 million, respectively, related to hedging activities.

The following table shows annual aircraft fuel consumption and costs for mainline for 2005 through 2007 (gallons and aircraft fuel expense in millions):


			Average Price		Aircraft Fuel		Percentage of Total
Year	Gallons		per Gallon(1)		Expense(1)		Operating Expenses

2007		1,195	$	2.20	$	2,630		30.7	%
2006		1,210		2.08		2,518		29.8	%
2005(2)		628		1.93		1,214		28.8	%


(1)		Includes fuel taxes and excludes the impact of fuel hedges. The impact of fuel hedges is described in Item 7 under “US Airways Group’s Results of Operations.”

(2)		The 2005 data includes AWA for the 269 days through September 27, 2005, the effective date of the merger, and consolidated data for AWA and US Airways for the 96 days from September 27, 2005 to December 31, 2005.

In addition, we incur fuel expense related to our US Airways Express operations. For the years ended December 31, 2007, 2006 and 2005, total fuel expense for US Airways’ former MidAtlantic division, US Airways Group’s wholly owned regional airlines and affiliate regional airlines operating as US Airways Express was $765 million, $764 million, and $327 million, respectively.

Prices and availability of all petroleum products are subject to political, economic and market factors that are generally outside of our control. Accordingly, the price and availability of aviation fuel, as well as other petroleum products, can be unpredictable. Prices may be affected by many factors, including:


	•	the impact of global political instability on crude production;

	•	unexpected changes to the availability of petroleum products due to disruptions in distribution systems or refineries, as evidenced in the third quarter of 2005 when Hurricane Katrina and Hurricane Rita caused widespread disruption to oil production, refinery operations and pipeline capacity along certain portions of the U.S. Gulf Coast. As a result of these disruptions, the price of jet fuel increased significantly and the availability of jet fuel supplies was diminished;

	•	unpredictable increases to oil demand due to weather or the pace of economic growth;


	•	inventory levels of crude, refined products and natural gas; and

	•	other factors, such as the relative fluctuation in value between the U.S. dollar and other major currencies and the influence of speculative positions on the futures exchanges.

Insurance

US Airways Group and its subsidiaries maintain insurance of the types and in amounts deemed adequate to protect themselves and their property. Principal coverage includes:


	•	liability for injury to members of the public, including passengers;

	•	damage to property of US Airways Group, its subsidiaries and others;

	•	loss of or damage to flight equipment, whether on the ground or in flight;

	•	fire and extended coverage;

	•	directors’ and officers’ liability;

	•	travel agents’ errors and omissions;

	•	advertiser and media liability;

	•	fiduciary; and

	•	workers’ compensation and employer’s liability.

Since September 11, 2001, US Airways Group and other airlines have been unable to obtain coverage for liability to persons other than employees and passengers for claims resulting from acts of terrorism, war or similar events, which coverage is called war risk coverage, at reasonable rates from the commercial insurance market. US Airways, therefore, purchased its war risk coverage through a special program administered by the FAA, as have most other U.S. airlines. The Emergency Wartime Supplemental Appropriations Act extended this insurance protection until August 2005. The program was subsequently extended, with the same conditions and premiums, until March 31, 2008. Under the Vision 100 — Century of Aviation Reauthorization Act, the President may continue the insurance program until December 31, 2008. If the federal insurance program terminates, we would likely face a material increase in the cost of war risk coverage, and because of competitive pressures in the industry, our ability to pass this additional cost to passengers may be limited.

Customer Service

We are committed to building a successful combined airline by taking care of our customers. We believe that our focus on excellent customer service in every aspect of our operations, including personnel, flight equipment, inflight and ancillary amenities, on-time performance, flight completion ratios and baggage handling, will strengthen customer loyalty and attract new customers.

We reported the following combined operating statistics to the DOT for mainline operations for the years ended December 31, 2007, 2006 and 2005:


	Full Year
	2007		2006		2005

On-time performance(a)		68.7		76.9		77.8
Completion factor(b)		98.2		98.9		98.2
Mishandled baggage(c)		8.47		7.88		7.68
Customer complaints(d)		3.16		1.36		1.55


(a)		Percentage of reported flight operations arriving on time as defined by the DOT.

(b)		Percentage of scheduled flight operations completed.

(c)		Rate of mishandled baggage reports per 1,000 passengers.


(d)		Rate of customer complaints filed with the DOT per 100,000 passengers.

We faced major operational challenges during the first half of 2007 resulting from adverse weather conditions in the northeast, heavy air traffic congestion in many of our hubs and difficulties associated with the migration to a single reservation system in early March 2007. All of these factors contributed to a difficult operating environment. During 2007, we implemented several initiatives to improve operational performance as follows:


	•	We hired approximately 1,000 new employees system-wide to boost airport customer service.

	•	Starting with the June 1, 2007 schedule, we lengthened the operating day at our hubs, lowered utilization, and increased the number of designated spare aircraft in order to ensure operational reliability.

	•	We established Passenger Operations Control (POC) centers at our Philadelphia and Charlotte hubs and at Reagan National airport. These POC centers monitor all inbound flight activity and identify customers who are on flights that for whatever reason (weather, air traffic congestion, etc.) might miss their connecting flights. The POC center professionals interact closely with the airline’s System Support Center to rebook passengers who may misconnect even before the inbound flight lands.

	•	We announced in the third quarter of 2007 the appointment of Robert Isom as the new Chief Operating Officer to head up the airline’s operations including flight operations, inflight services, maintenance and engineering, airport customer service, reservations, and cargo. Mr. Isom has over ten years of airline experience at Northwest Airlines, Inc. and AWA.

The implementation of our initiatives resulted in an improved trend in operational performance since the second quarter of 2007. In the fourth quarter of 2007, our on-time performance improved to 76.9% as compared to 64.3% in the second quarter of 2007. In the month of December 2007, our on-time performance was ranked first amongst the ten largest U.S. airlines. Our rate of customer complaints filed with the DOT per 100,000 passengers improved, decreasing to 2.27 in the fourth quarter of 2007 from 3.64 in the second quarter of 2007. Our rate of mishandled baggage reports per 1,000 passengers was 7.28 in the fourth quarter of 2007, an improvement from 8.57 in the second quarter of 2007.

Frequent Traveler Program

All major United States airlines offer frequent flyer programs to encourage travel on their respective airlines and customer loyalty. US Airways’ Dividend Miles frequent flyer program allows participants to earn mileage credits for each paid flight segment on US Airways, Star Alliance carriers, and certain other airlines that participate in the program. Participants flying on first class or Envoy class tickets receive additional mileage credits. Participants can also receive mileage credits through special promotions that we periodically offer and may also earn mileage credits by utilizing certain credit cards and purchasing services from non-airline partners such as hotels and rental car agencies. We sell mileage credits to credit card companies, telephone companies, hotels, car rental agencies and others that participate in the Dividend Miles program. Mileage credits can be redeemed for free, discounted or upgraded travel awards on US Airways, Star Alliance carriers or other participating airlines.

US Airways and the other participating airline partners limit the number of seats allocated per flight for award recipients by using various inventory management techniques. Award travel for all but the highest-level Dividend Miles participants is generally not permitted on blackout dates, which correspond to certain holiday periods or peak travel dates. US Airways reserves the right to terminate Dividend Miles or portions of the program at any time. Program rules, partners, special offers, blackout dates, awards and requisite mileage levels for awards are subject to change. On January 31, 2007, we changed our program regarding active membership status to require members to have either earned or redeemed miles within a consecutive 18 month period to maintain active membership status. Prior to the change in the program, members were granted a 36 month period to maintain active status.

Ticket Distribution

The now common usage of electronic tickets within North America, and the rapid expansion of electronic ticketing in Europe and elsewhere, have allowed for the streamlining of processes and the increased efficiency of customer servicing and support. During 2007, electronic tickets represented 99% of all tickets issued to customers

flying US Airways. The addition of a $50 surcharge to most customers requiring paper tickets has allowed US Airways to continue to support exceptional requests, while offsetting any cost variance associated with the issuance and postal fulfillment of paper tickets. Airlines based in North America have recently proposed a mandate that airlines move to 100% electronic ticketing over the next couple of years, which we believe would, if enacted, serve to enhance customer service and control costs for ticketing services supported by the airline and distribution partners.

The shift of consumer bookings that began several years ago from traditional travel agents, airline ticket offices and reservation centers to online travel agent sites (e.g., Orbitz, Travelocity, Expedia and others) as well as airline direct websites (e.g., www.usairways.com ) has continued to occur within the industry. Historically, traditional and online travel agencies used Global Distribution Systems (“GDSs”), such as Sabre Travel Network ^® , to obtain their fare and inventory data from airlines. Bookings made through these agencies result in a fee, referred to as a “GDS fee,” that is charged to the airline. Bookings made directly with an airline, through its reservation call centers or website, do not generate a GDS fee. The growth of the airline direct websites and travel agent sites that connect directly to airline host systems, effectively by-passing the traditional connection via GDSs, helps US Airways reduce distribution costs. In 2007, we received 55% of our sales from internet sites. Our website, www.usairways.com , accounted for 26% of our sales, while other internet sites accounted for 29% of our sales.

Due to the continued pressure on legacy airlines to lower distribution fees more aggressively than in the past in order to compete with low-cost airlines, many new companies have entered the distribution industry, such as ITA Software, G2 Switchworks, Navitaire and others, which provide low-cost GDSs. These new entrants are providing airlines with alternative economic models to do business with traditional travel agents by charging substantially lower GDS fees.

In an effort to further reduce distribution costs through internal channels, US Airways has instituted service fees for customer interaction in the following internal distribution channels: reservation call centers ($10.00 per ticket), airline ticket offices ($20.00 per ticket) and city ticket offices ($20.00 per ticket). Other services provided through these channels remain available with no extra fees. The goals of these service fees are to reduce the cost to us of providing customer service as required by the traveler and to promote the continued goal of shifting customers to our lowest cost distribution channel, www.usairways.com. Other airlines have instituted similar fee structures. Internal channels of distribution account for 37% of our sales.

US Airways Vacations

Through US Airways Vacations (“USV”), we sell individual and group travel packages including air transportation on US Airways, US Airways Express, and all US Airways codeshare partners, hotel accommodations, car rentals and other travel products. USV packages are marketed directly to consumers and through retail travel agencies in several countries and include travel to destinations throughout the U.S., Latin America, the Caribbean and Europe.

USV is focused on high-volume leisure travel products that have traditionally provided high profit margins. USV has negotiated several strategic partnerships with hotels, Internet travel sites and media companies to capitalize on the continued growth in online travel sales. USV sells vacation packages and hotel rooms through its call center; via the Internet and its websites, www.usairwaysvacations.com and www.usvtravelagents.com ; through global distribution systems Sabre Vacations, Amadeus AgentNet and VAX; and through third-party websites on a co-branded or private-label basis. In 2007, approximately 78% of USV’s total bookings were made electronically, compared to 71% in 2006.

During 2007, USV operated co-branded websites for ten partner companies, including Costco Travel, Vegas.com, BestFares.com and MandalayBay.com. These co-branded sites provide a retail presence via distribution channels such as Costco wholesale warehouses and other company websites where we and USV may not otherwise be a part of the consumer’s consideration set. USV intends to continue to add new co-branded websites as opportunities present themselves.

Pre-merger US Airways Group’s Chapter 11 Bankruptcy Proceedings

On September 12, 2004, US Airways Group and its domestic subsidiaries, US Airways, Piedmont, PSA and MSC, which at the time accounted for substantially all of the operations of US Airways Group, filed voluntary petitions for relief under the Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia, Alexandria Division. On September 16, 2005, the Bankruptcy Court issued an order confirming the Debtors’ plan of reorganization. The plan of reorganization, which was based upon the completion of the merger, among other things, set forth a revised capital structure and established the corporate governance for US Airways Group following the merger and subsequent to emergence from bankruptcy. Under the plan of reorganization, the Debtors’ general unsecured creditors received 8.2 million shares of the new common stock of US Airways Group, which represented approximately 10% of our common stock outstanding as of the completion of the merger. The holders of US Airways Group common stock outstanding prior to the merger received no distribution on account of their interests, and their existing stock was canceled.

In accordance with the Bankruptcy Code, the plan of reorganization classified claims into classes according to their relative priority and other criteria and provided for the treatment of each class of claims. Pursuant to the bankruptcy process, the Debtors’ claims agent received timely-filed proofs of claims totaling approximately $26.4 billion in the aggregate, exclusive of approximately $13.6 billion in claims by governmental entities. The Debtors continue to be responsible for administering and resolving claims related to the bankruptcy process. The administrative claims objection deadline passed on September 15, 2006. As of December 31, 2007, there were approximately $267 million of unresolved claims. The ultimate resolution of certain of the claims asserted against the Debtors in the Chapter 11 cases will be subject to negotiations, elections and Bankruptcy Court procedures. The recovery to individual creditors ultimately distributed to any particular general unsecured creditor under the plan of reorganization will depend on a number of variables, including the agreed value of any general unsecured claims filed by that creditor, the aggregate value of all resolved general unsecured claims and the value of shares of the new common stock of US Airways Group in the marketplace at the time of distribution. The effects of these distributions were reflected in US Airways’ financial statements upon emergence and will not have any further impact on the results of operations.


Item 1A.	*Risk Factors*

Below are a series of risk factors that may affect our results of operations or financial performance. We caution the reader that these risk factors may not be exhaustive. We operate in a continually changing business environment, and new risk factors emerge from time to time. Management cannot predict such new risk factors, nor can it assess the impact, if any, of these risk factors on our business or the extent to which any factor or combination of factors may impact our business.

Risk Factors Relating to the Company and Industry Related Risks

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

Our operating results are significantly impacted by changes in the availability or price of aircraft fuel, which in turn are often affected by global events. Fuel prices have increased substantially over the past several years and sharply in the last quarter of 2007. Because of the amount of fuel needed to operate the airline, even a relatively small increase in the price of fuel can have a significant aggregate effect on our costs. Due to the competitive nature of the airline industry and market forces, we can offer no assurance that we may be able to increase our fares or otherwise increase revenues sufficiently to offset fuel prices. Although we are currently able to obtain adequate supplies of aircraft fuel, we cannot predict the future availability or price of aircraft fuel. In addition, from time to time we enter into hedging arrangements to protect against rising fuel costs. Our ability to hedge in the future, however, may be limited. See also the discussion in Part II, Item 7A. “Quantitative and Qualitative Disclosures About Market Risk.”

US Airways Group could experience significant operating losses in the future.

Although US Airways Group reported operating profits in 2006 and in 2007, there is no guarantee of future profitability. There are several reasons, including those addressed in these risk factors, why US Airways Group might fail to achieve profitability and might in fact experience significant losses. In particular, the condition of the economy and historic high fuel prices have an impact on our operating results, and overall worsening economic conditions increase the risk that we will experience losses.

Since early 2001, the U.S. airline industry’s revenue performance has fallen short of what would have been expected based on historical growth trends. This shortfall has been caused by a number of factors discussed in these risk factors.

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

Relations between air carriers and labor unions in the United States are governed by the Railway Labor Act (the “RLA”). Under the RLA, collective bargaining agreements generally contain “amendable dates” rather than expiration dates, and the RLA requires that a carrier maintain the existing terms and conditions of employment following the amendable date through a multi-stage and usually lengthy series of bargaining processes overseen by the National Mediation Board. These processes do not apply to our current and ongoing negotiations for post-merger integrated labor agreements, and this means unions may not lawfully engage in concerted refusals to work, such as strikes, slow-downs, sick-outs or other similar activity. Nonetheless, there is a risk that disgruntled employees, either with or without union involvement, could engage in one or more concerted refusals to work that could individually or collectively harm the operation of the airline and impair its financial performance.

We rely heavily on automated systems to operate our business and any failure or disruption of these systems could harm our business.

To operate our business, we depend on automated systems, including our computerized airline reservation systems, our flight operations systems, our telecommunication systems and our websites. Our website and reservation systems must be able to accommodate a high volume of traffic and deliver important flight information on a timely and reliable basis. Substantial or repeated website, reservations systems or telecommunication systems failures could reduce the attractiveness of our services and could cause our customers to purchase tickets from another airline.

The inability to maintain labor costs at competitive levels could harm our financial performance.

Our business plan includes assumptions about labor costs going forward. Currently, the labor costs of both US Airways and AWA are very competitive and very similar; however, we cannot assure you that labor costs going forward will remain competitive, because some of our agreements are amendable now and others may become amendable, because competitors may significantly reduce their labor costs or because we may agree to higher-cost provisions in our current labor negotiations. Approximately 85% of the employees within US Airways Group are represented for collective bargaining purposes by labor unions. In the United States, there are nine labor groups at US Airways and AWA, and they are represented by five different unions. Some of these labor groups are fully integrated, but others, including the pilots, flight attendants, mechanics, and fleet service agents, are not. There are also five labor groups represented by four different unions at Piedmont, and five labor groups represented by five different unions at PSA. There are additional unionized groups of US Airways employees abroad.

Some of our unions have brought and may continue to bring grievances to binding arbitration. Unions may also bring court actions and may seek to compel us to engage in the bargaining processes where we believe we have no such obligation. If successful, there is a risk these judicial or arbitral avenues could create additional costs that we did not anticipate.

Our ability to operate and grow our route network in the future is dependent on the availability of adequate facilities and infrastructure throughout our system.

In order to operate our existing flight schedule and, where appropriate, add service along new or existing routes, we must be able to obtain adequate gates, ticketing facilities, operations areas, slots (where applicable) and office space. For example, at our largest hub airport, we are seeking to increase international service despite challenging airport space constraints. The nation’s aging air traffic control infrastructure presents challenges as well. The ability of the air traffic control system to handle traffic in high-density areas where we have a large concentration of flights is critical to our ability to operate our existing schedule. Also, as airports around the world become more congested, we cannot always be sure that our plans for new service can be implemented in a commercially viable manner given operating constraints at airports throughout our network.

Delays in scheduled aircraft deliveries or other loss of anticipated fleet capacity may adversely impact our operations and financial results.

The success of our business depends on, among other things, the ability to operate a certain number and type of aircraft. In many cases, the aircraft we intend to operate are not yet in our fleet, but we have contractual commitments to purchase or lease them. If for any reason we were unable to secure deliveries of new aircraft on contractually scheduled delivery dates, this could have a negative impact on our business, operations and financial performance. Our failure to integrate newly purchased aircraft into our fleet as planned might require us to seek extensions of the terms for some leased aircraft. Such unanticipated extensions may require us to operate existing aircraft beyond the point at which it is economically optimal to retire them, resulting in increased maintenance costs. If new aircraft orders are not filled on a timely basis, we could face higher monthly rental rates.

We are subject to many forms of environmental regulation and may incur substantial costs as a result.

We are subject to increasingly stringent federal, state, local and foreign laws, regulations and ordinances relating to the protection of the environment, including those relating to emissions to the air, discharges to surface and subsurface waters, safe drinking water, and the management of hazardous substances, oils and waste materials. Compliance with all environmental laws and regulations can require significant expenditures.

Several U.S. airport authorities are actively engaged in efforts to limit discharges of de-icing fluid (glycol) to local groundwater, often by requiring airlines to participate in the building or reconfiguring of airport de-icing facilities. Such efforts are likely to impose costs and restrictions on airlines using those airports. We do not believe, however, that such environmental developments will have a material impact on our capital expenditures or otherwise adversely affect its operations, operating costs or competitive position.

We are also subject to other environmental laws and regulations, including those that require us to remediate soil or groundwater to meet certain objectives. Under federal law, generators of waste materials, and owners or operators of facilities, can be subject to liability for investigation and remediation costs at locations that have been identified as requiring response actions. We have liability for such costs at various sites, although the future costs associated with the remediation efforts are currently not expected to have a material adverse affect on our business.

We have various leases and agreements with respect to real property, tanks and pipelines with airports and other operators. Under these leases and agreements, we have agreed to standard language indemnifying the lessor or operator against environmental liabilities associated with the real property or operations described under the agreement, even if we are not the party responsible for the initial event that caused the environmental damage. We also participate in leases with other airlines in fuel consortiums and fuel committees at airports, where such indemnities are generally joint and several among the participating airlines.

Recently, climate change issues and greenhouse gas emissions (including carbon) have attracted international and domestic regulatory interest that may result in the imposition of additional regulation on airlines. Any such regulatory activity in the future may adversely affect our business and financial results.

Governmental authorities in several U.S. and foreign cities are also considering or have already implemented aircraft noise reduction programs, including the imposition of nighttime curfews and limitations on daytime take-

offs and landings. We have been able to accommodate local noise restrictions imposed to date, but our operations could be adversely affected if locally-imposed regulations become more restrictive or widespread.

The travel industry continues to face ongoing security concerns.

The attacks of September 11, 2001 and continuing terrorist threats materially impacted and continue to impact air travel. The Aviation and Transportation Security Act mandates improved flight deck security; deployment of federal air marshals on board flights; improved airport perimeter access security; airline crew security training; enhanced security screening of passengers, baggage, cargo, mail, employees and vendors; enhanced training and qualifications of security screening personnel; additional provision of passenger data to U.S. Customs and enhanced background checks. These increased security procedures introduced at airports since the attacks and other such measures as may be introduced in the future generate higher operating costs for airlines. A concurrent increase in airport security charges and procedures, such as restrictions on carry-on baggage, has also had and may continue to have a disproportionate impact on short-haul travel, which constitutes a significant portion of US Airways’ flying and revenue. We would also be materially impacted in the event of further terrorist attacks or perceived terrorist threats.

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

Our reliance upon others to provide essential services on behalf of our operations may result in the relative inability to control the efficiency and timeliness of contract services. We have entered into agreements with contractors to provide various facilities and services required for our operations, including Express operations, aircraft maintenance, ground services and facilities, reservations and baggage handling. Similar agreements may be entered into in any new markets we decide to serve. These agreements are generally subject to termination after notice by the third party service provider. Any material problems with the efficiency and timeliness of contract services could have a material adverse effect on our business, financial condition and results of operations.

Fluctuations in interest rates and increased costs of financing could adversely affect our liquidity, operating expenses and results.

A substantial portion of our indebtedness bears interest at fluctuating interest rates. These are primarily based on the London interbank offered rate for deposits of U.S. dollars, or LIBOR. LIBOR tends to fluctuate based on general economic conditions, general interest rates, federal reserve rates and the supply of and demand for credit in the London interbank market. We have not hedged our interest rate exposure and, accordingly, our interest expense for any particular period may fluctuate based on LIBOR and other variable interest rates. To the extent these interest rates increase, our interest expense will increase, in which event we may have difficulties making interest payments and funding our other fixed costs, and our available cash flow for general corporate requirements may be adversely affected. See also the discussion of interest rate risk in Part II, Item 7A. Also, changes in the financial markets may increase our costs to obtain funding needed for the acquisition of aircraft that we have contractual commitments to purchase.

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

We have a significant amount of fixed obligations, including debt, aircraft leases and financings, aircraft purchase commitments, leases and developments of airport and other facilities and other cash obligations. We also have guaranteed costs associated with our regional alliances and commitments to purchase aircraft. As a result of the substantial fixed costs associated with these obligations:


	•	A decrease in revenues results in a disproportionately greater percentage decrease in earnings.

	•	We may not have sufficient liquidity to fund all of these fixed costs if our revenues decline or costs increase.


	•	We may have to use our working capital to fund these fixed costs instead of funding general corporate requirements, including capital expenditures.

	•	We may not have sufficient liquidity to respond to competitive developments and adverse economic conditions.

Our obligations also impact our ability to obtain additional financing, if needed, and our flexibility in the conduct of our business. Our existing indebtedness is secured by substantially all of our assets. Moreover, the terms of our Citicorp credit facility require us to maintain consolidated unrestricted cash and cash equivalents of not less than $1.25 billion, with not less than $750 million (subject to partial reductions upon certain reductions in the outstanding principal amount of the loan) of that amount held in accounts subject to control agreements.

Our ability to pay the fixed costs associated with our contractual obligations depends on our operating performance and cash flow, which in turn depend on general economic and political conditions. A failure to pay our fixed costs or a breach of the contractual obligations could result in a variety of adverse consequences, including the acceleration of our indebtedness, the withholding of credit card proceeds by the credit card servicers and the exercise of remedies by our creditors and lessors. In such a situation, it is unlikely that we would be able to fulfill our contractual obligations, repay the accelerated indebtedness, make required lease payments or otherwise cover our fixed costs.

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

Airlines are subject to extensive regulatory requirements. In the last several years, Congress has passed laws, and the DOT, the FAA, the TSA and the Department of Homeland Security have issued a number of directives and other regulations. These requirements impose substantial costs on airlines. The FAA has proposed a far-reaching set of rules governing flight operations at New York LaGuardia Airport. The new rules could result in dramatic changes to the type and number of services that we offer in the future at LaGuardia. Additional laws, regulations, taxes and airport rates and charges have been proposed or discussed from time to time, including by the current Congress, including recent discussions about a “passenger bill of rights,” and, if adopted, these could significantly increase the cost of airline operations or reduce revenues. The state of New York has already adopted such a measure, and other states are contemplating legislation. Also, the ability of U.S. carriers to operate international routes is subject to change because the applicable arrangements between the U.S. and foreign governments may be amended from time to time, or because appropriate slots or facilities may not be available. We cannot assure you that laws or regulations enacted in the future will not adversely affect our operating costs. In addition, increased environmental regulation may increase costs or restrict our operations.

Ongoing data security compliance requirements could increase our costs, and any significant data breach could harm our business, financial condition or results of operations.

Our business requires the appropriate and secure utilization of customer and other sensitive information. We cannot be certain that advances in criminal capabilities, discovery of new vulnerabilities, attempts to exploit existing vulnerabilities in our systems, data thefts, physical system or network break-ins or inappropriate access, or other developments will not compromise or breach the technology protecting the networks that access and store database information. Furthermore, there has been heightened legislative and regulatory focus on data security in the U.S., and abroad (particularly in the EU), including requirements for varying levels of customer notification in the event of a data breach.

Many of our commercial partners, including credit card companies, have imposed certain data security standards that we must meet. In particular, we were required by the Payment Card Industry Security Standards Council, founded by the credit card companies, to comply by September 30, 2007 with their highest level of data security standards. While we have made substantial progress, we did not fully meet these standards as of September 30, 2007, and we are continuing diligently to implement the remaining requirements.

In addition to the Payment Card Industry Standards discussed above, failure to comply with the other privacy and data use and security requirements of our partners or related laws and regulations to which we are subject may

expose us to fines, sanctions or other penalties, which could materially and adversely affect our results of operations and overall business. In addition, failure to address appropriately these issues could also give rise to additional legal risks, which, in turn, could increase the size and number of litigation claims and damages asserted or subject us to enforcement actions, fines and penalties and cause us to incur further related costs and expenses.

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

The terrorist attacks of September 11, 2001 led to a significant increase in insurance premiums and a decrease in the insurance coverage available to commercial air carriers. Accordingly, our insurance costs increased significantly and our ability to continue to obtain insurance even at current prices remains uncertain. In addition, we have obtained third party war risk (terrorism) insurance through a special program administered by the FAA, resulting in lower premiums than if we had obtained this insurance in the commercial insurance market. The program has been extended, with the same conditions and premiums, until March 31, 2008. Under Vision 100 - Century of Aviation Reauthorization Act, the President may continue the insurance program until December 31, 2008. If the federal insurance program terminates, we would likely face a material increase in the cost of war risk insurance. Because of competitive pressures in our industry, our ability to pass additional insurance costs to passengers is limited. As a result, further increases in insurance costs or reductions in available insurance coverage could have an adverse impact on our financial results.

The airline industry is intensely competitive and dynamic.

Our competitors include other major domestic airlines as well as foreign, regional and new entrant airlines, some of which have more financial resources or lower cost structures than ours, and other forms of transportation, including rail and private automobiles. In many of our markets we compete with at least one low-cost air carrier. Our revenues are sensitive to numerous factors, and the actions of other carriers in the areas of pricing, scheduling and promotions can have a substantial adverse impact on overall industry revenues. These factors may become even more significant in periods when the industry experiences large losses, as airlines under financial stress, or in bankruptcy, may institute pricing structures intended to achieve near-term survival rather than long-term viability. In addition, because a significant portion of US Airways’ traffic is short-haul travel, US Airways is more susceptible than other major airlines to competition from surface transportation such as automobiles and trains.

Low cost carriers have a profound impact on industry revenues. Using the advantage of low unit costs, these carriers offer lower fares, particularly those targeted at business passengers, in order to shift demand from larger, more-established airlines. Some low cost carriers, which have cost structures lower than ours, have better financial performance and significant numbers of aircraft on order for delivery in the next few years. These low-cost carriers are expected to continue to increase their market share through growth and could continue to have an impact on the overall performance of US Airways Group.

Industry consolidation could weaken our competitive position.

If mergers or other forms of industry consolidation take place, US Airways Group might or might not be included as a participant. Depending on which carriers combine and which assets, if any, are sold or otherwise transferred to other carriers in connection with such combinations, our competitive position relative to the post-combination carriers or other carriers that obtain assets could be harmed.

The loss of key personnel upon whom we depend to operate our business or the inability to attract additional qualified personnel could adversely affect the results of our operations or our financial performance.

We believe that our future success will depend in large part on our ability to attract and retain highly qualified management, technical and other personnel. We may not be successful in retaining key personnel or in attracting and retaining other highly qualified personnel. Any inability to retain or attract significant numbers of qualified management and other personnel could adversely affect our business.

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

We operate principally through primary hubs in Charlotte, Philadelphia and Phoenix and secondary hubs/focus cities in Las Vegas, New York, Washington, D.C. and Boston. A majority of our flights either originate in or fly into one of these locations. A significant interruption or disruption in service at one of our hubs could result in the cancellation or delay of a significant portion of our flights and, as a result, could have a severe impact on our business, operations and financial performance.

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

If one of our aircraft were to be involved in an accident, we could be exposed to significant tort liability. The insurance we carry to cover damages arising from any future accidents may be inadequate. In the event that our insurance is not adequate, we may be forced to bear substantial losses from an accident. In addition, any accident involving an aircraft that we operate could create a public perception that our aircraft are not safe or reliable, which could harm our reputation, result in air travelers being reluctant to fly on our aircraft and adversely impact our financial condition and operations.

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

Our operations are vulnerable to severe weather conditions in parts of our network that could disrupt service, create air traffic control problems, decrease revenue, and increase costs, such as during hurricane season in the Caribbean and Southeast United States, snow and severe winters in the Northeast United States and thunderstorms in the Eastern United States. In addition, the air travel business historically fluctuates on a seasonal basis. Due to the greater demand for air and leisure travel during the summer months, revenues in the airline industry in the second and third quarters of the year tend to be greater than revenues in the first and fourth quarters of the year. Our results of operations will likely reflect weather factors and seasonality, and therefore quarterly results are not necessarily indicative of those for an entire year, and the prior results of US Airways Group are not necessarily indicative of our future results.

We may be adversely affected by global events that affect travel behavior.

Our revenue and results of operations may be adversely affected by global events beyond our control. Wars or other military conflicts, including the war in Iraq may depress air travel, particularly on international routes. An outbreak of a contagious disease such as Severe Acute Respiratory Syndrome (“SARS”), avian flu, or an other influenza-type illness, if it were to persist for an extended period, could again materially affect the airline industry and us by reducing revenues and impacting travel behavior.

We are exposed to foreign currency exchange rate fluctuations.

As we expand our international operations, we will have significant operating revenues and expenses, as well as assets and liabilities, denominated in foreign currencies. Fluctuations in foreign currencies can significantly affect our operating performance and the value of our assets and liabilities located outside of the United States.

The use of US Airways Group’s pre-merger NOLs and certain other tax attributes could be limited in the future.

From the time of the merger until the first half of 2007, a significant portion of US Airways Group’s common stock was beneficially owned by a small number of equity investors. Since the merger, some of the equity investors have sold portions of their holdings and other investors have purchased US Airways Group stock, and, as a result, we believe an “ownership change” as defined in Internal Revenue Code Section 382 occurred for US Airways Group in February 2007. When a company undergoes such an ownership change, Section 382 limits the future ability to utilize any net operating losses, or NOL, generated before the ownership change and certain subsequently recognized “built-in” losses and deductions, if any, existing as of the date of the ownership change. A company’s ability to utilize new NOL arising after the ownership change is not affected. Until US Airways Group has used all

of its existing NOL, future significant shifts in ownership of US Airways Group’s common stock could result in a new Section 382 limit on our NOL as of the date of an additional ownership change.

Risks Related to Our Common Stock

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

Our common stock began trading on the NYSE on September 27, 2005 upon the effectiveness of our merger. The market price of our common stock may fluctuate substantially due to a variety of factors, many of which are beyond our control, including:


	•	our operating results failing to meet the expectations of securities analysts or investors;

	•	changes in financial estimates or recommendations by securities analysts;

	•	material announcements by us or our competitors;

	•	movements in fuel prices;

	•	new regulatory pronouncements and changes in regulatory guidelines;

	•	general and industry-specific economic conditions;

	•	public sales of a substantial number of shares of our common stock; and

	•	general market conditions.

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

The conversion of some or all of US Airways Group’s 7% senior convertible notes due 2020 will dilute the ownership interests of existing shareholders. Any sales in the public market of the common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock. In addition, the existence of the notes may encourage short selling by market participants because the conversion of the notes could depress the price of our common stock.

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

Certain provisions of the amended and restated certificate of incorporation and amended and restated bylaws of US Airways Group may have the effect of delaying or preventing changes in control if our board of directors determines that such changes in control are not in the best interests of US Airways Group and its stockholders. These provisions include, among other things, the following:


	•	a classified board of directors with three-year staggered terms;

	•	advance notice procedures for stockholder proposals to be considered at stockholders’ meetings;

	•	the ability of US Airways Group’s board of directors to fill vacancies on the board;

	•	a prohibition against stockholders taking action by written consent;

	•	a prohibition against stockholders calling special meetings of stockholders;

	•	a requirement that holders of at least 80% of the voting power of the shares entitled to vote in the election of directors approve amendment of the amended and restated bylaws; and

	•	super-majority voting requirements to modify or amend specified provisions of US Airways Group’s amended and restated certificate of incorporation.

These provisions are not intended to prevent a takeover, but are intended to protect and maximize the value of US Airways Group’s stockholders’ interests. While these provisions have the effect of encouraging persons seeking

to acquire control of our company to negotiate with our board of directors, they could enable our board of directors to prevent a transaction that some, or a majority, of our stockholders might believe to be in their best interests and, in that case, may prevent or discourage attempts to remove and replace incumbent directors. In addition, US Airways Group is subject to the provisions of Section 203 of the Delaware General Corporation Law, which prohibits business combinations with interested stockholders. Interested stockholders do not include stockholders, such as our equity investors at the time of the merger, whose acquisition of US Airways Group’s securities is approved by the board of directors prior to the investment under Section 203.

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

Our amended and restated certificate of incorporation provides that shares of capital stock may not be voted by or at the direction of persons who are not citizens of the United States if the number of shares held by such persons would exceed 24.9% of the voting stock of our company. In addition, any attempt to transfer equity securities to a non-U.S. citizen in excess of 49.9% of our outstanding equity securities will be void and of no effect.


Item 1B.	*Unresolved Staff Comments*

None.


Item 2.	*Properties*

Flight Equipment

We operated a mainline fleet of 356 aircraft at the end of 2007 (supported by approximately 232 regional jets and approximately 104 turboprops that provide passenger feed into the mainline system), down from a total of 359 mainline aircraft at the end of 2006. During 2007, we removed nine Boeing 737-300 aircraft and three Boeing 757-200 aircraft from our mainline fleet and took delivery of nine Embraer E190 aircraft.

On October 2, 2007, US Airways and Airbus executed definitive purchase agreements for the acquisition of 92 aircraft, including 60 single-aisle A320 family aircraft and 32 wide-body aircraft, including 22 A350 Xtra Wide Body (“XWB”) aircraft and ten A330-200 aircraft. These are in addition to the 37 single-aisle A320 family aircraft from the previous Airbus purchase agreement. On November 15, 2007, US Airways and Airbus amended the A330 Purchase Agreement, adding an additional five firm A330-200 aircraft.

In 2008, we expect to take delivery of an additional 14 Embraer E190 aircraft and five Airbus A321 aircraft. Between 2009 and 2011, we expect to take delivery of 83 Airbus aircraft, consisting of 68 Airbus A320 family and 15 A330-200 aircraft under the purchase agreements as well as lease two A330-200 aircraft in accordance with a letter of intent with an aircraft lessor.

As of December 31, 2007, we had 94 aircraft that have lease expirations prior to the end of 2010. This includes lease expirations for 41 Boeing 737-300 and eight Boeing 737-400 aircraft that are being replaced by Airbus A320 family aircraft to be delivered under the Airbus purchase agreement discussed above. The 45 remaining lease expirations are for Boeing 757, Boeing 767, Airbus A319 and Airbus A320 aircraft, which provides some flexibility to decrease capacity and related aircraft obligations in the event of an industry downturn or an operational need for different aircraft.

As of December 31, 2007, US Airways Group had the following jet and regional jet aircraft:


			Owned/
Aircraft Type	Avg. Seats		Mortgaged(1)		Leased(2)		Total		Avg. Age

A330-300		293		4		5		9		7.3
A321		183		15		13		28		6.5
A320		150		8		67		75		9.7
A319		124		3		90		93		7.2
B767-200		203		—		10		10		18.4
B757-200		189		3		40		43		17.8
B737-400		144		—		40		40		17.8
B737-300		130		—		47		47		19.7
ERJ 190		99		11		—		11		0.5

Total		151		44		312		356		11.9


(1)		All owned aircraft are pledged as collateral for various secured financing agreements.

(2)		The terms of the leases expire between 2008 and 2024.

As of December 31, 2007, US Airways Group’s wholly owned regional airline subsidiaries operated the following turboprop and regional jet aircraft:


	Average Seat								Average
Aircraft Type	Capacity		Owned		Leased(1)		Total		Age (years)

CRJ-700		70		7		7		14		3.3
CRJ-200		50		12		23		35		3.8
De Havilland Dash 8-300		50		—		11		11		16.3
De Havilland Dash 8-100		37		33		11		44		17.2

Total		47		52		52		104		10.8


(1)		The terms of the leases expire between 2008 and 2022.

As discussed in Item 1. “Business — Express Operations,” we have code share agreements with certain regional jet affiliate operators. Collectively, wholly owned regional airline subsidiaries and affiliate operators flew 225 regional jet aircraft and 61 turboprop aircraft (excluding affiliate carriers operating under pro-rate agreements) as part of US Airways Express as of December 31, 2007.

We maintain inventories of spare engines, spare parts, accessories and other maintenance supplies sufficient to meet its current operating requirements.

The following table illustrates our committed orders, scheduled lease expirations, and lessor put options as of December 31, 2007.


	2008		2009		2010		2011		2012		Thereafter

Firm orders remaining		19		25		25		33		24		22
Scheduled mainline lease expirations		35		23		36		20		24		174
Scheduled wholly owned subsidiary lease expirations		—		15		7		—		—		30
Lessor put options		—		—		—		—		1		—

See Notes 10 and 8, “Commitments and Contingencies” in Part II, Items 8A and 8B respectively, for additional information on aircraft purchase commitments.

We are a participant in the Civil Reserve Air Fleet, a voluntary program administered by the U.S. Air Force Air Mobility Command. The General Services Administration of the U.S. Government requires that airlines participate in Civil Reserve Air Fleet, if activated, in order to receive U.S. Government business. We are reimbursed at

compensatory rates when aircraft are activated under Civil Reserve Air Fleet or when participating in Department of Defense business.

Ground Facilities

We lease the majority of our ground facilities, including:


	•	executive and administrative offices in Tempe, Arizona;

	•	our principal operating, overhaul and maintenance bases at the Pittsburgh International, Charlotte Douglas International and Phoenix Sky Harbor International Airports;

	•	training facilities in Phoenix and Charlotte;

	•	central reservations offices in Winston-Salem, North Carolina, Tempe, Arizona, Reno, Nevada, and Liverpool, U.K.; and

	•	line maintenance bases and local ticket, cargo and administrative offices throughout our system.

The following table describes our principal properties:


		Approximate
		Internal Floor
Principal Properties	Description	Area (sq. ft.)		Nature of Ownership

Tempe, AZ Headquarters	Nine story complex housing headquarters for US Airways Group		218,000	Lease expires April 2014.
Tempe, AZ	Administrative office complex		203,000	Lease expires May 2013.
Philadelphia International Airport	68 preferential gates, exclusive ticket counter space, clubs, support space and concourse areas		550,000	Lease expires June 2011.
Charlotte Douglas International Airport	36 exclusive gates, ticket counter space and concourse areas		226,000	Lease expires June 2016.
Phoenix Sky Harbor International Airport	42 exclusive gates, ticket counter space and administrative offices		330,000	Airport Use Agreement expires June 2016. Gate use governed by month-to-month rates and charges program.
Pittsburgh International Airport	10 exclusive gates, ticket counter space and concourse areas		122,000	Lease expires May 2018.
Las Vegas McCarran International Airport	19 preferential gates, exclusive club, ticket counter space, support space and concourse areas		115,000	Lease expires June 2008.
Ronald Reagan Washington National Airport	15 gates, ticket counter space and concourse areas		80,000	Lease expires September 2014.


		Approximate
		Internal Floor
Principal Properties	Description	Area (sq. ft.)		Nature of Ownership

Maintenance facility — Charlotte, NC	Hangar bays, hangar shops, ground service equipment shops, cargo, catering and warehouse		847,000	Facilities and land leased from the City of Charlotte. Lease expires June 2017.
Maintenance facility — Pittsburgh, PA	Hangar bays, hangar shops, ground service equipment shops, cargo, catering and warehouse		649,000	Facilities and land leased from Allegheny County Airport Authority. Lease expires December 2010.
Maintenance and technical support facility at Phoenix Sky Harbor International Airport	Four hangar bays, hangar shops, office space, warehouse and commissary facilities		375,000	Facilities and land leased from the City of Phoenix. Lease expires September 2019.
Training facility — Charlotte, NC	Classroom training facilities and ten full flight simulator bays		159,000	Facilities and land leased from the City of Charlotte. Lease expires June 2017.
Flight Training and Systems Operations Control Center, Phoenix, AZ	Complex accommodates training facilities, systems operation control and crew scheduling functions		164,000	Facilities and land leased from the City of Phoenix. Lease expires February 2031.
Operations Control Center — Pittsburgh, PA	Complex accommodates systems operation control and crew scheduling functions		61,000	Lease expires March 2009.

In addition, we lease an aggregate of approximately 217,000 square feet of data center, office and warehouse space in Tempe and Phoenix, AZ as well as 27,000 square feet of data center in Winston-Salem, NC.

Space for ticket counters, gates and back offices has been obtained at each of the other airports in which we operate, either by lease from the airport operator or by sublease or handling agreement from another airline.

In September 2007, we broke ground for a new 72,000 square foot state-of-the-art operations control center near Pittsburgh International Airport. The new facility will hold 600 employees, with completion slated for early 2009.

Terminal Construction Projects

We use public airports for our flight operations under lease arrangements with the government entities that own or control these airports. Airport authorities frequently require airlines to execute long-term leases to assist in obtaining financing for terminal and facility construction. Any future requirements for new or improved airport facilities and passenger terminals at airports in which our airline subsidiaries operate could result in additional occupancy costs and long-term commitments.


Item 3.	*Legal Proceedings*

On September 12, 2004, US Airways Group and its domestic subsidiaries (collectively, the “Reorganized Debtors”) filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia, Alexandria Division (Case Nos. 04-13819-SSM through 03-13823-SSM) (the “2004 Bankruptcy”). On September 16, 2005, the Bankruptcy Court issued an order confirming the plan of reorganization submitted by the Reorganized Debtors and on September 27, 2005, the Reorganized Debtors emerged from the 2004 Bankruptcy. The Bankruptcy Court’s order confirming the plan included a provision called the plan injunction, which forever bars other parties from pursuing most claims against the Reorganized Debtors that arose prior to September 27, 2005 in any forum other than the Bankruptcy Court. The great majority of these claims are pre-petition claims that, if paid out at all, will be paid out in common stock of the post-bankruptcy US Airways Group at a fraction of the actual claim amount.

On February 9, 2007, passengers Daphne Renard and Todd Robins filed a class action suit against US Airways in San Francisco Superior Court. The complaint, which was later amended to include only Robins as a lead plaintiff, alleges that US Airways breached its contract of carriage by charging additional fares and fees, after the purchase of tickets on the usairways.com website, for passengers under two years of age who travel as “lap children,” meaning that the child does not occupy his or her own seat but travels instead on the lap of an accompanying adult. The named plaintiffs allege that he and his wife purchased international tickets through the website for themselves and a lap child. Plaintiffs allege that after initially receiving an electronic confirmation that there would be no charge for the lap child, they were later charged an additional $242.50. The complaint alleges a class period from February 9, 2002 to the present. We were served with an amended complaint in early March 2007 that continued the same allegations, but dropped plaintiff’s wife as a class representative. On May 1, 2007, US Airways filed an Answer to the complaint and also asked the court for a “complex case” designation, which the court granted on May 11, 2007. On September 25, 2007, the parties reached a settlement for an immaterial amount. That agreement must be approved by the court in order to become final.


Item 4.	*Submission of Matters to a Vote of Security Holders*

No matters were submitted to a vote of security holders during the fourth quarter of 2007.

PART II


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

Stock Exchange Listing

On September 27, 2005, the effective date of the merger, our common stock began trading on the NYSE under the symbol “LCC.” As of February 15, 2008, the closing price of our common stock on the NYSE was $14.41. As of February 15, 2008, there were 2,752 holders of record of the common stock.

Market Prices of Common Stock

The following table sets forth, for the periods indicated, the high and low sale prices of our common stock on the NYSE:


Year Ended
December 31		Period	High		Low

	2007	Fourth Quarter	$	33.45	$	14.41
		Third Quarter		36.81		24.26
		Second Quarter		48.30		26.78
		First Quarter		62.50		44.01
	2006	Fourth Quarter	$	63.27	$	43.81
		Third Quarter		56.41		36.80
		Second Quarter		52.18		36.19
		First Quarter		40.60		28.30

US Airways Group, organized under the laws of the State of Delaware, is subject to Sections 160 and 170 of the Delaware General Corporation Law, which govern the payment of dividends on or the repurchase or redemption of its capital stock. US Airways Group is restricted from engaging in any of these activities unless it maintains a capital surplus.

US Airways Group has not declared or paid cash or other dividends on its common stock since 1990 and currently does not intend to do so. Under the provisions of certain debt agreements, including our secured loans, our ability to pay dividends on or repurchase our common stock is restricted. Any future determination to pay cash dividends will be at the discretion of our board of directors, subject to applicable limitations under Delaware law, and will depend upon our results of operations, financial condition, contractual restrictions and other factors deemed relevant by our board of directors. See “Liquidity and Capital Resources” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” in Item 7 below for more information, including information related to dividend restrictions associated with our secured loans.

Foreign Ownership Restrictions

Under current federal law, non-U.S. citizens cannot own or control more than 25% of the outstanding voting securities of a domestic air carrier. We believe that we were in compliance with this statute during the time period covered by this report.


Item 6.	*Selected Financial Data*

Selected Consolidated Financial Data of US Airways Group

The selected consolidated financial data presented below under the captions “Consolidated Statements of Operations Data” and “Consolidated Balance Sheet Data” as of and for the years ended December 31, 2007, 2006, 2005, 2004 and 2003 are derived from the audited consolidated financial statements of US Airways Group. The full years 2007 and 2006 are comprised of the consolidated financial data of US Airways Group. The 2005 consolidated financial data presented includes the consolidated results of America West Holdings for the 269 days through September 27, 2005, the effective date of the merger, and the consolidated results of US Airways Group and its subsidiaries, including US Airways, America West Holdings and AWA, for the 96 days from September 27, 2005 to December 31, 2005. For periods prior to 2005, the consolidated financial data for US Airways Group reflect only the consolidated results of America West Holdings. The selected consolidated financial data should be read in conjunction with the consolidated financial statements for the respective periods, the related notes and the related reports of US Airways Group’s independent registered public accounting firm.


	Year Ended December 31,
	2007		2006		2005			2004			2003
	(In millions except share data)

Consolidated statements of operations data:
Operating revenues	$	11,700	$	11,557	$	5,069		$	2,757		$	2,572
Operating expenses(a)		11,167		10,999		5,286			2,777			2,539
Operating income (loss)(a)		533		558		(217	)		(20	)		33
Income (loss) before cumulative effect of change in accounting principle(b)		427		303		(335	)		(89	)		57
Cumulative effect of change in accounting principle, net(c)		—		1		(202	)		—			—
Net income (loss)		427		304		(537	)		(89	)		57
Earnings (loss) per common share before cumulative effect of change in accounting principle:
Basic		4.66		3.50		(10.65	)		(5.99	)		4.03
Diluted		4.52		3.32		(10.65	)		(5.99	)		3.07
Cumulative effect of change in accounting principle:
Basic		—		0.01		(6.41	)		—			—
Diluted		—		0.01		(6.41	)		—			—
Earnings (loss) per common share:
Basic		4.66		3.51		(17.06	)		(5.99	)		4.03
Diluted		4.52		3.33		(17.06	)		(5.99	)		3.07
Shares used for computation (in thousands):
Basic		91,536		86,447		31,488			14,861			14,252
Diluted		95,603		93,821		31,488			14,861			23,147
Consolidated balance sheet data (at end of period):
Total assets	$	8,040	$	7,576	$	6,964		$	1,475		$	1,614
Long-term obligations, less current maturities(d)		3,882		3,689		3,631			640			697
Total stockholders’ equity		1,439		970		420			36			126


(a)		The 2007 period includes $99 million of merger related transition expenses, a $99 million charge for an increase to long-term disability obligations for US Airways’ pilots as a result of a change in the FAA mandated


		retirement age for pilots from 60 to 65 and $5 million in charges for certain separation packages and lease termination costs related to the announced plans to reduce flying from Pittsburgh. These charges were offset by $7 million in tax credits due to an IRS rule change allowing the Company to recover tax amounts for years 2003-2006 for certain fuel usage, $9 million of insurance settlement proceeds related to business interruption and property damages incurred as a result of Hurricane Katrina and a $5 million Piedmont pilot pension curtailment gain related to the FAA mandated retirement age change discussed above.

		The 2006 period includes $131 million of merger related transition expenses, offset by a $90 million gain associated with the return of equipment deposits upon forgiveness of a loan and $14 million of gains associated with the settlement of bankruptcy claims.

		The 2005 period includes $28 million of merger related transition expenses, a $27 million loss on the sale-leaseback of six Boeing 737-300 aircraft and two Boeing 757 aircraft, $7 million of power by the hour program penalties associated with the return of certain leased aircraft, $1 million of severance for terminated employees resulting from the merger, a $1 million charge related to aircraft removed from service and a $50 million charge related to an amended Airbus purchase agreement, along with the write off of $7 million in capitalized interest. The $50 million charge was paid by means of set-off against existing equipment purchase deposits held by Airbus.

		The 2004 period includes a $16 million net credit associated with the termination of the rate per engine hour agreement with General Electric Engine Services for overhaul maintenance services on V2500-A1 engines. This credit was partially offset by $2 million of net charges related to the return of certain Boeing 737-200 aircraft, which includes termination payments of $2 million, the write-down of leasehold improvements and deferred rent of $3 million, offset by the net reversal of maintenance reserves of $3 million related to the returned aircraft.

		The 2003 period includes $11 million of expenses resulting from the elimination of AWA’s hub operations in Columbus, Ohio, $2 million in charges related to the reduction-in-force of certain management, professional and administrative employees and $3 million in impairment charges on certain owned Boeing 737-200 aircraft that were grounded, which was offset by a $1 million reduction due to a revision of the estimated costs related to the early termination of certain aircraft leases and a $1 million reduction related to the revision of estimated costs associated with the sale and leaseback of certain aircraft.

(b)		The 2007 period includes a non-cash expense for income taxes of $7 million related to the utilization of NOL acquired from US Airways. The valuation allowance associated with these acquired NOL was recognized as a reduction of goodwill rather than a reduction in tax expense. In addition, the period also includes an $18 million write-off of debt issuance costs in connection with the refinancing of the $1.25 billion senior secured credit facility with General Electric Capital Corporation (“GECC”), referred to as the GE Loan, in March 2007 and $10 million in impairment losses on certain available for sale auction rate securities considered to be other than temporary, offset by a $17 million gain recognized on the sale of stock in ARINC Incorporated.

		The 2006 period includes a non-cash expense for income taxes of $85 million related to the utilization of NOL acquired from US Airways. In addition, the period includes $6 million of prepayment penalties and $5 million in accelerated amortization of debt issuance costs in connection with the refinancing of the loan previously guaranteed by the Air Transportation Stabilization Board (“ATSB”) and two loans previously provided to AWA by GECC, $17 million in payments in connection with the inducement to convert $70 million of US Airways Group’s 7% Senior Convertible Notes to common stock and a $2 million write-off of debt issuance costs associated with those converted notes, offset by $8 million of interest income earned by AWA on certain prior year Federal income tax refunds.

		The 2005 period includes an $8 million charge related to the write-off of the unamortized value of the ATSB warrants upon their repurchase in October 2005 and an aggregate $2 million write-off of debt issuance costs associated with the exchange of AWA’s 7.25% Senior Exchangeable Notes due 2023 and retirement of a portion of the loan formerly guaranteed by the ATSB. In the fourth quarter 2005 period, which was subsequent to the effective date of the merger, US Airways recorded $4 million of mark-to-market gains attributable to stock options in Sabre Inc. (“Sabre”) and warrants in a number of e-commerce companies.


		The 2004 period includes a $1 million gain at AWA on the disposition of property and equipment due principally to the sale of one Boeing 737-200 aircraft and a $1 million charge for the write-off of debt issuance costs in connection with the refinancing of a term loan.

		The 2003 period includes federal government assistance of $81 million recognized as nonoperating income under the Emergency Wartime Supplemental Appropriations Act.

(c)		The 2006 period includes a $1 million benefit which represents the cumulative effect on the accumulated deficit of the adoption of Statement of Financial Accounting Standards (“SFAS”) No. 123R. The adjustment reflects the impact of estimating future forfeitures for previously recognized compensation expense.

		The 2005 period includes a $202 million adjustment which represents the cumulative effect on the accumulated deficit of the adoption of the direct expense method of accounting for major scheduled airframe, engine and certain component overhaul costs as of January 1, 2005. (See Part II, Item 8A, Note 3 “Change in Accounting Policy for Maintenance Costs”).

(d)		Includes debt, capital leases, postretirement benefits other than pensions and employee benefit liabilities and other.

Selected Consolidated Financial Data of US Airways, Inc.

The selected consolidated financial data presented below under the captions “Consolidated Statements of Operations Data” and “Consolidated Balance Sheet Data” as of and for the years ended December 31, 2007, 2006, three months ended December 31, 2005, nine months ended September 30, 2005, year ended December 31, 2004, nine months ended December 31, 2003 and three months ended March 31, 2003 are derived from the audited consolidated financial statements of US Airways. In connection with the combination of all mainline airline operations under one FAA operating certificate discussed further in Item 7, US Airways Group contributed 100% of its equity interest in America West Holdings, the parent company of AWA, to US Airways. As a result, America West Holdings and AWA are now wholly owned subsidiaries of US Airways. This contribution is reflected in the US Airways consolidated financial statements as though the transfer had occurred at the time of US Airways’ emergence from bankruptcy at the end of September 2005. Thus, the full years 2007, 2006 and three months ended December 31, 2005 are comprised of the consolidated financial data of US Airways and America West Holdings. For periods prior to September 30, 2005, the financial data reflects only the results of US Airways. The selected consolidated financial data should be read in conjunction with the consolidated financial statements for the respective periods, the related notes and the related reports of US Airways’ independent registered public accounting firm.


	Successor Company(a)							Predecessor Company(a)
					Three Months			Nine Months						Nine Months			Three Months
	Year Ended		Year Ended		Ended			Ended			Year Ended			Ended			Ended
	December 31,		December 31,		December 31,			September 30,			December 31,			December 31,			March 31,
	2007		2006		2005			2005			2004			2003			2003
	(In millions)

Consolidated statements of operations data:
Operating revenues	$	11,813	$	11,692	$	2,589		$	5,452		$	7,068		$	5,250		$	1,512
Operating expenses(b)		11,289		11,135		2,772			5,594			7,416			5,292			1,714

Operating income (loss)(b)		524		557		(183	)		(142	)		(348	)		(42	)		(202	)
Income (loss) before cumulative effect of change in accounting principle(c)		478		348		(256	)		280			(578	)		(160	)		1,613
Cumulative effect of change in accounting principle, net(d)		—		1		—			—			—			—			—
Net income (loss)	$	478	$	349	$	(256	)	$	280		$	(578	)	$	(160	)	$	1,613


									Predecessor
	Successor Company(a)								Company (a)
	December 31,
	2007		2006			2005			2004			2003
	(In millions)

Consolidated balance sheet data (at end of period):
Total assets	$	7,787	$	7,351		$	6,763		$	8,250		$	8,349
Long-term obligations, less current maturities(e)		2,223		2,344			3,456			4,815			4,591
Total stockholder’s equity (deficit)		1,850		(461	)		(810	)		(501	)		89


(a)		In connection with emergence from the first bankruptcy in March 2003 and the second bankruptcy in September 2005, US Airways adopted fresh-start reporting in accordance with AICPA Statement of Position 90-7, “Financial Reporting by Entities in Reorganization Under the Bankruptcy Code.” As a result of the application of fresh-start reporting, the financial statements prior to March 31, 2003 are not comparable with the financial statements for the period April 1, 2003 to September 30, 2005, nor is either period comparable to periods after September 30, 2005. References to “Successor Company” refer to US Airways on and after September 30, 2005, after the application of fresh-start reporting for the second bankruptcy.

(b)		The 2007 period includes $99 million of merger related transition expenses, a $99 million charge for an increase to long-term disability obligations for US Airways’ pilots as a result of a change in the FAA mandated retirement age for pilots from 60 to 65 and $4 million in charges for certain separation packages and lease termination costs related to the announced plans to reduce flying from Pittsburgh, which was offset by $7 million in tax credits due to an IRS rule change allowing US Airways to recover tax amounts for years 2003-2006 for certain fuel usage and $9 million of insurance settlement proceeds related to business interruption and property damages incurred as a result of Hurricane Katrina.

		The 2006 period includes $131 million of merger related transition expenses, offset by a $90 million gain associated with the return of equipment deposits upon forgiveness of a loan and $3 million of gains associated with the settlement of bankruptcy claims.

		The period for the three months ended December 31, 2005 includes $28 million of merger related transition costs, $7 million of power by the hour program penalties associated with the return of certain leased aircraft and $1 million of severance costs for terminated employees resulting from the merger.

		The period for the nine months ended December 31, 2003 includes a $212 million reduction in operating expenses, net of amounts due to certain affiliates, in connection with the reimbursement for certain aviation-related security expenses in connection with the Emergency Wartime Supplemental Appropriations Act and a $35 million charge in connection with US Airways’ intention not to take delivery of certain aircraft scheduled for future delivery.

(c)		The 2007 period includes a non-cash expense for income taxes of $7 million related to the utilization of NOL that was generated prior to the merger. The decrease in the corresponding valuation allowance was recognized as a reduction of goodwill rather than a reduction in tax expense. In addition, the period also includes a $17 million gain recognized on the sale of stock in ARINC Incorporated offset by a $10 million in impairment losses on certain available for sale auction rate securities considered to be other than temporary.

		The 2006 period includes a non-cash expense for income taxes of $85 million related to the utilization of NOL that was generated prior to the merger. In addition, the period includes $6 million of prepayment penalties and $5 million in accelerated amortization of debt issuance costs in connection with the refinancing of the loan previously guaranteed by the ATSB and two loans previously provided to AWA by GECC, which was offset by $8 million of interest income earned by AWA on certain prior year Federal income tax refunds.

		The period for the three months ended December 31, 2005 includes an $8 million charge related to the write-off of the unamortized value of the ATSB warrants upon their repurchase in October 2005 and an aggregate $2 million write-off of debt issuance costs associated with the exchange of AWA’s 7.25% Senior Exchangeable Notes due 2023 and retirement of a portion of the loan formerly guaranteed by the ATSB. US Airways also recorded in this period $4 million of mark-to-market gains attributable to stock options in Sabre and warrants in a number of e-commerce companies.


		The nine months ended September 30, 2005 and the year ended December 31, 2004 include reorganization items which amounted to a $636 million net gain and a $32 million expense, respectively.

		The nine months ended December 31, 2003 include a $30 million gain on the sale of US Airways’ investment in Hotwire, Inc. In connection with US Airways’ first bankruptcy, a $1.89 billion gain is included for the three months ended March 31, 2003.

(d)		The 2006 period includes a $1 million benefit which represents the cumulative effect on the accumulated deficit of the adoption of SFAS No. 123R. The adjustment reflects the impact of estimating future forfeitures for previously recognized compensation expense.

(e)		Includes debt, capital leases, postretirement benefits other than pensions and employee benefit liabilities and other. Also includes liabilities subject to compromise at December 31, 2004.


Item 7.	*Management’s Discussion and Analysis of Financial Condition and Results of Operations*

Background

US Airways Group is a holding company whose primary business activity is the operation of a major network air carrier, through its wholly owned subsidiaries US Airways, Piedmont, PSA, MSC and Airways Assurance Limited. On September 12, 2004, US Airways Group and its domestic subsidiaries, US Airways, Piedmont, PSA and MSC, which at the time accounted for substantially all of the operations of US Airways Group, filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia, Alexandria Division. On May 19, 2005, US Airways Group signed a merger agreement with America West Holdings pursuant to which America West Holdings merged with a wholly owned subsidiary of US Airways Group. The merger agreement was amended by a letter of agreement on July 7, 2005. The merger became effective upon US Airways Group’s emergence from bankruptcy on September 27, 2005.

As a result of the merger, we operate the fifth largest airline in the United States as measured by domestic RPMs and ASMs. We have primary hubs in Charlotte, Philadelphia and Phoenix and secondary hubs/focus cities in Las Vegas, New York, Washington, D.C. and Boston. We are a low-cost carrier offering scheduled passenger service on approximately 3,800 flights daily to 230 communities in the U.S., Canada, the Caribbean, Latin America and Europe, making us the only U.S. based low-cost carrier with a significant international route presence. We are also the only low-cost carrier with an established East Coast route network, including the US Airways Shuttle service, with substantial presence at capacity constrained airports including New York’s LaGuardia Airport and the Washington, D.C. area’s Ronald Reagan Washington National Airport. As of December 31, 2007, we operated 356 mainline jets and are supported by our regional airline subsidiaries and affiliates operating as US Airways Express, which operate approximately 232 regional jets and 104 turboprops. In 2007, we generated passenger revenues of $10.83 billion.

The merger was accounted for as a reverse acquisition using the purchase method of accounting. As a result, although the merger was structured such that America West Holdings became a wholly owned subsidiary of US Airways Group, America West Holdings was treated as the acquiring company for accounting purposes due to the following factors: (1) America West Holdings’ stockholders received the largest share of US Airways Group’s common stock in the merger in comparison to unsecured creditors of US Airways Group; (2) America West Holdings received a larger number of designees to the board of directors; and (3) America West Holdings’ Chairman and Chief Executive Officer prior to the merger became the Chairman and Chief Executive Officer of the combined company. As a result of the reverse acquisition, the 2005 consolidated statement of operations for the new US Airways Group presented in this report is comprised of the results of America West Holdings for the 269 days through September 27, 2005 and consolidated results of US Airways Group for the 96 days from September 27, 2005 through December 31, 2005.

On September 26, 2007, as part of the integration efforts following the merger, AWA surrendered its FAA operating certificate. As a result, all mainline airline operations are now being conducted under US Airways’ FAA operating certificate. In connection with the combination of all mainline airline operations under one FAA operating certificate, US Airways Group contributed 100% of its equity interest in America West Holdings, the parent company of AWA, to US Airways. As a result, America West Holdings and AWA are now wholly owned subsidiaries of US Airways. In addition, AWA transferred substantially all of its assets and liabilities to US Airways.

All off-balance sheet commitments of AWA were also transferred to US Airways. This transaction constituted a transfer of assets between entities under common control and was accounted for at historical cost. The contribution had no effect on the US Airways Group consolidated financial statements. Pilots, flight attendants, and ground and maintenance employees continue to work under the terms of their respective collective bargaining agreements, including, in some cases, transition agreements reached in connection with the merger.

As part of the transfer of assets and liabilities to US Airways, all of AWA’s obligations with respect to certain pass through trusts and the leases of related aircraft and engines were transferred to US Airways. The pass through trusts had issued pass through trust certificates (also known as “Enhanced Equipment Trust Certificates” or “EETCs”), of which AWA was the deemed issuer for SEC reporting purposes. Because US Airways has assumed all of AWA’s obligations with respect to the pass through trusts, US Airways is now the deemed issuer of these EETCs. As a result, AWA no longer has an obligation to file separate financial statements or reports with the SEC and has filed a Form 15 with the SEC terminating its reporting obligations.

2007 Overview

Solid Financial Results

In 2007, we earned net income of $427 million, the second profitable year since our merger in 2005 and the fourth highest level of annual earnings in our combined history. Diluted earnings per share for the year was $4.52, compared to $3.33 in 2006. These financial results were achieved during a year that saw record fuel prices and higher costs driven by implementation of our operational improvement plan to increase reliability as well as the rationalization of our capacity.

Merger Integration Update

For 2007, our operational accomplishments included the following:


	•	Merged two reservations systems onto one platform, which provides a single system for reservation and airport customer service agents that enables us to simplify ticketing processes, remove redundant systems and provide a consistent product to our passengers.

	•	Marked a significant milestone by moving all of our mainline operations to a single operating certificate from the FAA, as described above. The single certificate allows us to operate as one US Airways with one set of policies, procedures, computer systems, maintenance and flight control systems.

	•	Broke ground for our new 72,000 square foot state-of-the-art operations control center near Pittsburgh International Airport. The new facility will house 600 employees, with completion slated for early 2009.

	•	Completed the consolidation of operations at Chicago O’Hare, the last of 38 cities where both US Airways and AWA had operated at the time of the merger.

	•	Reached final single labor agreements covering the flight crew training instructors and the flight simulator engineers, each represented by the Transport Workers Union (“TWU”). Additionally, we are continuing to negotiate with the pilot, flight attendant, fleet service and mechanic labor groups in hopes of reaching final agreements with these unions.

Maintained Liquidity Position and Reduced Near-term Debt Amortizations

As of December 31, 2007, we had cash, cash equivalents and investments totaling $3 billion, of which $2.53 billion was unrestricted. Investments include $353 million of auction rate securities that are classified as noncurrent assets on our balance sheet.

In March 2007, we completed a $1.6 billion debt refinancing, which we used to extinguish three separate debt obligations: a $1.25 billion senior secured credit facility, $325 million of unsecured debt in the form of pre-paid miles and a $19 million secured credit facility. The refinancing improves liquidity by reducing debt amortization payments until 2014 and lowering near-term interest expense.

Fleet

In October 2007, US Airways entered into an agreement with Airbus S.A.S for the firm order of 60 A320 family aircraft, which will be used to replace older Boeing 737 aircraft in our fleet. In addition, as part of that same order, we announced plans to add 32 widebody aircraft to our fleet, which include ten Airbus A330-200 aircraft and 22 Airbus A350-XWB aircraft. We plan to use these aircraft for both replacements of older widebody aircraft in the fleet and to facilitate international growth. We subsequently modified our agreement with Airbus to add five additional A330-200 aircraft to our existing order, and also agreed to terms with an aircraft lessor to lease two more A330-200 aircraft, bringing the total number of widebody aircraft we are set to take delivery of to 39.

During 2007, we also committed capital to invest in our product. We have a $50 million aircraft appearance initiative currently underway to refurbish the interiors of nearly 300 mainline aircraft, including common interior branding and all leather seats through out our coach cabins. To enhance the onboard experience we plan to upgrade domestic meals and beverage selections, as well as our transatlantic Envoy product.

Revenue Pricing Environment

The revenue environment remained strong during 2007, as our mainline passenger revenue per available seat mile (“PRASM”) was 10.73 cents, a 3.7% improvement as compared to PRASM in 2006 of 10.35 cents. This improvement in mainline PRASM was driven by: (1) reductions in industry capacity and continued capacity discipline, which has better matched supply with passenger demand; (2) a rational industry pricing environment; (3) industry-wide fare increases; and (4) continued rationalization of our route network that eliminated capacity on our weakest routes.

Cost Control

During 2007, our mainline cost per available seat mile (“CASM”) increased 3.1% to 11.30 cents from 10.96 cents in 2006. The increase was largely due to higher costs associated with the implementation of our operational improvement plan to improve reliability and the impact on costs of our continued reduction in capacity, which decreased 1.5% year over year. See “US Airways Group’s Results of Operations” below for analysis related to CASM. While up year over year, we believe our mainline CASM will remain competitive with the low cost carriers and among the lowest of the traditional legacy carriers.

We remain committed to maintaining a low cost structure, which we believe is necessary to compete effectively with other airlines and in an industry whose economic prospects are heavily dependent upon two variables it cannot control: the health of the economy and the price of fuel. We will continue to exercise tight cost controls and minimize unnecessary capital expenditures to drive down expenses.

First Quarter 2008 Outlook

As we begin 2008, the airline industry appears to be headed for another challenging period due to extremely high fuel prices and a potential economic slowdown. Current fuel prices remain high by historical standards. Significant increases in fuel price can materially and adversely affect our operating costs. We estimate that a one cent per gallon increase in fuel prices results in a $16 million increase in annual expense. A softening economy makes realizing increases in yield difficult.

In this environment, we currently expect to post a loss for the first quarter of 2008. In the event this environment continues through 2008, we believe we are well positioned due to our current cash position and the debt restructurings completed over the past two years.

Customer Service

We reported the following combined operating statistics to the DOT for mainline operations for the years ended December 31, 2007, 2006 and 2005:


	Full Year
	2007		2006		2005

On-time performance(a)		68.7		76.9		77.8
Completion factor(b)		98.2		98.9		98.2
Mishandled baggage(c)		8.47		7.88		7.68
Customer complaints(d)		3.16		1.36		1.55


(a)		Percentage of reported flight operations arriving on time as defined by the DOT.

(b)		Percentage of scheduled flight operations completed.

(c)		Rate of mishandled baggage reports per 1,000 passengers.

(d)		Rate of customer complaints filed with the DOT per 100,000 passengers.


	•	We hired approximately 1,000 new employees system-wide to boost airport customer service.

	•	Starting with the June 1, 2007 schedule, we lengthened the operating day at our hubs, lowered utilization, and increased the number of designated spare aircraft in order to ensure operational reliability.

	•	We established Passenger Operations Control (POC) centers at our Philadelphia and Charlotte hubs and at Reagan National airport. These POC centers monitor all inbound flight activity and identify customers who are on flights that for whatever reason (weather, air traffic congestion, etc.) might miss their connecting flights. The POC center professionals interact closely with the airline’s System Support Center to rebook passengers who may misconnect even before the inbound flight lands.

	•	We announced in the third quarter of 2007 the appointment of Robert Isom as the new Chief Operating Officer to head up the airline’s operations including flight operations, inflight services, maintenance and engineering, airport customer service, reservations, and cargo. Mr. Isom has over ten years of airline experience at Northwest Airlines, Inc. and AWA.

US Airways Group’s Results of Operations

The full years 2007 and 2006 include the consolidated results of US Airways Group and its subsidiaries. As noted above, the 2005 statement of operations presented includes the consolidated results of America West Holdings for the 269 days through September 27, 2005, the effective date of the merger, and the consolidated results of the new US Airways Group for the 96 days from September 27, 2005 to December 31, 2005.

In 2007, we realized operating income of $533 million and income before income taxes of $434 million. Included in these results is $245 million of net gains associated with fuel hedging transactions. This includes $187 million of unrealized gains resulting from the application of mark-to-market accounting for changes in the fair value of fuel hedging instruments as well as $58 million of net realized gains on settled hedge transactions. We are required to use mark-to-market accounting as our existing fuel hedging instruments do not meet the requirements

for hedge accounting established by SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” If these instruments had qualified for hedge accounting treatment, any unrealized gains or losses, including the $187 million discussed above, would have been deferred in other comprehensive income, a component of stockholders’ equity, until the jet fuel is purchased and the underlying fuel hedging instrument is settled. Given the market volatility of jet fuel, the fair value of these fuel hedging instruments is expected to change until settled. Operating results in the 2007 period also include $99 million of net special charges due to merger related transition expenses, as well as a $99 million charge for an increase to long-term disability obligations for US Airways’ pilots as a result of a change in the FAA mandated retirement age for pilots from 60 to 65 and $5 million in charges related to our plans to reduce flying from Pittsburgh. These charges were offset by $7 million in tax credits due to an IRS rule change allowing the Company to recover certain fuel usage tax amounts for years 2003-2006, $9 million of insurance settlement proceeds related to business interruption and property damages incurred as a result of Hurricane Katrina and a $5 million Piedmont pilot pension curtailment gain related to the FAA mandated pilot retirement age change discussed above.

Nonoperating expense in the 2007 period includes an $18 million write-off of debt issuance costs in connection with the refinancing of the $1.25 billion GE loan in March 2007 and $10 million in impairment losses on certain available for sale auction rate securities considered to be other than temporary, offset by a $17 million gain recognized on the sale of stock in ARINC Incorporated. The refinancing of the GE loan is discussed in more detail under “Liquidity and Capital Resources — Commitments.”

In 2006, we realized operating income of $558 million and income before income taxes and cumulative effect of change in accounting principle of $404 million. Included in these results is $79 million of net losses associated with fuel hedging transactions. This includes $70 million of unrealized losses resulting from the application of mark-to-market accounting for changes in the fair value of fuel hedging instruments as well as $9 million of net realized losses on settled hedge transactions. Operating results in the 2006 period also include $27 million of net special charges, consisting of $131 million of merger related transition expenses, offset by a $90 million credit related to the restructuring of the then existing Airbus aircraft order and $14 million of credits related to the settlement of certain bankruptcy-related claims.

Nonoperating expense in the 2006 period includes $6 million of expense related to prepayment penalties and $5 million in accelerated amortization of debt issuance costs in connection with the refinancing of the loan previously guaranteed by the ATSB and two loans previously provided to AWA by GECC, as well as $17 million in payments in connection with the inducement to convert $70 million of the 7% Senior Convertible Notes to common stock, a $2 million write off of debt issuance costs associated with those converted notes and $8 million of interest income earned by AWA on certain prior year federal income tax refunds.

In 2005, we realized operating losses of $217 million and a loss before income taxes and cumulative effect of change in accounting principle of $335 million. In 2005, America West Holdings changed its accounting policy for certain maintenance costs from the deferral method to the direct expense method as if that change occurred January 1, 2005. This resulted in a $202 million loss from the cumulative effect of a change in accounting principle, or $6.41 per common share. See Note 3, “Change in Accounting Policy for Maintenance Costs,” to the consolidated financial statements in Item 8A of this report.

Included in the 2005 results is $75 million of net gains associated with fuel hedging transactions. This includes $71 million of net realized gains on settled hedge transactions as well as $4 million of unrealized gains resulting from the application of mark-to-market accounting for changes in the fair value of fuel hedging instruments. Operating results in the 2005 period also include $121 million of special charges, including $28 million of merger related transition expenses, a $27 million loss on the sale-leaseback of six Boeing 737-300 aircraft and two Boeing 757 aircraft, $7 million of power by the hour program penalties associated with the return of certain leased aircraft, $1 million of severance payments for terminated employees resulting from the merger, a $1 million charge related to certain aircraft removed from service and a $50 million charge related to an amended Airbus purchase agreement, along with the write off of $7 million in capitalized interest. The Airbus restructuring fee was paid by means of set-off against existing equipment purchase deposits held by Airbus.

off of debt issuance costs associated with the exchange of the 7.25% Senior Exchangeable Notes due 2023 and retirement of a portion of the loan formerly guaranteed by the ATSB.

As of December 31, 2007, we have approximately $761 million of gross net operating loss carryforwards (“NOL”) to reduce future federal taxable income. Of this amount, approximately $649 million is available to reduce federal taxable income in the calendar year 2008. Our deferred tax asset, which includes the $649 million of NOL discussed above, has been subject to a full valuation allowance.

For the year ended December 31, 2007, we utilized NOL to reduce our income tax obligation. Utilization of this NOL results in a corresponding decrease in the valuation allowance. In accordance with SFAS No. 109, “Accounting for Income Taxes,” as this valuation allowance was established through the recognition of tax expense, the decrease in valuation allowance offsets our tax provision dollar for dollar. We recognized $7 million of non-cash state income tax expense for the year ended December 31, 2007, as we used NOL that was generated by US Airways prior to the merger. In accordance with SFAS No. 109, as this was acquired NOL, the decrease in the valuation allowance associated with this NOL reduced goodwill instead of the provision for income taxes. At December 31, 2007, the remaining federal valuation allowance is $32 million, all of which was established through the recognition of tax expense. In addition, we have $37 million and $4 million, respectively, of unrealized federal and state tax benefit related to amounts recorded in other comprehensive income. At December 31, 2007, the remaining state valuation allowance is $45 million, of which $21 million was established through the recognition of tax expense and $24 million is associated with acquired NOL.

For the year ended December 31, 2006, we recognized $85 million of non-cash income tax expense, as we utilized NOL that was generated by US Airways prior to the merger. In accordance with SFAS No. 109, as this valuation allowance was established through the recognition of tax expense, the decrease in valuation allowance offsets our tax provision dollar for dollar. We also recorded Alternative Minimum Tax liability (“AMT”) tax expense of $10 million. In most cases, the recognition of AMT does not result in tax expense. However, as discussed above, since our NOL was subject to a full valuation allowance, any liability for AMT is recorded as tax expense. We also recorded $2 million of state income tax provision in 2006 related to certain states where NOL was not available to be used.

For the year ended December 31, 2005, we did not record an income tax benefit and recorded a full valuation allowance on any future tax benefits generated during that period as we had yet to achieve several consecutive quarters of profitable results coupled with an expectation of continued profitability.

The table below sets forth our selected mainline operating data. The 2005 full year operating statistics, which consist of 269 days of AWA results and 96 days of consolidated US Airways Group results, do not provide a meaningful comparison and have been omitted.


					Percent
	Year Ended December 31,				Change
	2007		2006		2007-2006

Revenue passenger miles (millions)(a)		61,262		60,689		0.9
Available seat miles (millions)(b)		75,842		76,983		(1.5	)
Load factor (percent)(c)		80.8		78.8		2.0 pts
Yield (cents)(d)		13.28		13.13		1.2
Passenger revenue per available seat mile (cents)(e)		10.73		10.35		3.7
Cost per available seat mile (cents)(f)		11.30		10.96		3.1
Passenger enplanements (thousands)(g)		57,871		57,345		0.9
Departures (thousands)		524.8		541.7		(3.1	)
Aircraft at end of period		356		359		(0.8	)
Block hours (thousands)(h)		1,343		1,365		(1.6	)
Average stage length (miles)(i)		925		927		(0.3	)
Average passenger journey (miles)(j)		1,489		1,478		0.7
Gallons of aircraft fuel consumed (millions)		1,195		1,210		(1.3	)
Average aircraft fuel price including tax (dollars per gallon)		2.20		2.08		5.8
Full time equivalent employees (end of period)		34,437		34,077		1.1


(a)		Revenue passenger mile (“RPM”) — A basic measure of sales volume. A RPM represents one passenger flown one mile.


(b)		Available seat mile (“ASM”) — A basic measure of production. An ASM represents one seat flown one mile.

(c)		Load factor — The percentage of available seats that are filled with revenue passengers.

(d)		Yield — A measure of airline revenue derived by dividing passenger revenue by revenue passenger miles and expressed in cents per mile.

(e)		Passenger revenue per available seat mile (“PRASM”) — Total passenger revenues divided by total available seat miles.

(f)		Cost per available seat mile (“CASM”) — Total mainline operating expenses divided by total available seat miles.

(g)		Passenger enplanements — The number of passengers on board an aircraft including local, connecting and through passengers.

(h)		Block hours — The hours measured from the moment an aircraft first moves under its own power, including taxi time, for the purposes of flight until the aircraft is docked at the next point of landing and its power is shut down.

(i)		Average stage length — The average of the distances flown on each segment of every route.

(j)		Average passenger journey — The average one-way trip measured in statute miles for one passenger origination.

2007 Compared With 2006

Operating Revenues:


					Percent
	2007		2006		Change
	(In millions)

Operating revenues:
Mainline passenger	$	8,135	$	7,966		2.1
Express passenger		2,698		2,744		(1.7	)
Cargo		138		153		(9.4	)
Other		729		694		4.9

Total operating revenues	$	11,700	$	11,557		1.2

Total operating revenues for 2007 were $11.7 billion as compared to $11.56 billion in 2006. Mainline passenger revenues were $8.14 billion in 2007, as compared to $7.97 billion in 2006. RPMs increased 0.9% as mainline capacity, as measured by ASMs, decreased 1.5%, resulting in a 2.0 point increase in load factor to 80.8%. Passenger yield increased 1.2% to 13.28 cents in 2007 from 13.13 cents in 2006. PRASM increased 3.7% to 10.73 cents in 2007 from 10.35 cents in 2006. The increases in yield and PRASM are due principally to the strong revenue environment in 2007 resulting from reductions in industry capacity and continued capacity and pricing discipline, industry wide fare increases during the 2007 period and higher passenger demand.

Express passenger revenues were $2.7 billion for 2007, a decrease of $46 million from the 2006 period. Express capacity, as measured by ASMs, decreased 5.0% in the 2007 period, due primarily to planned reductions in Express flying during 2007. Express RPMs decreased by 2.6% on lower capacity resulting in a 1.8 point increase in load factor to 73.0%. Passenger yield increased by 1% to 26.12 cents in 2007 from 25.86 cents in 2006.

Cargo revenues were $138 million in 2007, a decrease of $15 million from the 2006 period due to decreases in domestic mail and freight volumes. Other revenues were $729 million in 2007, an increase of $35 million from the 2006 period. The increase in other revenues was primarily driven by an increase in revenue associated with higher fuel sales to pro-rate carriers through MSC.

Operating Expenses:


						Percent
	2007			2006		Change
	(In millions)

Operating expenses:
Aircraft fuel and related taxes	$	2,630		$	2,518		4.4
Loss (gain) on fuel hedging instruments, net:
Realized		(58	)		9		nm
Unrealized		(187	)		70		nm
Salaries and related costs		2,302			2,090		10.1
Aircraft rent		727			732		(0.6	)
Aircraft maintenance		635			582		9.1
Other rent and landing fees		536			568		(5.7	)
Selling expenses		453			446		1.6
Special items, net		99			27		nm
Depreciation and amortization		189			175		8.2
Other		1,247			1,223		2.0

Total mainline operating expenses		8,573			8,440		1.6
Express expenses:
Fuel		765			764		0.1
Other		1,829			1,795		1.9

Total operating expenses	$	11,167		$	10,999		1.5

Total operating expenses were $11.17 billion in 2007, an increase of $168 million or 1.5% compared to the 2006 period. Mainline operating expenses were $8.57 billion in the 2007 period, an increase of $133 million from the 2006 period, while ASMs decreased 1.5%. The 2007 period included net charges from special items of $99 million, primarily due to merger related transition expenses. This compares to net charges from special items of $27 million in 2006, which included $131 million of merger related transition expenses, offset by a $90 million credit related to the restructuring of the then existing Airbus aircraft order and $14 million of credits related to the settlement of certain bankruptcy-related claims. Mainline CASM increased 3.1% to 11.30 cents in 2007 from 10.96 cents in 2006. The period over period increase in CASM was driven principally by higher salaries and related costs ($212 million), due primarily to increased headcount associated with our operational improvement plan and a $99 million charge to increase our obligation for long-term disability as a result of a change in the FAA mandated retirement age for certain pilots, and aircraft fuel costs ($112 million), due to a 5.8% increase in the average price per gallon of fuel in 2007. These increases were offset in part by gains on fuel hedging instruments ($245 million) in the 2007 period as compared to losses in the 2006 period ($79 million).

The table below sets forth the major components of our mainline CASM for the years ended December 31, 2007 and 2006:


	Year Ended
	December 31,					Percent
	2007			2006		Change
	(In cents)

Mainline:
Aircraft fuel and related taxes		3.47			3.27		6.0
Loss (gain) on fuel hedging instruments, net		(0.32	)		0.10		nm
Salaries and related costs		3.03			2.71		11.8
Aircraft rent		0.96			0.95		0.9
Aircraft maintenance		0.84			0.75		10.8
Other rent and landing fees		0.70			0.74		(4.3	)
Selling expenses		0.60			0.58		3.1
Special items, net		0.13			0.04		nm
Depreciation and amortization		0.25			0.23		9.9
Other		1.64			1.59		3.5

		11.30			10.96		3.1

Significant changes in the components of mainline operating expense per ASM are as follows:


	•	Aircraft fuel and related taxes per ASM increased 6% due primarily to a 5.8% increase in the average price per gallon of fuel to $2.20 in 2007 from $2.08 in 2006.

	•	Loss (gain) on fuel hedging instruments, net per ASM fluctuated from a loss of 0.10 cents in 2006 to a gain of 0.32 cents in 2007 as a result of a period over period increase in the volume of barrels hedged during a period in which the fair market value of the costless collar transactions increased.

	•	Salaries and related costs per ASM increased 11.8% due to a $99 million charge for an increase to long-term disability obligations for US Airways’ pilots as a result of a change in the FAA mandated retirement age for pilots from 60 to 65 as well as a period over period increase in headcount, principally in fleet and passenger service employees as part of our initiative to improve operational performance, and increases in employee benefits as a result of higher medical claims due to general inflationary cost increases.

	•	Aircraft maintenance expense per ASM increased 10.8% due principally to an increase in the number of overhauls performed on engines not subject to power by the hour maintenance agreements as well as an increase in the volume of seat overhauls and thrust reverser repairs in the 2007 period compared to the 2006 period.

	•	Depreciation and amortization per ASM increased 9.9% due to an increase in capital expenditures in 2007, specifically the acquisition of Embraer 190 aircraft and equipment to support flight operations.

Total Express expenses increased 1.4% in the 2007 period to $2.59 billion from $2.56 billion in the 2006 period, as other Express operating expenses increased $34 million. Fuel costs remained consistent period over period as the average fuel price per gallon increased 4.2% from $2.14 in the 2006 period to $2.23 in the 2007 period, which was offset by a 4% decrease in gallons consumed as block hours were down 6.2% in the 2007 period due to planned reductions in Express flying. The increase in other Express operating expenses is a result of higher rates paid under certain capacity purchase agreements due to contractually scheduled rate changes.

Nonoperating Income (Expense):


							Percent
	2007			2006			Change
	(In millions)

Nonoperating income (expense):
Interest income	$	172		$	153			12.5
Interest expense, net		(273	)		(295	)		(7.5	)
Other, net		2			(12	)		nm

Total nonoperating expense, net	$	(99	)	$	(154	)		(35.7	)

We had net nonoperating expense of $99 million in 2007 as compared to $154 million in 2006. Interest income increased $19 million to $172 million in 2007 due to higher average cash balances and higher average rates of return on investments. Interest expense decreased $22 million to $273 million due to the full year effect in 2007 of refinancing the loan formerly guaranteed by the ATSB at lower average interest rates in March 2006, as well as the refinancing of the GE loan at lower average interest rates and the repayment of the Barclays Bank of Delaware prepaid miles loan in March 2007.

The 2007 period includes other nonoperating income of $2 million primarily related to the $18 million write off of debt issuance costs in connection with the refinancing of the GE loan in March 2007 as well as a $10 million impairment on auction rate securities considered to be other than temporary, offset by a $17 million gain on the sale of stock in ARINC Incorporated and $7 million in foreign currency gains related to sales transactions denominated in foreign currencies. The 2006 period includes $6 million of nonoperating expense related to prepayment penalties and $5 million in accelerated amortization of debt issuance costs in connection with the refinancing of the loan formerly guaranteed by the ATSB and two loans previously provided to AWA by GECC as well as $17 million in payments in connection with the inducement to convert $70 million of the 7% Senior Convertible Notes to common stock and a $2 million write off of debt issuance costs associated with those converted notes, offset by $11 million of derivative gains attributable to stock options in Sabre and warrants in a number of companies.

2006 Compared With 2005

As discussed above, the full year 2006 includes the consolidated results of US Airways Group and its subsidiaries, including US Airways, America West Holdings and AWA. The 2005 statement of operations presented includes the consolidated results of America West Holdings for the 269 days through September 27, 2005, the effective date of the merger, and the consolidated results of the new US Airways Group for the 96 days from September 27, 2005 to December 31, 2005. The table below shows the consolidated results (in millions):


	2006			2005
	Consolidated			Consolidated						America
	US Airways			US Airways			96 Days			West
	Group			Group			US Airways(1)			Holdings

Operating revenues	$	11,557		$	5,069		$	1,805		$	3,264
Operating expenses		10,999			5,286			1,897			3,389

Operating income (loss)		558			(217	)		(92	)		(125	)
Nonoperating expense, net		(154	)		(118	)		(44	)		(74	)
Income tax provision		101			—			—			—

Income (loss) before cumulative effect of a change in accounting principle	$	303		$	(335	)	$	(136	)	$	(199	)

Diluted earnings (loss) per common share before cumulative effect of a change in accounting principle	$	3.32		$	(10.65	)	$	n/a		$	n/a


(1)		Includes US Airways and US Airways Group’s wholly owned subsidiaries, PSA, Piedmont and MSC.

Total revenue in 2006 was $11.56 billion compared to $5.07 billion in 2005. The majority of the increase in revenue resulted from the inclusion of the results of US Airways Group as a result of the merger. In addition, an increase of $373 million, or 11.4%, was driven by an increase in passenger yield of 12.8% due to improvements in the revenue environment from increased demand and reductions in industry capacity.

Total operating expenses in 2006 were $11 billion compared to $5.29 billion in 2005, primarily reflecting the impact of the merger. The remaining increase in operating expense of $288 million or 8.5% was driven by the following factors:


	•	Aircraft fuel and related tax expense increased $99 million or 12.2% due primarily to a 16.5% increase in the average price per gallon of fuel to $2.09 in 2006 from $1.80 in 2005.

	•	Loss (gain) on fuel hedging instruments, net fluctuated from a gain of $75 million in 2005 to a loss of $79 million in 2006 as a result of a period over period increase in the volume of barrels hedged during a period in which the fair market value of the costless collar transactions decreased.

	•	Other operating expenses increased $36 million or 11.3% in 2006 primarily due to the transition from the FlightFund frequent flyer program to the Dividend Miles program, which resulted in higher costs due to the Dividend Miles program allowing members to redeem awards on Star Alliance partner airlines.

Total nonoperating expense increased $36 million or 31% from 2005 to 2006, primarily reflecting the results of the merger. Interest income increased $123 million to $153 million in 2006 due to higher average cash balances as a result of the merger and higher average rates of return on investments as well as $8 million of interest income earned by AWA in 2006 on certain prior year federal tax refunds. Interest expense increased $148 million to $295 million due to higher average debt balances as a result of the merger.

The 2006 period includes $6 million of nonoperating expense related to prepayment penalties and $5 million in accelerated amortization of debt issuance costs in connection with the refinancing of the loan formerly guaranteed by the ATSB and two loans previously provided to AWA by GECC, as well as $17 million in payments in connection with the inducement to convert $70 million of the 7% Senior Convertible Notes to common stock and a $2 million write off of debt issuance costs associated with those converted notes. These expenses were offset by $11 million of derivative gains attributable to stock options in Sabre and warrants in a number of companies. The 2005 period includes nonoperating expense of $8 million related to the write-off of the unamortized value of the ATSB warrants upon their repurchase in October 2005 and an aggregate $2 million write-off of debt issuance costs associated with the exchange of the 7.25% Senior Exchangeable Notes due 2023 and retirement of a portion of the loan formerly guaranteed by the ATSB.

US Airways’ Results of Operations

In connection with emergence from bankruptcy in September 2005, US Airways adopted fresh-start reporting in accordance with AICPA Statement of Position 90-7, “Financial Reporting by Entities in Reorganization Under the Bankruptcy Code.” As a result of the application of fresh-start reporting, the financial statements prior to September 30, 2005 are not comparable with the financial statements for the periods after September 30, 2005. While the effective date of the plan of reorganization and the merger was September 27, 2005, the results of operations for US Airways during the four day period from September 27 through September 30, 2005 are not material to the financial statement presentation. References to “Successor Company” refer to US Airways on or after September 30, 2005, after giving effect to the application of fresh-start reporting for bankruptcy. References to “Predecessor Company” refer to US Airways prior to September 30, 2005.

On September 26, 2007, as part of the integration efforts following the merger of US Airways Group and America West Holdings in September 2005, AWA surrendered its FAA operating certificate. As a result, all mainline airline operations are now being conducted under US Airways’ FAA operating certificate. In connection with the combination of all mainline airline operations under one FAA operating certificate, US Airways Group contributed 100% of its equity interest in America West Holdings, the parent company of AWA, to US Airways. As a result, America West Holdings and AWA are now wholly owned subsidiaries of US Airways. In addition, AWA transferred substantially all of its assets and liabilities to US Airways. All off-balance sheet commitments of AWA

were also transferred to US Airways. This transaction constituted a transfer of assets between entities under common control and was accounted for at historical cost.

Transfers of assets between entities under common control are accounted for similar to the pooling of interests method of accounting. Under this method, the carrying amount of net assets recognized in the balance sheets of each combining entity are carried forward to the balance sheet of the combined entity, and no other assets or liabilities are recognized as a result of the contribution of shares. This management’s discussion and analysis of financial condition and results of operations is presented as though the transfer had occurred at the time of US Airways’ emergence from bankruptcy. Therefore, the Successor Company consolidated statements of operations, cash flows and shareholder’s equity for US Airways for the three month period ended December 31, 2005 in this report are comprised of the results of US Airways and America West Holdings. The Predecessor Company statements of operations for US Airways for the nine month period ended September 30, 2005 remain unchanged.

In 2007, US Airways realized operating income of $524 million and income before income taxes of $485 million. Included in these results is $245 million of net gains associated with fuel hedging transactions. This includes $187 million of unrealized gains resulting from the application of mark-to-market accounting for changes in the fair value of fuel hedging instruments as well as $58 million of net realized gains on settled hedge transactions. US Airways is required to use mark-to-market accounting as our existing fuel hedging instruments do not meet the requirements for hedge accounting established by SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” If these instruments had qualified for hedge accounting treatment, any unrealized gains or losses, including the $187 million discussed above, would have been deferred in other comprehensive income, a component of stockholder’s equity, until the jet fuel is purchased and the underlying fuel hedging instrument is settled. Given the market volatility of jet fuel, the fair value of these fuel hedging instruments is expected to change until settled. Operating results in the 2007 period also include $99 million of net special charges due to merger related transition expenses, as well as a $99 million charge for an increase to long-term disability obligations for US Airways’ pilots as a result of a change in the FAA mandated retirement age for pilots from 60 to 65 and $4 million in charges related to the plans to reduce flying from Pittsburgh. These charges were offset by $7 million in tax credits due to an IRS rule change allowing US Airways to recover certain fuel usage tax amounts for years 2003-2006 and $9 million of insurance settlement proceeds related to business interruption and property damages incurred as a result of Hurricane Katrina.

Nonoperating expense in the 2007 period includes a $17 million gain recognized on the sale of stock in ARINC Incorporated, offset by $10 million in impairment losses on certain available for sale auction rate securities considered to be other than temporary.

In 2006, US Airways realized operating income of $557 million and income before income taxes and cumulative effect of change in accounting principle of $446 million. Included in these results is $79 million of net losses associated with fuel hedging transactions. This includes $70 million of unrealized losses resulting from the application of mark-to-market accounting for changes in the fair value of fuel hedging instruments as well as $9 million of net realized losses on settled hedge transactions. Operating results in the 2006 period also include $38 million of net special charges, consisting of $131 million of merger related transition expenses offset by a $90 million credit related to the restructuring of the then existing Airbus aircraft order and $3 million of credits related to the settlement of certain bankruptcy-related claims.

In 2005, US Airways realized an operating loss of $325 million and income before income taxes of $22 million. Included in these results is $50 million of net losses associated with fuel hedging transactions. This includes $70 million of unrealized losses resulting from the application of mark-to-market accounting for changes in the fair value of fuel hedging instruments offset by $20 million of net realized gains on settled hedge transactions. Operating results in the 2005 period include $36 million of net special charges, including $28 million in merger related transition costs and $7 million in power by the hour program penalties.

Nonoperating expense in the 2005 period includes $8 million of expenses related to the write-off of the unamortized value of the ATSB warrants upon their repurchase in October 2005 and an aggregate $2 million write off of debt issuance costs associated with the exchange of the 7.25% Senior Exchangeable Notes due 2023.

As of December 31, 2007, US Airways has approximately $761 million of gross NOL to reduce future federal taxable income. Of this amount, approximately $649 million is available to reduce federal taxable income in the calendar year 2008. US Airways’ deferred tax asset, which includes the $649 million of NOL discussed above, has been subject to a full valuation allowance.

For the year ended December 31, 2007, US Airways utilized NOL to reduce its income tax obligation. Utilization of this NOL results in a corresponding decrease in the valuation allowance. In accordance with SFAS No. 109, as this valuation allowance was established through the recognition of tax expense, the decrease in valuation allowance offsets the tax provision dollar for dollar. US Airways recognized $7 million of non-cash state income tax expense for the year ended December 31, 2007, as it utilized NOL that was generated prior to the merger. In accordance with SFAS No. 109, as this was acquired NOL, the decrease in the valuation allowance associated with this NOL reduced goodwill instead of the provision for income taxes. At December 31, 2007, the remaining federal valuation allowance is $40 million, all of which was established through the recognition of tax expense. In addition, US Airways has $33 million and $3 million, respectively, of unrealized federal and state tax benefit related to amounts recorded in other comprehensive income. At December 31, 2007, the remaining state valuation allowance is $43 million, of which $19 million was established through the recognition of tax expense and $24 million is associated with acquired NOL.

For the year ended December 31, 2006, US Airways recognized $85 million of non-cash income tax expense, as it used NOL that was generated prior to the merger. In accordance with SFAS No. 109, as this valuation allowance was established through the recognition of tax expense, the decrease in valuation allowance offsets the tax provision dollar for dollar. US Airways also recorded AMT tax expense of $10 million. In most cases, the recognition of AMT does not result in tax expense. However, as discussed above, since US Airways’ NOL was subject to a full valuation allowance, any liability for AMT is recorded as tax expense. US Airways also recorded $2 million of state income tax provision in 2006 related to certain states where NOL was not available to be used.

For the year ended December 31, 2005, US Airways did not record an income tax benefit and recorded a full valuation allowance on any future tax benefits generated during that period as we had yet to achieve several consecutive quarters of profitable results coupled with an expectation of continued profitability.

The table below sets forth selected mainline operating data for US Airways. The 2005 full year operating statistics, which consist of a full year of US Airways’ results and AWA’s results for the three months ended December 31, 2005, do not provide a meaningful comparison and have been omitted.


					Percent
	Year Ended December 31,				Change
	2007		2006		2007-2006

Revenue passenger miles (millions)(a)		61,262		60,689		0.9
Available seat miles (millions)(b)		75,842		76,983		(1.5	)
Load factor (percent)(c)		80.8		78.8		2.0 pts
Yield (cents)(d)		13.28		13.13		1.2
Passenger revenue per available seat mile (cents)(e)		10.73		10.35		3.7
Aircraft at end of period		356		359		(0.8	)


(a)		Revenue passenger mile (“RPM”) — A basic measure of sales volume. A RPM represents one passenger flown one mile.

(b)		Available seat mile (“ASM”) — A basic measure of production. An ASM represents one seat flown one mile.

(c)		Load factor — The percentage of available seats that are filled with revenue passengers.

(d)		Yield — A measure of airline revenue derived by dividing passenger revenue by revenue passenger miles and expressed in cents per mile.


(e)		Passenger revenue per available seat mile (“PRASM”) — Total passenger revenues divided by total available seat miles.

2007 Compared With 2006

Operating Revenues:


					Percent
	2007		2006		Change
	(In millions)

Operating revenues:
Mainline passenger	$	8,135	$	7,966		2.1
Express passenger		2,698		2,744		(1.7	)
Cargo		138		153		(9.4	)
Other		842		829		1.5

Total operating revenues	$	11,813	$	11,692		1.0

Total operating revenues for 2007 were $11.81 billion as compared to $11.69 billion in 2006. Mainline passenger revenues were $8.14 billion in 2007, as compared to $7.97 billion in 2006. RPMs increased 0.9% as mainline capacity, as measured by ASMs, decreased 1.5%, resulting in a 2.0 point increase in load factor to 80.8%. Passenger yield increased 1.2% to 13.28 cents in 2007 from 13.13 cents in 2006. PRASM increased 3.7% to 10.73 cents in 2007 from 10.35 cents in 2006. The increases in yield and PRASM are due principally to the strong revenue environment in 2007 resulting from reductions in industry capacity and continued capacity and pricing discipline, industry wide fare increases during the 2007 period and higher passenger demand.

Cargo revenues were $138 million in 2007, a decrease of $15 million from the 2006 period due to decreases in domestic mail and freight volumes. Other revenues were $842 million in 2007, which is consistent with the 2006 period.

Operating Expenses:


						Percent
	2007			2006		Change
	(In millions)

Operating expenses:
Aircraft fuel and related taxes	$	2,630		$	2,518		4.4
Loss (gain) on fuel hedging instruments, net
Realized		(58	)		9		nm
Unrealized		(187	)		70		nm
Salaries and related costs		2,302			2,090		10.2
Aircraft rent		727			732		(0.6	)
Aircraft maintenance		635			582		9.1
Other rent and landing fees		536			568		(5.7	)
Selling expenses		453			446		1.6
Special items, net		99			38		nm
Depreciation and amortization		198			184		8.1
Other		1,227			1,228		(0.1	)

Total mainline operating expenses		8,562			8,465		1.1
Express expenses:
Fuel		765			764		0.1
Other		1,962			1,906		2.9

Total operating expenses	$	11,289		$	11,135		1.4

Total operating expenses were $11.29 billion in 2007, an increase of $154 million or 1.4% compared to the 2006 period. Mainline operating expenses were $8.56 billion in 2007, an increase of $97 million from the 2006 period, while ASMs decreased 1.5%. The 2007 period included net charges from special items of $99 million, primarily due to merger related transition expenses. This compares to net charges from special items of $38 million in 2006, which included $131 million of merger related transition expenses, offset by a $90 million credit related to the restructuring of the then existing Airbus aircraft order and $3 million of credits related to the settlement of certain bankruptcy-related claims. The period over period increase in mainline operating expenses was driven principally by increases in salaries and related costs ($212 million), aircraft fuel ($112 million) and aircraft maintenance ($53 million). These increases were offset in part by gains on fuel hedging instruments ($245 million) in the 2007 period as compared to losses in the 2006 period ($79 million).

Significant changes in the components of mainline operating expenses are as follows:


	•	Aircraft fuel and related taxes increased 4.4% due primarily to a 5.8% increase in the average price per gallon of fuel to $2.20 in 2007 from $2.08 in 2006.

	•	Loss (gain) on fuel hedging instruments, net fluctuated from a loss of $79 million in 2006 to a gain of $245 million in 2007 as a result of a period over period increase in the volume of barrels hedged during a period in which the fair market value of the costless collar transactions increased.

	•	Salaries and related costs increased 10.2% due a $99 million charge for an increase to long-term disability obligations for US Airways’ pilots as a result of a change in the FAA mandated retirement age for pilots from 60 to 65 as well as a period over period increase in headcount, principally in fleet and passenger service employees as part of our initiative to improve operational performance, and increases in employee benefits as a result of higher medical claims due to general inflationary cost increases.

	•	Aircraft maintenance expense increased 9.1% due principally to an increase in the number of overhauls performed on engines not subject to power by the hour maintenance agreements as well as an increase in the volume of seat overhauls and thrust reverser repairs in the 2007 period compared to the 2006 period.


	•	Depreciation and amortization increased 8.1% due to an increase in capital expenditures in 2007, specifically the acquisition of Embraer 190 aircraft and equipment to support flight operations.

Total Express expenses increased 2.1% in the 2007 period to $2.73 billion from $2.67 billion in the 2006 period, as other Express operating expenses increased $56 million. Fuel costs remained consistent period over period as the average fuel price per gallon increased 4.2% from $2.14 in the 2006 period to $2.23 in the 2007 period, which was offset by a 4% decrease in gallons consumed as block hours were down 6.2% in the 2007 period due to planned reductions in Express flying. The increase in other Express operating expenses is a result of higher rates paid under certain capacity purchase agreements due to contractually scheduled rate changes.

Nonoperating Income (Expense):


							Percent
	2007			2006			Change
	(In millions)

Nonoperating income (expense):
Interest income	$	172		$	153			12.6
Interest expense, net		(229	)		(268	)		(14.4	)
Other, net		18			4			nm

Total nonoperating expense, net	$	(39	)	$	(111	)		(64.7	)

US Airways had net nonoperating expense of $39 million in 2007 as compared to $111 million in 2006. Interest income increased $19 million to $172 million in 2007 due to higher average cash balances and higher average rates of returns on investments. Interest expense decreased to $229 million from $268 million due to the full year effect in 2007 of the refinancing in March 2006 by US Airways Group of the loan formerly guaranteed by the ATSB. The refinanced debt is no longer held by US Airways. Also contributing to lower interest expense was the conversion of the 7.5% Convertible Senior Notes in April 2006 into equity of US Airways Group and the repayment by US Airways Group of the Barclays Bank of Delaware prepaid miles loan in March 2007.

The 2007 period includes other nonoperating income of $18 million primarily related to a $17 million gain on the sale of stock in ARINC Incorporated as well as $7 million in foreign currency gains related to sales transactions denominated in foreign currencies, offset by a $10 million impairment on auction rate securities considered to be other than temporary. The 2006 period includes other nonoperating expense of $6 million related to prepayment penalties and an aggregate of $5 million in accelerated amortization of debt issuance costs in connection with the refinancing of the loan formerly guaranteed by the ATSB and two loans previously provided to AWA by GECC, offset by $11 million of derivative gains attributable to stock options in Sabre and warrants in a number of companies.

2006 Compared With 2005

As discussed above, the Successor Company consolidated statement of operations for US Airways for the three month period ended December 31, 2005 in this report is comprised of the results of US Airways and America West

Holdings. The Predecessor Company statement of operations for US Airways for the nine month period ended September 30, 2005 remains unchanged. The table below shows the consolidated results (in millions):


							Predecessor
	Successor Company						Company
				Three Months			Nine Months
	Year Ended			Ended			Ended
	December 31,			December 31,			September 30,
	2006			2005			2005

Operating revenues	$	11,692		$	2,589		$	5,452
Operating expenses		11,135			2,772			5,594

Operating income (loss)		557			(183	)		(142	)
Nonoperating income (expense), net		(111	)		(73	)		420
Income tax provision (benefit)		98			—			(2	)

Income (loss) before cumulative effect of a change in accounting principle	$	348		$	(256	)	$	280

Total revenue in 2006 was $11.69 billion compared to $8.04 billion in 2005. The majority of the increase in revenue resulted from the inclusion of the results of America West Holdings beginning in the fourth quarter of 2005. In addition, an increase of $849 million, or 11.8%, was driven by an increase in passenger yield of 12.2% due to improvements in the revenue environment from increased demand and reductions in industry capacity.

Total operating expenses in 2006 were $11.14 billion compared to $8.37 billion, primarily reflecting the impact of the inclusion of America West Holdings’ results. The remaining increase in operating expense of $44 million or 0.6% was driven by the following factors:


	•	Aircraft fuel and related tax expense increased $121 million or 8.1% due primarily to a 16.8% increase in the average price per gallon of fuel to $2.07 in 2006 from $1.77 in 2005.

	•	Selling expenses decreased $42 million or 12.9% primarily due to reduction in travel agent commissions and booking fees as a result of lower rates renegotiated subsequent to the merger.

	•	Depreciation and amortization decreased $51 million or 27% as a result of fewer owned aircraft in the operating fleet as a result of sale lease back transactions completed in 2005.

Total nonoperating expense (income) decreased from income of $347 million in 2005 to expense of $111 million in 2006, primarily reflecting income from reorganization items in 2005 of $636 million and the results of the inclusion of America West Holdings. Interest income increased $116 million to $153 million in 2006 due to higher average cash balances as a result of the merger and higher average rates of return on investments. Interest expense decreased $44 million to $268 million as a result of reductions in the outstanding debt subsequent to the sale-leaseback transactions completed in 2005 and the fact that interest expense in the first nine months of 2005 included penalty interest incurred as a result of the bankruptcy proceedings.

Description of Reorganization Items

Reorganization items, net represent amounts incurred as a direct result of US Airways’ Chapter 11 filings and are presented separately in the statements of operations. Such items consist of the following (in millions):


	Predecessor Company
	Nine Months Ended
	September 30, 2005

Curtailment of postretirement benefits(a)	$	1,420
Termination of pension plans(b)		801
Discharge of liabilities(c)		75
Aircraft order cancellation penalties & reversals(d)		30
Interest income on accumulated cash		7
Damage and deficiency claims(e)		2
Revaluation of assets and liabilities(f)		(1,498	)
Severance including benefits(g)		(96	)
Professional fees		(57	)
Airbus equipment deposits and credits, net(h)		(35	)
Restructured aircraft financings(i)		(5	)
Write-off of deferred compensation		(4	)
Other		(4	)

	$	636


(a)		In January 2005, the Bankruptcy Court approved settlement agreements between US Airways and representatives of its retirees, including the IAM, TWU and a court-appointed Section 1114 Committee, to begin the significant curtailment of postretirement medical benefits. US Airways recognized a gain of $183 million in connection with this curtailment in the first quarter of 2005. Upon the emergence from bankruptcy and effectiveness of the plan of reorganization, an additional gain of $1.24 billion was recognized when the liability associated with the postretirement medical benefits was reduced to fair market value. See also Note 6(a) to US Airways’ consolidated financial statements included in Item 8B of this report.

(b)		Also in January 2005, US Airways terminated three defined benefit plans related to the flight attendants, mechanics and certain other employees (see Note 6(a) to US Airways’ consolidated financial statements included in Item 8B of this report). PBGC was appointed trustee of the plans upon termination. US Airways recognized a curtailment gain of $24 million and a $91 million minimum pension liability adjustment in connection with the terminations in the first quarter of 2005. Upon the effective date of the plan of reorganization and in connection with the settlement with the PBGC, the remaining liabilities associated with these plans were written off, net of settlement amounts.

(c)		Reflects the discharge of trade accounts payable and other liabilities upon emergence from bankruptcy. Most of these obligations were only entitled to receive such distributions of cash and common stock as provided for under the plan of reorganization in each of the bankruptcies. A portion of the liabilities subject to compromise in the bankruptcies were restructured and continued, as restructured, to be liabilities of the Successor Company.

(d)		As a result of US Airways’ bankruptcy filing in September 2004, US Airways was not able to secure the financing necessary to take on-time delivery of three scheduled regional jet aircraft and therefore accrued penalties of $3 million until delivery of these aircraft was made to a US Airways Express affiliate in August 2005. Offsetting these penalties is the reversal of $33 million in penalties recorded by US Airways in the nine months ended December 31, 2003 due to its intention not to take delivery of certain aircraft scheduled for future delivery. In connection with the Airbus Memorandum of Understanding (“MOU”), the accrual for these penalties was reversed.

(e)		Damage and deficiency claims are largely a result of US Airways’ election to either restructure, abandon or reject aircraft debt and leases during the bankruptcy proceedings. As a result of the confirmation of the plan of reorganization and the effectiveness of the merger, these claims were withdrawn and the accruals reversed.


(f)		As of September 30, 2005, US Airways recorded $1.5 billion of adjustments to reflect assets and liabilities at fair value, including an initial net write-down of goodwill of $1.82 billion. Goodwill of $584 million was recorded to reflect the excess of the estimated fair value of liabilities and equity over identifiable assets. Subsequent to September 30, 2005, US Airways recorded an additional $148 million of goodwill to reflect adjustments to the estimated fair values of certain assets and liabilities.

(g)		In connection with filing for bankruptcy on September 12, 2004, US Airways achieved cost-savings agreements with its principal collective bargaining groups. In connection with the new labor agreements, approximately 5,000 employees across several of US Airways’ labor groups were involuntarily terminated or participated in voluntary furlough and termination programs.

(h)		In connection with the Airbus MOU, US Airways was required to pay a restructuring fee of $39 million, which was paid by means of offset against existing equipment deposits held by Airbus. US Airways also received credits from Airbus totaling $4 million in 2005, primarily related to equipment deposits. See also Note 3 to US Airways’ consolidated financial statements included in Item 8B of this report.

(i)		The GE Merger MOU provided for the continued use of certain leased Airbus, Boeing and regional jet aircraft, the modification of monthly lease rates and the return of certain other leased Airbus and Boeing aircraft. The GE Merger MOU also provided for the sale-leaseback of assets securing various GE obligations. In connection with these transactions, US Airways recorded a net loss of $5 million.

Liquidity and Capital Resources

As of December 31, 2007, our cash, cash equivalents, investments in marketable securities and restricted cash were $3 billion, of which $2.53 billion was unrestricted. As of December 31, 2007, US Airways’ cash, cash equivalents, investments in marketable securities and restricted cash were $2.99 billion, of which $2.52 billion was unrestricted. US Airways’ and our investments in marketable securities include $353 million of investments in auction rate securities that are classified as noncurrent assets on our balance sheet.

The par value of these auction rate securities totals $411 million as of December 31, 2007. Contractual maturities for these auction rate securities are greater than nine years with an interest reset date approximately every 28 days. Historically, the carrying value of auction rate securities approximated fair value due to the frequent resetting of the interest rates. With the liquidity issues experienced in the global credit and capital markets, our auction rate securities have experienced multiple failed auctions. While we continue to earn interest on these investments at the maximum contractual rate, the estimated market value of these auction rate securities no longer approximates par value.

Given the complexity of auction rate securities, we engaged an investment advisor to assist us in determining the fair values of our investments. With the assistance of our advisor, we estimated the fair value of these auction rate securities based on the following: (i) the underlying structure of each security; (ii) the present value of future principal and interest payments discounted at rates considered to reflect current market conditions; (iii) consideration of the probabilities of default, auction failure, or repurchase at par for each period; and (iv) estimates of the recovery rates in the event of default for each security. These estimated fair values could change significantly based on future market conditions.

We concluded that the fair market value of these auction rate securities at December 31, 2007 was $353 million, a decline of $58 million from par value. Of this amount $48 million was deemed temporary as we believe the decline in market value is due to general market conditions. Based upon our evaluation of available information, we believe these investments are of high credit quality, as substantially all of the investments carry an AAA credit rating, and approximately 30% of the par value of these auction rate securities is insured. Accordingly, we have recorded an unrealized loss on these securities of $48 million in other comprehensive income. We concluded that $10 million of the decline was other than temporary and recorded an impairment charge in other income, net. Our conclusion for the other than temporary impairment is based on the significant decline in fair value indicated for a certain investment, a portion of which is collateralized either directly or indirectly by sub-prime mortgages.

additional declines in value are also temporary and are attributed to current credit market events and continued lack of market liquidity in early 2008. Such temporary declines, if sustained, would be recognized in other comprehensive income in the first quarter of 2008. It is possible that additional declines in fair value may occur. To the extent the fair market values of our auction rate securities were to subsequently increase, such increase would reduce the unrealized loss recorded in other comprehensive income.

We continue to monitor the market for auction rate securities and consider its impact (if any) on the fair market value of our investments. If the current market conditions deteriorate further, or the anticipated recovery in market values does not occur, we may be required to record additional unrealized losses in other comprehensive income or impairment charges in 2008.

We intend and have the ability to hold these auction rate securities until the market recovers. We do not anticipate having to sell these securities in order to operate our business. We believe that, based on our current unrestricted cash, cash equivalents and short-term marketable securities balances of $2.17 billion at December 31, 2007, the current lack of liquidity in the credit and capital markets will not have a material impact on our liquidity, cash flow or our ability to fund our operations.

Sources and Uses of Cash

US Airways Group

Net cash provided by operating activities was $442 million and $618 million in 2007 and 2006, respectively, a decrease of $176 million. The decrease is a result of higher cash outflows in 2007 related to salaries and benefits, aircraft maintenance expense and fuel costs. The increase in cash outflows was partially offset by an increase in cash receipts due to the better revenue environment in 2007 compared to 2006.

Net cash provided by investing activities in 2007 was $269 million compared to net cash used in investing activities of $903 million in 2006. Principal investing activities in 2007 included purchases of property and equipment that totaled $523 million, including the purchase of nine Embraer 190 aircraft, an $80 million increase in equipment purchase deposits, a decrease in restricted cash of $200 million, and $56 million in proceeds from the sale of investments in ARINC and Sabre. We also had net proceeds from sales of investments in marketable securities of $612 million, which was principally the result of sales of auction rate securities that were still liquid at par value in the third quarter of 2007. The 2006 period included purchases of property and equipment totaling $232 million, including the purchase of three Boeing 757-200 and two Embraer 190 aircraft, net purchases of investments in marketable securities of $798 million and a decrease in restricted cash of $128 million. Changes in the restricted cash balances for the 2007 and 2006 periods are due to changes in reserves required under agreements for processing credit card transactions.

Net cash provided by financing activities was $121 million and $276 million in 2007 and 2006, respectively. Principal financing activities in 2007 included proceeds from the issuance of new debt including $1.6 billion of debt under the Citicorp credit facility and $198 million of equipment notes issued to finance the acquisition of nine Embraer 190 aircraft. Debt repayments were $1.68 billion and, using the proceeds from the Citicorp credit facility discussed above, included the repayment in full of the outstanding balance on the GE loan of $1.25 billion, the prepayment of miles by Barclays Bank Delaware of $325 million and a GECC credit facility of $19 million. Principal financing activities in 2006 included proceeds from the issuance of new debt totaling $1.42 billion, which included borrowings of $1.25 billion under the GE loan, a $64 million draw on one of the Airbus loans and $92 million of equipment notes issued to finance the acquisition of three Boeing 757-200 and two Embraer 190 aircraft. Debt repayments totaled $1.19 billion and, using the proceeds from the GE loan, included the repayment in full of the balances outstanding on our ATSB loans of $801 million, Airbus loans of $161 million, and two GECC term loans of $110 million. We also made a $17 million payment in 2006 related to the partial conversion of the 7% Senior Convertible Notes.

US Airways

Net cash provided by operating activities was $430 million and $649 million in 2007 and 2006, respectively, a decrease of $219 million. The decrease is a result of higher cash outflows in 2007 related to salaries and benefits,

aircraft maintenance expense and fuel costs. The increase in cash outflows was partially offset by an increase in cash receipts due to the better revenue environment in 2007 compared to 2006.

Net cash provided by investing activities in 2007 was $306 million compared to net cash used in investing activities of $893 million in 2006. Principal investing activities in 2007 included purchases of property and equipment that totaled $486 million, including the purchase of nine Embraer 190 aircraft, an $80 million increase in equipment purchase deposits, a decrease in restricted cash of $200 million, and $56 million in proceeds from the sale of investments in ARINC and Sabre. US Airways also had net proceeds from sales of investments in marketable securities of $612 million, principally the result of sales of auction rate securities that were still liquid at par value in the third quarter of 2007. The 2006 period included purchases of property and equipment totaling $222 million, including the purchase of three Boeing 757-200 and two Embraer 190 aircraft, net purchases of investments in marketable securities of $798 million and a decrease in restricted cash of $128 million. Changes in the restricted cash balances for the 2007 and 2006 periods are due to changes in reserves required under agreements for processing credit card transactions.

Net cash provided by financing activities was $93 million and $239 million in 2007 and 2006, respectively. Principal financing activities in 2007 included the issuance of $198 million of new debt to finance the acquisition of nine Embraer 190 aircraft and total debt repayments of $105 million. The 2006 period included a net increase in payables to related parties of $247 million, the issuance of $92 million of new debt to finance the acquisition of three Boeing 757-200 aircraft and two Embraer 190 aircraft and total debt repayments of $100 million.

Commitments

As of December 31, 2007, we had $3.27 billion of long-term debt and capital leases (including current maturities and net of discount on debt), which consisted primarily of the items discussed below.

Refinancing Transactions

On March 23, 2007, we entered into a new term loan credit facility with Citicorp North America, Inc., as administrative agent, and a syndicate of lenders, pursuant to which US Airways Group borrowed an aggregate principal amount of $1.6 billion. US Airways, AWA and certain other subsidiaries of US Airways Group are guarantors of the Citicorp credit facility.

The proceeds of the Citicorp credit facility were used to repay in full the following indebtedness:


	•	The amended and restated loan agreement, dated April 7, 2006, entered into by US Airways Group with GECC and a syndicate of lenders. At the time of the repayment, the total outstanding balance of the loan was $1.25 billion.

	•	The Barclays prepaid miles issued on October 3, 2005 in connection with the amended co-branded credit card agreement dated August 8, 2005 between pre-merger US Airways Group, AWA and Juniper Bank, a subsidiary of Barclays PLC that has since been renamed Barclays Bank Delaware (“Barclays”). At the time of the repayment, the total outstanding balance was $325 million.

	•	The credit facility with GECC, amended in July 2005 with an original balance of $28 million. At the time of the repayment, the total outstanding balance of the loan was $19 million.

The Citicorp credit facility bears interest at an index rate plus an applicable index margin or, at our option, LIBOR plus an applicable LIBOR margin for interest periods of one, two, three or six months. The applicable index margin, subject to adjustment, is 1.00%, 1.25% or 1.50% if the adjusted loan balance is less than $600 million, between $600 million and $1 billion, or between $1 billion and $1.6 billion, respectively. The applicable LIBOR margin, subject to adjustment, is 2.00%, 2.25% or 2.50% if the adjusted loan balance is less than $600 million, between $600 million and $1 billion, or between $1 billion and $1.6 billion, respectively. In addition, interest on the Citicorp credit facility may be adjusted based on the credit rating for the Citicorp credit facility as follows: (i) if the credit ratings of the Citicorp credit facility by Moody’s and S&P in effect as of the last day of the most recently ended fiscal quarter are both at least one subgrade better than the credit ratings in effect on March 23, 2007, then (A) the applicable LIBOR margin will be the lower of 2.25% and the rate otherwise applicable based upon the

adjusted Citicorp credit facility balance and (B) the applicable index margin will be the lower of 1.25% and the rate otherwise applicable based upon the Citicorp credit facility principal balance, and (ii) if the credit ratings of the Citicorp credit facility by Moody’s and S&P in effect as of the last day of the most recently ended fiscal quarter are both at least two subgrades better than the credit ratings in effect on March 23, 2007, then (A) the applicable LIBOR margin will be 2.00% and (B) the applicable index margin will be 1.00%. As of December 31, 2007, the interest rate on the Citicorp credit facility was 7.28% based on a 2.50% LIBOR margin.

The Citicorp credit facility matures on March 23, 2014, and is repayable in seven annual installments with each of the first six installments to be paid on each anniversary of the closing date in an amount equal to 1% of the initial aggregate principal amount of the loan and the final installment to be paid on the maturity date in the amount of the full remaining balance of the loan.

In addition, the Citicorp credit facility requires certain mandatory prepayments upon the occurrence of certain events, establishes certain financial covenants, including minimum cash requirements and maintenance of certain minimum ratios, contains customary affirmative covenants and negative covenants and contains customary events of default. The Citicorp credit facility requires us to maintain consolidated unrestricted cash and cash equivalents of not less than $1.25 billion, with not less than $750 million (subject to partial reductions upon certain reductions in the outstanding principal amount of the loan) of that amount held in accounts subject to control agreements, which would become restricted for use by us if certain adverse events occur per the terms of the agreement. At December 31, 2007, we were in compliance with all debt covenants.

7% Senior Convertible Notes

US Airways Group received net proceeds of $139 million related to the 7% Senior Convertible Notes due 2020 that were issued on September 30, 2005. The 7% notes are US Airways Group’s senior unsecured obligations and rank equally in right of payment to its other senior unsecured and unsubordinated indebtedness, and are effectively subordinated to its secured indebtedness to the extent of the value of assets securing such indebtedness. The 7% notes are fully and unconditionally guaranteed, jointly and severally and on a senior unsecured basis, by US Airways and AWA. The US Airways and AWA guarantees are the guarantors’ unsecured obligations, rank equally in right of payment to the other senior unsecured and unsubordinated indebtedness of the guarantors and are effectively subordinated to the guarantors’ secured indebtedness to the extent of the value of assets securing such indebtedness.

The 7% notes bear interest at the rate of 7% per year payable in cash semiannually in arrears on March 30 and September 30 of each year, beginning March 30, 2006. The 7% notes mature on September 30, 2020. Holders may convert, at any time on or prior to maturity or redemption, any outstanding notes (or portions thereof) into shares of US Airways Group’s common stock, initially at a conversion rate of 41.4508 shares of US Airways Group’s common stock per $1,000 principal amount of 7% notes (equivalent to an initial conversion price of approximately $24.12 per share of US Airways Group’s common stock). If a holder elects to convert its 7% notes in connection with certain specified fundamental changes that occur prior to October 5, 2015, the holder will be entitled to receive additional shares of US Airways Group’s common stock as a make whole premium upon conversion. In lieu of delivery of shares of US Airways Group’s common stock upon conversion of all or any portion of the 7% notes, US Airways Group may elect to pay holders surrendering 7% notes for conversion cash or a combination of shares and cash.

Holders of the 7% notes may require US Airways Group to purchase for cash or shares or a combination thereof, at US Airways Group’s election, all or a portion of their notes on September 30, 2010 and September 30, 2015 at a purchase price equal to 100% of the principal amount of the notes to be repurchased plus accrued and unpaid interest, if any, to the purchase date. In addition, if US Airways Group experiences a fundamental change (as defined in the indenture governing the notes), holders may require US Airways Group to purchase for cash, shares or a combination thereof, at its election, all or a portion of their notes, subject to specified exceptions, at a price equal to 100% of the principal amount of the notes plus accrued and unpaid interest, if any, to the purchase date. Prior to October 5, 2010, the notes will not be redeemable at US Airways Group’s option. US Airways Group may redeem all or a portion of the notes at any time on or after October 5, 2010, at a price equal to 100% of the principal amount of the notes plus accrued and unpaid interest, if any, to the redemption date if the closing price of US

Airways Group’s common stock has exceeded 115% of the conversion price for at least 20 trading days in the 30 consecutive trading day period ending on the trading day before the date on which US Airways Group mails the redemption notice.

In July 2006, approximately $21 million of the $144 million outstanding principal amount of the 7% notes were converted into 883,523 shares of common stock. In connection with the conversion, we paid a premium of $5 million to the holders of the converted notes, which was recorded in other non-operating expenses. In November 2006, approximately $49 million of the remaining $123 million outstanding principal amount of the notes were converted into 2,026,113 shares of common stock. In connection with the conversion, we paid a premium of $12 million to the holders of the converted notes, which was recorded in other non-operating expenses.

Affinity Credit Card Partner Agreement

In connection with the merger, AWA, pre-merger US Airways Group and Barclays Bank of Delaware entered into an amended credit card agreement on August 8, 2005. Pursuant to the amended credit card agreement, Barclays agreed to offer and market an airline mileage award credit card program to the general public to participate in US Airways Group’s Dividend Miles program through the use of a co-branded credit card. Under the amended credit card agreement, Barclays pays us fees for each mile awarded to each credit card account administered by Barclays, subject to certain exceptions. The credit card services provided by Barclays commenced in early January 2006.

Pre-merger US Airways’ credit card program was administered by Bank of America, N.A. (USA). Pending termination of the Bank of America agreement, there is a dual branding period during which both Barclays and Bank of America are running separate credit card programs for us. As a result of a May 11, 2007 settlement of litigation filed by Bank of America against US Airways Group, US Airways and AWA, the agreement with Bank of America has been extended to March 31, 2009, among other changes, and the dual branding period has been extended through the same date. The term of the amended credit card agreement with Barclays also was extended to March 31, 2015, among other changes, as a result of the litigation settlement.

Under the amended credit card agreement, Barclays also agreed to pay a one-time bonus payment of $130 million following the effectiveness of the merger and an annual bonus of $5 million to us, subject to certain exceptions, for each year after Barclays becomes the exclusive issuer of the co-branded credit card. If Barclays is not granted exclusivity to offer a co-branded credit card after the dual branding period with Bank of America, we must repay this bonus payment plus repay a $20 million bonus payment AWA previously received under the original credit card agreement with Barclays. Barclays may, at its option, terminate the amended credit card agreement in the event that we breach our obligations under the amended credit card agreement, or upon the occurrence of certain other events, which also would require us to repay some or all of the bonus payments as discussed above. As of December 31, 2007, we have not recorded income from the bonus payments and have a deferred liability of $150 million recorded in other long-term liabilities.

Aircraft and Engine Purchase Commitments

On June 13, 2006, we and Embraer executed an Amended and Restated Purchase Agreement and an Amended and Restated Letter Agreement. In accordance with the terms of these agreements, we placed an initial firm order for 25 Embraer 190 aircraft and an additional order for 32 Embraer 190 aircraft. The progress and deposit payments totaling approximately $18 million previously paid by us to Embraer in accordance with the terms of the Purchase Agreement dated as of May 9, 2003, are being applied to these orders in accordance with the terms of the amended and restated agreements. In addition, we had the option to purchase up to 50 additional Embraer 190 aircraft and to convert certain of the Embraer 190 aircraft to Embraer 170, Embraer 175 or Embraer 195 aircraft, subject to availability and upon agreed notice. Embraer has agreed to provide financing for certain of the aircraft. On July 21, 2006, we assigned 30 of the purchase options to Republic Airlines Inc. On January 12, 2007, we assigned eight additional purchase options to Republic Airlines. We purchased and took delivery of two Embraer 190 aircraft in the fourth quarter of 2006 and nine Embraer 190 aircraft throughout 2007. We expect to take delivery of 14 Embraer 190 aircraft in 2008. In June and August 2007, we amended the Amended and Restated Purchase Agreement to revise the delivery schedule for the additional 32 Embraer 190 aircraft. On June 6, 2007, we entered into another amendment to the Amended and Restated Purchase Agreement whereby Embraer granted us an additional

140 purchase options. We further amended the Amended and Restated Letter Agreement in August 2007 to revise previous provisions concerning price escalation limits and assignment of purchase rights to regional operators.

In June 2007, US Airways announced that it had agreed to terms with Airbus for the acquisition of 92 aircraft, including 60 single-aisle A320 family aircraft and 32 wide-body aircraft, including 22 A350 XWB aircraft and ten A330 aircraft. On October 2, 2007, US Airways and Airbus executed the following definitive agreements for these aircraft:


	•	An Amended and Restated Airbus A320 Family Aircraft Purchase Agreement, which supersedes the AWA A319/A320 Purchase Agreement. The terms of the amended and restated purchase agreement encompass the purchase of 60 new narrow-body aircraft, including ten A319 aircraft, 40 A320 aircraft, and ten A321 aircraft, with conversion rights, in addition to the 37 aircraft from the previous A319/A320 Purchase Agreement. Deliveries of the aircraft under this agreement will run through 2012. US Airways expects to use the 60 A320 family aircraft to replace 60 older aircraft in the airline’s fleet. The amended and restated purchase agreement also provides US Airways with certain conversion rights, as well as purchase rights for the acquisition of additional A320 family aircraft, subject to certain terms and conditions. In addition, the amended and restated purchase agreement revises the delivery schedule for 15 A318 aircraft and provides US Airways with certain other rights with respect thereto. On January 31, 2008, US Airways canceled its order for 12 of the 15 A318 aircraft.

	•	An Amended and Restated Airbus A350 XWB Purchase Agreement, which supersedes the A350 Purchase Agreement dated September 27, 2005 between US Airways Group, US Airways, AWA and AVSA, S.A.R.L. (now Airbus S.A.S.). The new purchase agreement increases the number of firm order aircraft from 20 A350 aircraft to 18 A350-800 XWB aircraft and four A350-900 XWB aircraft, with the option to convert these aircraft to other A350 models, subject to certain terms and conditions. Deliveries for the 22 A350 XWB aircraft will begin in 2014 and extend through 2017. US Airways expects to use these aircraft for modest international expansion or replacement of existing older technology aircraft, as market conditions warrant. The Amended and Restated Airbus A350 XWB Purchase Agreement also gives US Airways purchase rights for the acquisition of additional A350 XWB aircraft, subject to certain terms and conditions.

	•	An Airbus A330 Purchase Agreement, which provides for the purchase by US Airways of ten firm order A330-200 aircraft with deliveries in 2009 and 2010. The Airbus A330 Purchase Agreement also provides US Airways with purchase rights for the acquisition of additional A330-200 aircraft, subject to certain terms and conditions.

On October 2, 2007, US Airways and Airbus also entered into Amendment No. 11 to the A330/A340 Purchase Agreement dated as of November 24, 1998, rescheduling the delivery positions for the cancellable A330 aircraft under that agreement to dates in 2014 and 2015 and replacing the predelivery payment schedule.

On November 15, 2007, US Airways and Airbus entered into Amendment No. 1 to the A330 Purchase Agreement adding an additional five firm A330-200 aircraft to the Airbus A330 Purchase Agreement. These additional aircraft will allow US Airways to continue its international growth plans of adding approximately three to four new markets per year between 2009 and 2011.

On January 11, 2008, US Airways and Airbus entered into Amendment No. 1 to the Amended and Restated Airbus A320 Family Aircraft Purchase Agreement. Under this amended and restated purchase agreement, US Airways has the right to convert certain aircraft models to other aircraft models within the mix of 97 A320 family aircraft. Amendment No. 1 provides for the conversion of 13 A319 aircraft to A320 aircraft, one A319 to an A321 and 11 A320 aircraft to A321 aircraft for deliveries during 2009 and 2010.

US Airways has an agreement with International Aero Engines (“IAE”) which provides for the purchase by US Airways of eight new V2500-A5 spare engines scheduled for delivery through 2014 for use on the Airbus A320 family fleet.

We have also agreed to terms with Rolls-Royce to acquire Trent XWB engines to power the 22 Airbus A350 XWB aircraft along with a TotalCare long-term engine services agreement. The engine order and the services agreement are contingent upon execution of definitive documentation.

Under all of the aircraft and engine purchase agreements discussed above, US Airways’ total future commitments to Embraer, Airbus and IAE are expected to be approximately $7.5 billion through 2017, which includes predelivery deposits and payments. US Airways expects to fund these payments through future financings.

On October 18, 2006, US Airways entered into a facility agreement in the total aggregate amount of $242 million to finance the acquisition of aircraft. As of December 31, 2007, the amount outstanding under that facility was $237 million. On November 2, 2007, US Airways entered into another facility agreement in the total aggregate amount of $323 million to finance additional deliveries of aircraft. As of December 31, 2007, US Airways has not borrowed against this facility. The financing facilities bear interest at a rate of LIBOR plus a margin and contain default and other covenants that are typical in the industry for similar financings.

Covenants and Credit Rating

In addition to the minimum cash balance requirements, our long-term debt agreements contain various negative covenants that restrict or limit our actions, including our ability to pay dividends or make other restricted payments. Certain long-term debt agreements also contain cross-default provisions, which may be triggered by defaults by us under other agreements relating to indebtedness. See “Risk Factors — Our high level of fixed obligations limits our ability to fund general corporate requirements and obtain additional financing, limits our flexibility in responding to competitive developments and increases our vulnerability to adverse economic and industry conditions” in Item 1A. “Risk Factors.” As of December 31, 2007, we and our subsidiaries were in compliance with the covenants in our long-term debt agreements.

Our credit ratings, like those of most airlines, are relatively low, with S&P’s assessment of the issuer credit rating for us and US Airways at B- and our senior unsecured debt rating at CCC. Fitch’s ratings for our long-term debt and senior unsecured debt are B- and CCC, respectively. Moody’s has rated our long-term corporate family rating at B3. A decrease in our credit ratings could cause our borrowing costs to increase, which would increase our interest expense and could affect our net income, and our credit ratings could adversely affect our ability to obtain additional financing. If our financial performance or industry conditions do not improve, we may face future downgrades, which could further negatively impact our borrowing costs and the prices of our equity or debt securities. In addition, any downgrade of our credit ratings may indicate a decline in our business and in our ability to satisfy our obligations under our indebtedness.

Off-Balance Sheet Arrangements

An off-balance sheet arrangement is any transaction, agreement or other contractual arrangement involving an unconsolidated entity under which a company has (1) made guarantees, (2) a retained or a contingent interest in transferred assets, (3) an obligation under derivative instruments classified as equity or (4) any obligation arising out of a material variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the company, or that engages in leasing, hedging or research and development arrangements with the company.

We have no off-balance sheet arrangements of the types described in the first three categories above that we believe may have a material current or future effect on financial condition, liquidity or results of operations. Certain guarantees that we do not expect to have a material current or future effect on financial condition, liquidity or results of operations are disclosed in Note 10(f) to the consolidated financial statements of US Airways Group included in Item 8A of this report and Note 8(f) to the consolidated financial statements of US Airways included in Item 8B of this report.

Pass Through Trusts — US Airways has set up pass through trusts, which have issued pass through trust certificates or EETCs covering the financing of 19 owned aircraft and 62 leased aircraft. These trusts are off-balance sheet entities, the primary purpose of which is to finance the acquisition of aircraft. Rather than finance each aircraft separately when such aircraft is purchased or delivered, these trusts allowed US Airways to raise the financing for several aircraft at one time and place such funds in escrow pending the purchase or delivery of the relevant aircraft. The trusts were also structured to provide for certain credit enhancements, such as liquidity facilities to cover

certain interest payments, that reduce the risks to the purchasers of the trust certificates and, as a result, reduce the cost of aircraft financing to US Airways.

Each trust covered a set amount of aircraft scheduled to be delivered within a specific period of time. At the time of each covered aircraft financing, the relevant trust used the funds in escrow to purchase equipment notes relating to the financed aircraft. The equipment notes were issued, at US Airways’ election, either by US Airways in connection with a mortgage financing of the aircraft or by a separate owner trust in connection with a leveraged lease financing of the aircraft. In the case of a leveraged lease financing, the owner trust then leased the aircraft to US Airways. In both cases, the equipment notes are secured by a security interest in the aircraft. The pass through trust certificates are not direct obligations of, nor are they guaranteed by, US Airways Group or US Airways. However, in the case of mortgage financings, the equipment notes issued to the trusts are direct obligations of US Airways. As of December 31, 2007, $576 million associated with these mortgage financings is reflected as debt on the balance sheet of US Airways.

AWA also had 18 pass through trusts that have issued over $1.4 billion of EETCs covering the financing of 54 aircraft and three engines that were leased to AWA. As part of the transfer of substantially all of AWA’s assets and liabilities to US Airways in connection with the combination of all mainline airline operations under one FAA operating certificate on September 26, 2007, all off-balance sheet commitments of AWA were also transferred to US Airways. As of September 26, 2007, approximately $714 million of principal amount of pass through certificates was outstanding. All of AWA’s obligations with respect to those pass through trusts and the leases of the related aircraft and engines were transferred to US Airways. As a result of the transfer of AWA’s obligations, the leases are now direct obligations of US Airways. As of December 31, 2007, the total amount of US Airways’ obligations with respect to pass through trusts and leases of the related aircraft and engines, including those transferred from AWA, was $1.85 billion.

Neither US Airways Group nor US Airways guarantee or participate in any way in the residual value of the leased aircraft. All leased aircraft financed by these trusts are structured as leveraged leased financings, which are not reflected as debt on the balance sheet of either US Airways Group or US Airways. US Airways does not provide residual value guarantees under these lease arrangements. Each lease contains a purchase option that allows US Airways to purchase the aircraft at a fixed price, which at the inception of the lease approximated the aircraft’s expected fair market value at the option date, near the end of the lease term.

These leasing entities meet the criteria for variable interest entities. However, they do not meet the consolidation criteria under Financial Accounting Standards Board (“FASB”) Interpretation No. 46 “Consolidation of Variable Interest Entities,” as revised (“FIN 46(R)”) because US Airways is not the primary beneficiary under these arrangements.

Special Facility Revenue Bonds — US Airways guarantees the payment of principal and interest on certain special facility revenue bonds issued by municipalities to build or improve certain airport and maintenance facilities which are leased to US Airways. Under such leases, US Airways is required to make rental payments through 2023, sufficient to pay maturing principal and interest payments on the related bonds. As of December 31, 2007, the principal amount outstanding on these bonds was $93 million. Remaining lease payments guaranteeing the principal and interest on these bonds will be $154 million.

US Airways also reviewed long-term operating leases at a number of airports, including leases where US Airways is also the guarantor of the underlying debt. These leases are typically with municipalities or other governmental entities. The arrangements are not required to be consolidated based on the provisions of FIN 46(R).

Jet Service Agreements — Certain entities with which US Airways has capacity purchase agreements are considered variable interest entities under FIN 46(R). In connection with its restructuring and emergence from bankruptcy, US Airways contracted with Air Wisconsin, a related party, and Republic Airways to purchase a significant portion of these companies’ regional jet capacity for a period of ten years. US Airways has determined that it is not the primary beneficiary of these variable interest entities, based on cash flow analyses. Additionally, US Airways has analyzed the arrangements with other carriers with which US Airways has long-term capacity purchase agreements and has concluded that it is not required to consolidate any of the entities.

Contractual Obligations

The following table provides details of our future cash contractual obligations as of December 31, 2007 (in millions):


	Payments Due by Period
	2008		2009		2010		2011		2012		Thereafter		Total

US Airways Group(1)
Debt(2)	$	16	$	16	$	16	$	16	$	16	$	1,594	$	1,674
Aircraft related and other commitments		453		36		—		—		—		—		489
US Airways(3)
Debt and capital lease obligations		101		129		105		118		123		1,019		1,595
Aircraft purchase and operating lease commitments(4)		1,472		2,264		2,240		2,105		1,571		6,142		15,794
Regional capacity purchase agreements(5)		1,062		1,106		1,125		1,158		1,017		4,679		10,147
Other US Airways Group subsidiaries(6)		11		7		2		1		1		1		23

Total	$	3,115	$	3,558	$	3,488	$	3,398	$	2,728	$	13,435	$	29,722


(1)		These commitments represent those specifically entered into by US Airways Group or joint commitments entered into by US Airways Group and US Airways under which each entity is jointly and severally liable.

(2)		Includes $74 million aggregate principal amount of 7% Senior Convertible Notes due 2020 issued by US Airways Group and the $1.6 billion Citicorp credit facility due March 23, 2014.

(3)		Commitments listed separately under US Airways and its wholly owned subsidiaries represent commitments under agreements entered into separately by those companies.

(4)		Aircraft purchase commitments exclude the Rolls Royce engine order announced in June 2007 as the order is contingent upon execution of a definitive purchase agreement.

(5)		Represents minimum payments under capacity purchase agreements with third-party Express carriers.

(6)		Represents operating lease commitments entered into by US Airways Group’s other airline subsidiaries Piedmont and PSA.

We expect to fund these cash obligations from funds provided by operations and future financings, if necessary. The cash available to us from these sources, however, may not be sufficient to cover these cash obligations because economic factors outside our control may reduce the amount of cash generated by operations or increase our costs. For instance, an economic downturn or general global instability caused by military actions, terrorism, disease outbreaks and natural disasters could reduce the demand for air travel, which would reduce the amount of cash generated by operations. An increase in our costs, either due to an increase in borrowing costs caused by a reduction in our credit rating or a general increase in interest rates or due to an increase in the cost of fuel, maintenance, aircraft and aircraft engines and parts, could decrease the amount of cash available to cover the cash obligations. Moreover, the Citicorp credit facility and our amended credit card agreement with Barclays contain minimum cash balance requirements. As a result, we cannot use all of our available cash to fund operations, capital expenditures and cash obligations without violating these requirements.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in accordance with accounting principles generally accepted in the United States requires that we make certain estimates and assumptions that affect the reported amount of assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities at the date of our financial statements. We believe our estimates and assumptions are reasonable; however, actual results

could differ from those estimates. Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties and potentially result in materially different results under different assumptions and conditions. We have identified the following critical accounting policies that impact the preparation of our consolidated financial statements. See also the summary of significant accounting policies included in the notes to the financial statements under Items 8A and 8B of this Form 10-K for additional discussion of the application of these estimates and other accounting policies.

Passenger Revenue

Passenger revenue is recognized when transportation is provided. Ticket sales for transportation that has not yet been provided are initially deferred and recorded as air traffic liability on the balance sheet. The air traffic liability represents tickets sold for future travel dates and estimated future refunds and exchanges of tickets sold for past travel dates. The balance in the air traffic liability fluctuates throughout the year based on seasonal travel patterns and fare sale activity. Our air traffic liability was $832 million and $847 million as of December 31, 2007 and 2006, respectively.

The majority of our tickets sold are nonrefundable. Tickets that are sold but not flown on the travel date may be reused for another flight, up to a year from the date of sale, or refunded, if the ticket is refundable, after taking into account any cancellation penalties or change fees. A small percentage of tickets, some of which are partially used tickets, expire unused. Due to complex pricing structures, refund and exchange policies, and interline agreements with other airlines, certain amounts are recognized in revenue using estimates regarding both the timing of the revenue recognition and the amount of revenue to be recognized. These estimates are generally based on the analysis of our historical data. We routinely evaluate estimated future refunds and exchanges included in the air traffic liability based on subsequent activity to validate the accuracy of our estimates. Holding other factors constant, a 10% change in our estimate of the amount refunded, exchanged or forfeited for 2007 would result in a $38 million change in our passenger revenue, which represents less than 1% of our passenger revenue.

Passenger traffic commissions and related fees are expensed when the related revenue is recognized. Passenger traffic commissions and related fees not yet recognized are included as a prepaid expense.

Impairment of Goodwill

SFAS No. 142, “Goodwill and Other Intangible Assets,” requires that goodwill be tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. We believe that this accounting estimate is a critical accounting estimate because: (1) goodwill is a significant asset and (2) the impact that recognizing an impairment would have on the asset reported on the consolidated balance sheets, as well as the consolidated statement of operations, could be material.

We assess the fair value of the reporting unit considering both the income approach and market approach. Under the market approach, the fair value of the reporting unit is based on quoted market prices and the number of shares outstanding for US Airways Group common stock. Under the income approach, the fair value of the reporting unit is based on the present value of estimated future cash flows. The income approach is dependent on a number of factors including estimates of future market growth trends, forecasted revenues and expenses, expected periods the assets will be utilized, appropriate discount rates and other variables. We base our estimates on assumptions that we believe to be reasonable, but which are unpredictable and inherently uncertain. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment. Actual future results may differ from those estimates.

At December 31, 2007, goodwill represents the purchase price in excess of the net amount assigned to assets acquired and liabilities assumed by America West Holdings on September 27, 2005. We tested goodwill for impairment during the fourth quarter of 2007. At that time, we concluded that the fair value of the reporting unit was in excess of the carrying value. We will perform our next annual impairment test on October 1, 2008.

Impairment of Long-lived Assets and Intangible Assets

We assess the impairment of long-lived assets and intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In addition, our international route authorities and trademark intangible assets are classified as indefinite lived assets and are reviewed for impairment annually. Factors which could trigger an impairment review include the following: significant changes in the manner of use of the assets; significant underperformance relative to historical or projected future operating results; or significant negative industry or economic trends. An impairment has occurred when the future undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those items. Cash flow estimates are based on historical results adjusted to reflect management’s best estimate of future market and operating conditions. The net carrying value of assets not recoverable is reduced to fair value. Estimates of fair value represent management’s best estimate based on appraisals, industry trends and reference to market rates and transactions. Changes in industry capacity and demand for air transportation can significantly impact the fair value of aircraft and related assets. International route authorities and trademarks were tested for impairment during the fourth quarter of 2007, at which time we concluded that no impairment exists. We will perform our next annual impairment test on October 1, 2008.

Frequent Traveler Programs

The Dividend Miles frequent traveler program awards miles to passengers who fly on US Airways, US Airways Shuttle, US Airways Express, Star Alliance carriers and certain other airlines that participate in the program. We use the incremental cost method to account for the portion of our frequent flyer liability incurred when Dividend Miles members earn mileage credits. We have an obligation to provide this future travel and have therefore recognized an expense and recorded a liability for mileage awards. Outstanding miles may be redeemed for travel on any airline that participates in the program, in which case we pay a designated amount to the transporting carrier.

Members may not reach the threshold necessary for a free ticket and outstanding miles may not be redeemed for free travel. Therefore, in calculating the liability we estimate how many miles will never be used for an award and exclude those miles from the estimate of the liability. Estimates are also made for the number of miles that will be used per award and the number of awards that will be redeemed on partner airlines. These estimates are based on past customer behavior. Estimated future travel awards for travel on US Airways are valued at the combined estimated average incremental cost of carrying one additional passenger. Incremental costs include unit costs for passenger food, beverages and supplies, credit card fees, fuel, insurance and denied boarding compensation. No profit or overhead margin is included in the accrual for incremental costs. For travel awards on partner airlines, the liability is based upon the gross payment to be paid to the other airline for redemption on the other airline. A change to these cost estimates, actual redemption activity or award redemption level could have a material impact on the liability in the year of change as well as future years. Incremental changes in the liability resulting from participants earning or redeeming mileage credits or changes in assumptions used for the related calculations are recorded in the statement of operations as part of the regular review process. At December 31, 2007, we have assumed 10% of our future travel awards accrued will be redeemed on partner airlines. A 1% increase or decrease in the percentage of awards redeemed on partner airlines would have an $8 million impact on the liability as of December 31, 2007.

As of December 31, 2007, Dividend Miles members had accumulated mileage credits for approximately 3.1 million awards. The liability for the future travel awards accrued on our balance sheet within other accrued liabilities was $161 million as of December 31, 2007. The number of awards redeemed for free travel during the year ended December 31, 2007 was approximately 0.9 million, representing approximately 4% of US Airways’ RPMs during that period. The use of certain inventory management techniques minimizes the displacement of revenue passengers by passengers traveling on award tickets.

On January 31, 2007, we changed our program regarding active membership status to require members to have either earned or redeemed miles within a consecutive 18 month period to maintain active membership status. Prior to the change in the program, members were granted a 36 month period to maintain active status.

US Airways also sells mileage credits to participating airline partners and non-airline business partners. Revenue earned from selling mileage credits to other companies is recognized in two components. A portion of the

revenue from these sales is deferred, representing the estimated fair value of the transportation component of the sold mileage credits. The deferred revenue for the transportation component is amortized on a straight-line basis over the period in which the credits are expected to be redeemed for travel as passenger revenue, which is currently estimated to be 28 months. The marketing component, which is earned at the time the miles are sold, is recognized in other revenues at the time of the sale. As of December 31, 2007, we had $241 million in deferred revenue from the sale of mileage credits included in other accrued liabilities on our balance sheet. A change to either the period over which the credits are used or the estimated fair value of credits sold could have a significant impact on revenue in the year of change as well as future years.

Fresh-start Reporting and Purchase Accounting

In connection with its emergence from bankruptcy on September 27, 2005, US Airways adopted fresh-start reporting in accordance with SOP 90-7. Accordingly, US Airways valued its assets, liabilities and equity at fair value. In addition, as a result of the merger, which is accounted for as a reverse acquisition under SFAS No. 141, “Business Combinations” (“SFAS 141”), with America West Holdings as the accounting acquirer, US Airways Group applied the provisions of SFAS 141 and allocated the purchase price to the assets and liabilities of US Airways Group and to its wholly owned subsidiaries including US Airways. The purchase price or value of the merger consideration was determined based upon America West Holdings’ traded market price per share due to the fact that US Airways Group was operating under bankruptcy protection. The $4.82 per share value was based on the five-day average share price of America West Holdings, with May 19, 2005, the merger announcement date, as the midpoint. US Airways’ equity value of $1 million was determined based on an allocation of the purchase price to each of US Airways Group subsidiaries’ fair values of assets and liabilities. The remaining equity of $116 million was assigned to US Airways Group’s and its other subsidiaries. US Airways engaged an outside appraisal firm to assist in determining the fair value of the long-lived tangible and identifiable intangible assets and certain noncurrent liabilities. The foregoing estimates and assumptions are inherently subject to significant uncertainties and contingencies beyond the control of US Airways. Accordingly, we cannot assure you that the estimates, assumptions, and values reflected in the valuations will be realized, and actual results could vary materially.

See Note 2(b) to the US Airways financial statements in Item 8B of this Form 10-K for further detail related to the fresh-start fair-value and purchase accounting adjustments.

Deferred Tax Asset Valuation Allowance

At December 31, 2007, US Airways Group has a full valuation allowance against its net deferred tax assets. In assessing the realizability of the deferred tax assets, we considered whether it was more likely than not that all or a portion of the deferred tax assets will not be realized, in accordance with SFAS No. 109, “Accounting for Income Taxes.” We utilized NOL in lieu of cash income tax in 2007, a portion of which was reserved by a valuation allowance. The use of the NOL permitted the reversal of the valuation allowance which reduced income tax expense.

Recent Accounting and Reporting Developments

In June 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109” (“FIN 48”), which clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements. The interpretation prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. We adopted the provisions of FIN 48 on January 1, 2007. The implementation of FIN 48 did not have a material impact on our consolidated financial statements.

require any new fair value measurement. This statement is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. In December of 2007, the FASB agreed to a one year deferral of SFAS No. 157’s fair value measurement requirements for nonfinancial assets and liabilities that are not required or permitted to be measured at fair value on a recurring basis. Management is currently evaluating the requirements of SFAS No. 157 but does not expect it to have a material impact on our 2008 consolidated financial statements.

Effective December 31, 2006, we adopted the recognition provisions of SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R).” This statement requires employers to recognize in their balance sheets the overfunded or underfunded status of defined benefit postretirement plans, measured as the difference between the fair value of plan assets and the benefit obligation (the projected benefit obligation for pension plans and the accumulated postretirement benefit obligation for other postretirement plans). The impact on our consolidated financial statements of adopting the recognition provisions of SFAS No. 158 was not material. We recognized a nominal amount of prior changes in the funded status of our postretirement benefit plans through accumulated other comprehensive income. The adoption of the recognition provisions of SFAS No. 158 had no effect on our statement of operations for the year ended December 31, 2006 or for any prior period presented.

SFAS No. 158 also requires plan assets and obligations to be measured as of the employer’s balance sheet date. We currently use a measurement date of September 30 for our other postretirement benefits. The measurement provisions of this statement are required to be adopted no later than fiscal years beginning after December 15, 2008. We will adopt the measurement provisions of this statement in 2008. The impact on our consolidated financial statements of adoption of the measurement provisions will not be material.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities.” SFAS No. 159 allows entities the option to measure eligible financial instruments at fair value as of specified dates. Such election, which may be applied on an instrument by instrument basis, is typically irrevocable once elected. SFAS 159 is effective for fiscal years beginning after November 15, 2007. We adopted SFAS No. 159 on January 1, 2008, but have not yet elected the fair value option for any items permitted under SFAS No. 159.


Item 7A.	*Quantitative and Qualitative Disclosures About Market Risk*

Market Risk Sensitive Instruments

Our primary market risk exposures include commodity price risk (i.e., the price paid to obtain aviation fuel) and interest rate risk. The potential impact of adverse increases in these risks and general strategies that we employ to manage these risks are discussed below. The following sensitivity analyses do not consider the effects that an adverse change may have on the overall economy nor do they consider additional actions we may take to mitigate our exposure to these changes. Actual results of changes in prices or rates may differ materially from the following hypothetical results.

Commodity Price Risk


	•	the impact of global political instability on crude production;

	•	unexpected changes to the availability of petroleum products due to disruptions in distribution systems or refineries as evidenced in the third quarter of 2005 when Hurricane Katrina and Hurricane Rita caused widespread disruption to oil production, refinery operations and pipeline capacity along certain portions of the U.S. Gulf Coast. As a result of these disruptions, the price of jet fuel increased significantly and the availability of jet fuel supplies was diminished;

	•	unpredicted increases to oil demand due to weather or the pace of economic growth;

	•	inventory levels of crude, refined products and natural gas; and

	•	other factors, such as the relative fluctuation between the U.S. dollar and other major currencies and influence of speculative positions on the futures exchanges.

Because our operations are dependent upon aviation fuel, significant increases in aviation fuel costs materially and adversely affect our liquidity, results of operations and financial condition. Our 2008 forecasted mainline and Express fuel consumption is approximately 1.57 billion gallons and a one cent per gallon increase in fuel price results in a $16 million annual increase in expense, excluding the impact of hedge transactions.

As of December 31, 2007, we have entered into costless collars to protect ourself from fuel price risks, which establish an upper and lower limit on heating oil futures prices. These transactions are in place with respect to approximately 22% of our mainline and Express 2008 fuel requirements at a weighted average collar range of $2.05 to $2.25 per gallon of heating oil.

The use of such hedging transactions in our fuel hedging program could result in us not fully benefiting from certain declines in heating oil futures prices. Further, these instruments do not provide protection from the increases unless heating oil prices exceed the call option price of the costless collar. Although heating oil prices are generally highly correlated with those of jet fuel, the prices of jet fuel may change more or less then heating oil, resulting in a change in fuel expense that is not perfectly offset by the hedge transactions. As of December 31, 2007, we estimate that a 10% increase in heating oil futures prices would increase the fair value of the hedge transactions by approximately $85 million. We estimate that a 10% decrease in heating oil futures prices would decrease the fair value of the hedging transactions by approximately $75 million.

As of February 15, 2008, approximately 28% of our 2008 projected fuel requirements for mainline and Express operations are hedged.

Interest Rate Risk

Our exposure to interest rate risk relates primarily to our cash equivalents, investments portfolios and variable rate debt obligations. At December 31, 2007, our variable-rate long-term debt obligations of approximately $2.13 billion represented approximately 65% of our total long-term debt. If interest rates increased 10% in 2007, the

impact on our results of operations would be approximately $16 million of additional interest expense. This increase in interest rates would be largely offset by additional interest income on our $3 billion in cash, cash equivalents, investments in marketable securities and restricted cash. Additional information regarding our debt obligations as of December 31, 2007 is as follows (dollars in millions):


	Expected Maturity Date
	2008			2009			2010			2011			2012			Thereafter			Total

Fixed-rate debt	$	56		$	57		$	61		$	72		$	89		$	802		$	1,137
Weighted avg. interest rate		7.6	%		7.6	%		7.6	%		7.6	%		7.6	%		7.6	%
Variable-rate debt	$	61		$	88		$	60		$	62		$	50		$	1,811		$	2,132
Weighted avg. interest rate		7.3	%		7.3	%		7.3	%		7.3	%		7.3	%		7.3	%

US Airways Group and US Airways have total future aircraft and spare engine purchase commitments of approximately $7.53 billion. We expect to finance such commitments either by entering into leases or debt agreements. Changes in interest rates will impact the cost of such financings.

At December 31, 2007, included within our investment portfolio are $353 million of investments in auction rate securities. With the liquidity issues experienced in the global credit and capital markets, our auction rate securities have experienced multiple failed auctions. While we continue to earn interest on these investments at the maximum contractual rate, the estimated market values of these auction rate securities no longer approximates par value. As of December 2007, we recorded an unrealized loss of $48 million in other comprehensive income for auction rate securities with declines in value deemed to be temporary and a $10 million impairment charge related to an auction rate security for which we deemed the decline in value to be other than temporary.

As of January 31, 2008, the commercial banks managing our investments provided us with estimated fair market values, which indicated an additional decline in the aggregate fair market value of our auction rate securities of approximately $70 million (from amounts provided at December 31, 2007). We believe that these additional declines in value are also temporary and are attributed to current credit market events and continued lack of market liquidity in early 2008. Such temporary declines, if sustained, would be recognized in the first quarter of 2008. It is possible that additional declines in fair value may occur. To the extent the fair market values of our auction rate securities were to subsequently increase, such increase would reduce the unrealized loss recorded in other comprehensive income.

We continue to monitor the market for auction rate securities and consider its impact (if any) on the fair market value of our investments. If the current market conditions continue, or the anticipated recovery in market values does not occur, we may be required to record additional unrealized losses or impairment charges in 2008.


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

On September 27, 2005, US Airways Group consummated the transactions contemplated by its plan of reorganization, including the merger transaction with America West Holdings. As a result of the merger, America West Holdings became a wholly owned subsidiary of US Airways Group. As described in greater detail in Note 1(b), while the merger was structured such that US Airways Group was the legal acquirer, the merger was accounted for as a reverse acquisition such that America West Holdings was treated as the accounting acquirer. Financial information for periods prior to the merger include the accounts and activities of America West Holdings, which owned all of the stock of AWA.

Management’s Annual Report on Internal Control over Financial Reporting

Management of US Airways Group, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. US Airways Group’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. US Airways Group’s internal control over financial reporting includes those policies and procedures that:


	•	pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of US Airways Group;

	•	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of US Airways Group are being made only in accordance with authorizations of management and directors of US Airways Group; and

	•	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of US Airways Group’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of US Airways Group’s internal control over financial reporting as of December 31, 2007. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.

Based on our assessment and those criteria, management concludes that US Airways Group maintained effective internal control over financial reporting as of December 31, 2007.

US Airways Group’s independent registered public accounting firm has issued an audit report on the effectiveness of the Company’s internal control over financial reporting. That report has been included herein.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
US Airways Group, Inc.:

We have audited US Airways Group, Inc.’s (“US Airways Group” or the “Company”) internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based upon assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

In our opinion, US Airways Group maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of US Airways Group and subsidiaries as of December 31, 2007 and 2006, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2007, and our report dated February 20, 2008 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

Phoenix, Arizona

February 20, 2008

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
US Airways Group, Inc.:

We have audited the accompanying consolidated balance sheets of US Airways Group, Inc. and subsidiaries as of December 31, 2007 and 2006, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2007. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of US Airways Group, Inc. and subsidiaries as of December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2007, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, the Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB No. 109 effective January 1, 2007, and Statement of Financial Accounting Standards (“SFAS”) No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R) , effective December 31, 2006, and as discussed in Note 17 to the consolidated financial statements, the Company adopted the provisions of SFAS No. 123(R), Share Based Payment, effective January 1, 2006. Also, as discussed in Note 3 to the consolidated financial statements, the Company changed its method of accounting for major scheduled airframe, engine and certain component overhaul costs from the deferral method to the direct expense method in 2005.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), US Airways Group, Inc.’s internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 20, 2008 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

Phoenix, Arizona

February 20, 2008

US Airways Group, Inc.

Consolidated Statements of Operations

For the Years Ended December 31, 2007, 2006 and 2005


	2007			2006			2005
	(In millions, except share and per share amounts)

Operating revenues:
Mainline passenger	$	8,135		$	7,966		$	3,695
Express passenger		2,698			2,744			976
Cargo		138			153			58
Other		729			694			340

Total operating revenues		11,700			11,557			5,069

Operating expenses:
Aircraft fuel and related taxes		2,630			2,518			1,214
Loss (gain) on fuel hedging instruments, net		(245	)		79			(75	)
Salaries and related costs		2,302			2,090			1,046
Express expenses		2,594			2,559			1,073
Aircraft rent		727			732			429
Aircraft maintenance		635			582			349
Other rent and landing fees		536			568			281
Selling expenses		453			446			232
Special items, net		99			27			121
Depreciation and amortization		189			175			88
Other		1,247			1,223			528

Total operating expenses		11,167			10,999			5,286

Operating income (loss)		533			558			(217	)

Nonoperating income (expense):
Interest income		172			153			30
Interest expense, net		(273	)		(295	)		(147	)
Other, net		2			(12	)		(1	)

Total nonoperating expense, net		(99	)		(154	)		(118	)

Income (loss) before income taxes and cumulative effect of change in accounting principle		434			404			(335	)
Income tax provision		7			101			—

Income (loss) before cumulative effect of change in accounting principle		427			303			(335	)
Cumulative effect of change in accounting principle, net (Note 3)		—			1			(202	)

Net income (loss)	$	427		$	304		$	(537	)

Earnings (loss) per common share:
Basic:
Before cumulative effect of change in accounting principle	$	4.66		$	3.50		$	(10.65	)
Cumulative effect of change in accounting principle		—			0.01			(6.41	)

Earnings (loss) per share	$	4.66		$	3.51		$	(17.06	)

Diluted:
Before cumulative effect of change in accounting principle	$	4.52		$	3.32		$	(10.65	)
Cumulative effect of change in accounting principle		—			0.01			(6.41	)

Earnings (loss) per share	$	4.52		$	3.33		$	(17.06	)

Shares used for computation (in thousands):
Basic		91,536			86,447			31,488
Diluted		95,603			93,821			31,488

See accompanying notes to consolidated financial statements.

US Airways Group, Inc.

Consolidated Balance Sheets

December 31, 2007 and 2006


	2007			2006
	(In millions, except share and per share amounts)

ASSETS
Current assets
Cash and cash equivalents	$	1,948		$	1,116
Investments in marketable securities		226			1,249
Restricted cash		2			1
Accounts receivable, net		374			388
Materials and supplies, net		249			223
Prepaid expenses and other		548			377

Total current assets		3,347			3,354
Property and equipment
Flight equipment		2,414			2,051
Ground property and equipment		703			598
Less accumulated depreciation and amortization		(757	)		(583	)

		2,360			2,066
Equipment purchase deposits		128			48

Total property and equipment		2,488			2,114
Other assets
Goodwill		622			629
Other intangibles, net		553			554
Restricted cash		466			666
Investments in marketable securities		353			—
Other assets, net		211			259

Total other assets		2,205			2,108

Total assets	$	8,040		$	7,576


LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities
Current maturities of debt and capital leases	$	117		$	95
Accounts payable		366			454
Air traffic liability		832			847
Accrued compensation and vacation		225			262
Accrued taxes		152			181
Other accrued expenses		859			873

Total current liabilities		2,551			2,712
Noncurrent liabilities and deferred credits
Long-term debt and capital leases, net of current maturities		3,031			2,907
Deferred gains and credits, net		168			205
Postretirement benefits other than pensions		138			187
Employee benefit liabilities and other		713			595

Total noncurrent liabilities and deferred credits		4,050			3,894
Commitments and contingencies (Note 10)		—			—
Stockholders’ equity
Common stock, $0.01 par value; 200,000,000 shares authorized, 92,278,557 and 91,864,564 shares issued and outstanding at December 31, 2007; 91,697,896 and 91,283,903 shares issued and outstanding at December 31, 2006		1			1
Additional paid-in capital		1,536			1,501
Accumulated other comprehensive income		10			3
Accumulated deficit		(95	)		(522	)
Treasury stock, common stock, 413,993 shares at December 31, 2007 and December 31, 2006		(13	)		(13	)

Total stockholders’ equity		1,439			970

Total liabilities and stockholders’ equity	$	8,040		$	7,576

See accompanying notes to consolidated financial statements.

US Airways Group, Inc.

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2007, 2006 and 2005


	2007			2006			2005
	(In millions)

Cash flows from operating activities:
Net income (loss)	$	427		$	304		$	(537	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Cumulative effect of change in accounting principle		—			(1	)		202
Depreciation and amortization		212			198			88
Gains on curtailment of pension benefit		(5	)		—			—
Loss on dispositions of property		1			—			—
Gain on forgiveness of debt		—			(90	)		—
Gain on sale of investments		(17	)		—			—
Impairment on auction rate securities		10			—			—
Non cash special charges, net		—			—			86
Utilization of acquired net operating loss carryforwards		7			85			—
Change in fair value of fuel hedging instruments, net		(187	)		70			(4	)
Amortization of deferred credits		(43	)		(43	)		(23	)
Amortization of deferred rent		3			5			5
Amortization of warrants		—			—			12
Amortization of debt issuance costs and guarantee fees		2			4			30
Amortization of debt discount		12			12			11
Amortization of investment discount and premium, net		—			—			9
Stock-based compensation		32			34			5
Debt extinguishment costs		18			7			2
Premium paid in conversion of 7% senior convertible notes		—			17			—
Other		—			(1	)		(18	)
Changes in operating assets and liabilities:
Decrease (increase) in restricted cash		(1	)		6			120
Decrease (increase) in accounts receivable, net		14			(35	)		55
Increase in expendable spare parts and supplies, net		(18	)		(25	)		(8	)
Decrease (increase) in prepaid expenses		(52	)		22			(63	)
Decrease (increase) in other assets, net		(14	)		(16	)		11
Decrease in accounts payable		(11	)		(2	)		(45	)
Increase (decrease) in air traffic liability		(22	)		59			(54	)
Increase (decrease) in accrued compensation and vacation benefits		(37	)		56			(1	)
Increase (decrease) in accrued taxes		(29	)		38			(5	)
Increase (decrease) in other liabilities		140			(86	)		168

Net cash provided by operating activities		442			618			46

Cash flows from investing activities:
Purchases of property and equipment		(523	)		(232	)		(44	)
Purchases of marketable securities		(2,591	)		(2,583	)		(711	)
Sales of marketable securities		3,203			1,785			416
Proceeds from sale of other investments		56			—			—
Cash acquired as part of acquisition		—			—			279
Costs incurred as part of acquisition		—			—			(21	)
Decrease (increase) in long-term restricted cash		200			128			(112	)
Proceeds from dispositions of property and equipment and sale-leaseback transactions		4			7			592
Increase in equipment purchase deposits		(80	)		(8	)		—

Net cash provided by (used in) investing activities		269			(903	)		399

Cash flows from financing activities:
Repayments of debt and capital lease obligations		(1,680	)		(1,187	)		(741	)
Proceeds from issuance of debt		1,798			1,419			655
Proceeds from issuance of common stock, net		3			44			732
Acquisition of warrants		—			—			(116	)
Other		—			—			1

Net cash provided by financing activities		121			276			531

Net increase (decrease) in cash and cash equivalents		832			(9	)		976
Cash and cash equivalents at beginning of year		1,116			1,125			149

Cash and cash equivalents at end of year	$	1,948		$	1,116		$	1,125

See accompanying notes to consolidated financial statements.

US Airways Group, Inc.

Consolidated Statements of Stockholders’ Equity

For the Years Ended December 31, 2007, 2006 and 2005


									Retained			Accumulated
			Class B			Additional			Earnings/			Other						Class B
	Common		Common			Paid-In			(Accumulated			Comprehensive			Treasury			Treasury
	Stock		Stock			Capital			Deficit)			Income (Loss)			Stock			Stock			Total
	(In millions, except share amounts)

Balance at December 31, 2004	$	—	$	1		$	632		$	(289	)	$	—		$	—		$	(308	)	$	36
Net loss		—		—			—			(537	)		—			—			—			(537	)
Issuance of 36,465,445 shares of common stock		1		—			564			—			—			—			—			565
Issuance of 7,533,334 shares of common stock pursuant to the exercise of stock options by investors, net of issuance costs		—		—			113			—			—			—			—			113
Issuance of 9,775,000 shares of common stock pursuant to a public stock offering, net of issuance costs		—		—			180			—			—			—			—			180
Issuance of 8,212,119 shares of common stock to unsecured creditors		—		—			96			—			—			—			—			96
Withholding of 418,977 shares from the issuance of stock to unsecured creditors to cover tax obligations		—		—			—			—			—			(13	)		—			(13	)
Issuance of 792,475 shares of common stock pursuant to employee stock plans		—		—			12			—			—			—			—			12
Cancellation of 6,781,470 shares of Class B Treasury Stock due to the merger		—		—			—			—			—			—			308			308
Conversion of 21,430,147 shares of Class B common stock to US Airways Group common stock		—		(1	)		(315	)		—			—			—			—			(316	)
Issuance of 4,195,275 shares of common stock pursuant to the conversion of the 7.25% notes		—		—			87			—			—			—			—			87
Repurchase of 7,735,770 warrants held by the ATSB		—		—			(116	)		—			—			—			—			(116	)
Stock compensation for stock appreciation rights and restricted stock units that will be ultimately settled in shares of common stock		—		—			5			—			—			—			—			5

Balance at December 31, 2005		1		—			1,258			(826	)		—			(13	)		—			420
Net income		—		—			—			304			—			—			—			304
Issuance of 3,860,358 shares of common stock pursuant to the conversion of the 7.5% notes		—		—			95			—			—			—			—			95
Issuance of 2,909,636 shares of common stock pursuant to the conversion of the 7.0% notes		—		—			70			—			—			—			—			70
Issuance of 386,925 shares of common stock pursuant to the exercise of warrants		—		—			3			—			—			—			—			3
Issuance of 2,463,534 shares of common stock pursuant to employee stock plans		—		—			41			—			—			—			—			41
Stock-based compensation expense		—		—			34			—			—			—			—			34
Adjustment to initially apply FASB Statement No. 158, net of tax		—		—			—			—			3			—			—			3

Balance at December 31, 2006		1		—			1,501			(522	)		3			(13	)		—			970
Net income		—		—			—			427			—			—			—			427
Issuance of 580,661 shares of common stock pursuant to employee stock plans		—		—			3			—			—			—			—			3
Stock-based compensation expense		—		—			32			—			—			—			—			32
Actuarial gain associated with pension and other postretirement benefits		—		—			—			—			55			—			—			55
Unrealized loss on available for sale securities, net		—		—			—			—			(48	)		—			—			(48	)

Balance at December 31, 2007	$	1	$	—		$	1,536		$	(95	)	$	10		$	(13	)	$	—		$	1,439

See accompanying notes to consolidated financial statements.

US Airways Group, Inc.

Notes to Consolidated Financial Statements


1.	Basis of presentation and summary of significant accounting policies


*(a)*	*Nature of Operations and Operating Environment*

US Airways Group, Inc.’s (“US Airways Group” or the “Company”) primary business activity is the operation of a major network air carrier through its ownership of the common stock of US Airways, Inc. (“US Airways”), Piedmont Airlines, Inc. (“Piedmont”), PSA Airlines, Inc. (“PSA”), Material Services Company, Inc. (“MSC”) and Airways Assurance Limited, LLC (“AAL”).

On September 12, 2004, US Airways Group and its domestic subsidiaries, US Airways, Piedmont, PSA and MSC (collectively referred to as the “Debtors”), which at the time accounted for substantially all of the operations of US Airways Group, filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States bankruptcy court for the Eastern District of Virginia, Alexandria Division (the “Bankruptcy Court”). On May 19, 2005, US Airways Group signed a merger agreement with America West Holdings Corporation (“America West Holdings”) pursuant to which America West Holdings, the parent company of America West Airlines, Inc. (“AWA”), merged with a wholly owned subsidiary of US Airways Group. The merger was amended by a letter of agreement on July 7, 2005. The merger became effective upon US Airways Group’s emergence from bankruptcy on September 27, 2005.

On September 26, 2007, as part of the integration efforts following the merger of US Airways Group and America West Holdings in September 2005, AWA surrendered its Federal Aviation Administration (“FAA”) operating certificate. As a result, all future mainline airline operations are being conducted under US Airways’ FAA operating certificate. In connection with the combination of all mainline airline operations under one FAA operating certificate, US Airways Group contributed 100% of its equity interest in America West Holdings to US Airways. As a result, America West Holdings and its wholly owned subsidiary, AWA, are now wholly owned subsidiaries of US Airways. In addition, AWA transferred substantially all of its assets and liabilities to US Airways. All off-balance sheet commitments of AWA were also transferred to US Airways. This transaction constituted a transfer of assets between entities under common control and was accounted for at historical cost. Effective January 1, 2008, both America West Holdings and AWA converted from Delaware corporations to Delaware limited liability companies.

Transfers of assets between entities under common control are accounted for in a manner similar to the pooling of interests method of accounting. Under this method, the carrying amount of net assets recognized in the balance sheets of each combining entity are carried forward to the balance sheet of the combined entity, and no other assets or liabilities are recognized as a result of the contribution of shares. This contribution has no effect on the US Airways Group consolidated financial statements.

Most of the airline operations are in competitive markets. Competitors include other air carriers along with other modes of transportation. US Airways Group operates the fifth largest airline in the United States as measured by domestic revenue passenger miles (“RPMs”) and available seat miles (“ASMs”). US Airways is a certificated air carrier engaged primarily in the business of transporting passengers, property and mail. US Airways enplaned approximately 58 million passengers in 2007. As of December 31, 2007, US Airways operated 356 mainline jet aircraft, which were supported by 49 regional jets and 55 turboprops operated by the Company’s wholly owned regional airlines. During 2007, US Airways, along with US Airways Express, provided regularly scheduled service or seasonal service at 256 airports in the continental United States, Hawaii, Alaska, Canada, the Caribbean, Latin America and Europe.

As of December 31, 2007, US Airways Group employed approximately 39,600 active full-time equivalent employees. Approximately 85% of US Airways Group’s employees are covered by collective bargaining agreements with various labor unions. The Company’s pilots, flight attendants, and ground and maintenance employees are currently working under the terms of their respective US Airways or AWA collective bargaining agreements, including, in some cases, transition agreements reached in connection with the merger. In 2007, the Company

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

reached final single labor agreements covering the flight crew training instructors and the flight simulator engineers, each represented by the Transport Workers Union.


*(b)*	*Basis of Presentation*

The merger was accounted for as a reverse acquisition using the purchase method of accounting. Although the merger was structured such that America West Holdings became a wholly owned subsidiary of US Airways Group, America West Holdings was treated as the acquiring company for accounting purposes under Statement of Financial Accounting Standards (“SFAS”) No. 141 “Business Combinations,” due to the following factors: (1) America West Holdings’ stockholders received the larger share of the Company’s common stock in the merger in comparison to the unsecured creditors of US Airways; (2) America West Holdings received a larger number of designees to the board of directors; and (3) America West Holdings’ Chairman and Chief Executive Officer prior to the merger became the Chairman and Chief Executive Officer of the combined company. As a result of the reverse acquisition, the 2005 consolidated statement of operations presented herein includes the results of America West Holdings for the period from January 1, 2005 through September 26, 2005 and consolidated results of US Airways Group for the period from September 27, 2005 through December 31, 2005.

The accompanying consolidated financial statements include the accounts of US Airways Group and its wholly owned subsidiaries. US Airways Group has the ability to move funds freely between its operating subsidiaries to support operations. These transfers are recognized as intercompany transactions. All significant intercompany accounts and transactions have been eliminated.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. The principal areas of judgment relate to passenger revenue recognition, impairment of goodwill, impairment of long-lived and intangible assets and the frequent traveler program.


*(c)*	*Cash Equivalents*

Cash equivalents consist primarily of cash in money market securities of various banks, highly liquid debt instruments, commercial paper and asset-backed securities of various financial institutions and securities backed by the U.S. government. All highly liquid investments purchased within three months of maturity are classified as cash equivalents. Cash equivalents are stated at cost, which approximates fair value due to the highly liquid nature and short maturities of the underlying securities.


*(d)*	*Investments in Marketable Securities*

All other highly liquid investments with original maturities greater than three months but less than one year are classified as current investments in marketable securities. Investments in marketable securities classified as noncurrent assets on the Company’s balance sheet represent investments expected to be converted to cash after 12 months. Debt securities, other than auction rate securities, are classified as held to maturity in accordance with SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities” (“SFAS 115”). Held to maturity investments are carried at amortized cost. Investments in auction rate securities are classified as available for sale. See Note 6(c) for more information on the Company’s investments in marketable securities.


*(e)*	*Restricted Cash*

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

deposits held by institutions that process credit card sales transactions. Restricted cash is stated at cost, which approximates fair value.


*(f)*	*Materials and Supplies, Net*

Inventories of materials and supplies are valued at the lower of cost or fair value. Costs are determined using average costing methods. An allowance for obsolescence is provided for flight equipment expendable and repairable parts. These items are generally charged to expense when issued for use.


*(g)*	*Property and Equipment*

Property and equipment are recorded at cost. Interest expenses related to the acquisition of certain property and equipment are capitalized as an additional cost of the asset or as a leasehold improvement if the asset is leased. Interest capitalized for the years ended December 31, 2007, 2006 and 2005 was $4 million, $2 million and $4 million, respectively. Property and equipment is depreciated and amortized to residual values over the estimated useful lives or the lease term, whichever is less, using the straight-line method. Costs of major improvements that enhance the usefulness of the asset are capitalized and depreciated over the estimated useful life of the asset or the modifications, whichever is less.

The estimated useful lives range from three to 12 years for owned property and equipment and from 18 to 30 years for training equipment and buildings. The estimated useful lives of owned aircraft, jet engines, flight equipment and rotable parts range from five to 30 years. Leasehold improvements relating to flight equipment and other property on operating leases are amortized over the life of the lease or the life of the asset, whichever is shorter, on a straight-line basis.

The Company records impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired as defined by SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”). Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell. The Company recorded no impairment charges in the years ended December 31, 2007, 2006 and 2005.


*(h)*	*Income Taxes*

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. A valuation allowance is established, if necessary, for the amount of any tax benefits that, based on available evidence, are not expected to be realized.


*(i)*	*Goodwill and Other Intangibles, Net*

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

exceeds the fair value of the reporting unit, then a second step must be performed in order to determine the implied fair value of the goodwill and compare it to the carrying value of the goodwill. If the carrying value of goodwill exceeds its implied fair value, then an impairment loss is recorded equal to the difference. The Company tested its goodwill for impairment during the fourth quarter of 2007, at which time it concluded that fair value of the reporting units was in excess of the carrying value. The Company assessed the fair value of the reporting units considering both the income approach and market approach. Under the market approach, the fair value of the reporting units is based on quoted market prices for US Airways Group common stock and the number of shares outstanding of US Airways Group common stock. Under the income approach, the fair value of the reporting unit is based on the present value of estimated future cash flows.

Other intangible assets consist primarily of trademarks, international route authorities and airport take-off and landing slots and airport gates. As of each of December 31, 2007 and 2006, the Company had $55 million of international route authorities on its balance sheets. The carrying value of the trademarks was $30 million as of December 31, 2007 and 2006. International route authorities and trademarks are classified as indefinite lived assets under SFAS 142. Indefinite lived assets are not amortized but instead are reviewed for impairment annually and more frequently if events or circumstances indicate that the asset may be impaired. International route authorities and trademarks were tested for impairment during the fourth quarter of 2007, at which time the Company concluded that no impairment exists. The Company will perform its next annual impairment test on October 1, 2008.

SFAS 142 requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairments in accordance with SFAS 144. The following table provides information relating to the Company’s intangible assets subject to amortization as of December 31, 2007 and 2006 (in millions):


	2007			2006

Airport take-off and landing slots	$	478		$	454
Airport gate leasehold rights		52			52
Accumulated amortization		(62	)		(37	)

Total	$	468		$	469

The intangible assets subject to amortization generally are amortized over 25 years for airport take-off and landing slots and over the term of the lease for airport gate leasehold rights on a straight-line basis and are included in depreciation and amortization on the statements of operations. For the years ended December 31, 2007, 2006 and 2005, the Company recorded amortization expense of $25 million, $28 million and $8 million, respectively, related to its intangible assets. The Company expects to record annual amortization expense of $26 million in 2008, $26 million in year 2009, $25 million in year 2010, $23 million in year 2011, and $21 million in year 2012 related to these intangible assets.

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)


*(j)*	*Other Assets, Net*

Other assets, net consists of the following as of December 31, 2007 and 2006 (in millions):


	2007		2006

Deposits	$	46	$	49
Debt issuance costs, net		14		24
Long term investments		12		38
Deferred rent		48		49
Aircraft leasehold interest, net		89		95
Other		2		4

Total other assets, net	$	211	$	259

In connection with fresh-start reporting for US Airways, aircraft operating leases were adjusted to fair value and $101 million of assets were established for leasehold interests in aircraft for aircraft leases with rental rates deemed to be below market rates. These leasehold interests are amortized on a straight-line basis as an increase to aircraft rent expense over the applicable remaining lease periods, which range from one month to 17 years.


*(k)*	*Frequent Traveler Program*

Members of the Dividend Miles program, the US Airways frequent traveler program, can redeem miles on US Airways or other members of the Star Alliance. The estimated cost of providing the free travel, using the incremental cost method as adjusted for estimated redemption rates, is recognized as a liability and charged to operations as program members accumulate mileage and requisite mileage award levels are achieved. For travel awards on partner airlines, the liability is based on the average contractual amount to be paid to the other airline per redemption. As of December 31, 2007, Dividend Miles members had accumulated mileage credits for approximately 3.1 million awards. The liability for the future travel awards accrued on the Company’s balance sheets within other accrued liabilities was $161 million and $201 million as of December 31, 2007 and 2006, respectively.

The Company sells mileage credits to participating airline and non-airline business partners. Revenue earned from selling mileage credits to other companies is recognized in two components. A portion of the revenue from these sales is deferred, representing the estimated fair value of the transportation component of the sold mileage credits. The deferred revenue for the transportation component is amortized on a straight-line basis over the period in which the credits are expected to be redeemed for travel as passenger revenue, which is currently estimated to be 28 months. The marketing component, which is earned at the time the miles are sold, is recognized in other revenues at the time of the sale. As of December 31, 2007 and 2006, the Company had $241 million and $220 million, respectively, in deferred revenue from the sale of mileage credits included in other accrued liabilities on its balance sheets.


*(l)*	*Derivative Instruments*

The Company utilizes financial derivative instruments primarily to manage its risk associated with changing jet fuel prices. The Company currently utilizes heating oil-based derivative instruments to hedge a portion of its exposure to jet fuel price increases. These instruments consist of costless collars. As of December 31, 2007, the Company has entered into costless collars to hedge approximately 22% of its 2008 projected mainline and Express jet fuel requirements. The Company does not purchase or hold any derivative financial instruments for trading purposes.

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

The weighted average collar range of the fuel hedges outstanding as of December 31, 2007 are as follows:


	Put Option		Call Option

Heating oil ($/gallon)	$	2.05	$	2.25
Estimated Crude Oil Equivalent ($/barrel)	$	72.04	$	80.44

SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” (“SFAS 133”) requires that all derivatives be marked to market (fair value) and recorded on the balance sheet. Derivatives that are not hedges must be adjusted to fair value through income.

As of December 31, 2007 and 2006, US Airways had open fuel hedge positions in place, which do not currently qualify for hedge accounting under SFAS 133. Accordingly, the derivative hedging instruments are recorded as an asset or liability on the balance sheets at fair value and any changes in fair value are recorded as gains on fuel hedging instruments, net in operating expenses in the accompanying consolidated statements of operations in the period of change. During 2007, 2006 and 2005, US Airways recognized a net gain of $245 million, a net loss of $79 million and a net gain of $75 million, respectively, related to hedging activities. The fair value of US Airways’ financial derivative instruments at December 31, 2007 and 2006 was a net asset of approximately $121 million and a net liability of $66 million, respectively. Since US Airways’ financial derivative instruments are not traded on a market exchange, the fair values are determined by the use of valuation models with assumptions about commodity prices based on those observed in the underlying markets.


*(m)*	*Deferred Gains and Credits, Net*

In connection with fresh-start reporting and purchase accounting, US Airways’ aircraft operating leases were adjusted to fair value and deferred credits of $190 million were established in the accompanying balance sheets representing the net present value of the difference between the stated lease rates and the fair market rates. These deferred credits will be decreased on a straight-line basis as a reduction in rent expense over the applicable lease periods. At December 31, 2007 and 2006, the unamortized balance of the deferred credits was $110 million and $141 million, respectively.

Rents for operating leases were adjusted to fair market value when AWA emerged from bankruptcy in 1994. The net present value of the difference between the stated lease rates and the fair market rates has been recorded as a deferred credit in the accompanying consolidated balance sheets. The deferred credits will be decreased on a straight-line basis as a reduction in rent expense over the applicable lease periods. At December 31, 2007 and 2006, the unamortized balance of the deferred credits was $24 million and $30 million, respectively.

US Airways has deferred the gain related to certain Sabre Inc. (“Sabre”) options exercised in 1999 and 2007. The gain will be amortized over the contract period as a reduction to other operating expenses. At December 31, 2007 and 2006, the unamortized balance of the deferred credit, was $34 million and $31 million, respectively. See Note 6(a) for more information related to the Sabre options.


*(n)*	*Revenue Recognition*

Passenger revenue

Passenger revenue is recognized when transportation is provided. Ticket sales for transportation that has not yet been provided are initially recorded as air traffic liability on the balance sheets. The air traffic liability represents tickets sold for future travel dates and estimated future refunds and exchanges of tickets sold for past travel dates. The majority of tickets sold are nonrefundable. Tickets that are sold but not flown on the travel date may be reused for another flight, up to a year from the date of sale, or refunded, if the ticket is refundable, after taking into account any cancellation penalties or change fees. A small percentage of tickets, some of which are partially used tickets, expire unused. Due to complex pricing structures, refund and exchange policies, and interline agreements with other airlines, certain amounts are recognized in revenue using estimates regarding both the timing of the revenue

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

recognition and the amount of revenue to be recognized. These estimates are generally based on the analysis of the Company’s historical data. The Company and members of the airline industry have consistently applied this accounting method to estimate revenue from forfeited tickets at the date travel was to be provided. Estimated future refunds and exchanges included in the air traffic liability are routinely evaluated based on subsequent activity to validate the accuracy of the Company’s estimates. Any adjustments resulting from periodic evaluations of the estimated air traffic liability are included in results of operations during the period in which the evaluations are completed.

The Company purchases capacity, or ASMs, generated by the Company’s wholly owned regional air carriers and the capacity of Air Wisconsin Airlines Corp. (“Air Wisconsin”), Republic Airways Holdings (“Republic”), Mesa Airlines Inc. (“Mesa”) and Chautauqua Airlines, Inc. (“Chautauqua”) in certain markets. Air Wisconsin, Republic, Mesa and Chautauqua operate regional jet aircraft in these markets as part of US Airways Express. The Company classifies revenues related to capacity purchase arrangements as Express passenger revenues. Liabilities related to tickets sold for travel on these air carriers are also included in the Company’s air traffic liability and are subsequently relieved in the same manner as described above.

Most of the Company’s receivables relate to tickets sold to individual passengers through the use of major credit cards or to tickets sold by other airlines and used by passengers on US Airways or its regional airline affiliates. These receivables are short-term, mostly being settled within seven days after sale. Bad debt losses, which have been minimal in the past, have been considered in establishing allowances for doubtful accounts.

The Company collects various excise taxes on its ticket sales, which are accounted for on a net basis.

Cargo Revenue

Cargo revenue is recognized when shipping services for mail and other cargo are provided.

Other Revenue

Other revenue includes excess baggage charges, ticket change and service fees, commissions earned on tickets sold for flights on other airlines, sales of tour packages by the US Airways Vacations division and the marketing component earned from selling mileage credits to partners, as discussed in Note 1(k), “Frequent Traveler Program.”


*(o)*	*Stock-based Compensation*

Prior to January 1, 2006, the Company accounted for stock-based compensation plans in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and related interpretations. Effective January 1, 2006, the Company adopted SFAS No. 123R, “Share-Based Payment” (“SFAS 123R”), using the modified prospective transition method. Under the modified prospective transition method, compensation cost is recognized in the financial statements beginning with the effective date based on the requirements of SFAS 123R for all share-based payments granted after that date, and based on the requirements of SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), for all unvested awards granted prior to the effective date of SFAS 123R. Results for prior periods are not restated using the modified prospective transition method.

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

Had US Airways Group determined compensation cost based on the fair value at the grant date for its stock options, stock appreciation rights and restricted stock units under SFAS 123 for the year ended December 31, 2005, the Company’s net loss and loss per share would have been adjusted as indicated below (in millions, except per share data):


	2005

Net loss, as reported	$	(537	)
Add: Stock-based compensation included in reported net loss		4
Deduct: Stock-based compensation determined under the fair value based method		(12	)

Pro forma net loss	$	(545	)

Loss per share:
Basic — as reported	$	(17.06	)
Basic — pro forma	$	(17.30	)
Diluted — as reported	$	(17.06	)
Diluted — pro forma	$	(17.30	)


*(p)*	*Maintenance and Repair Costs*

Maintenance and repair costs for owned and leased flight equipment are charged to operating expense as incurred. AWA historically recorded the cost of major scheduled airframe, engine and certain component overhauls as capitalized assets that were subsequently amortized over the periods benefited, referred to as the deferral method. US Airways Group historically charged maintenance and repair costs for owned and leased flight equipment to operating expense as incurred (direct expense method). In 2005, AWA changed its accounting policy from the deferral method to the direct expense method. While the deferral method is permitted under accounting principles generally accepted in the United States of America, US Airways Group and AWA believe that the direct expense method is preferable and the predominant method used in the airline industry. The effect of this change in accounting for aircraft maintenance and repairs was recorded as a cumulative effect of a change in accounting principle (see also Note 3).


*(q)*	*Selling Expenses*

Selling expenses include commissions, credit card fees, computerized reservations systems fees, advertising and promotional expenses. Advertising and promotional expenses are expensed when incurred. Advertising and promotional expenses for the years ended December 31, 2007, 2006 and 2005 were $16 million, $16 million and $13 million, respectively.

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)


*(r)*	*Express Expenses*

Expenses associated with US Airways’ former MidAtlantic division, US Airways Group’s wholly owned regional airlines and affiliate regional airlines operating as US Airways Express have been classified as Express expenses on the consolidated statements of operations. Effective May 27, 2006, the transfer of certain MidAtlantic assets to Republic was complete, and Republic assumed the operations of the aircraft as a US Airways affiliate Express carrier. Express expenses on the consolidated statements of operations consist of the following (in millions):


	Year Ended		Year Ended		Year Ended
	December 31,		December 31,		December 31,
	2007		2006		2005

Aircraft fuel and related taxes	$	765	$	764	$	327
Salaries and related costs		245		266		67
Capacity purchases		987		972		459
Other rent and landing fees		112		117		41
Aircraft rent		51		59		22
Selling expenses		157		148		57
Aircraft maintenance		76		71		16
Depreciation and amortization		23		24		7
Other expenses		178		138		77

Express expenses	$	2,594	$	2,559	$	1,073


*(s)*	*Variable Interest Entities*

The Company determined that certain entities with which the Company has capacity purchase agreements are considered variable interest entities under Financial Accounting Standards Board (“FASB”) Interpretation No. 46 “Consolidation of Variable Interest Entities,” as revised (“FIN 46(R)”). The Company has determined that it is not the primary beneficiary of any of these variable interest entities and, accordingly, does not consolidate any of the entities with which it has jet service agreements. See Note 10(d) for further discussion.


*(t)*	*Recent Accounting Pronouncements*

In June 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109” (“FIN 48”), which clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements. The interpretation prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company adopted the provisions of FIN 48 on January 1, 2007. The implementation of FIN 48 did not have a material impact on the Company’s consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” This standard defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America, and expands disclosure about fair value measurements. This pronouncement applies to other accounting standards that require or permit fair value measurements. Accordingly, this statement does not require any new fair value measurement. This statement is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. In December of 2007, the FASB agreed to a one year deferral of SFAS No. 157’s fair value measurement requirements for nonfinancial assets and liabilities that are not required or permitted to be measured at fair value on a recurring basis. Management is currently evaluating the requirements of SFAS No. 157, but does not expect it to have a material impact on the Company’s 2008 consolidated financial statements.

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

Effective December 31, 2006, the Company adopted the recognition provisions of SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R).” This statement requires employers to recognize in their balance sheets the overfunded or underfunded status of defined benefit postretirement plans, measured as the difference between the fair value of plan assets and the benefit obligation (the projected benefit obligation for pension plans and the accumulated postretirement benefit obligation for other postretirement plans). The impact on the Company’s consolidated financial statements of adopting the recognition provisions of SFAS No. 158 was not material. The Company recognized a nominal amount of prior changes in the funded status of its postretirement benefit plans through accumulated other comprehensive income. The adoption of the recognition provisions of SFAS No. 158 had no effect on the Company’s statement of operations for the year ended December 31, 2006 or for any prior period presented.

SFAS No. 158 also requires plan assets and obligations to be measured as of the employer’s balance sheet date. The Company currently uses a measurement date of September 30 for its other postretirement benefits. The measurement provisions of this statement are required to be adopted no later than fiscal years beginning after December 15, 2008. The Company will adopt the measurement provisions of this statement in 2008. The impact on the Company’s consolidated financial statements of adoption of the measurement provisions will not be material.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities.” SFAS No. 159 allows entities the option to measure eligible financial instruments at fair value as of specified dates. Such election, which may be applied on an instrument by instrument basis, is typically irrevocable once elected. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company adopted SFAS No. 159 on January 1, 2008, but has not yet elected the fair value option for any items permitted under SFAS No. 159.


2.	New equity structure and conversion

Pursuant to US Airways Group’s plan of reorganization, all securities of US Airways Group outstanding prior to September 27, 2005 were canceled upon emergence from Chapter 11. In connection with the merger, US Airways Group adopted an Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws effective September 27, 2005. US Airways Group’s authorized capital stock, following the merger, consists of 200 million shares of common stock, par value $0.01 per share. Holders of the new US Airways Group common stock are entitled to one vote per share on all matters submitted to a vote of common shareholders, except that voting rights of non-U.S. citizens are limited to the extent that the shares of common stock held by such non-U.S. persons would otherwise be entitled to more than 24.9% of the aggregate votes of all outstanding equity securities of US Airways Group.

In the merger, holders of America West Holdings Class A common stock received 0.5362 of a share of new US Airways Group common stock for each share of America West Holdings Class A common stock they owned, and holders of America West Holdings Class B common stock received 0.4125 of a share of new US Airways Group common stock for each share of America West Holdings Class B common stock they owned, according to the terms specified in the merger agreement.

On September 27, 2005, US Airways Group received new equity investments of $565 million in the aggregate from ACE Aviation Holdings Inc. (“ACE”); Par Investment Partners, L.P. (“Par”); Peninsula Investment Partners, L.P. (“Peninsula”); a group of investors under the management of Wellington Management Company, LLP (“Wellington”); Tudor Proprietary Trading, L.L.C. and certain investors advised by Tudor Investment Corp. (“Tudor”); and Eastshore Aviation, LLC (“Eastshore”). In connection with the equity investments, each of the equity investors received an option to purchase additional shares at $15.00 per share. Par purchased the options granted to ACE and Eastshore, and each option holder exercised the first two-thirds of its option on September 28, 2005, for aggregate proceeds to US Airways Group of approximately $75 million. On October 13, 2005, each of the equity investors exercised the remaining portion of its option for aggregate proceeds to US Airways Group of

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

approximately $38 million. Proceeds from these new equity investments, including the option exercises, totaled approximately $678 million. The new equity investors acquired an aggregate of approximately 44 million shares of common stock, including the shares acquired upon exercise of their options.


3.	Change in accounting policy for maintenance costs

As discussed in Note 1(p), AWA changed its accounting policy from the deferral method to the direct expense method during the fourth quarter of 2005. The effect of this change in accounting for aircraft maintenance and repairs was recorded as a cumulative effect of a change in accounting principle. The increase in the 2005 net loss of $202 million is the cumulative effect on retained earnings of the adoption as of January 1, 2005. The cumulative effect of the change in accounting principle is not presented net of tax as any tax effects resulting from the change have been immediately offset by the recording of a valuation allowance through the same financial statement caption.


4.	Earnings (loss) per common share

Basic earnings (loss) per common share (“EPS”) is computed on the basis of the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding employee stock options, employee stock appreciation rights, employee restricted stock units, warrants and convertible debt. The following table presents the computation of basic and diluted EPS (in millions, except share and per share amounts):


	Year Ended December 31,
	2007		2006		2005

Basic earnings (loss) per share:
Income (loss) before cumulative effect of change in accounting principle	$	427	$	303	$	(335	)
Cumulative effect of change in accounting principle		—		1		(202	)

Net income (loss)	$	427	$	304	$	(537	)

Weighted average common shares outstanding (in thousands)		91,536		86,447		31,488

Basic earnings (loss) per share:
Before cumulative effect of change in accounting principle	$	4.66	$	3.50	$	(10.65	)
Cumulative effect of change in accounting principle		—		0.01		(6.41	)

Net earnings (loss) per share	$	4.66	$	3.51	$	(17.06	)

Diluted earnings (loss) per share:
Income (loss) before cumulative effect of change in accounting principle	$	427	$	303	$	(335	)
Cumulative effect of change in accounting principle		—		1		(202	)

Net income (loss)		427		304		(537	)
Interest expense on 7.0% senior convertible notes		5		9		—

Income (loss) for purposes of computing diluted net income (loss) per share	$	432	$	313	$	(537	)

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)


	Year Ended December 31,
	2007		2006		2005

Share computation (in thousands):
Weighted average common shares outstanding		91,536		86,447		31,488
Dilutive effect of stock awards and warrants		1,017		2,058		—
Assumed conversion of 7.0% senior convertible notes		3,050		5,316		—

Weighted average common shares outstanding as adjusted		95,603		93,821		31,488

Diluted earnings (loss) per share:
Before cumulative effect of change in accounting principle	$	4.52	$	3.32	$	(10.65	)
Cumulative effect of change in accounting principle		—		0.01		(6.41	)

Net earnings (loss) per share	$	4.52	$	3.33	$	(17.06	)

For the year ended December 31, 2007, 2,772,414 stock options and stock appreciation rights are not included in the computation of diluted EPS because the exercise prices were greater than the average market price of common stock for the period.

For the year ended December 31, 2006, 1,254,960 stock options and stock appreciation rights are not included in the computation of diluted EPS because the exercise prices were greater than the average market price of common stock for the period. Also, 34,650 performance-based restricted stock unit awards were excluded as the performance-based provision had not been met as of December 31, 2006. In addition, 1,054,692 incremental shares from assumed conversion of the 7.5% senior convertible notes are not included in the computation of diluted EPS because of the antidilutive effect on EPS.

For the year ended December 31, 2005, 2,656,804 stock options are not included in the computation of diluted EPS because the exercise prices were greater than the average market price of common stock for the period. Options to acquire 930,976 common shares and 3,021,908 warrants issued in conjunction with the AWA ATSB Loan and related transactions are not included in the computation of diluted EPS because of the antidilutive effect on EPS. In addition, 1,506,141 incremental shares from assumed conversion of the 7% senior convertible notes, 3,860,289 incremental shares from assumed conversion of the 7.5% senior convertible notes and 3,042,555 incremental shares from assumed conversion of the 7.25% senior exchangeable notes are not included in the computation of diluted EPS because of the antidilutive effect on EPS.


5.	Special items, net

Special items, net as shown on the consolidated statements of operations include the following charges (credits) (in millions):


	Year Ended December 31,
	2007			2006			2005

Airbus restructuring	$	—		$	(90	)(a)	$	57	(a)
Merger related transition expenses		99	(b)		131	(b)		28	(b)
Sale leaseback transactions		—			—			27	(c)
Power by the hour program penalties		—			—			7	(d)
Severance due to change in control		—			—			2	(e)
Aircraft returns		—			—			1	(f)
Settlement of bankruptcy claims		—			(14	)(g)		—
Other		—			—			(1	)

Total	$	99		$	27		$	121

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)


(a)		In connection with the merger and the Airbus Memorandum of Understanding (the “Airbus MOU”) executed between AVSA S.A.R.L., an affiliate of Airbus S.A.S. (“Airbus”), US Airways Group, US Airways and AWA, certain aircraft firm orders were restructured. In connection with that restructuring, US Airways Group and America West Holdings were required to pay non-refundable restructuring fees totaling $89 million by means of set-off against existing equipment deposits of US Airways and AWA held by Airbus of $39 million and $50 million respectively. In 2005, AWA’s restructuring fee of $50 million has been classified as a special charge, along with $7 million in associated capitalized interest. Also in connection with the Airbus MOU, US Airways and AWA entered into two loan agreements with aggregate commitments of up to $161 million and $89 million. On March 31, 2006, the outstanding principal and accrued interest on the $89 million loan was forgiven upon repayment in full of the $161 million loan in accordance with terms of the Airbus loans. As a result, in 2006, the Company recognized a gain associated with the return of these equipment deposits upon forgiveness of the loan totaling $90 million, consisting of the $89 million in equipment deposits and accrued interest of $1 million.

(b)		In 2007, in connection with the continuing effort to consolidate functions and integrate the Company’s organizations, procedures, and operations, the Company incurred $99 million of transition and merger integration costs. These items included $13 million in training and related expenses; $19 million in compensation expenses for equity awards granted in connection with the merger to retain key employees through the integration period; $20 million of aircraft livery costs; $37 million in professional and technical fees related to the integration of the Company’s airline operations systems; $1 million in employee moving expenses; $4 million related to reservation system migration expenses and $5 million of other expenses.

		In 2006, the Company incurred $131 million of transition and merger integration costs. These items included $6 million in training and related expenses; $41 million in compensation expenses primarily for severance, retention payments and equity awards granted in connection with the merger to retain key employees through the integration period; $17 million of aircraft livery costs; $38 million in professional and technical fees, including continuing professional fees associated with US Airways’ bankruptcy proceedings and fees related to the integration of the Company’s airline operations systems; $7 million of employee moving expenses; $11 million of net costs associated with the integration of the AWA FlightFund and US Airways Dividend Miles frequent traveler programs; $2 million in merger related aircraft lease return expenses and $9 million of other expenses.

		In 2005, the Company incurred $28 million of transition and merger integration costs in the fourth quarter of 2005. These items included $8 million in compensation expenses primarily for severance and special stock awards granted under a program designed to retain key employees through the integration period; $1 million of aircraft livery costs; $3 million in professional and technical fees; $11 million in insurance premiums related to policies for former officers and directors; $2 million of sales and marketing program expenses related to notifying frequent traveler program members about the merger; $1 million of programming service expense and $2 million in other expenses.

Severance charges and payment activity related to the merger are as follows (in millions):


	Year Ended December 31,
	2006			2005

Balance beginning of year	$	9		$	—
Amount recorded by US Airways in purchase accounting		—			24
Severance expense		14			2
Payments		(23	)		(17	)

Balance end of year	$	—		$	9

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)


(c)		In 2005, a $27 million loss was incurred related to the sale-leaseback of six Boeing 737-200 aircraft and two Boeing 757 aircraft.

(d)		In 2005, in connection with the return of certain leased aircraft, AWA incurred expenses of $7 million related to penalties incurred under an outsourced maintenance arrangement.

(e)		In 2005, AWA recorded severance expense totaling approximately $2 million for terminated employees resulting from the merger.

(f)		In 2004, AWA entered into definitive agreements with two lessors to return six Boeing 737-200 aircraft. Three of these aircraft were returned to the lessors in the third quarter of 2004, two were returned in the fourth quarter of 2004 and one was returned in January 2005. In the first quarter of 2005, AWA recorded $1 million in special charges related to the final Boeing 737-200 aircraft, which was removed from service in January 2005.

(g)		In 2006, the Company recognized $14 million in gains in connection with the settlement of bankruptcy claims, which includes $11 million related to a settlement with Bombardier.


6.	Financial instruments


*(a)*	*General*

On January 1, 1998, as part of a comprehensive information technology services agreement with Sabre, US Airways was granted two tranches of stock options (“SHC Stock Options”) to acquire up to 6,000,000 shares of Class A Common Stock, $0.01 par value, of Sabre Holdings Corporation (“SHC Common Stock”), Sabre’s parent company. Each tranche included 3,000,000 stock options. In December 1999, US Airways exercised the first tranche of stock options at an exercise price of $27 per option and received proceeds of $81 million in January 2000 in lieu of receiving SHC Common Stock. In February 2000, SHC declared a cash dividend resulting in a dilution adjustment to the terms of the second tranche. The adjusted terms of the second tranche include stock options to acquire 3,406,914 shares of SHC Common Stock at an exercise price of $23.78 subject to a $111.83 per share cap on the fair market value of the underlying common stock. On December 12, 2006, Sabre announced that it had agreed to be acquired by several private equity groups for $32.75 per share in cash. The acquisition of Sabre was completed during March 2007 at which time the remaining options were exercised and the related shares were sold. The Company received proceeds of $31 million in connection with the transaction. Realized gains resulting from the exercise of Sabre options are subject to a clawback provision. Under the clawback provision, if US Airways elects to terminate its information technology service agreement with Sabre, it will be required to pay Sabre an amount equal to the gain multiplied by the ratio of the remaining months in the contract period over 180 months. The deferred gain from the 1999 and 2007 exercises is amortized on a straight-line basis over a contractually determined period ending December 2012. As of December 31, 2007, US Airways had $34 million of unamortized deferred gain related to the sale of Sabre options.


*(b)*	*Fuel Price Risk Management*

As of December 31, 2007, the Company had entered into costless collar transactions hedging approximately 22% of the Company’s projected 2008 fuel requirements. The fair value of the financial derivative instruments was a net asset of $121 million recorded in prepaid expenses and other at December 31, 2007 and a net liability of $66 million recorded in accounts payable at December 31, 2006. As of December 31, 2007, US Airways had no deposits held as collateral on open fuel hedge positions as these deposits are only required when the fair value of the hedges is in a liability position.

The Company is exposed to credit risks in the event any counterparty to a hedge transaction fails to meet its obligations. The Company does not anticipate such non-performance as counterparties are selected based on credit ratings and exposure to any one counterparty is closely monitored.

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)


*(c)*	*Fair Values of Financial Instruments*

Cash, Cash Equivalents and Investments in Marketable Securities

As of December 31, 2007 and 2006, the Company’s cash and cash equivalents are as follows (in millions):


	2007		2006

Cash and cash equivalents:
Corporate notes	$	90	$	731
Cash and money market funds		1,858		385

Total cash and cash equivalents	$	1,948	$	1,116

The carrying amount of cash equivalents approximates fair value because of the short-term nature of these instruments.

As of December 31, 2007 and 2006, the Company’s investments in marketable securities are classified as follows (in millions):


			Unrealized
Investments in marketable securities	Cost Basis		Loss		Fair Value

December 31, 2007
Held to maturity securities:
Corporate bonds	$	125	$	—	$	125
U.S. government sponsored enterprises		81		—		81
Certificates of deposit		20		—		20

Total investments in marketable securities-current	$	226	$	—	$	226

Available for sale securities:
Auction rate securities		401		48		353

Total investments in marketable securites-noncurrent	$	401	$	48	$	353

December 31, 2006
Held to maturity securities:
Corporate bonds	$	79	$	—	$	79
U.S. government sponsored enterprises		78		—		78
Commercial paper		20		—		20

Total held to maturity securities		177		—		177
Available for sale securities:
Auction rate securities		1,072		—		1,072

Total investments in marketable securities-current	$	1,249	$	—	$	1,249

All held to maturity securities mature in one year or less.

As of December 31, 2007, the Company held auction rate securities totaling $411 million at par value, which are classified as available for sale securities and noncurrent assets on the Company’s balance sheet. Contractual maturities for these auction rate securities are greater than nine years with an interest reset date approximately every 28 days. Historically, the carrying value of auction rate securities approximated fair value due to the frequent resetting of the interest rates. With the liquidity issues experienced in the global credit and capital markets, the Company’s auction rate securities have experienced multiple failed auctions. While the Company continues to earn

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

interest on these investments at the maximum contractual rate, the estimated market value of these auction rate securities no longer approximates par value.

Given the complexity of auction rate securities, the Company engaged an investment advisor to assist in determining the fair values of its investments. The Company, with the assistance of its advisor, estimated the fair value of these auction rate securities based on the following: (i) the underlying structure of each security; (ii) the present value of future principal and interest payments discounted at rates considered to reflect current market conditions; (iii) consideration of the probabilities of default, auction failure, or repurchase at par for each period; and (iv) estimates of the recovery rates in the event of default for each security. These estimated fair values could change significantly based on future market conditions.

The Company concluded that the fair market value of these auction rate securities at December 31, 2007 was $353 million, a decline of $58 million from par value. Of this amount $48 million was deemed temporary as the Company believes the decline in market value is due to general market conditions. Based upon the Company’s evaluation of available information, the Company believes these investments are of high credit quality, as substantially all of the investments carry a AAA credit rating, and approximately 30% of the par value of these auction rate securities is insured. In addition, the Company has the intent and ability to hold these investments until anticipated recovery in market value occurs. Accordingly, the Company has recorded an unrealized loss on these securities of $48 million in other comprehensive income. The Company concluded that $10 million of the decline was other than temporary and recorded an impairment charge in other income, net. The Company’s conclusion for the other than temporary impairment is based on the significant decline in fair value indicated for a certain investment, a portion of which is collateralized either directly or indirectly by sub-prime mortgages.

As of January 31, 2008, the commercial banks managing the investments provided the Company with estimated fair market values, which indicated an additional decline in the aggregate fair market value of the Company’s auction rate securities of approximately $70 million (from amounts provided as of December 31, 2007). The Company currently believes that these additional declines in value are also temporary and are attributed to current credit market events and continued lack of market liquidity in early 2008. Such temporary declines, if sustained, would be recognized in other comprehensive income in the first quarter of 2008. It is possible that additional declines in fair value may occur. To the extent the fair market values of the auction rate securities were to subsequently increase, such increase would reduce the unrealized loss recorded in other comprehensive income.

The Company continues to monitor the market for auction rate securities and consider its impact (if any) on the fair market value of its investments. If the current market conditions deteriorate further, or the anticipated recovery in market values does not occur, the Company may be required to record additional unrealized losses in other comprehensive income or impairment charges in 2008.

Gross proceeds from sales of marketable securities for the years ended December 31, 2007, 2006 and 2005 were $3.2 billion, $1.79 billion and $416 million, respectively.

Long-term Debt

At December 31, 2007 and 2006, the fair value of long-term debt was approximately $3.23 billion and $3.09 billion, respectively. The Company’s variable rate long-term debt with a carrying value of $2.13 billion and $1.94 billion at December 31, 2007 and 2006, respectively, approximates fair value because these borrowings have variable interest rate terms that approximate market interest rates for similar debt instruments. The fair value of the Company’s other long-term debt is determined based on quoted market prices if available or market prices for comparable debt instruments.

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)


7.	Debt, including capital lease obligations

The following table details US Airways Group’s debt as of December 31, 2007 and 2006 (in millions). Variable interest rates listed are the rates as of December 31, 2007 unless noted.


	December 31,			December 31,
	2007			2006

Secured
Citicorp North America loan, variable interest rate of 7.28%, installments due through maturity(a)	$	1,600		$	—
General Electric Capital Corporation loan(b)		—			1,250
Equipment notes payable, fixed and variable interest rates ranging from 6.55% to 9.62%, averaging 7.57% as of December 31, 2007		1,378			1,258
Slot financing, interest rate of 8%, installments due through 2015(c)		47			47
Capital lease obligations, interest rate of 8%, installments due through 2021(d)		41			41
Senior secured discount notes, variable interest rate of 8.24%, installments due 2005 through 2009(e)		32			33
GE credit facility(b)		—			21
Capital lease obligations, computer software, installments due through 2009		1			2

		3,099			2,652

Unsecured
7% senior convertible notes, interest only payments until due in 2020(f)		74			74
GE Engine Maintenance term note, variable interest of 8.79%, installments due 2008 through 2011(g)		57			45
Industrial development bonds, fixed interest rate of 6.3%, due 2023(h)		29			29
Barclays prepaid miles (formerly Juniper prepaid miles)(b)		—			325
Note payable to Pension Benefit Guaranty Corporation, interest rate of 6%, interest only payments until due 2012(i)		10			10

		170			483

Total long-term debt and capital lease obligations		3,269			3,135
Less: Unamortized discount on debt		(121	)		(133	)
Current maturities		(117	)		(95	)

Long-term debt and capital lease obligations, net of current maturities	$	3,031		$	2,907


(a)		On March 23, 2007, US Airways Group entered into a new term loan credit facility with Citicorp North America, Inc., as administrative agent, and a syndicate of lenders pursuant to which the Company borrowed an aggregate principal amount of $1.6 billion. US Airways is a guarantor of the Citicorp credit facility.

		The Citicorp credit facility bears interest at an index rate plus an applicable index margin or, at US Airways Group’s option, LIBOR plus an applicable LIBOR margin for interest periods of one, two, three or six months. The applicable index margin, subject to adjustment, is 1.00%, 1.25% or 1.50% if the adjusted loan balance is less than $600 million, between $600 million and $1 billion, or between $1 billion and $1.6 billion,

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)


		respectively. The applicable LIBOR margin, subject to adjustment, is 2.00%, 2.25% or 2.50% if the adjusted loan balance is less than $600 million, between $600 million and $1 billion, or between $1 billion and $1.6 billion, respectively. In addition, interest on the Citicorp credit facility may be adjusted based on the credit rating for the Citicorp credit facility as follows: (i) if the credit ratings of the Citicorp credit facility by Moody’s and S&P in effect as of the last day of the most recently ended fiscal quarter are both at least one subgrade better than the credit ratings in effect on March 23, 2007, then (A) the applicable LIBOR margin will be the lower of 2.25% and the rate otherwise applicable based upon the adjusted Citicorp credit facility balance and (B) the applicable index margin will be the lower of 1.25% and the rate otherwise applicable based upon the Citicorp credit facility principal balance, and (ii) if the credit ratings of the Citicorp credit facility by Moody’s and S&P in effect as of the last day of the most recently ended fiscal quarter are both at least two subgrades better than the credit ratings in effect on March 23, 2007, then (A) the applicable LIBOR margin will be 2.00% and (B) the applicable index margin will be 1.00%. As of December 31, 2007, the interest rate on the Citicorp credit facility was 7.28% based on a 2.50% LIBOR margin.

		The Citicorp credit facility matures on March 23, 2014, and is repayable in seven annual installments, with each of the first six installments to be paid on each anniversary of the closing date in an amount equal to 1% of the initial aggregate principal amount of the loan and the final installment to be paid on the maturity date in the amount of the full remaining balance of the loan.

		In addition, the Citicorp credit facility requires certain mandatory prepayments upon the occurrence of certain events, establishes certain financial covenants, including minimum cash requirements and maintenance of certain minimum ratios, contains customary affirmative covenants and negative covenants and contains customary events of default. The Citicorp credit facility requires US Airways Group to maintain consolidated unrestricted cash and cash equivalents of not less than $1.25 billion, with not less than $750 million (subject to partial reductions upon certain reductions in the outstanding principal amount of the loan) of that amount held in accounts subject to control agreements, which would become restricted for use by the Company if certain adverse events occur per the terms of the agreement. The Company capitalized $4 million of debt issuance costs consisting principally of Citicorp credit facility arrangement fees which will be amortized over the life of the loan. The Company recorded a nonoperating expense of $18 million related to the write-off of unamortized debt issuance costs for the $1.25 billion GECC loan.

(b)		The proceeds of the Citicorp credit facility were used to repay in full the following indebtedness:


	•	The amended and restated loan agreement, dated April 7, 2006, entered into by US Airways Group with General Electric Capital Corporation (“GECC”) and a syndicate of lenders. At the time of the repayment, the total outstanding balance of the loan was $1.25 billion.

	•	The Barclays prepaid miles issued on October 3, 2005 in connection with the amended co-branded credit card agreement dated August 8, 2005 between pre-merger US Airways Group, AWA and Juniper Bank, a subsidiary of Barclays PLC that has since been renamed Barclays Bank Delaware (“Barclays”). At the time of the repayment, the total outstanding balance was $325 million.

	•	The credit facility with GECC, amended in July 2005, with an original balance of $28 million. At the time of the repayment, the total outstanding balance of the loan was $19 million.


(c)		In September 2005, US Airways entered into an agreement with Republic to sell and leaseback certain of its commuter slots at Ronald Reagan Washington National Airport and New York LaGuardia Airport. US Airways continues to hold the right to repurchase the slots anytime after the second anniversary of the slot sale-leaseback transaction. These transactions were accounted for as secured financings. Installments are due monthly through 2015. In December 2006, Republic and US Airways modified terms of the agreement to conform to subsequent regulatory changes at LaGuardia, and the slots were returned to US Airways. The need for a subsequent modification was fully contemplated in the original agreement.

(d)		Capital lease obligations consist principally of certain airport maintenance and facility leases which expire in 2018 and 2021.

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)


(e)		On December 27, 2004, AWA raised additional capital by financing its Phoenix maintenance facility and flight training center. The flight training center was previously unencumbered, and the maintenance facility became unencumbered earlier in 2004 when AWA refinanced its term loan. Using its leasehold interest in these two facilities as collateral, AWA, through a wholly owned subsidiary named FTCHP LLC, raised $31 million through the issuance of senior secured discount notes. The notes were issued by FTCHP at a discount pursuant to the terms of a senior secured term loan agreement among the Company, FTCHP, Heritage Bank SSB, as administrative agent, Citibank, N.A., as the initial lender, and the other lenders from time to time party thereto. Citibank, N.A. subsequently assigned all of its interests in the notes to third party lenders.

		AWA fully and unconditionally guaranteed the payment and performance of FTCHP’s obligations under the notes and the loan agreement. The notes require aggregate principal payments of $36 million with principal payments of $2 million due on each of the first two anniversary dates and the remaining principal amount due on the fifth anniversary date. The notes may be prepaid in full at any time (subject to customary LIBOR breakage costs) and in partial amounts of $2 million on the third and fourth anniversary dates. The unpaid principal amount of the notes bears interest based on LIBOR plus a margin subject to adjustment based on a loan to collateral value ratio.

		The loan agreement contains customary covenants applicable to loans of this type, including obligations relating to the preservation of the collateral and restrictions on the activities of FTCHP. In addition, the loan agreement contains events of default, including payment defaults, cross-defaults to other debt of FTCHP, if any, breach of covenants, bankruptcy and insolvency defaults and judgment defaults.

		In connection with this financing, AWA sold all of its leasehold interests in the maintenance facility and flight training center to FTCHP and entered into subleases for the facilities with FTCHP at lease rates expected to approximate the interest payments due under the notes. In addition, AWA agreed to make future capital contributions to FTCHP in amounts sufficient to cover principal payments and other amounts owing pursuant to the notes and the loan agreement. As part of the transfer of substantially all of AWA’s assets and liabilities to US Airways in connection with the combination of all mainline airline operations under one FAA operating certificate on September 26, 2007, AWA assigned its subleases for the facilities with FTCHP to US Airways. In addition, US Airways assumed all of the obligations of AWA in connection with the financing and joined the guarantee of the payment and performance of FTCHP’s obligations under the notes and the loan agreement.

(f)		On September 30, 2005, US Airways Group issued $144 million aggregate principal amount of 7% Senior Convertible Notes due 2020 (the “7% Senior Convertible Notes”) for proceeds, net of expenses, of approximately $139 million. The 7% Senior Convertible Notes are US Airways Group’s senior unsecured obligations and rank equally in right of payment to its other senior unsecured and unsubordinated indebtedness and are effectively subordinated to its secured indebtedness to the extent of the value of assets securing such indebtedness. The 7% Senior Convertible Notes are fully and unconditionally guaranteed, jointly and severally and on a senior subordinated basis, by US Airways and AWA. The guarantees are the guarantors’ unsecured obligations and rank equally in right of payment to the other senior unsecured and unsubordinated indebtedness of the guarantors and are effectively subordinated to the guarantors’ secured indebtedness to the extent of the value of assets securing such indebtedness.

		The 7% Senior Convertible Notes bear interest at the rate of 7% per year payable in cash semiannually in arrears on March 30 and September 30 of each year, beginning March 30, 2006. The 7% Senior Convertible Notes mature on September 30, 2020.

		Holders may convert, at any time on or prior to maturity or redemption, any outstanding notes (or portions thereof) into shares of US Airways Group’s common stock, initially at a conversion rate of 41.4508 shares of US Airways Group’s common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $24.12 per share of US Airways Group’s common stock). If a holder elects to convert its notes in connection with certain specified fundamental changes that occur prior to October 5, 2015, the holder will be entitled to receive additional shares of US Airways Group’s common stock as a make whole premium upon conversion. In lieu of delivery of shares of US Airways Group’s common stock upon conversion of all or

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)


		any portion of the notes, US Airways Group may elect to pay holders surrendering notes for conversion, cash or a combination of shares and cash.

		Holders may require US Airways Group to purchase for cash or shares or a combination thereof, at US Airways Group’s election, all or a portion of their 7% Senior Convertible Notes on September 30, 2010 and September 30, 2015 at a purchase price equal to 100% of the principal amount of the 7% Senior Convertible Notes to be repurchased plus accrued and unpaid interest, if any, to the purchase date. In addition, if US Airways Group experiences a specified fundamental change, holders may require US Airways Group to purchase for cash, shares or a combination thereof, at its election, all or a portion of their 7% Senior Convertible Notes, subject to specified exceptions, at a price equal to 100% of the principal amount of the 7% Senior Convertible Notes plus accrued and unpaid interest, if any, to the purchase date. Prior to October 5, 2010, the 7% Senior Convertible Notes will not be redeemable at US Airways Group’s option. US Airways Group may redeem all or a portion of the 7% Senior Convertible Notes at any time on or after October 5, 2010, at a price equal to 100% of the principal amount of the 7% Senior Convertible Notes plus accrued and unpaid interest, if any, to the redemption date if the closing price of US Airways Group’s common stock has exceeded 115% of the conversion price for at least 20 trading days in the 30 consecutive trading day period ending on the trading day before the date on which US Airways Group mails the optional redemption notice.

		In 2006, $70 million of the $144 million outstanding principal amount was converted into 2,909,636 shares of common stock. In connection with the conversion, the Company paid a premium of $17 million to the holders of the converted notes, which was recorded in other nonoperating expenses.

(g)		In December 2004, deferred charges under US Airways’ maintenance agreements with GE Engine Systems, Inc. were converted into an unsecured term note. Interest on the note accrues at LIBOR plus 4%, and becomes payable beginning in January 2008, at which time principal and interest payments are due in 48 monthly installments.

(h)		The industrial development revenue bonds are due April 2023. Interest at 6.3% is payable semiannually on April 1 and October 1. The bonds are subject to optional redemption prior to the maturity date on or after April 1, 2008, in whole or in part, on any interest payment date at the following redemption prices: 102% on April 1 or October 1, 2008; 101% on April 1 or October 1, 2009; and 100% on April 1, 2010 and thereafter.

(i)		In connection with US Airways Group’s emergence from bankruptcy in September 2005, it reached a settlement with the Pension Benefit Guaranty Corporation (“PBGC”) related to the termination of three of its defined benefit pension plans. The settlement included the issuance of a $10 million note which matures in 2012 and bears interest at 6% payable annually in arrears.

Secured financings are collateralized by assets, primarily aircraft, engines, simulators, rotable aircraft parts and hangar and maintenance facilities. At December 31, 2007, the estimated maturities of long-term debt and capital leases are as follows (in millions):


2008	$	117
2009		145
2010		121
2011		134
2012		139
Thereafter		2,613

	$	3,269

Certain of US Airways Group’s long-term debt agreements contain minimum cash balance requirements and other covenants with which the Company was in compliance at December 31, 2007. Certain of US Airways Group’s long-term debt agreements contain cross-default provisions, which may be triggered by defaults by US Airways or US Airways Group under other agreements relating to indebtedness.

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

Interest rates on $2.13 billion principal amount of long-term debt as of December 31, 2007 are subject to adjustment to reflect changes in floating interest rates. As of December 31, 2007, the weighted average effective interest rate was 7.35% for the variable interest rate debt.


8.	Employee pension and benefit plans

Substantially all of the Company’s employees meeting certain service and other requirements are eligible to participate in various pension, medical, dental, life insurance, disability and survivorship plans.


*(a)*	*Defined Benefit and Other Postretirement Benefit Plans*

Prior to the merger, America West Holdings had no obligations for defined benefit or other postretirement benefit plans. The following table sets forth changes in the fair value of plan assets, benefit obligations and the funded status of the plans and the amounts recognized in the Company’s consolidated balance sheets as of December 31, 2007 and 2006 (in millions). Defined benefit plans are measured as of December 31, 2007 and 2006, and postretirement benefit plans are measured as of September 30, 2007 and 2006:


	Defined Benefit Pension Plans(1)						Other Postretirement Benefits
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2007			2006			2007			2006

Fair value of plan assets at beginning of period	$	45		$	37		$	—		$	—
Actual return on plan assets		3			5			—			—
Employer contributions		1			5			24			31
Plan participants’ contributions		—			—			29			30
Gross benefits paid		(3	)		(2	)		(53	)		(61	)

Fair value of plan assets at end of period		46			45			—			—

Benefit obligation at beginning of period		59			60			220			234
Service cost		2			2			3			3
Interest cost		3			3			12			12
Plan participants’ contributions		—			—			29			30
Actuarial (gain) loss		(7	)		(4	)		(48	)		2
Curtailments(2)		(5	)		—			—			—
Gross benefits paid		(2	)		(2	)		(53	)		(61	)

Benefit obligation at end of period		50			59			163			220

Funded status of the plan		(4	)		(14	)		(163	)		(220	)
Contributions for October to December		—			—			6			5

Liability recognized in consolidated balance sheet	$	(4	)	$	(14	)	$	(157	)	$	(215	)

Net actuarial gain recognized in accumulated other comprehensive income	$	9		$	2		$	49		$	1

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)


(1)		The aggregate accumulated benefit obligations, projected benefit obligations and plan assets were $46 million, $50 million and $46 million, as of December 31, 2007 and $57 million, $59 million and $45 million, as of December 31, 2006, respectively.

(2)		For the year ended December 31, 2007, the Company recognized a $5 million curtailment gain related to the elimination of a social security supplemental benefit as a result of the federally mandated change in the pilot retirement age from age 60 to 65.

The following table presents the weighted average assumptions used to determine benefit obligations:


	Defined Benefit Pension Plans						Other Postretirement Benefits
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2007			2006			2007			2006

Discount rate		6	%		5.75	%		5.94	%		5.67	%
Rate of compensation increase		4	%		4	%		—			—

As of December 31, 2007 and 2006, the Company discounted its pension obligations based on the current rates earned on high quality Aa rated long-term bonds.

The Company assumed discount rates for measuring its other postretirement benefit obligations, based on a hypothetical portfolio of high quality publicly traded U.S. bonds (Aa rated, non-callable or callable with make-whole provisions), for which the timing and cash outflows approximate the estimated benefit payments of the other postretirement benefit plans.

As of September 30, 2007, the assumed health care cost trend rates are 10% in 2008 and 9% in 2009, decreasing to 5.5% in 2013 and thereafter. As of September 30, 2006, the assumed health care cost trend rates were 10% in 2007 and 9% in 2008, decreasing to 5.5% in 2012 and thereafter. The assumed health care cost trend rates could have a significant effect on amounts reported for retiree health care plans. A one-percentage point change in the health care cost trend rates would have the following effects on other postretirement benefits as of September 30, 2007 (in millions):


	1% Increase		1% Decrease

Effect on total service and interest costs	$	1	$	(1	)
Effect on postretirement benefit obligation		11		(9	)

Weighted average assumptions used to determine net periodic benefit cost were as follows:


	Defined Benefit Pension Plans						Other Postretirement Benefits
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2007			2006			2007			2006

Discount rate		5.75	%		5.75	%		5.67	%		5.3	%
Expected return on plan assets		8	%		8	%		—			—
Rate of compensation increase		4	%		4	%		—			—

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

Components of the net and total periodic cost for pension and other postretirement benefits (in millions):


	Defined Benefit Pension Plans						Other Postretirement Benefits
	Year Ended			Year Ended			Year Ended		Year Ended
	December 31,			December 31,			December 31,		December 31,
	2007			2006			2007		2006

Service cost	$	2		$	2		$	3	$	4
Interest cost		3			3			12		12
Expected return on plan assets		(3	)		(3	)		—		—

Total periodic costs	$	2		$	2		$	15	$	16

In 2008, the Company expects to contribute $2 million and $19 million to its defined benefit pension plans and other postretirement plans, respectively. The following benefits, which reflect expected future service, as appropriate, are expected to be paid from the other postretirement plans (in millions):


			Other
			Postretirement
	Defined Benefit		Benefits before
	Pension Plans		Medicare Subsidy		Medicare Subsidy

2008	$	2	$	19	$	—
2009		2		18		—
2010		2		16		—
2011		2		15		—
2012		2		14		—
2013 to 2017		12		58		3

The Company assumed that its pension plans’ assets would generate a long-term rate of return of 8% at December 31, 2007. The expected long-term rate of return assumption was developed by evaluating input from the plans’ investment consultants, including their review of asset class return expectations and long-term inflation assumptions.

The weighted average asset allocation as of December 31 by asset category is as follows:


	2007			2006

Equity securities		69	%		70	%
Debt securities		30			25
Other		1			5

Total		100	%		100	%

The Company’s targeted asset allocation as of December 31, 2007 is approximately 65% equity securities and 35% debt securities. The Company believes that its long-term asset allocation on average will approximate the targeted allocation. The Company regularly reviews its actual asset allocation and periodically rebalances its investments to its targeted allocation when considered appropriate.


*(b)*	*Defined Contribution Plans*

The Company sponsors several defined contribution plans for certain employees. The Company makes cash contributions to certain plans based on the employee’s age, compensation, a match that is annually determined by the Board of Directors, and elected contributions. The Company also participates in a multi-employer plan for certain employees. Expenses related to these plans, excluding expenses related to the Company’s pilot defined contribution plans (see below), were approximately $28 million, $28 million and $16 million for the years ended December 31, 2007, 2006 and 2005, respectively.

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

In connection with its first reorganization under Chapter 11 of the Bankruptcy Code, US Airways terminated the Retirement Income Plan for Pilots of US Airways, Inc. and the related nonqualified pilot plan effective March 31, 2003. The Company implemented a qualified and nonqualified defined contribution plan for pilots effective April 1, 2003. The defined contribution amount was individually determined based on a target normal retirement date balance of approximately $1 million for a career US Airways pilot. The target balance included the estimated value of other retirement benefits including, but not limited to, the estimated benefit pilots are expected to receive from the PBGC, the trustee for the terminated pilot defined benefit plan. Effective October 15, 2004, each pilot’s contribution rate became the lesser of the original rate or 10% of eligible compensation. Expenses for this plan were $31 million, $42 million and $16 million for the years ended December 31, 2007, 2006 and 2005, respectively, and are included in the Company’s consolidated financial results.

Effective January 1, 2005, America West Holdings amended its defined contribution plan, requiring AWA to make a non-elective discretionary employer contribution equal to 7% of the annual compensation for each pilot covered under the collective bargaining agreement between AWA and the Air Line Pilots Association (as defined in the plan and subject to statutory annual maximums). Effective January 1, 2006, the non-elective discretionary employer contribution was increased to 10% of each pilot’s annual compensation. These non-elective discretionary employer contributions replace the existing AWA company match under the 401(k) defined contribution plan for pilots. The AWA company match continues for all other eligible covered employees under the plan. AWA’s contribution expense to this plan totaled $19 million, $19 million and $13 million for 2007, 2006, and 2005 respectively.


*(c)*	*Postemployment Benefits*

The Company provides certain postemployment benefits to its employees. These benefits include disability-related and workers’ compensation benefits for certain employees. The Company accrues for the cost of such benefit expenses once an appropriate triggering event has occurred. In 2007, the Company recorded a $99 million charge to increase long-term disability obligations for US Airways’ pilots as a result of a change in the FAA mandated retirement age for pilots from 60 to 65.


*(d)*	*Profit Sharing Plans*

Most non-executive employees of US Airways Group are eligible to participate in the 2005 Profit Sharing Plan, an annual bonus program, which was established subsequent to the merger. Annual bonus awards are paid from a profit-sharing pool equal to (i) ten percent of the annual profits of US Airways Group (excluding unusual items) for pre-tax profit margins up to ten percent, plus (ii) 15% of the annual profits of US Airways Group (excluding unusual items) for pre-tax profit margins greater than ten percent. Awards are paid as a lump sum no later than March 15 after the end of each fiscal year. The profit-sharing pool is shared among eligible employee groups in proportion to each group’s share of overall cost savings achieved through US Airways’ 2005 transformation plan; however, the represented pilots’ and flight attendants’ portions of the pool will not be less than 36% and 14.5%, respectively. An employee’s share of the pool is based on the ratio that the employee’s compensation bears to the respective employee group’s aggregate compensation. The Company recorded $49 million and $59 million for profit sharing in 2007 and 2006, respectively, which is recorded in salaries and related costs.


9.	Income taxes

The Company accounts for income taxes according to the provisions in SFAS No. 109, “Accounting for Income Taxes.” The Company files a consolidated federal income tax return with its wholly owned subsidiaries. The Company and its wholly owned subsidiaries allocate tax and tax items, such as net operating losses (“NOL”) and net tax credits, between members of the group based on their proportion of taxable income and other items. Accordingly, the Company’s tax expense is based on taxable income, taking into consideration allocated tax loss carryforwards/carrybacks and tax credit carryforwards.

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

The reorganization of the Company and merger with America West Holdings on September 27, 2005 resulted in a statutory “ownership change” as defined for purposes of Section 382 of the Internal Revenue Code. When a company undergoes such an ownership change, Section 382 limits the company’s future ability to utilize any NOL generated before the ownership change and certain subsequently recognized “built-in” losses and deductions, if any, existing as of the date of the ownership change. As a result of the merger, a significant portion of US Airways Group’s common stock was beneficially owned by a small number of equity investors. Due to sales by some of these investors and purchases by other investors since the merger, an “ownership change” occurred in February 2007 for US Airways Group, as that term is defined in Section 382 of the Internal Revenue Code. Accordingly, the Company’s annual use of its NOL that existed as of the date of the ownership change is limited. The Company’s ability to utilize any new NOL arising after the February 2007 ownership change is not affected.

As of December 31, 2007, the Company has approximately $761 million of gross NOL to reduce future federal taxable income. Of this amount, approximately $649 million is available to reduce federal taxable income in the calendar year 2008. The NOL expires during the years 2022 through 2025. The Company’s deferred tax asset, which includes the $649 million of NOL discussed above, has been subject to a full valuation allowance. The Company also has approximately $63 million of tax affected state NOL as of December 31, 2007.

In assessing the realizability of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The Company has recorded a valuation allowance against its net deferred tax asset. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income (including reversals of deferred tax liabilities) during the periods in which those temporary differences will become deductible.

Throughout 2006 and 2007, the Company utilized NOL that was generated prior to the merger. Utilization of the NOL results in a corresponding decrease in the valuation allowance. In accordance with SFAS No. 109, as this valuation allowance was established through the recognition of tax expense, the decrease in valuation allowance offsets the Company’s tax provision dollar for dollar. The Company recognized $7 million and $85 million of non-cash tax expense for the years ended December 31, 2007 and 2006, respectively, as the Company utilized NOL that was generated by US Airways prior to the merger. In accordance with SFAS No. 109, as this was acquired NOL, the decrease in the valuation allowance associated with this NOL reduced goodwill instead of the provision for income taxes. At December 31, 2007, the remaining federal valuation allowance is $32 million, all of which was established through the recognition of tax expense. In addition, the Company has $37 million and $4 million, respectively, of unrealized federal and state tax benefit related to amounts recorded in other comprehensive income. The remaining state valuation allowance is $45 million, of which $21 million was established through the recognition of tax expense and $24 million is associated with acquired NOL.

The Company is subject to Alternative Minimum Tax liability (“AMT”). In most cases, the recognition of AMT does not result in tax expense. However, since the Company’s net deferred tax asset is subject to a full valuation allowance, any liability for AMT is recorded as tax expense. The Company recorded AMT expense of $1 million and $10 million for the years ended December 31, 2007 and 2006, respectively. The Company also recorded $1 million and $2 million of state income tax related to certain states where NOL was not available or limited, for the years ended December 31, 2007 and 2006, respectively.

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

The components of the provision for income taxes are as follows (in millions). The tax expense for tax year 2005 was insignificant to the financial statements:


	Year Ended			Year Ended
	December 31,			December 31,
	2007			2006

Current provision:
Federal	$	1		$	10
State		1			2

Total current		2			12

Deferred provision:
Federal		(1	)		77
State		6			12

Total deferred		5			89

Provision for income taxes	$	7		$	101

Income tax expense (benefit) differs from amounts computed at the federal statutory income tax rate as follows (in millions):


	Year Ended December 31,
	2007			2006			2005

Income tax expense (benefit) at the federal statutory income tax rate	$	152		$	142		$	(188	)
Book expenses not deductible for tax purposes		13			(4	)		(4	)
State income tax expense, net of federal income tax expense (benefit)		7			10			—
Change in state deferred tax items		—			—			(15	)
Change in valuation allowance		(163	)		(67	)		218
Indefinite lived asset		—			—			(13	)
AMT provision		1			10			—
Other, net		(3	)		10			2

Total	$	7		$	101		$	—

Effective tax rate		1.5	%		24.9	%		—

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of December 31, 2007 and 2006 are as follows (in millions):


	2007			2006

Deferred tax assets:
Net operating loss carryforwards	$	282		$	364
Property, plant and equipment		22			21
Investments		19			3
Aircraft leases		—			11
Financing transactions		18			—
Employee benefits		347			297
Dividend Miles awards		153			205
Restructuring reserve		—			2
AMT credit carryforward		38			37
Other deferred tax assets		16			48
Valuation allowance		(77	)		(263	)

Net deferred tax assets		818			725

Deferred tax liabilities:
Depreciation and amortization		519			502
Sale and leaseback transactions and deferred rent		146			123
Leasing transactions		59			20
Financing transactions		—			41
Long-lived intangibles		31			31
Other deferred tax liabilities		84			30

Total deferred tax liabilities		839			747

Net deferred tax liabilities		21			22

Less: current deferred tax liabilities		—			—

Non-current deferred tax liabilities	$	21		$	22

The reason for significant differences between taxable and pretax book income primarily relates to depreciation on fixed assets, employee pension and postretirement benefit costs, employee-related accruals and leasing transactions.

The Company files tax returns in the U.S. federal jurisdiction, and in various states and foreign jurisdictions. As part of US Airways’ bankruptcy filings, the Internal Revenue Service and various state jurisdictions filed proofs of claim. Upon its emergence from bankruptcy, US Airways had established reserves for all IRS claims and state income tax claims as of the date of the bankruptcy filing on September 12, 2004. All creditors, including the IRS and state and local taxing jurisdictions, had to timely file a proof of claim to support any tax deficiencies per the tax authority records. On February 15, 2007, US Airways and the IRS agreed to settle the IRS’s outstanding proofs of claim for $7 million.

All federal and state tax filings for US Airways Group and its subsidiaries for fiscal years through December 31, 2006 have been timely filed. There are currently no federal or state audits in process. US Airways’ last federal income tax audit closed all tax years through December 31, 2002. AWA’s tax year 2002 was closed by operation of the statute of limitations expiring, and there were no extensions filed. The Company is not currently under examination.

100

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

The Company believes that its income tax filing positions and deductions related to tax periods subject to examination will be sustained upon audit and does not anticipate any adjustments that will result in a material adverse effect on the Company’s financial condition, results of operations, or cash flow. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to FIN 48.


10.	Commitments and contingencies


*(a)*	*Commitments to Purchase Flight Equipment and Maintenance Services*

Aircraft and Engine Purchase Commitments

In August 2006, AWA amended its A319/A320 Purchase Agreement with Airbus to add seven new Airbus A321 aircraft to an existing order for 30 A320 family aircraft. The amendment also converted one A320 aircraft and seven A319 aircraft to an order of eight A321 aircraft. Deliveries of the 15 new A321 aircraft will begin in 2008 and run through 2009. The new A321 aircraft will be configured to accommodate up to 187 passengers in two classes of service and will be used for replacement purposes or modest expansion should market conditions warrant. On July 30, 2007, AWA entered into an additional amendment to the A319/A320 Purchase Agreement adjusting the delivery schedule for the propulsion systems for two A321 aircraft.

In June 2007, US Airways announced that it had agreed to terms with Airbus for the acquisition of 92 aircraft, including 60 single-aisle A320 family aircraft and 32 wide-body aircraft, including 22 A350 Xtra Wide-Body (“XWB”) aircraft and ten A330 aircraft. On October 2, 2007, US Airways and Airbus executed the following definitive agreements for these aircraft:


	•	An Amended and Restated Airbus A320 Family Aircraft Purchase Agreement, which supersedes the AWA A319/A320 Purchase Agreement discussed above. The terms of the amended and restated purchase agreement encompass the purchase of 60 new narrow-body aircraft, including ten A319 aircraft, 40 A320 aircraft, and ten A321 aircraft, with conversion rights, in addition to the 37 aircraft from the previous A319/A320 Purchase Agreement. Deliveries of the aircraft under this agreement will run through 2012. US Airways expects to use the 60 A320 family aircraft to replace 60 older aircraft in the airline’s fleet. The amended and restated purchase agreement also provides US Airways with certain conversion rights, as well as purchase rights for the acquisition of additional A320 family aircraft, subject to certain terms and conditions. In addition, the amended and restated purchase agreement revises the delivery schedule for 15 A318 aircraft and provides US Airways with certain other rights with respect thereto. On January 31, 2008, US Airways canceled its order for 12 of the 15 A318 aircraft.

	•	An Amended and Restated Airbus A350 XWB Purchase Agreement, which supersedes the A350 Purchase Agreement dated September 27, 2005 between US Airways Group, US Airways, AWA and AVSA, S.A.R.L. (now Airbus S.A.S.). The new purchase agreement increases the number of firm order aircraft from 20 A350 aircraft to 18 A350-800 XWB aircraft and four A350-900 XWB aircraft, with the option to convert these aircraft to other A350 models, subject to certain terms and conditions. Deliveries for the 22 A350 XWB aircraft will begin in 2014 and extend through 2017. US Airways expects to use these aircraft for modest international expansion or replacement of existing older technology aircraft, as market conditions warrant. The Amended and Restated Airbus A350 XWB Purchase Agreement also gives US Airways purchase rights for the acquisition of additional A350 XWB aircraft, subject to certain terms and conditions.

	•	An Airbus A330 Purchase Agreement, which provides for the purchase by US Airways of ten firm order A330-200 aircraft with deliveries in 2009 and 2010. The Airbus A330 Purchase Agreement also provides US Airways with purchase rights for the acquisition of additional A330-200 aircraft, subject to certain terms and conditions.

101

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

On November 15, 2007, US Airways and Airbus entered into Amendment No. 1 to the A330 Purchase Agreement adding an additional five firm A330-200 aircraft to the Airbus A330 Purchase Agreement. These additional aircraft allow US Airways to continue its international growth plans of adding approximately three to four new markets per year between 2009 and 2011.

On June 13, 2006, US Airways Group and Embraer executed an Amended and Restated Purchase Agreement and an Amended and Restated Letter Agreement. In accordance with the terms of these agreements, the Company placed an initial firm order for 25 Embraer 190 aircraft and an additional order for 32 Embraer 190 aircraft. The progress and deposit payments totaling approximately $18 million previously paid by the Company to Embraer in accordance with the terms of the Purchase Agreement dated as of May 9, 2003, are being applied to these orders in accordance with the terms of the amended and restated agreements. In addition, the Company had the option to purchase up to 50 additional Embraer 190 aircraft and to convert certain of the Embraer 190 aircraft to Embraer 170, Embraer 175 or Embraer 195 aircraft, subject to availability and upon agreed notice. Embraer has agreed to provide financing for certain of the aircraft. On July 21, 2006, the Company assigned 30 of the purchase options to Republic Airlines, Inc. On January 12, 2007, the Company assigned eight additional purchase options to Republic Airlines. The Company purchased and took delivery of two Embraer 190 aircraft in the fourth quarter of 2006 and nine Embraer 190 aircraft throughout 2007. The Company expects to take delivery of 14 Embraer 190 aircraft in 2008. In June and August 2007, the Company amended the Amended and Restated Purchase Agreement to revise the delivery schedule for the additional 32 Embraer 190 aircraft. On June 6, 2007, the Company entered into another amendment to the Amended and Restated Purchase Agreement whereby Embraer granted the Company an additional 140 purchase options. The Company further amended the Amended and Restated Letter Agreement in August 2007 to revise previous provisions concerning price escalation limits and assignment of purchase rights to regional operators.

US Airways Group has also agreed to terms with Rolls-Royce to acquire Trent XWB engines to power the 22 Airbus A350 XWB aircraft along with a TotalCare long-term engine services agreement. The engine order and the services agreement are contingent upon execution of definitive documentation.

Under all of the aircraft and engine purchase agreements discussed above, US Airways’ total future commitments to Embraer, Airbus and IAE are expected to be approximately $7.5 billion through 2017 as follows: $798 million in 2008, $1.27 billion in 2009, $1.31 billion in 2010, $1.28 billion in 2011, $774 million in 2012 and $2.07 billion thereafter, which includes predelivery deposits and payments. US Airways expects to fund payments through future financings.

Engine Maintenance Commitments

In connection with the merger, US Airways and AWA restructured their rate per engine hour agreements with General Electric Engine Services for overhaul maintenance services. Under the restructured agreements, the minimum monthly payment on account of accrued engine flight hours for both of the agreements together will equal

102

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

$3 million as long as both agreements remain in effect through October 2009. In September 2007, all engines covered under the AWA agreement were transferred to the US Airways agreement, and the AWA agreement was terminated. The minimum monthly payment of $3 million remains unchanged.


*(b)*	*Leases*

The Company leases certain aircraft, engines, and ground equipment, in addition to the majority of its ground facilities and terminal space. As of December 31, 2007, the Company had 364 aircraft under operating leases, with remaining terms ranging from two months to approximately 16 years. Ground facilities include executive offices, maintenance facilities and ticket and administrative offices. Public airports are utilized for flight operations under lease arrangements with the municipalities or agencies owning or controlling such airports. Substantially all leases provide that the lessee must pay taxes, maintenance, insurance and certain other operating expenses applicable to the leased property. Some leases also include renewal and purchase options.

As of December 31, 2007, obligations under noncancellable operating leases for future minimum lease payments were as follows (in millions):


2008	$	1,088
2009		997
2010		916
2011		827
2012		797
Thereafter		4,081

Total minimum lease payments	$	8,706

For the years ended December 31, 2007, 2006 and 2005, rental expense under operating leases, excluding landing fees, was $1.26 billion, $1.24 billion and $632 million, respectively.


*(c)*	*Off-balance Sheet Arrangements*

US Airways has obligations with respect to $1.85 billion in principal amount of pass through trust certificates, also known as “Enhanced Equipment Trust Certificates” or EETCs, issued by pass through trusts to cover the financing of 19 owned aircraft, 116 leased aircraft and three leased engines. These trusts are off-balance sheet entities, the primary purpose of which is to finance the acquisition of aircraft. Rather than finance each aircraft separately when such aircraft is purchased or delivered, these trusts allowed the Company to raise the financing for several aircraft at one time and place such funds in escrow pending the purchase or delivery of the relevant aircraft. The trusts were also structured to provide for certain credit enhancements, such as liquidity facilities to cover certain interest payments, that reduce the risks to the purchasers of the trust certificates and, as a result, reduce the cost of aircraft financing to the Company.

Each trust covered a set amount of aircraft scheduled to be delivered within a specific period of time. At the time of each covered aircraft financing, the relevant trust used the funds in escrow to purchase equipment notes relating to the financed aircraft. The equipment notes were issued, at US Airways’ or AWA’s election, either by US Airways or AWA in connection with a mortgage financing of the aircraft or by a separate owner trust in connection with a leveraged lease financing of the aircraft. In the case of a leveraged lease financing, the owner trust then leased the aircraft to US Airways or AWA. In both cases, the equipment notes are secured by a security interest in the aircraft. As part of the transfer of substantially all of AWA’s assets and liabilities to US Airways in connection with the combination of all airline operations under one FAA operating certificate on September 26, 2007, all of AWA’s obligations with respect to the pass through trusts and the leases of related aircraft and engines were transferred to US Airways and are now direct obligations of US Airways. The pass through trust certificates are not direct obligations of, nor are they guaranteed by, the Company, US Airways or AWA. However, in the case of

103

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

mortgage financings, the equipment notes issued to the trusts are direct obligations of US Airways. As of December 31, 2007, $576 million associated with these mortgage financings is reflected as debt in the accompanying balance sheet.

Neither the Company nor US Airways guarantee or participate in any way in the residual value of the leased aircraft. All leased aircraft financed by these trusts are structured as leveraged leased financings, which are not reflected as debt on the balance sheet of either the Company or US Airways. US Airways does not provide residual value guarantees under these lease arrangements. Each lease contains a purchase option that allows US Airways to purchase the aircraft at a fixed price, which at the inception of the lease approximated the aircraft’s expected fair market value at the option date, near the end of the lease term.

These leasing entities meet the criteria for variable interest entities. However, they do not meet the consolidation criteria under FIN 46(R) “Consolidation of Variable Interest Entities — An Interpretation of ARB No. 51” because the Company is not the primary beneficiary under these arrangements.


*(d)*	*Regional Jet Capacity Purchase Agreements*

The Company has entered into capacity purchase agreements with certain regional jet operators. The capacity purchase agreements provide that all revenues (passenger, mail and freight) go to the Company. In return, the Company agrees to pay predetermined fees to the regional airlines for operating an agreed upon number of aircraft, without regard to the number of passengers onboard. In addition, these agreements provide that certain variable costs, such as airport landing fees, will be reimbursed 100% by the Company. The Company controls marketing, scheduling, ticketing, pricing and seat inventories. The regional jet capacity purchase agreements have expirations from 2012 to 2020 and provide for optional extensions at the Company’s discretion. The future minimum noncancellable commitments under the regional jet capacity purchase agreements are $1.06 billion in 2008, $1.11 billion in 2009, $1.13 billion in 2010, $1.16 billion in 2011, $1.02 billion in 2012 and $4.68 billion thereafter.

Certain entities with which the Company has capacity purchase agreements are considered variable interest entities under FIN 46(R). In connection with its restructuring and emergence from bankruptcy, US Airways contracted with Air Wisconsin, a related party, and Republic to purchase a significant portion of these companies’ regional jet capacity for a period of ten years. The Company has determined that it is not the primary beneficiary of these variable interest entities, based on cash flow analyses. Additionally, the Company has analyzed the arrangements with other carriers with which the Company has long-term capacity purchase agreements and has concluded it is not required to consolidate any of the entities.


*(e)*	*Legal Proceedings*

104

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

that the child does not occupy his or her own seat but travels instead on the lap of an accompanying adult. The named plaintiffs allege that he and his wife purchased international tickets through the website for themselves and a lap child. Plaintiffs allege that after initially receiving an electronic confirmation that there would be no charge for the lap child, they were later charged an additional $242.50. The complaint alleges a class period from February 9, 2002 to the present. The Company was served with an amended complaint in early March 2007 that continued the same allegations, but dropped plaintiff’s wife as a class representative. On May 1, 2007, US Airways filed an Answer to the complaint and also asked the court for a “complex case” designation, which the court granted on May 11, 2007. On September 25, 2007, the parties reached a settlement for an immaterial amount. That agreement must be approved by the court in order to become final.


*(f)*	*Guarantees and Indemnifications*

The Company guarantees the payment of principal and interest on certain special facility revenue bonds issued by municipalities to build or improve certain airport and maintenance facilities which are leased to US Airways. Under such leases, US Airways is required to make rental payments through 2023, sufficient to pay maturing principal and interest payments on the related bonds. As of December 31, 2007, the principal amount outstanding on these bonds was $93 million. Remaining lease payments guaranteeing the principal and interest on these bonds will be $154 million.

The Company enters into real estate leases in substantially all cities that it serves. It is common in such commercial lease transactions for the Company as the lessee to agree to indemnify the lessor and other related third parties for tort liabilities that arise out of or relate to the use or occupancy of the leased premises. In some cases, this indemnity extends to related liabilities arising from the negligence of the indemnified parties, but usually excludes any liabilities caused by their gross negligence or willful misconduct. With respect to certain special facility bonds, the Company agreed to indemnify the municipalities for any claims arising out of the issuance and sale of the bonds and use or occupancy of the concourses financed by these bonds. Additionally, the Company typically indemnifies such parties for any environmental liability that arises out of or relates to its use or occupancy of the leased premises.

The Company is the lessee under many aircraft financing agreements (including leveraged lease financings of aircraft under pass through trusts) and real estate leases. It is common in such transactions for the Company as the lessee to agree to indemnify the lessor and other related third parties for the manufacture, design, ownership, financing, use, operation and maintenance of the aircraft, and for tort liabilities that arise out of or relate to the Company’s use or occupancy of the leased asset. In some cases, this indemnity extends to related liabilities arising from the negligence of the indemnified parties, but usually excludes any liabilities caused by their gross negligence or willful misconduct. In aircraft financing agreements structured as leverage leases, the Company typically indemnifies the lessor with respect to adverse changes in U.S. tax laws.

The Company reviewed its long-term operating leases at a number of airports, including leases where the Company is also the guarantor of the underlying debt. Such leases are typically with municipalities or other governmental entities. The arrangements are not required to be consolidated based on the provisions of FIN 46(R).


*(g)*	*Concentration of Credit Risks*

The Company invests available cash in money market securities of various banks, commercial paper and asset-backed securities of various financial institutions, other companies with high credit ratings and securities backed by the U.S. government.

As of December 31, 2007, most of the Company’s receivables related to tickets sold to individual passengers through the use of major credit cards or to tickets sold by other airlines and used by passengers on US Airways or its regional airline affiliates. These receivables are short-term, mostly being settled within seven days after sale. Bad debt losses, which have been minimal in the past, have been considered in establishing allowances for doubtful accounts. The Company does not believe it is subject to any significant concentration of credit risk.

105

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)


11.	Other comprehensive income (loss)

The Company’s other comprehensive income (loss) for the years ended December 31, 2007, 2006 and 2005 consist of the following (in millions):


	Year Ended December 31,
	2007			2006		2005

Net income (loss)	$	427		$	304	$	(537	)
Unrealized losses on available for sale securities		(48	)		—		—
Adjustment to initially apply FASB Statement No. 158, net of tax		—			3		—
Actuarial gains associated with pension and other postretirement benefits		55			—		—

Total comprehensive income (loss)	$	434		$	307	$	(537	)

The components of accumulated other comprehensive income were as follows as of December 31, 2007 and 2006 (in millions):


	December 31,			December 31,
	2007			2006

Accumulated net unrealized losses on available for sale securities	$	(48	)	$	—
Adjustment to initially apply FASB Statement No. 158, net of tax		3			3
Actuarial gains associated with pension and other postretirement benefits		55			—

Accumulated other comprehensive income	$	10		$	3

The accumulated other comprehensive income is not presented net of tax as any tax effects resulting from the items above have been immediately offset by the recording of a valuation allowance through the same financial statement caption.

106

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)


12.	Supplemental cash flow information

Supplemental disclosure of cash flow information and non-cash investing and financing activities were as follows (in millions):


	Year Ended December 31,
	2007		2006		2005

Non-cash transactions:
Unrealized loss on available for sale securities	$	48	$	—	$	—
Reclassification of investments in debt securities to short-term		—		—		30
Fair value of assets acquired in business combination		—		—		5,568
Liabilities assumed in business combination, net of cash acquired		—		—		5,451
Conversion of 7.25% notes into common stock of US Airways Group		—		—		87
Conversion of 7% convertible notes into common stock of US Airways Group		—		70		—
Conversion of 7.5% convertible senior notes, net of discount of $17 million to common stock		—		95		—
Notes payable issued for equipment purchase deposits		—		—		9
Notes payable canceled under the aircraft purchase agreement		—		4		21
Equipment purchases financed by capital lease		—		3		—
Cash transactions:
Interest paid, net of amounts capitalized		248		264		88
Income taxes paid		4		12		—


13.	Related party transactions

Richard A. Bartlett, a member of the board of directors of US Airways Group, is a greater than 10% minority owner and director of Eastshore. In February 2005, Eastshore entered into an agreement with US Airways Group to provide a $125 million financing commitment to provide equity funding for a plan of reorganization, in the form of a debtor-in-possession term loan. Under the terms of US Airways Group’s plan of reorganization, Eastshore received a cash payment in the amount of all accrued interest on the loan, and the principal amount of $125 million was satisfied by the delivery of 8,333,333 shares of US Airways Group common stock, representing a price of $15.00 per share. As of December 31, 2007, Eastshore has sold all of its investment in US Airways Group. Mr. Bartlett is also a greater than 10% owner of Air Wisconsin. US Airways and Air Wisconsin also entered into a regional jet services agreement under which Air Wisconsin may, but is not required to, provide regional jet service under a US Airways Express code share arrangement. On April 8, 2005, Air Wisconsin notified US Airways Group of its intention to deploy 70 regional jets, the maximum number provided for in the agreement, into the US Airways Express network. The amount paid to Air Wisconsin in 2007 was approximately $320 million.

Robert A. Milton, a member of the board of directors of US Airways Group until April 19, 2006, is the Chairman, President and Chief Executive Officer of ACE. ACE purchased 5,000,000 shares of US Airways Group common stock at a purchase price of $15.00 per share, for a total investment of $75 million. ACE or its subsidiaries entered into commercial agreements with US Airways Group and America West Holdings for various services including maintenance and airport handling. The amount paid in 2005 for these commercial agreements was approximately $2 million. As of December 31, 2006, ACE has sold all of its investment in US Airways Group.

Edward L. Shapiro, a member of the board of directors of US Airways Group, is a Vice President and partner of PAR Capital Management, the general partner of PAR. PAR received 10,768,485 shares of US Airways Group common stock, including shares received pursuant to Participation Agreements with America West Holdings, for a

107

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

total investment of $160 million. As of December 31, 2007, PAR has sold substantially all of its investment in US Airways Group.

Richard P. Schifter, a member of the board of directors of US Airways Group until November 15, 2006, is a partner of Texas Pacific Group, which was a controlling stockholder of America West Holdings prior to the completion of the merger. An affiliate of Texas Pacific Group received $6.4 million as an advisory fee for providing financial advisory services in 2005, in connection with the merger and in contribution for and reimbursement for certain expenses incurred by Texas Pacific Group and its affiliates in connection with the merger.


14.	Merger accounting and pro forma information


*(a)*	*Purchase Price Allocation*

The value of the merger consideration was determined based upon America West Holdings’ traded market price per share due to the fact that US Airways Group was operating under bankruptcy protection prior to the merger. The outstanding shares in America West Holdings at September 27, 2005 were valued at $4.82 per share, resulting in an aggregate value assigned to the shares of $175 million. The $4.82 per share value was based on the five-day average share price of America West Holdings common stock, with May 19, 2005, the merger announcement date, as the midpoint. The outstanding shares of America West Holdings Class A and Class B common stock were converted into shares of US Airways Group common stock at a conversion rate of 0.5362 and 0.4125, respectively. Certain unsecured creditors of US Airways Group have been or will be issued an aggregate of approximately 8.2 million shares of US Airways Group common stock in settlement of their claims, including stock issued to the PBGC and ALPA. The fair value of that common stock valued at an equivalent price based on the $4.82 value of the America West Holdings stock is $96 million. America West Holdings incurred $21 million of direct acquisition costs in connection with the merger. The following table summarizes the components of the purchase price (in millions):


Fair value of common shares issued to US Airways Group’s unsecured creditors	$	96
Estimated merger costs		21

Total purchase price	$	117

The net assets acquired and liabilities assumed in connection with the merger and initial allocation of purchase price is as follows (in millions):


Current assets	$	1,098
Property and equipment		2,367
Other intangible assets		592
Other assets		779
Goodwill		732
Liabilities assumed		(5,451	)

Total purchase price	$	117

In connection with US Airways Group’s emergence from bankruptcy, significant prepetition liabilities were discharged. The surviving liabilities and the assets acquired in the merger are shown at estimated fair value. The Company used an outside appraisal firm to assist in determining the fair value of long-lived tangible and identifiable intangible assets. Significant assets and liabilities adjusted to fair market value include expendable spare parts and supplies, property and equipment, airport take-off and landing slots, aircraft leases, deferred revenue and continuing debt obligations. In connection with the merger, primarily due to the relocation of the corporate headquarters from Arlington, Virginia to Tempe, Arizona, US Airways accrued in purchase accounting $24 million of severance and benefits related to planned reductions in force for its non-union employees. The Company expects to incur

108

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

additional severance and benefits for reductions in force related to the merger; however, due to requirements for continued service during the integration period, these severance and benefits will not be an adjustment to the purchase price allocation but will be expensed in future periods. See Note 5 for discussion of amounts expensed for severance and benefits in the fourth quarter of 2005 and 2006.

Adjustments made in the year ended December 31, 2007 and 2006 to previously recorded fair values are as follows (in millions):


Goodwill reported as of September 27, 2005	$	732
Utilization of pre-merger NOL		(85	)
Materials and supplies, net		40
Accounts receivable		(22	)
Other assets		(22	)
Other accrued expenses		(12	)
Property and equipment		6
Long-term debt		(6	)
Accrued compensation and vacation		(4	)
Non current employee benefits and other		4
Accrued taxes		(2	)
Accounts payable		(1	)
Other intangibles, net		1

Goodwill reported as of December 31, 2006		629

Utilization of pre-merger NOL		7

Goodwill reported as of December 31, 2007	$	622

The 2007 adjustment to goodwill is related to the utilization of pre-merger NOL generated by US Airways prior to the merger. In accordance with SFAS No. 109, the associated decrease in the valuation allowance reduced goodwill. Adjustments in 2006 resulted as further refinement of information became available on assets and liabilities that existed as of the acquisition date. In accordance with SFAS 141, the allocation of equity values is subject to adjustment for up to one year after the date of acquisition when additional information on asset and liability valuations becomes available. Significant adjustments included an adjustment for the utilization of pre-merger NOL generated by US Airways prior to the merger; an adjustment to accounts receivable to reflect credits due from Republic related to pre-merger aircraft lease assumptions; adjustments to materials and supplies for the refinement of fair market value information available at the time of the acquisition; adjustments to other assets for the application of pre-merger airport operating expense and rent credits and a fair market value adjustment to an investment; and adjustments to other accrued expenses to refine estimates for remaining pending bankruptcy claim matters.


*(b)*	*Pro Forma Information*

The following information is presented assuming the merger and the conversion of America West Holdings’ Class A and Class B common stock had been completed as of January 1, 2005. The pro forma consolidated results of operations include purchase accounting adjustments, such as fair market value adjustments of the assets and liabilities of US Airways Group, adjustments to reflect the disposition of prepetition liabilities upon US Airways Group’s emergence from bankruptcy, and adjustments to conform certain accounting policies of US Airways Group and America West Holdings, together with related income tax effects. Certain other transactions critical to US Airways Group’s emergence from bankruptcy and the completion of the merger that became effective either before, at or immediately following the merger have also been reflected in the pro forma financial information.

109

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

These transactions include the new equity investments, the comprehensive agreements with GECC, the comprehensive agreement with Airbus, the restructuring of the ATSB loans, and the restructuring of the credit card partner and credit card processing agreements. The unaudited pro forma information presented below is not necessarily indicative of the results of operations that would have occurred had the purchase been made at the beginning of the period presented or of future results of the combined operations (in millions, except share and per share amounts).


	Year Ended
	December 31,
	2005

Operating revenues	$	10,440
Operating expenses		10,799

Operating loss		(359	)
Net loss	$	(891	)
Basic and fully diluted loss per share	$	(12.59	)
Basic and diluted shares (in thousands)		70,689


15.	Operating segments and related disclosures

The Company is managed as a single business unit that provides air transportation for passengers and cargo. This allows it to benefit from an integrated revenue pricing and route network that includes US Airways, Piedmont, PSA and third-party carriers that fly under capacity purchase agreements as part of the Company’s Express operations. The flight equipment of all these carriers is combined to form one fleet that is deployed through a single route scheduling system. When making resource allocation decisions, the chief operating decision maker evaluates flight profitability data, which considers aircraft type and route economics, but gives no weight to the financial impact of the resource allocation decision on an individual carrier basis. The objective in making resource allocation decisions is to maximize consolidated financial results, not the individual results of US Airways, Piedmont and PSA.

Information concerning operating revenues in principal geographic areas is as follows (in millions):


	Year Ended		Year Ended		Year Ended
	December 31,		December 31,		December 31,
	2007		2006		2005

United States	$	9,582	$	9,397	$	4,567
Foreign		2,118		2,160		502

Total	$	11,700	$	11,557	$	5,069

The Company attributes operating revenues by geographic region based upon the origin and destination of each flight segment. The Company’s tangible assets consist primarily of flight equipment, which are mobile across geographic markets and, therefore, have not been allocated.


16.	Stockholders’ equity


*(a)*	*Common Stock*

Holders of common stock are entitled to one vote per share on all matters submitted to a vote of common shareholders, except that voting rights of non-U.S. citizens are limited to the extent that the shares of common stock held by such non-U.S. persons would otherwise be entitled to more than 24.9% of the aggregate votes of all outstanding equity securities of US Airways Group. Holders of common stock have no right to cumulate their votes. Holders of common stock participate equally as to any dividends or distributions on the common stock.

110

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

On September 30, 2005, US Airways Group completed a public offering of common stock in which it issued 9,775,000 shares of its common stock at a price of $19.30 per share. The Company received net proceeds of $180 million from the offering.


*(b)*	*Warrants*

As compensation for various elements of AWA’s financial restructuring completed in January 2002, America West Holdings issued a warrant to purchase 18.8 million shares of its Class B common stock to the ATSB and additional warrants to purchase 3.8 million shares of its Class B common stock to other loan participants, in each case at an exercise price of $3 per share and with a term of ten years. For accounting purposes, the warrants were valued at $35.4 million, or $1.57 per share, using the Black-Scholes pricing model with the following assumptions: expected dividend yield of 0.0%, risk-free interest rate of 4.8%, volatility of 44.9% and an expected life of ten years. The warrants were recorded by AWA as a non-cash capital contribution in the accompanying consolidated statements of stockholders’ equity and comprehensive income and classified as other assets, net in the accompanying consolidated balance sheets. The warrants were amortized over the life of the AWA ATSB Loan as an increase to interest expense. In the first quarter of 2004, approximately 220,000 warrants were exercised at $3 per share. In the third quarter of 2003, approximately 2.6 million warrants were exercised at $3 per share. These warrant exercises were cashless transactions resulting in the issuance of approximately 1.6 million shares of America West Holdings’ Class B common stock.

In the fourth quarter of 2005, US Airways Group announced an agreement to repurchase all of the replacement warrants issued to the ATSB in connection with the merger with America West Holdings. US Airways Group repurchased approximately 7.7 million warrants to purchase shares of common stock that had an exercise price of $7.27 per share. The total purchase price for the warrants was $116 million, which approximated their fair value at the purchase date. In connection with this repurchase, AWA recorded $8 million of nonoperating expense. This amount represented the unamortized balance recorded in other assets, which was being amortized over the life of the AWA ATSB Loan as an increase to interest expense.

In the second quarter of 2006, US Airways Group received $2.8 million of proceeds related to the issuance of 386,925 shares of common stock that were issued pursuant to a warrant exercise. As of December 31, 2007, there were no warrants outstanding.


17.	Stock-based compensation

Prior to January 1, 2006, the Company accounted for stock-based compensation plans in accordance with APB 25 and related interpretations. Effective January 1, 2006, the Company adopted SFAS No. 123R, using the modified prospective transition method. Under the modified prospective transition method, compensation cost is recognized in the financial statements beginning with the effective date based on the requirements of SFAS 123R for all share-based payments granted after that date, and based on the requirements of SFAS No. 123 for all unvested awards granted prior to the effective date of SFAS 123R. Results for prior periods are not restated using the modified prospective transition method.

Substantially all of America West Holdings and AWA employee stock options outstanding at the time of the merger were fully vested in accordance with the change of control provisions of America West Holdings’ stock option plans and were converted into options of US Airways Group. Existing stock options of US Airways Group outstanding prior to the merger on September 27, 2005 were canceled as part of the plan of reorganization. Accordingly, as of January 1, 2006, only unvested stock options, stock appreciation rights and restricted stock units granted subsequent to and in connection with the merger are subject to the transition provisions of SFAS 123R. As part of the plan of reorganization, the Bankruptcy Court approved a new equity incentive plan, referred to as the 2005 Incentive Equity Plan (the “2005 Incentive Plan”). The 2005 Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, stock purchase awards, stock bonus awards, stock unit awards, and other forms of equity compensation, collectively referred to as stock awards, as well as

111

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

performance-based cash awards. Incentive stock options granted under the 2005 Incentive Plan are intended to qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended. Nonstatutory stock options granted under the 2005 Incentive Plan are not intended to qualify as incentive stock options under the Internal Revenue Code.

At the time of adoption, a maximum of 12.5% of the fully-diluted shares (as of the completion of the merger) of US Airways Group common stock was available for issuance under the 2005 Incentive Plan, totaling 10,969,191 shares. Any or all of these shares may be granted pursuant to incentive stock options. Shares of US Airways Group common stock issued under the 2005 Incentive Plan may be unissued shares or reacquired shares, purchased on the open market or otherwise. At December 31, 2007, approximately 4 million shares are available for grant under the 2005 Equity Incentive Plan.

The number of shares of US Airways Group common stock available for issuance under the 2005 Incentive Plan is reduced by (i) one share for each share of stock issued pursuant to a stock option or a stock appreciation right, and (ii) three shares for each share of stock issued pursuant to a stock purchase award, stock bonus award, stock unit award, and other full-value types of stock awards. Stock awards that are terminated, forfeited or repurchased result in an increase in the share reserve of the 2005 Incentive Plan corresponding to the reduction originally made in respect of the award.

If a stock award granted under the 2005 Incentive Plan or AWA’s previous incentive plan (the “2002 Incentive Plan”) expires or otherwise terminates without being exercised in full, or if any shares of US Airways Group common stock issued pursuant to a stock award under the 2005 Incentive Plan are forfeited to or repurchased by US Airways Group, including, but not limited to, any repurchase or forfeiture caused by the failure to meet a contingency or condition required for the vesting of such shares, then the shares of US Airways Group common stock not issued under that stock award, or forfeited to or repurchased by US Airways Group, will revert to and again become available for issuance under the 2005 Incentive Plan. If any shares subject to a stock award are not delivered to a participant because those shares are withheld for the payment of taxes or the stock award is exercised through a reduction of shares subject to the stock award ( i.e ., “net exercised”), the number of shares that are not delivered will remain available for issuance under the 2005 Incentive Plan. If the exercise price of any stock award is satisfied by tendering shares of US Airways Group common stock held by the participant, then the number of shares so tendered (whether by actual tender or by attestation of ownership) will remain available for issuance under the 2005 Incentive Plan. Shares of US Airways Group common stock subject to stock awards issued in substitution for previously outstanding awards assumed in connection with a merger, consolidation or similar transaction will not reduce the number of shares available for issuance under the 2005 Incentive Plan.

The Company’s net income for the years ended December 31, 2007 and 2006 includes $32 million and $34 million, respectively, of compensation costs related to share-based payments. Compensation expense of $4 million, calculated using the provisions of APB 25, was recorded for stock appreciation rights and restricted stock units granted to employees of US Airways Group in the fourth quarter of 2005. Upon adoption of SFAS 123R, the Company recorded a cumulative benefit from the accounting change of $1 million, which reflects the impact of estimating future forfeitures for previously recognized compensation expense. Pursuant to APB 25, stock compensation expense was not reduced for estimated future forfeitures, but instead was reversed upon actual forfeiture. No income tax effect related to share-based payments or cumulative effect has been recorded as the effects have been immediately offset by the recording of a valuation allowance through the same financial statement caption.

Restricted Stock Unit Awards — As of December 31, 2007, the Company has outstanding restricted stock unit awards (“RSUs”) with service conditions (vesting periods) and RSUs with service and performance conditions (which performance condition of obtaining a combined operating certificate for AWA and US Airways was met on September 26, 2007). SFAS 123R requires that the grant-date fair value of RSUs be equal to the market price of the share on the date of grant if vesting is based on a service or a performance condition. The grant-date fair value of RSU awards that are subject to both a service and a performance condition are being expensed over the vesting

112

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

period, as the performance condition has been met. Vesting periods for RSU awards range from two to four years. RSUs are classified as equity awards.

Restricted stock unit award activity for the years ending December 31, 2007, 2006 and 2005 is as follows (shares in thousands):


				Weighted
	Number of			Average Grant-
2005 Equity Incentive Plan	Shares			Date Fair Value

Nonvested balance at December 31, 2004		—		$	—
Granted		696			26.15
Vested and released		—			—
Forfeited		(9	)		24.68

Nonvested balance at December 31, 2005		687		$	26.17
Granted		254			38.55
Vested and released		(75	)		42.38
Forfeited		(52	)		24.85

Nonvested balances at December 31, 2006		814		$	28.63
Granted		242			41.51
Vested and released		(446	)		29.85
Forfeited		(18	)		31.26

Nonvested balance at December 31, 2007		592		$	32.91

As of December 31, 2007, there was $11 million of total unrecognized compensation costs related to RSUs. These costs are expected to be recognized over a weighted average period of 1.2 years. The total fair value of RSUs vested during 2007 and 2006 was $14 million and $3 million, respectively. No RSUs vested during 2005. The tax benefit realized from RSUs vesting during the years ended December 31, 2007 and 2006 was $5 million and $1 million, respectively. The Company recognized no tax expense for RSUs vested and released with book expense exceeding the tax deduction.

Stock Options and Stock Appreciation Rights — Stock options and stock appreciation rights (“SARs”) are granted with an exercise price equal to the common stock’s fair market value at the date of each grant, generally become exercisable over a three to four year period and expire if unexercised at the end of ten years. Stock options and SARs are classified as equity awards. The exercise of SARs will be settled with the issuance of shares of the Company’s common stock.

113

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

Stock option and SARs activity for the years ending December 31, 2007, 2006 and 2005 is as follows (stock options and SARs in thousands):


						Weighted
						Average
	Stock			Weighted		Remaining
	Options			Average		Contractual Term		Aggregate
	and SARs			Exercise Price		(years)		Intrinsic Value
								(In millions)

1994 Incentive Equity Plan
Balance at December 31, 2004		1,672		$	35.63
Granted		—			—
Exercised		(167	)		18.28
Forfeited		—			—
Expired		(238	)		33.74

Balance at December 31, 2005		1,267		$	38.28
Granted		—			—
Exercised		(455	)		23.64
Forfeited		—			—
Expired		(62	)		50.93

Balance at December 31, 2006		750		$	46.10
Granted		—			—
Exercised		(30	)		40.93
Forfeited		—			—
Expired		(75	)		46.38

Balance at December 31, 2007		645		$	46.30		1.43	$	—
Vested or expected to vest at December 31, 2007		645		$	46.30		1.43	$	—
Exercisable at December 31, 2007		645		$	46.30		1.43	$	—
2002 Incentive Equity Plan
Balance at December 31, 2004		2,094		$	15.80
Granted		806			14.52
Exercised		(786	)		11.37
Forfeited		(56	)		15.71
Expired		(10	)		19.85

Balance at December 31, 2005		2,048		$	16.98
Granted		—			—
Exercised		(1,250	)		16.12
Forfeited		—			—
Expired		—			—

Balance at December 31, 2006		798		$	18.33
Granted		—			—
Exercised		(36	)		14.36
Forfeited		—			—
Expired		—			—

Balance at December 31, 2007		762		$	18.52		5.95	$	1
Vested or expected to vest at December 31, 2007		754		$	18.49		5.85	$	1
Exercisable at December 31, 2007		659		$	18.13		5.70	$	1

114

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)


						Weighted
						Average
	Stock			Weighted		Remaining
	Options			Average		Contractual Term		Aggregate
	and SARs			Exercise Price		(years)		Intrinsic Value
								(In millions)

2005 Equity Incentive Plan
Balance at December 31, 2004		—			—
Granted		2,034		$	23.08
Exercised		—			—
Forfeited		(61	)		20.64
Expired		—			—

Balance at December 31, 2005		1,973		$	23.15
Granted		1,310			40.30
Exercised		(701	)		24.49
Forfeited		(87	)		30.34
Expired		—			—

Balance at December 31, 2006		2,495		$	31.53
Granted		1,123			42.23
Exercised		(92	)		29.74
Forfeited		(93	)		35.00
Expired		(63	)		37.48

Balance at December 31, 2007		3,370		$	34.96		8.48	$	—
Vested or expected to vest at December 31, 2007		3,206		$	34.82		8.45	$	—
Exercisable at December 31, 2007		1,094		$	30.00		8.01	$	—

The fair value of stock options and SARs is determined at the grant date using a Black-Scholes option pricing model, which requires several assumptions. The risk-free interest rate is based on the U.S. Treasury yield curve in effect for the expected term of the stock option or SAR at the time of grant. The dividend yield is assumed to be zero since the Company does not pay dividends and has no current plans to do so in the future. The volatility is based on the historical volatility of the Company’s common stock over a time period equal to the expected term of the stock option or SAR. The expected life of stock options and SARs is based on the historical experience of the Company.

The per share weighted-average grant-date fair value of stock options and SARs granted and the weighted-average assumptions used for the year ended December 31, 2007, 2006 and 2005 were as follows:


	Year Ended
	December 31,			December 31,			December 31,
	2007			2006			2005

Weighted average fair value	$	16.57		$	16.77		$	8.50
Risk free interest rate		4.5	%		4.8	%		3.4	%
Expected dividend yield		—			—			—
Expected life		3.0 years			2.9 years			4.0 years
Volatility		52	%		57	%		54	%

As of December 31, 2007, there were $26 million of total unrecognized compensation costs related to stock options and SARs. These costs are expected to be recognized over a weighted average period of 1.2 years.

The total intrinsic value of stock options and SARs exercised during the years ended December 31, 2007, 2006, and 2005 was $4 million, $68 million, and $13 million, respectively. Cash received from stock option and SAR exercises during the years ended December 31, 2007 and 2006 totaled $13 million and $51 million, respectively. The tax benefit realized from stock options and SARs exercised during the years ended December 31, 2007 and 2006 was $2 million and $25 million, respectively. The Company recognized no tax expense for exercises with book expense exceeding the tax deduction for 2007 and $0.2 million was recognized for 2006.

115

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

Agreements with ALPA — US Airways Group and US Airways have a letter of agreement with the ALPA that provides that US Airways’ pilots designated by ALPA receive stock options to purchase 1.1 million shares of the Company’s common stock. The first tranche of 500,000 stock options was granted on January 31, 2006 with an exercise price of $33.65. The second tranche of 300,000 stock options was granted on January 31, 2007 with an exercise price of $56.90. The third and final tranche of 300,000 stock options was granted on January 31, 2008 with an exercise price of $12.29. The stock options granted to ALPA pilots do not reduce the shares available for grant under any equity incentive plan. Any of these ALPA stock options that are forfeited or that expire without being exercised will not become available for grant under any of the Company’s plans.

The per share fair value of the ALPA pilot stock options and assumptions used for the January 31, 2007 and 2006 grants were as follows:


	January 31,			January 31,
	2007			2006

Per share fair value	$	18.02		$	17.11
Risk free interest rate		4.9	%		4.4	%
Expected dividend yield		—			—
Contractual term		2.0 years			5.0 years
Volatility		53	%		69.8	%

As of December 31, 2007, there were no unrecognized compensation costs related to stock options granted to ALPA pilots as the stock options were fully vested on the grant date. There were 25,029 and 315,390 stock options exercised during 2007 and 2006, respectively, pursuant to this agreement. The total intrinsic value of options exercised during 2007 and 2006 was $0.6 million and $5 million, respectively. Cash received from stock options exercised during the years ended December 31, 2007 and 2006 totaled $1 million and $12 million, respectively. The tax benefit realized from stock options exercised during the years ended December 31, 2007 and 2006 was $0.2 million and $2 million, respectively. The Company recognized no tax expense for exercises with book expense exceeding the tax deduction for 2007 and $0.5 million was recognized for 2006.


18.	Valuation and qualifying accounts (in millions)


	Balance at							Balance
	Beginning							at End
Description	of Period		Additions			Deductions		of Period

Allowance for doubtful receivables:
Year ended December 31, 2007	$	8	$	9		$	13	$	4

Year ended December 31, 2006	$	10	$	7		$	9	$	8

Year ended December 31, 2005	$	1	$	12	(a)	$	3	$	10

Allowance for inventory obsolescence:
Year ended December 31, 2007	$	30	$	12		$	2	$	40

Year ended December 31, 2006	$	24	$	10		$	4	$	30

Year ended December 31, 2005	$	15	$	9		$	—	$	24

Valuation allowance on deferred tax asset, net:
Year ended December 31, 2007	$	263	$	—		$	186	$	77

Year ended December 31, 2006	$	446	$	—		$	183	$	263

Year ended December 31, 2005	$	127	$	976		$	657	$	446


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

116

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)


19.	Selected quarterly financial information (unaudited)

Summarized quarterly financial information for 2007 and 2006, before the cumulative effect of change in accounting principle, are as follows (in millions):


	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter

2007
Operating revenues	$	2,732		$	3,155		$	3,036		$	2,776
Operating expenses		2,616			2,866			2,834			2,850	(a)
Operating income (loss)		116			289			202			(74	)
Nonoperating expenses, net		(47	)		(18	)		(21	)		(13	)
Income tax provision (benefit)		3			8			4			(8	)
Income (loss)		66			263			177			(79	)
Earnings (loss) per common share:
Basic:	$	0.73		$	2.88		$	1.93		$	(0.87	)
Diluted:	$	0.70		$	2.77		$	1.87		$	(0.87	)
Shares used for computation (in thousands):
Basic		91,363			91,477			91,542			91,761
Diluted		96,223			95,613			95,492			91,761
2006
Operating revenues	$	2,632		$	3,171		$	2,968		$	2,786
Operating expenses		2,507			2,829			2,952			2,711
Operating income		125			342			16			75
Nonoperating expenses, net		(61	)		(30	)		(33	)		(30	)
Income tax provision		—			7			61			33
Income (loss) before cumulative effect of change in accounting principle		64			305			(78	)		12
Earnings (loss) per common share before cumulative effect of change in accounting principle:
Basic:	$	0.79		$	3.55		$	(0.88	)	$	0.13
Diluted:	$	0.75		$	3.25		$	(0.88	)	$	0.13
Shares used for computation (in thousands):
Basic		81,679			85,886			88,212			89,892
Diluted		93,362			94,673			88,212			91,872


(a)		In the fourth quarter of 2007, the Company recorded a $99 million charge to increase long-term disability obligations for US Airways’ pilots as a result of a change in the FAA mandated retirement age for pilots from 60 to 65.


20.	Financial information for subsidiary guarantors and non-guarantor subsidiaries

The Company’s 7% Senior Convertible Notes are fully and unconditionally guaranteed, jointly and severally and on a senior subordinated basis, by US Airways and AWA (the “Subsidiary Guarantors”). The other subsidiaries of the Company (the “Non-Guarantor Subsidiaries”) do not guarantee the 7% Senior Convertible Notes. Presented below is consolidating financial information for the Company, the Subsidiary Guarantors and the Non-Guarantor Subsidiaries at December 31, 2007 and 2006 and for the twelve months ended December 31, 2007, 2006 and 2005.

117

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

US Airways Group, Inc.

Consolidating Statement of Operations

For the year ended December 31, 2007


	US Airways
	Group, Inc. (Parent			Subsidiary			Non-Guarantor						US Airways Group,
	Company Only)			Guarantors			Subsidiaries			Eliminations			Inc. Consolidated
	(In millions)

Operating revenues:
Mainline passenger	$	—		$	8,135		$	—		$	—		$	8,135
Express passenger		—			2,698			—			—			2,698
Cargo		—			138			—			—			138
Other		—			842			1,697			(1,810	)		729

Total operating revenues		—			11,813			1,697			(1,810	)		11,700
Operating expenses:
Aircraft fuel and related taxes		—			2,630			—			—			2,630
Gain on fuel hedging instruments, net		—			(245	)		—			—			(245	)
Salaries and related costs		—			2,302			115			(115	)		2,302
Express expenses		—			2,727			—			(133	)		2,594
Aircraft rent		—			727			86			(86	)		727
Aircraft maintenance		—			635			76			(76	)		635
Other rent and landing fees		—			538			19			(21	)		536
Selling expenses		—			453			—			—			453
Special items, net		—			99			—			—			99
Depreciation and amortization		—			196			16			(23	)		189
Other		8			1,227			1,368			(1,356	)		1,247

Total operating expenses		8			11,289			1,680			(1,810	)		11,167

Operating income (loss)		(8	)		524			17			—			533
Nonoperating income (expense):
Interest income		92			172			1			(93	)		172
Interest expense, net		(129	)		(225	)		(12	)		93			(273	)
Other, net		472			14			1			(485	)		2

Total nonoperating income (expense), net		435			(39	)		(10	)		(485	)		(99	)
Income before income taxes		427			485			7			(485	)		434
Income tax provision (benefit)		—			7			—			—			7

Net income	$	427		$	478		$	7		$	(485	)	$	427

118

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

US Airways Group, Inc.

Consolidating Statement of Operations

For the year ended December 31, 2006


	US Airways
	Group, Inc. (Parent			Subsidiary			Non-Guarantor						US Airways Group,
	Company Only)			Guarantors			Subsidiaries			Eliminations			Inc. Consolidated
	(In millions)

Operating revenues:
Mainline passenger	$	—		$	7,966		$	—		$	—		$	7,966
Express passenger		—			2,744			—			—			2,744
Cargo		—			153			—			—			153
Other		—			829			1,441			(1,576	)		694

Total operating revenues		—			11,692			1,441			(1,576	)		11,557
Operating expenses:
Aircraft fuel and related taxes		—			2,518			—			—			2,518
Loss on fuel hedging instruments, net		—			79			—			—			79
Salaries and related costs		—			2,090			123			(123	)		2,090
Express expenses		—			2,670			—			(111	)		2,559
Aircraft rent		—			732			87			(87	)		732
Aircraft maintenance		—			582			69			(69	)		582
Other rent and landing fees		—			571			20			(23	)		568
Selling expenses		—			446			—			—			446
Special items, net		(11	)		38			—			—			27
Depreciation and amortization		—			181			18			(24	)		175
Other		3			1,228			1,131			(1,139	)		1,223

Total operating expenses		(8	)		11,135			1,448			(1,576	)		10,999

Operating income (loss)		8			557			(7	)		—			558
Nonoperating income (expense):
Interest income		76			153			1			(77	)		153
Interest expense, net		(98	)		(264	)		(10	)		77			(295	)
Other, net		318			—			2			(332	)		(12	)

Total nonoperating income (expense), net		296			(111	)		(7	)		(332	)		(154	)
Income (loss) before income taxes and cumulative effect of change in accounting principle		304			446			(14	)		(332	)		404
Income tax provision		—			98			3			—			101

Income (loss) before cumulative effect of change in accounting principle		304			348			(17	)		(332	)		303
Cumulative effect of change in accounting principle, net		—			1			—			—			1

Net income (loss)	$	304		$	349		$	(17	)	$	(332	)	$	304

119

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

US Airways Group, Inc.

Consolidating Statement of Operations

For the year ended December 31, 2005


	US Airways
	Group, Inc. (Parent			Subsidiary			Non-Guarantor						US Airways Group,
	Company Only)			Guarantors			Subsidiaries			Eliminations			Inc. Consolidated
	(In millions)

Operating revenues:
Mainline passenger	$	—		$	3,695		$	—		$	—		$	3,695
Express passenger		—			976			—			—			976
Cargo		—			58			—			—			58
Other		—			368			281			(309	)		340

Total operating revenues		—			5,097			281			(309	)		5,069
Operating expenses:
Aircraft fuel and related taxes		—			1,214			—			—			1,214
Gain on fuel hedging instruments, net		—			(75	)		—			—			(75	)
Salaries and related costs		—			1,046			30			(30	)		1,046
Express expenses		—			1,057			—			16			1,073
Aircraft rent		—			429			23			(23	)		429
Aircraft maintenance		—			349			14			(14	)		349
Other rent and landing fees		—			284			7			(10	)		281
Selling expenses		—			232			—			—			232
Special items, net		—			121			—			—			121
Depreciation and amortization		—			88			7			(7	)		88
Other		—			564			205			(241	)		528

Total operating expenses		—			5,309			286			(309	)		5,286

Operating loss		—			(212	)		(5	)		—			(217	)
Nonoperating income (expense):
Interest income		7			30			—			(7	)		30
Interest expense, net		(4	)		(144	)		(6	)		7			(147	)
Other, net		(540	)		(5	)		—			544			(1	)

Total nonoperating expense, net		(537	)		(119	)		(6	)		544			(118	)
Loss before income taxes and cumulative effect of change in accounting principle		(537	)		(331	)		(11	)		544			(335	)
Income tax provision		—			—			—			—			—

Loss before cumulative effect of change in accounting principle		(537	)		(331	)		(11	)		544			(335	)
Cumulative effect of change in accounting principle, net		—			(202	)		—			—			(202	)

Net loss	$	(537	)	$	(533	)	$	(11	)	$	544		$	(537	)

120

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

US Airways Group, Inc.

Consolidating Balance Sheet

December 31, 2007


	US Airways
	Group, Inc. (Parent			Subsidiary			Non-Guarantor						US Airways Group,
	Company Only)			Guarantors			Subsidiaries			Eliminations			Inc. Consolidated
	(In millions)

ASSETS
Current assets
Cash and cash equivalents	$	6		$	1,940		$	2		$	—		$	1,948
Investments in marketable securities		—			226			—			—			226
Restricted cash		—			2			—			—			2
Accounts receivable, net		—			366			8			—			374
Receivables from related parties, net		1,192			—			—			(1,192	)		—
Materials and supplies, net		—			197			52			—			249
Prepaid expenses and other		—			524			24			—			548

Total current assets		1,198			3,255			86			(1,192	)		3,347
Property and equipment
Flight equipment		—			2,295			119			—			2,414
Ground property and equipment		—			620			83			—			703
Less accumulated depreciation and amortization		—			(700	)		(57	)		—			(757	)

		—			2,215			145			—			2,360
Equipment purchase deposits		—			128			—			—			128

Total property and equipment		—			2,343			145			—			2,488
Other assets
Goodwill		—			622			—			—			622
Other intangibles, net		—			514			39			—			553
Restricted cash		—			466			—			—			466
Investments in marketable securities		—			353			—			—			353
Other assets, net		1,896			201			2			(1,888	)		211

Total other assets		1,896			2,156			41			(1,888	)		2,205

Total assets	$	3,094		$	7,754		$	272		$	(3,080	)	$	8,040


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current maturities of debt and capital leases	$	16		$	99		$	2		$	—		$	117
Accounts payable		—			333			33			—			366
Payables to related parties, net		—			1,063			129			(1,192	)		—
Air traffic liability		—			832			—			—			832
Accrued compensation and vacation		—			214			11			—			225
Accrued taxes		(6	)		158			—			—			152
Other accrued expenses		3			841			15			—			859

Total current liabilities		13			3,540			190			(1,192	)		2,551
Noncurrent liabilities and deferred credits
Long-term debt and capital leases, net of current maturities		1,657			1,346			28			—			3,031
Deferred gains and credits		—			168			—			—			168
Postretirement benefits other than pensions		—			137			1			—			138
Employee benefit liabilities and other		(5	)		713			5			—			713

Total noncurrent liabilities and deferred credits		1,652			2,364			34			—			4,050
Stockholders’ equity
Common stock		1			—			—			—			1
Additional paid-in capital		1,536			1,845			47			(1,892	)		1,536
Accumulated other comprehensive income (loss)		—			(1	)		11			—			10
Retained earnings (deficit)		(95	)		6			(10	)		4			(95	)
Treasury stock		(13	)		—			—			—			(13	)

Total stockholders’ equity		1,429			1,850			48			(1,888	)		1,439

Total liabilities and stockholders’ equity	$	3,094		$	7,754		$	272		$	(3,080	)	$	8,040

121

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

US Airways Group, Inc.

Consolidating Balance Sheet

December 31, 2006


	US Airways
	Group, Inc. (Parent			Subsidiary			Non-Guarantor						US Airways Group,
	Company Only)			Guarantors			Subsidiaries			Eliminations			Inc. Consolidated
	(In millions)

ASSETS
Current assets
Cash and cash equivalents	$	2		$	1,110		$	4		$	—		$	1,116
Investments in marketable securities		—			1,249			—			—			1,249
Restricted cash		—			1			—			—			1
Accounts receivable, net		—			383			5			—			388
Receivables from related parties, net		2,706			—			—			(2,706	)		—
Materials and supplies, net		—			187			36			—			223
Prepaid expenses and other		—			351			26			—			377

Total current assets		2,708			3,281			71			(2,706	)		3,354
Property and equipment
Flight equipment		—			1,965			86			—			2,051
Ground property and equipment		—			518			80			—			598
Less accumulated depreciation and amortization		—			(540	)		(43	)		—			(583	)

		—			1,943			123			—			2,066
Equipment purchase deposits		—			48			—			—			48

Total property and equipment		—			1,991			123			—			2,114
Other assets
Goodwill		—			629			—			—			629
Other intangibles, net		—			513			41			—			554
Restricted cash		—			666			—			—			666
Other assets, net		(415	)		240			3			431			259

Total other assets		(415	)		2,048			44			431			2,108

Total assets	$	2,293		$	7,320		$	238		$	(2,275	)	$	7,576


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current maturities of debt and capital leases	$	—		$	93		$	2		$	—		$	95
Accounts payable		—			436			18			—			454
Payables to related parties, net		—			2,603			104			(2,707	)		—
Air traffic liability		—			847			—			—			847
Accrued compensation and vacation		1			250			11			—			262
Accrued taxes		—			180			1			—			181
Other accrued expenses		1			850			22			—			873

Total current liabilities		2			5,259			158			(2,707	)		2,712
Noncurrent liabilities and deferred credits
Long-term debt and capital leases, net of current maturities		1,324			1,556			27			—			2,907
Deferred gains and credits, net		—			205			—			—			205
Postretirement benefits other than pensions		—			183			4			—			187
Employee benefit liabilities and other		—			578			17			—			595

Total noncurrent liabilities and deferred credits		1,324			2,522			48			—			3,894
Stockholders’ equity
Common stock		1			—			—			—			1
Additional paid-in capital		1,501			11			48			(59	)		1,501
Accumulated other comprehensive income		—			—			3			—			3
Accumulated deficit		(522	)		(472	)		(19	)		491			(522	)
Treasury stock		(13	)		—			—			—			(13	)

Total stockholders’ equity		967			(461	)		32			432			970

Total liabilities and stockholders’ equity	$	2,293		$	7,320		$	238		$	(2,275	)	$	7,576

122

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

US Airways Group, Inc.

Consolidating Statement of Cash Flows

For the year ended December 31, 2007


	US Airways
	Group, Inc. (Parent			Subsidiary			Non-Guarantor						US Airways Group,
	Company Only)			Guarantors			Subsidiaries			Eliminations			Inc. Consolidated
	(In millions)

Cash flows from operating activities:
Net income	$	427		$	478		$	7		$	(485	)	$	427
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		—			196			16			—			212
Gains on curtailment of pension benefit		—			—			(5	)		—			(5	)
Loss on dispositions of property		—			—			1			—			1
Gain on sale of investments		—			(17	)		—			—			(17	)
Impairment on auction rate securities		—			10			—			—			10
Utilization of acquired net operating loss carryforwards		—			7			—			—			7
Change in fair value of fuel hedging instruments, net		—			(187	)		—			—			(187	)
Amortization of deferred credits		—			(43	)		—			—			(43	)
Amortization of deferred rent		—			3			—			—			3
Amortization of debt issuance costs and guarantee fees		1			1			—			—			2
Amortization of debt discount		—			11			1			—			12
Stock-based compensation		32			—			—			—			32
Debt extinguishment costs		18			—			—			—			18
Equity in earnings of subsidiaries		(489	)		4			—			485			—
Changes in operating assets and liabilities:
Increase in restricted cash		—			(1	)		—			—			(1	)
Decrease (increase) in accounts receivable, net		—			17			(3	)		—			14
Increase in expendable spare parts and supplies, net		—			(2	)		(16	)		—			(18	)
Decrease (increase) in prepaid expenses		—			(55	)		3			—			(52	)
Increase in other assets, net		(6	)		(8	)		—			—			(14	)
Increase (decrease) in accounts payable		—			(26	)		15			—			(11	)
Decrease in air traffic liability		—			(22	)		—			—			(22	)
Increase (decrease) in payable to affiliate		5			(30	)		25			—			—
Decrease in accrued compensation and vacation benefits		—			(36	)		(1	)		—			(37	)
Decrease in accrued taxes		(6	)		(22	)		(1	)		—			(29	)
Increase (decrease) in other liabilities		(6	)		152			(6	)		—			140

Net cash provided by (used in) operating activities		(24	)		430			36			—			442
Cash flows from investing activities:
Purchases of property and equipment		—			(486	)		(37	)		—			(523	)
Purchases of marketable securities		—			(2,591	)		—			—			(2,591	)
Sales of marketable securities		—			3,203			—			—			3,203
Proceeds from sale of other investments		—			56			—			—			56
Decrease in long-term restricted cash		—			200			—			—			200
Proceeds from disposition of property and equipment		—			4			—			—			4
Increase in equipment purchase deposits		—			(80	)		—			—			(80	)

Net cash provided by (used in) investing activities		—			306			(37	)		—			269
Cash flows from financing activities:
Repayments of debt and capital lease obligations		(1,575	)		(104	)		(1	)		—			(1,680	)
Proceeds from issuance of debt		1,600			198			—			—			1,798
Proceeds from issuance of common stock, net		3			—			—			—			3

Net cash provided by (used in) financing activities		28			94			(1	)		—			121

Net increase (decrease) in cash and cash equivalents		4			830			(2	)		—			832
Cash and cash equivalents at beginning of year		2			1,110			4			—			1,116

Cash and cash equivalents at end of year	$	6		$	1,940		$	2		$	—		$	1,948

123

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

US Airways Group, Inc.

Consolidating Statement of Cash Flows

For the year ended December 31, 2006


	US Airways												US Airways
	Group, Inc. (Parent			Subsidiary			Non-Guarantor						Group, Inc.
	Company Only)			Guarantors			Subsidiaries			Eliminations			Consolidated
	(In millions)

Cash flows from operating activities:
Net income (loss)	$	304		$	349		$	(17	)	$	(332	)	$	304
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Cumulative effect of change in accounting principle		—			(1	)		—			—			(1	)
Depreciation and amortization		—			180			18			—			198
Loss (gain) on dispositions of property		—			(1	)		1			—			—
Gain on forgiveness of debt		—			(90	)		—			—			(90	)
Utilization of acquired net operating loss carryforwards		—			85			—			—			85
Change in fair value of fuel hedging instruments, net		—			70			—			—			70
Amortization of deferred credits		—			(43	)		—			—			(43	)
Amortization of deferred rent		—			5			—			—			5
Amortization of debt issuance costs and guarantee fees		3			—			1			—			4
Amortization of debt discount		—			11			1			—			12
Stock-based compensation		34			—			—			—			34
Debt extinguishment costs		2			5			—			—			7
Premium paid in conversion of 7% convertible notes		17			—			—			—			17
Equity in earnings of subsidiaries		(337	)		5			—			332			—
Other		—			—			(1	)		—			(1	)
Changes in operating assets and liabilities:
Decrease in restricted cash		—			6			—			—			6
Decrease (increase) in accounts receivable, net		—			(36	)		1			—			(35	)
Increase in expendable spare parts and supplies, net		—			(16	)		(9	)		—			(25	)
Decrease (increase) in prepaid expenses		—			37			(15	)		—			22
Decrease (increase) in other assets, net		(22	)		5			1			—			(16	)
Increase (decrease) in accounts payable		(1	)		16			(17	)		—			(2	)
Increase in air traffic liability		—			59			—			—			59
Increase in accrued compensation and vacation benefits		1			49			6			—			56
Increase in accrued taxes		—			36			2			—			38
Decrease in other liabilities		—			(83	)		(3	)		—			(86	)

Net cash provided by (used in) operating activities		1			648			(31	)		—			618
Cash flows from investing activities:
Purchases of property and equipment		—			(222	)		(10	)		—			(232	)
Purchases of marketable securities		—			(2,583	)		—			—			(2,583	)
Sales of marketable securities		—			1,785			—			—			1,785
Decrease in long-term restricted cash		—			128			—			—			128
Proceeds from dispositions of property and equipment		—			7			—			—			7
Increase in equipment purchase deposits		—			(8	)		—			—			(8	)

Net cash used in investing activities		—			(893	)		(10	)		—			(903	)
Cash flows from financing activities:
Repayments of debt and capital lease obligations		(1,087	)		(98	)		(2	)		—			(1,187	)
Proceeds from issuance of debt		1,327			92			—			—			1,419
Proceeds from issuance of common stock, net		44			—			—			—			44
Increase (decrease) in payables to affiliate, net		(291	)		245			46			—			—

Net cash provided by (used in) financing activities		(7	)		239			44			—			276

Net increase (decrease) in cash and cash equivalents		(6	)		(6	)		3			—			(9	)
Cash and cash equivalents at beginning of year		8			1,116			1			—			1,125

Cash and cash equivalents at end of year	$	2		$	1,110		$	4		$	—		$	1,116

124

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

US Airways Group, Inc.

Consolidating Statement of Cash Flows

For the year ended December 31, 2005


	US Airways												US Airways
	Group, Inc. (Parent			Subsidiary			Non-Guarantor						Group, Inc.
	Company Only)			Guarantors			Subsidiaries			Eliminations			Consolidated
	(In millions)

Cash flows from operating activities:
Net loss	$	(537	)	$	(533	)	$	(11	)	$	544		$	(537	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Cumulative effect of change in accounting principle		—			202			—			—			202
Depreciation and amortization		—			87			1			—			88
Loss (gain) on dispositions of property		—			1			(1	)		—			—
Non cash special charges, net		—			86			—			—			86
Change in fair value of fuel hedging instruments, net		—			(4	)		—			—			(4	)
Amortization of deferred credits		—			(23	)		—			—			(23	)
Amortization of deferred rent		—			5			—			—			5
Amortization of warrants		—			12			—			—			12
Amortization of debt issuance costs and guarantee fees		—			30			—			—			30
Amortization of debt discount		—			10			1			—			11
Amortization of investment discount and premium, net		—			9			—			—			9
Stock-based compensation		5			—			—			—			5
Debt extinguishment costs		—			2			—			—			2
Equity in earnings of subsidiaries		540			4			—			(544	)		—
Other		—			(18	)		—			—			(18	)
Changes in operating assets and liabilities:
Decrease in restricted cash		—			120			—			—			120
Decrease in accounts receivable, net		—			55			—			—			55
Increase in expendable spare parts and supplies, net		—			(7	)		(1	)		—			(8	)
Increase in prepaid expenses		—			(50	)		(13	)		—			(63	)
Decrease in other assets, net		—			9			2			—			11
Decrease in accounts payable		—			(45	)		—			—			(45	)
Decrease in air traffic liability		—			(54	)		—			—			(54	)
Decrease in accrued compensation and vacation benefits		—			—			(1	)		—			(1	)
Decrease in accrued taxes		—			(5	)		—			—			(5	)
Increase in other liabilities		2			149			17			—			168

Net cash provided by (used in) operating activities		10			42			(6	)		—			46
Cash flows from investing activities:
Purchases of property and equipment		—			(42	)		(2	)		—			(44	)
Purchases of marketable securities		—			(711	)		—			—			(711	)
Sales of marketable securities		—			416			—			—			416
Cash acquired as part of acquisition		—			279			—			—			279
Costs incurred as part of acquisition		(21	)		—			—			—			(21	)
Increase in long-term restricted cash		—			(112	)		—			—			(112	)
Proceeds from disposition of property and equipment and sale-leaseback transactions		—			592			—			—			592

Net cash provided by (used in) investing activities		(21	)		422			(2	)		—			399
Cash flows from financing activities:
Repayments of debt and capital lease obligations		(124	)		(615	)		(2	)		—			(741	)
Proceeds from issuance of debt		655			—			—			—			655
Proceeds from issuance of common stock, net		732			—			—			—			732
Acquisition of warrants		(116	)		—			—			—			(116	)
Increase (decrease) in payables to affiliate, net		(1,128	)		1,117			11			—			—
Other		—			1			—			—			1

Net cash provided by financing activities		19			503			9			—			531

Net increase in cash and cash equivalents		8			967			1			—			976
Cash and cash equivalents at beginning of year		—			149			—			—			149

Cash and cash equivalents at end of year	$	8		$	1,116		$	1		$	—		$	1,125

125

US Airways Group, Inc.

Notes to Consolidated Financial Statements — (Continued)


21.	Subsequent events

On February 1, 2008, US Airways entered into a loan agreement for $145 million, secured by six Bombardier CRJ-700 aircraft, three Boeing 757 aircraft and one spare engine. The loan bears interest at a rate of LIBOR plus an applicable LIBOR margin and is amortized over ten years. The proceeds of the loan were used to repay $97 million of the equipment notes previously secured by the six Bombardier CRJ-700 and three Boeing 757 aircraft.

126


Item 8B.	*Consolidated Financial Statements and Supplementary Data of US Airways, Inc.*

Management’s Annual Report on Internal Control over Financial Reporting

Management of US Airways is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. US Airways’ internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. US Airways’ internal control over financial reporting includes those policies and procedures that:


	•	pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of US Airways;

	•	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of US Airways are being made only in accordance with authorizations of management and directors of US Airways; and

	•	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of US Airways’ assets that could have a material effect on the financial statements.

Management assessed the effectiveness of US Airways’ internal control over financial reporting as of December 31, 2007. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.

Based on our assessment and those criteria, management concludes that US Airways maintained effective internal control over financial reporting as of December 31, 2007.

US Airways’ independent registered public accounting firm has issued an audit report on the effectiveness of US Airways’ internal control over financial reporting. That report has been included herein.

127

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholder

US Airways, Inc.:

We have audited US Airways, Inc. and its subsidiaries’ (“US Airways” or the “Company”) internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). US Airways’ management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

In our opinion, US Airways maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of US Airways as of December 31, 2007 and 2006, and the related consolidated statements of operations, stockholder’s equity (deficit) and cash flows for the year ended December 31, 2007, and the three months ended December 31, 2006 for the Successor Company, and for the nine months ended September 30, 2005, and the year ended December 31, 2004 for the Predecessor Company, and our report dated February 20, 2008 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

Phoenix, Arizona

February 20, 2008

128

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholder

US Airways, Inc.:

We have audited the accompanying consolidated balance sheets of US Airways, Inc. and subsidiaries (“US Airways”) as of December 31, 2007 and 2006, and the related statements of operations, stockholder’s equity (deficit) and cash flows for years ended December 31, 2007, and 2006, and the three months ended December 31, 2005 for the Successor Company, and for the nine months ended September 30, 2005 for the Predecessor Company. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of US Airways as of December 31, 2007 and 2006, and the results of their operations and their cash flows for the years ended December 31, 2007, and 2006, and the three months ended December 31, 2005 for the Successor Company, and for the nine months ended September 30, 2005 for the Predecessor Company, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 1 and 2(b) to the consolidated financial statements, on September 16, 2005, the Bankruptcy Court confirmed the Company’s Plan of Reorganization (the Plan), related to its Chapter 11 bankruptcy proceeding. The Plan became effective on September 27, 2005 and US Airways and its parent Company, US Airways Group, Inc. (US Airways Group), emerged from the Chapter 11 bankruptcy proceeding. In connection with its emergence from the Chapter 11 bankruptcy proceedings, US Airways adopted fresh-start reporting pursuant to Statement of Position 90-7, “Financial Reporting by Entities in Reorganization Under the Bankruptcy Code” as of September 27, 2005. As a result, the consolidated financial statements of the Successor Company are presented on a different basis than those of the Predecessor Company and, therefore, are not comparable in all respects.

As discussed in Note 1 to the consolidated financial statements, the Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 , effective January 1, 2007 and Statement of Financial Accounting Standards (“SFAS”) No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R) , effective December 31, 2006, and as discussed in Note 14 to the consolidated financial statements, the Company adopted the provisions of SFAS No. 123(R), Shared Based Payment , effective January 1, 2006.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), US Airways’ internal control over financial reporting as of December 31, 2007, based on criteria established in “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 20, 2008 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

Phoenix, Arizona

February 20, 2008

129

US Airways, Inc.

Consolidated Statements of Operations

For the Years Ended December 31, 2007, 2006 and 2005


										Predecessor
	Successor Company									Company
							Three Months			Nine Months
							Ended			Ended
							December 31,			September 30,
	2007			2006			2005			2005
	(In millions)

Operating revenues:
Mainline passenger	$	8,135		$	7,966		$	1,757		$	3,738
Express passenger		2,698			2,744			587			1,178
Cargo		138			153			33			71
Other		842			829			212			465

Total operating revenues		11,813			11,692			2,589			5,452
Operating expenses:
Aircraft fuel and related taxes		2,630			2,518			603			1,111
Loss (gain) on fuel hedging instruments, net		(245	)		79			50			—
Salaries and related costs		2,302			2,090			505			1,073
Express expenses		2,727			2,670			641			1,372
Aircraft rent		727			732			184			293
Aircraft maintenance		635			582			152			253
Other rent and landing fees		536			568			144			319
Selling expenses		453			446			103			258
Special items, net		99			38			36			—
Depreciation and amortization		198			184			52			152
Other		1,227			1,228			302			763

Total operating expenses		11,289			11,135			2,772			5,594

Operating income (loss)		524			557			(183	)		(142	)
Nonoperating income (expense):
Interest income		172			153			22			15
Interest expense, net		(229	)		(268	)		(90	)		(222	)
Reorganization items, net		—			—			—			636
Other, net		18			4			(5	)		(9	)

Total nonoperating income (expense), net		(39	)		(111	)		(73	)		420

Income (loss) before income taxes and cumulative effect of change in accounting principle		485			446			(256	)		278
Income tax provision (benefit)		7			98			—			(2	)

Income (loss) before cumulative effect of change in accounting principle		478			348			(256	)		280
Cumulative effect of change in accounting principle		—			1			—			—

Net income (loss)	$	478		$	349		$	(256	)	$	280

See accompanying notes to consolidated financial statements.

130

US Airways, Inc.

Consolidated Balance Sheets

December 31, 2007 and 2006


	2007			2006
	(In millions, except share and per share amounts)

ASSETS
Current assets
Cash and cash equivalents	$	1,940		$	1,111
Investments in marketable securities		226			1,249
Restricted cash		2			1
Accounts receivable, net		366			383
Materials and supplies, net		197			187
Prepaid expenses and other		524			351

Total current assets		3,255			3,282
Property and equipment
Flight equipment		2,295			1,965
Ground property and equipment		681			579
Less accumulated depreciation and amortization		(729	)		(567	)

		2,247			1,977
Equipment purchase deposits		128			48

Total property and equipment		2,375			2,025
Other assets
Goodwill		622			629
Other intangibles, net		514			513
Restricted cash		466			666
Investments in marketable securities		353			—
Other assets, net		202			236

Total other assets		2,157			2,044

Total assets	$	7,787		$	7,351


LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT)
Current liabilities
Current maturities of debt and capital leases	$	101		$	95
Accounts payable		333			436
Payables to related parties, net		1,067			2,604
Air traffic liability		832			847
Accrued compensation and vacation		214			250
Accrued taxes		158			180
Other accrued expenses		841			851

Total current liabilities		3,546			5,263
Noncurrent liabilities and deferred credits
Long-term debt and capital leases, net of current maturities		1,373			1,583
Deferred gains and credits, net		168			205
Postretirement benefits other than pensions		137			183
Employee benefit liabilities and other		713			578

Total noncurrent liabilities and deferred credits		2,391			2,549
Commitments and contingencies (Note 8)		—			—
Stockholder’s equity
Common stock, $1 par, 1,000 shares issued and outstanding		—			—
Additional paid-in capital		1,845			11
Accumulated other comprehensive loss		(1	)		—
Retained earnings (deficit)		6			(472	)

Total stockholder’s equity (deficit)		1,850			(461	)

Total liabilities and stockholder’s equity (deficit)	$	7,787		$	7,351

See accompanying notes to consolidated financial statements.

131

US Airways, Inc.

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2007, 2006 and 2005


										Predecessor
	Successor Company									Company
							Three Months			Nine Months
	Year Ended			Year Ended			Ended			Ended
	December 31,			December 31,			December 31,			September 30,
	2007			2006			2005			2005
	(In millions)

Cash flows from operating activities:
Net income (loss)	$	478		$	349		$	(256	)	$	280
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities before reorganization items, net:
Fresh-start adjustments		—			—			—			(697	)
Cumulative effect of change in accounting principle		—			(1	)		—			—
Depreciation and amortization		198			183			53			158
Gains on curtailment of pension and postretirement benefits		—			—			—			(255	)
Loss (gain) on dispositions of property		—			(1	)		1			(2	)
Gain on forgiveness of debt		—			(90	)		—			—
Gain on sale of investments		(17	)		—			—			—
Impairment on auction rate securities		10			—			—			—
Utilization of acquired net operating loss carryforwards		7			85			—			—
Change in the fair value of fuel hedging instruments, net		(187	)		70			69			—
Amortization of deferred credits		(43	)		(43	)		(16	)		(66	)
Amortization of deferred rent		3			5			1			—
Amortization of warrants		—			—			8			—
Amortization of debt issuance costs and guarantee fees		1			1			10			—
Amortization of debt discount		12			12			14			—
Stock-based compensation		—			—			—			10
Debt extinguishment costs		—			5			2			—
Other		—			—			(34	)		(8	)
Changes in operating assets and liabilities:
Decrease (increase) in restricted cash		(1	)		6			79			12
Decrease (increase) in accounts receivables, net		17			(36	)		72			(42	)
Decrease (increase) in expendable spare parts and supplies, net		(2	)		(16	)		5			(8	)
Decrease (increase) in prepaid expenses		(55	)		37			(30	)		(24	)
Decrease (increase) in other assets, net		(8	)		5			19			7
Increase (decrease) in accounts payable		(26	)		16			(46	)		41
Increase (decrease) in air traffic liability		(22	)		59			(123	)		175
Decrease in payable to affiliate		(28	)		—			—			—
Increase (decrease) in accrued compensation and vacation benefits		(36	)		49			11			30
Increase (decrease) in accrued taxes		(22	)		36			(27	)		56
Increase (decrease) in other liabilities		151			(82	)		17			(30	)

Net cash provided by (used in) operating activities before reorganization items		430			649			(171	)		(363	)
Reorganization items, net		—			—			(33	)		(92	)

Net cash provided by (used in) operating activities		430			649			(204	)		(455	)

Cash flows from investing activities:
Purchases of property and equipment		(486	)		(222	)		(5	)		(136	)
Purchases of marketable securities		(2,591	)		(2,583	)		(395	)		—
Sales of marketable securities		3,203			1,785			112			—
Proceeds from sale of other investments		56			—			—			—
Decrease (increase) in long-term restricted cash		200			128			(89	)		(81	)
Proceeds from sales of property and equipment and sale-leaseback transactions		4			7			539			211
Increase in equipment purchase deposits		(80	)		(8	)		—			—

Net cash provided by (used in) investing activities		306			(893	)		162			(6	)

Cash flows from financing activities:
Repayments of debt and capital lease obligations		(105	)		(100	)		(436	)		(215	)
Proceeds from issuance of debt		198			92			—			140
Proceeds from issuance of debtor-in-possession financings		—			—			—			125
Increase in payables to affiliates, net		—			247			607			53

Net cash provided by financing activities		93			239			171			103

Net increase (decrease) in cash and cash equivalents		829			(5	)		129			(358	)
Cash and cash equivalents at beginning of period		1,111			1,116			987			734

Cash and cash equivalents at end of period	$	1,940		$	1,111		$	1,116		$	376

See accompanying notes to consolidated financial statements.

132

US Airways, Inc.

Consolidated Statements of Stockholder’s Equity (Deficit)

For the Years Ended December 31, 2007, 2006 and 2005


			Additional									Accumulated Other
	Common		Paid-in			Accumulated			Deferred			Comprehensive
	Stock		Capital			Deficit			Compensation			Income (Loss)			Total
	(In millions)

Predecessor Company:
Balance at December 31, 2004	$	—	$	349		$	(738	)	$	(14	)	$	(98	)	$	(501	)
Amortization of deferred compensation		—		—			—			10			—			10
Unrealized loss on fuel cash flow hedges, net		—		—			—			—			(17	)		(17	)
Minimum pension liability change		—		—			—			—			29			29
Net income		—		—			280			—			—			280
Fresh-start adjustments:
Adjustments to stockholder’s deficit in connection with fresh-start		—		(348	)		444			4			86			186

Successor Company:
Balance at September 30, 2005		—		1			(14	)		—			—			(13	)
Contribution of ownership in America West Holdings to US Airways by US Airways Group		—		10			(551	)		—			—			(541	)
Net loss		—		—			(256	)		—			—			(256	)

Balance at December 31, 2005		—		11			(821	)		—			—			(810	)
Net income		—		—			349			—			—			349

Balance at December 31, 2006		—		11			(472	)		—			—			(461	)
Forgiveness of intercompany payable to US Airways Group		—		1,834			—			—			—			1,834
Unrealized loss on available for sale securities, net		—		—			—			—			(48	)		(48	)
Actuarial gain associated with pension and other postretirement benefits		—		—			—			—			47			47
Net income		—		—			478			—			—			478

Balance at December 31, 2007	$	—	$	1,845		$	6		$	—		$	(1	)	$	1,850

See accompanying notes to consolidated financial statements.

133

US Airways, Inc.

Notes to Consolidated Financial Statements


1.	Basis of presentation and summary of significant accounting policies


*(a)*	*Nature of Operations and Operating Environment*

US Airways, Inc. (“US Airways”), a Delaware corporation, is a certificated air carrier engaged primarily in the business of transporting passengers, property and mail. US Airways is a wholly owned subsidiary of US Airways Group, Inc. (“US Airways Group”). On September 12, 2004, US Airways Group and its domestic subsidiaries, US Airways, Piedmont Airlines, Inc., PSA Airlines, Inc. and Material Services Company, Inc. (collectively, the “Debtors”), which at the time accounted for substantially all of the operations of US Airways Group, filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Eastern District of Virginia, Alexandria Division (the “Bankruptcy Court”). On May 19, 2005, US Airways Group signed a merger agreement with America West Holdings Corporation (“America West Holdings”), the parent company of America West Airlines, Inc. (“AWA”), pursuant to which America West Holdings merged with a wholly owned subsidiary of US Airways Group. The merger agreement was amended by a letter agreement on July 7, 2005. The merger became effective upon US Airways Group’s emergence from bankruptcy on September 27, 2005. While the merger was structured such that US Airways Group was the legal acquirer, the merger has been accounted for as a reverse acquisition such that America West Holdings was treated as the accounting acquirer.

On September 26, 2007, as part of the integration efforts following the merger of US Airways Group and America West Holdings in September 2005, AWA surrendered its Federal Aviation Administration (“FAA”) operating certificate. As a result, all future mainline airline operations are being conducted under US Airways’ FAA operating certificate. In connection with the combination of all mainline airline operations under one FAA operating certificate, US Airways Group contributed 100% of its equity interest in America West Holdings to US Airways. As a result, America West Holdings and its wholly owned subsidiary AWA are now wholly owned subsidiaries of US Airways. In addition, AWA transferred substantially all of its assets and liabilities to US Airways. All off-balance sheet commitments of AWA were also transferred to US Airways. This transaction constituted a transfer of assets between entities under common control and was accounted for at historical cost. Effective January 1, 2008, both America West Holdings and AWA converted from Delaware corporations to Delaware limited liability corporations.

As part of the transfer of assets and liabilities to US Airways, all of AWA’s obligations with respect to certain pass through trusts and the leases of related aircraft and engines were transferred to US Airways. The pass through trusts had issued pass through trust certificates (also known as “Enhanced Equipment Trust Certificates” or “EETCs”), of which AWA was the deemed issuer for Securities and Exchange Commission (“SEC”) reporting purposes. Because US Airways has assumed all of AWA’s obligations with respect to the pass through trusts, US Airways is now the deemed issuer of these EETCs. As a result, AWA no longer has an obligation to file separate financial statements or reports with the SEC and has filed a Form 15 with the SEC terminating its reporting obligations.

Most of US Airways’ operations are in competitive markets. Competitors include other air carriers along with other modes of transportation. US Airways enplaned approximately 58 million passengers in 2007. As of December 31, 2007, US Airways operated 356 jet aircraft. During 2007, US Airways, along with US Airways Express, provided regularly scheduled service or seasonal service at 256 airports in the continental United States, Hawaii, Alaska, Canada, the Caribbean, Latin America and Europe.

As of December 31, 2007, US Airways employed approximately 34,400 active full-time equivalent employees. Approximately 85% of US Airways’ employees are covered by collective bargaining agreements with various labor unions. US Airways pilots, flight attendants, and ground and maintenance employees are currently working under the terms of their respective US Airways or AWA collective bargaining agreements, including, in some cases, transition agreements reached in connection with the merger. In 2007, US Airways reached final single labor

134

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

agreements covering the flight crew training instructors and the flight simulator engineers, each represented by the Transport Workers Union (“TWU”).


*(b)*	*Basis of Presentation*

The transfer of assets between US Airways and AWA described above constitutes a transfer of assets between entities under common control and was accounted for in a manner similar to the pooling of interests method of accounting. Under this method, the carrying amount of net assets recognized in the balance sheets of each combining entity are carried forward to the balance sheet of the combined entity, and no other assets or liabilities are recognized as a result of the contribution of shares. The accompanying consolidated financial statements in this annual report on Form 10-K are presented as though the transfer had occurred at the time of US Airways emergence from bankruptcy. Therefore, the Successor Company consolidated statement of operations, cash flows, and stockholder’s equity for US Airways for the three month period ended December 31, 2005 in this report is comprised of the results of US Airways and America West Holdings. The Predecessor Company statement of operations, cash flows, and stockholder’s equity for US Airways for the nine month period ended September 30, 2005 remains unchanged.

The accompanying consolidated financial statements include the accounts of US Airways and its wholly owned subsidiaries. US Airways Group has the ability to move funds freely between its operating subsidiaries to support operations. These transfers are recognized as intercompany transactions. In the accompanying consolidated statements of cash flows, these intercompany transactions are designated as payable to affiliate and are classified as financing activities as US Airways Group has no plans to settle these transactions in the near term. All significant intercompany accounts and transactions between US Airways and US Airways’ subsidiaries have been eliminated in consolidation.


*(c)*	*Cash Equivalents*


*(d)*	*Investments in Marketable Securities*

All other highly liquid investments with original maturities greater than three months but less than one year are classified as current investments in marketable securities. Investments in marketable securities classified as noncurrent assets on US Airways’ balance sheet represent investments expected to be converted to cash after 12 months. Debt securities, other than auction rate securities, are classified as held to maturity in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 115, “Accounting for Certain Investments in Debt and Equity Securities” (“SFAS 115”). Held to maturity investments are carried at amortized cost. Investments in auction rate securities are classified as available for sale. See Note 4(c) for more information on US Airways’ investments in marketable securities.

135

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)


*(e)*	*Restricted Cash*

Restricted cash includes deposits in trust accounts primarily to fund certain taxes and fees and collateralize letters of credit and workers’ compensation claims, deposits securing certain letters of credit and surety bonds and deposits held by institutions that process credit card sales transactions. Restricted cash is stated at cost, which approximates fair value.


*(f)*	*Materials and Supplies, Net*


*(g)*	*Property and Equipment*

Property and equipment are recorded at cost. Interest expenses related to the acquisition of certain property and equipment are capitalized as an additional cost of the asset or as a leasehold improvement if the asset is leased. Interest capitalized for the years ended December 31, 2007, 2006, the three months ended December 31, 2005 and nine months ended September 30, 2005 was $4 million, $2 million, $1 million and $1 million, respectively. Property and equipment is depreciated and amortized to residual values over the estimated useful lives or the lease term, whichever is less, using the straight-line method. Costs of major improvements that enhance the usefulness of the asset are capitalized and depreciated over the estimated useful life of the asset or the modifications, whichever is less.

Effective with the emergence from bankruptcy and the merger with America West Holdings, US Airways conformed its estimated useful lives to those of America West Holdings. The estimated useful lives range from three to 12 years for owned property and equipment and from 18 to 30 years for training equipment and buildings. The estimated useful lives of owned aircraft, jet engines, flight equipment and rotable parts range from five to 30 years. Leasehold improvements relating to flight equipment and other property on operating leases are amortized over the life of the lease or the life of the asset, whichever is shorter, on a straight-line basis. For periods prior to September 30, 2005, the estimated useful lives for owned property and equipment ranged from five to ten years, the estimated useful lives for training equipment and buildings ranged from ten to 30 years and the estimated useful lives of owned aircraft, jet engines, flight equipment and rotable parts ranged from five to 30 years.

US Airways records impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired as defined by SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”). Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell. US Airways recorded no impairment charges in the years ended December 31, 2007, 2006 and 2005.


*(h)*	*Income Taxes*

136

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)


*(i)*	*Goodwill and Other Intangibles, Net*

At December 31, 2007, goodwill represents the purchase price in excess of the net amount assigned to assets acquired and liabilities assumed by America West Holdings on September 27, 2005. Since that time, there have been no events or changes that would indicate an impairment to goodwill. US Airways performs its annual impairment test on October 1, unless events or changes indicate a potential impairment in the carrying value. The provisions of SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”) require that a two-step impairment test be performed on goodwill. In the first step, the fair value of the reporting unit is compared to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets of the reporting unit, goodwill is not impaired and no further testing is required. If the carrying value of the net assets of the reporting unit exceeds the fair value of the reporting unit, then a second step must be performed in order to determine the implied fair value of the goodwill and compare it to the carrying value of the goodwill. If the carrying value of goodwill exceeds its implied fair value, then an impairment loss is recorded equal to the difference. US Airways tested its goodwill for impairment during the fourth quarter of 2007, at which time it concluded that fair value of the reporting units was in excess of the carrying value. US Airways assessed the fair value of the reporting units considering both the income approach and market approach. Under the market approach, the fair value of the reporting units is based on quoted market prices for US Airways Group common stock and the number of shares outstanding of US Airways Group common stock. Under the income approach, the fair value of the reporting unit is based on the present value of estimated future cash flows.

Other intangible assets consist primarily of trademarks, international route authorities and airport take-off and landing slots and airport gates. As of each of December 31, 2007 and 2006, US Airways had $55 million of international route authorities on its balance sheets. The carrying value of the trademarks was $30 million as of December 31, 2007 and 2006. International route authorities and trademarks are classified as indefinite lived assets under SFAS 142. Indefinite lived assets are not amortized but instead are reviewed for impairment annually and more frequently if events or circumstances indicate that the asset may be impaired. International route authorities and trademarks were tested for impairment during the fourth quarter of 2007, at which time US Airways concluded that no impairment exists. US Airways will perform its next annual impairment test on October 1, 2008.

SFAS 142 requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairments in accordance with SFAS 144. The following table provides information relating to US Airways’ intangible assets subject to amortization as of December 31, 2007 and 2006 (in millions):


	2007			2006

Airport take-off and landing slots	$	435		$	411
Airport gate leasehold rights		52			52
Accumulated amortization		(58	)		(35	)

Total	$	429		$	428

The intangible assets subject to amortization generally are amortized over 25 years for airport take-off and landing slots and over the term of the lease for airport gate leasehold rights on a straight-line basis and are included in depreciation and amortization on the statements of operations. For the years ended December 31, 2007 and 2006, the three months ended December 31, 2005, and the nine months ended September 30, 2005, US Airways recorded amortization expense of $23 million, $27 million, $8 million, and $19 million, respectively, related to its intangible assets. US Airways expects to record annual amortization expense of $24 million in 2008, $24 million in year 2009, $23 million in year 2010, $21 million in year 2011, and $19 million in year 2012 related to these intangible assets.

137

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)


*(j)*	*Other Assets, Net*

Other assets, net consists of the following as of December 31, 2007 and 2006 (in millions):


	2007		2006

Deposits	$	46	$	49
Debt issuance costs, net		7		4
Long term investments		12		38
Deferred rent		48		50
Aircraft leasehold interest, net		89		95

Total other assets, net	$	202	$	236


*(k)*	*Frequent Traveler Program*

Members of the Dividend Miles program, the US Airways frequent traveler program, can redeem miles on US Airways or other members of the Star Alliance. The estimated cost of providing the free travel, using the incremental cost method as adjusted for estimated redemption rates, is recognized as a liability and charged to operations as program members accumulate mileage and requisite mileage award levels are achieved. For travel awards on partner airlines, the liability is based on the average contractual amount to be paid to the other airline per redemption. As of December 31, 2007, Dividend Miles members had accumulated mileage credits for approximately 3.1 million awards. The liability for the future travel awards accrued on US Airways’ balance sheets within other accrued liabilities was $161 million and $201 million as of December 31, 2007 and 2006, respectively.

US Airways sells mileage credits to participating airline and non-airline business partners. Revenue earned from selling mileage credits to other companies is recognized in two components. A portion of the revenue from these sales is deferred, representing the estimated fair value of the transportation component of the sold mileage credits. The deferred revenue for the transportation component is amortized on a straight-line basis over the period in which the credits are expected to be redeemed for travel as passenger revenue, which is currently estimated to be 28 months. The marketing component, which is earned at the time the miles are sold, is recognized in other revenues at the time of the sale. As of December 31, 2007 and 2006, US Airways had $241 million and $220 million, respectively, in deferred revenue from the sale of mileage credits included in other accrued liabilities on its balance sheets.


*(l)*	*Derivative Instruments*

US Airways utilizes financial derivative instruments primarily to manage its risk associated with changing jet fuel prices. US Airways currently utilizes heating oil-based derivative instruments to hedge a portion of its exposure to jet fuel price increases. These instruments consist of costless collars. As of December 31, 2007, US Airways has entered into costless collars to hedge approximately 22% of its 2008 projected mainline and Express jet fuel requirements. US Airways does not purchase or hold any derivative financial instruments for trading purposes.

The weighted average collar range of the fuel hedges outstanding as of December 31, 2007 are as follows:


	Put Option		Call Option

Heating oil ($/gallon)	$	2.05	$	2.25
Estimated Crude Oil Equivalent ($/barrel)	$	72.04	$	80.44

138

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

As of December 31, 2007 and 2006, US Airways had open fuel hedge positions in place, which do not currently qualify for hedge accounting under SFAS 133. Accordingly, the derivative hedging instruments are recorded as an asset or liability on the balance sheets at fair value and any changes in fair value are recorded as gains on fuel hedging instruments, net in operating expenses in the accompanying consolidated statements of operations in the period of change. During 2007, 2006 and the three months ended December 31, 2005, US Airways recognized a net gain of $245 million, a net loss of $79 million and a net loss of $50 million, respectively, related to hedging activities. The fair value of US Airways’ financial derivative instruments at December 31, 2007 and 2006 was a net asset of approximately $121 million and a net liability of $66 million, respectively. Since US Airways’ financial derivative instruments are not traded on a market exchange, the fair values are determined by the use of valuation models with assumptions about commodity prices based on those observed in the underlying markets.

Due to the application of fresh-start reporting, US Airways recognized a one-time gain of $6 million related to unrecognized fuel hedge gains included in reorganization items, net for the nine months ended September 30, 2005.


*(m)*	*Deferred Gains and Credits, Net*

US Airways has deferred the gain related to certain Sabre Inc. (“Sabre”) options exercised in 1999 and 2007. The gain will be amortized over the contract period as a reduction to other operating expenses. At December 31, 2007 and 2006, the unamortized balance of the deferred credit, was $34 million and $31 million, respectively. See Note 4(a) for more information related to the Sabre options.


*(n)*	*Revenue Recognition*

Passenger revenue

139

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

exchanges included in the air traffic liability are routinely evaluated based on subsequent activity to validate the accuracy of US Airways’ estimates. Any adjustments resulting from periodic evaluations of the estimated air traffic liability are included in results of operations during the period in which the evaluations are completed.

US Airways purchases capacity, or ASMs, generated by US Airways Group’s wholly owned regional air carriers and the capacity of Air Wisconsin Airlines Corp. (“Air Wisconsin”), Republic Airways Holdings (“Republic”), Mesa Airlines, Inc. (“Mesa”) and Chautauqua Airlines, Inc. (“Chautauqua”) in certain markets. Air Wisconsin, Republic, Mesa and Chautauqua operate regional jet aircraft in these markets as part of US Airways Express. US Airways classifies revenues related to capacity purchase arrangements as Express passenger revenues. Liabilities related to tickets sold for travel on these air carriers are also included in US Airways’ air traffic liability and are subsequently relieved in the same manner as described above.

Most of US Airways’ receivables relate to tickets sold to individual passengers through the use of major credit cards or to tickets sold by other airlines and used by passengers on US Airways or its regional airline affiliates. These receivables are short-term, mostly being settled within seven days after sale. Bad debt losses, which have been minimal in the past, have been considered in establishing allowances for doubtful accounts.

US Airways collects various excise taxes on its ticket sales, which are accounted for on a net basis.

Cargo Revenue

Cargo revenue is recognized when shipping services for mail and other cargo are provided.

Other Revenue


*(o)*	*Stock-based Compensation*

Upon emergence from the first bankruptcy in March 2003, the Predecessor Company adopted the fair value method of recording stock-based employee compensation contained in SFAS No. 123 “Accounting for Stock-Based Compensation” (“SFAS 123”) and accounted for this change in accounting principle using the “prospective method” as described by SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure, an amendment of FASB Statement No. 123” (“SFAS 148”). Accordingly, the fair values of all Predecessor Company stock option and warrant grants, as determined on the date of the grant, were amortized as compensation expense in the statements of operations over the vesting period. All stock options and warrants were canceled upon emergence from the second bankruptcy.

Effective with the emergence from bankruptcy and merger with America West Holdings, US Airways applied the provisions of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and related interpretations. Effective January 1, 2006, US Airways adopted SFAS No. 123R, “Share-Based Payment” (“SFAS 123R”), using the modified prospective transition method. Under the modified prospective transition method, compensation cost is recognized in the financial statements beginning with the effective date based on the requirements of SFAS 123R for all share-based payments granted after that date, and based on the requirements of SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), for all unvested awards granted prior to the effective date of SFAS 123R. Results for prior periods are not restated using the modified prospective transition method.

140

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

Had US Airways determined compensation cost based on the fair value at the grant date for its stock options, stock appreciation rights and restricted stock units under SFAS 123 for the three months ended December 31, 2005, US Airways’ net loss would have been adjusted as indicated below (in millions):


	Three Months
	Ended
	December 31,
	2005

Net loss, as reported	$	(256	)
Add: Stock-based compensation included in reported net loss		4
Deduct: Stock-based compensation determined under the fair value based method		(3	)

Pro forma net loss	$	(255	)


*(p)*	*Maintenance and Repair Costs*

Maintenance and repair costs for owned and leased flight equipment are charged to operating expense as incurred.


*(q)*	*Selling Expenses*

Selling expenses include commissions, credit card fees, computerized reservations systems fees, advertising and promotional expenses. Advertising and promotional expenses are expensed when incurred. Advertising and promotional expenses for the years ended December 31, 2007, 2006, the three months ended December 31, 2005 and nine months ended September 30, 2005 were $16 million, $16 million, $2 million and $14 million, respectively.


*(r)*	*Express Expenses*

Expenses associated with US Airways’ former MidAtlantic division, US Airways Group’s wholly owned regional airlines and affiliate regional airlines operating as US Airways Express are classified as Express expenses on the consolidated statements of operations. Effective May 27, 2006, the transfer of certain MidAtlantic assets to Republic was complete, and Republic assumed the operations of the aircraft as a US Airways affiliate Express carrier. Express expenses on the consolidated statements of operations consist of the following (in millions):


	Successor Company						Predecessor Company
	Year Ended		Year Ended		Three Months Ended		Nine Months Ended
	December 31,		December 31,		December 31,		September 30,
	2007		2006		2005		2005

Aircraft fuel and related taxes	$	765	$	764	$	193	$	328
Salaries and related costs		20		36		15		55
Capacity purchases		1,599		1,551		351		740
Other rent and landing fees		93		97		25		73
Aircraft rent		—		9		10		21
Selling expenses		157		148		32		66
Aircraft maintenance		—		2		3		9
Depreciation and amortization		—		—		—		7
Other expenses		93		63		12		73

Express expenses	$	2,727	$	2,670	$	641	$	1,372

141

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)


*(s)*	*Variable Interest Entities*

US Airways determined that certain entities with which US Airways has capacity purchase agreements are considered variable interest entities under Financial Accounting Standards Board (“FASB”) Interpretation No. 46 “Consolidation of Variable Interest Entities,” as revised (“FIN 46(R)”). US Airways has determined that it is not the primary beneficiary of any of these variable interest entities and, accordingly, does not consolidate any of the entities with which it has jet service agreements. See Note 8(d) for further discussion.


*(t)*	*Recent Accounting Pronouncements*

In June 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109” (“FIN 48”), which clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements. The interpretation prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. US Airways adopted the provisions of FIN 48 on January 1, 2007. The implementation of FIN 48 did not have a material impact on the US Airways’ consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” This standard defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America, and expands disclosure about fair value measurements. This pronouncement applies to other accounting standards that require or permit fair value measurements. Accordingly, this statement does not require any new fair value measurement. This statement is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. In December of 2007, the FASB agreed to a one year deferral of SFAS No. 157’s fair value measurement requirements for nonfinancial assets and liabilities that are not required or permitted to be measured at fair value on a recurring basis. Management is currently evaluating the requirements of SFAS No. 157, but does not expect it to have a material impact on US Airways’ 2008 consolidated financial statements.

Effective December 31, 2006, US Airways adopted the recognition provisions of SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R).” This statement requires employers to recognize in their balance sheets the overfunded or underfunded status of defined benefit postretirement plans, measured as the difference between the fair value of plan assets and the benefit obligation (the projected benefit obligation for pension plans and the accumulated postretirement benefit obligation for other postretirement plans). The impact on US Airways’ consolidated financial statements of adopting the recognition provisions of SFAS No. 158 was not material. US Airways recognized a nominal amount of prior changes in the funded status of its postretirement benefit plans through accumulated other comprehensive income. The adoption of the recognition provisions of SFAS No. 158 had no effect on US Airways’ statement of operations for the year ended December 31, 2006 or for any prior period presented.

SFAS No. 158 also requires plan assets and obligations to be measured as of the employer’s balance sheet date. US Airways currently uses a measurement date of September 30 for its other postretirement benefits. The measurement provisions of this statement are required to be adopted no later than fiscal years beginning after December 15, 2008. US Airways will adopt the measurement provisions of this statement in 2008. The impact on US Airways’ consolidated financial statements of adoption of the measurement provisions will not be material.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities.” SFAS No. 159 allows entities the option to measure eligible financial instruments at fair value as of specified dates. Such election, which may be applied on an instrument by instrument basis, is typically irrevocable once elected. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. US Airways adopted

142

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

SFAS No. 159 on January 1, 2008, but has not yet elected the fair value option for any items permitted under SFAS No. 159.


2.	Emergence from bankruptcy


*(a)*	*Emergence and Claims Resolution*

On September 16, 2005, the Bankruptcy Court entered an order approving and confirming the Joint Plan of Reorganization of US Airways, Inc. and Its Affiliated Debtors and Debtors-in-Possession (the “Plan of Reorganization”). The Plan of Reorganization provides for a reorganization of each of the five Debtors. In accordance with the Plan of Reorganization, US Airways Group entered into a merger transaction with America West Holdings.

Initially, the equity of the new US Airways Group was allocated to three categories of holders. First, existing shares of America West Holdings were converted into shares of common stock of US Airways Group. Second, the new equity investors received shares for their initial investments and the exercise of their options. Third, unsecured creditors of the Debtors have received or will receive distributions totaling 8.2 million shares of the new common stock of US Airways Group in satisfaction of allowed unsecured claims, including shares issued to the Pension Benefit Guaranty Corporation (“PBGC”) and the Air Line Pilots Association (“ALPA”).

The Plan of Reorganization classified claims into classes according to their relative seniority and other criteria and provides for the treatment for each class of claims. Pursuant to the bankruptcy process, the Debtors’ claims agent received approximately 4,600 timely-filed proofs of claims as of the general bar date totaling approximately $26.4 billion in the aggregate, and approximately 530 proofs of claims timely-filed by governmental entities totaling approximately $13.6 billion in the aggregate. The Debtors continue to be responsible for administering and resolving claims related to the bankruptcy process. As of December 31, 2007, there are $267 million of unresolved claims. The ultimate resolution of certain of the claims asserted against the Debtors in the Chapter 11 cases will be subject to negotiations, elections and Bankruptcy Court procedures. The recovery to individual creditors ultimately distributed to any particular general unsecured creditor under the Plan of Reorganization will depend on a number of variables, including the agreed value of any general unsecured claims filed by that creditor, the aggregate of all resolved general unsecured claims and the value of shares of the new common stock of US Airways Group in the marketplace at the time of distribution. The effects of these distributions were reflected in US Airways’ financial statements upon emergence and will not have any further impact on the results of operations.

PBGC Claim — On November 12, 2004, US Airways filed a motion requesting a determination from the Bankruptcy Court that US Airways satisfied the financial requirements for a “distress termination” under section 4041(c)(2)(B)(ii)(IV) of the Employee Retirement Security Act of 1974, as amended (“ERISA”), of the Retirement Plan for Flight Attendants in the Service of US Airways, Inc. (“AFA Plan”), the Pension Plan for Employees of US Airways, Inc. Who Are Represented by the International Association of Machinists and Aerospace Workers (the “IAM Plan”), and the Retirement Plan for Certain Employees of US Airways, Inc. (the “CE Plan”), as well as approval of each plan’s termination. These plans had aggregate benefit obligations of $2.71 billion and aggregate plan assets of $1.76 billion, as of the plans’ termination dates in January 2005. On January 6, 2005, the Bankruptcy Court entered an order (i) finding that the financial requirements for a distress termination of the plans had been met and (ii) approving termination of the plans. The AFA Plan and the IAM Plan were terminated effective January 10, 2005, which was the date agreed to by the PBGC and US Airways. The CE Plan was terminated effective January 17, 2005, which was the date agreed to by the PBGC and US Airways. Effective February 1, 2005, the PBGC was appointed trustee for each of the three plans. As a result of these terminations, the PBGC filed claims against US Airways for the unfunded portion of each of the plans. Under the Plan of Reorganization, the PBGC received, as treatment for its claims: (i) cash in the amount of $13.5 million; (ii) an unsecured promissory note in the principal amount of $10 million issued by US Airways and guaranteed by US Airways Group, bearing interest at a rate of 6.00% per annum payable annually in arrears, with such promissory note to be payable in a single installment on the seventh anniversary of the effective date of the Plan of

143

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

Reorganization; and (iii) 70%, or 4,873,485 shares, of the common stock of US Airways Group issued to the unsecured creditors, net of shares allocated to ALPA.

Agreements with ALPA — On September 14, 2005, US Airways Group, US Airways, America West Holdings and AWA reached agreement with the two ALPA-represented pilot groups at the separate airlines on a comprehensive agreement (the “Transition Agreement”) that governs many merger related aspects of the parties’ relationships until there is a single collective bargaining agreement covering all pilots. US Airways Group and US Airways had entered into a separate letter of agreement that provided that US Airways’ pilots designated by ALPA would receive 1.25 million shares of US Airways Group common stock and options to purchase 1.1 million shares of US Airways Group common stock. The 1.25 million shares were drawn from the 8.2 million shares initially allocated to unsecured creditors in the Plan of Reorganization and were issued to the pilots in accordance with the instructions provided by ALPA during the fourth quarter of 2005. The options have been issued according to the following schedule: the first tranche of 500,000 options was issued on January 31, 2006, a second tranche of 300,000 options was issued on January 31, 2007, and the third tranche of 300,000 options was issued on January 31, 2008. The options have a term of five years from date of issuance. The exercise price for each tranche of options is the average of the closing price per share of US Airways Group common stock as reflected on the New York Stock Exchange for the 20 business day period prior to the applicable option issuance date. The letter of agreement also includes provisions restricting transfer of the options and governing anti-dilution. In connection with the negotiation of the Transition Agreement and the letter of agreement, US Airways also agreed with ALPA to eliminate an existing 1% pay reduction that would have otherwise applied to all pilots as a result of a lump sum payment due to pilots recalled from furlough and further agreed to pay $500,000 to resolve an outstanding grievance over pay credits for pilots assigned by US Airways to travel to and from certain duty assignments.


*(b)*	*Fresh-start Reporting and Purchase Accounting*

In connection with its emergence from bankruptcy on September 27, 2005, US Airways adopted fresh-start reporting in accordance with SOP 90-7. Accordingly, US Airways valued its assets and liabilities at fair value. In addition, as a result of the merger which is accounted for as a reverse acquisition under SFAS No. 141, “Business Combinations,” (“SFAS 141”) with America West Holdings as the accounting acquirer, US Airways Group applied the provisions of SFAS 141 and allocated the purchase price to the assets and liabilities of US Airways Group and to its wholly owned subsidiaries including US Airways. The purchase price or value of the merger consideration was determined based upon America West Holdings’ traded market price per share due to the fact that US Airways Group was operating under bankruptcy protection prior to the merger. The outstanding shares of America West Holdings at September 27, 2005 were valued at $4.82 per share, resulting in an aggregate value assigned to the shares of $175 million. The $4.82 per share value was based on the five-day average share price of America West Holdings common stock, with May 19, 2005, the merger announcement date, as the midpoint. Certain unsecured creditors of US Airways Group have been or will be issued an aggregate of approximately 8.2 million shares of US Airways Group common stock in settlement of their claims, including stock issued to the PBGC and ALPA. The fair value of that common stock valued at an equivalent price based on the $4.82 value of the America West Holdings stock is $96 million, which was determined to be the reorganization value of US Airways Group. America West Holdings incurred $21 million of direct acquisition costs in connection with the merger. The following table summarizes the components of the purchase price (in millions):


Fair value of common shares issued to US Airways Group’s unsecured creditors	$	96
Estimated merger costs		21

Total purchase price	$	117

US Airways’ equity value of $1 million was determined based on an allocation of the purchase price to each of US Airways Group’s subsidiaries’ fair values of assets and liabilities. The remaining equity of $116 million was assigned to US Airways Group and its other subsidiaries. In connection with US Airways’ emergence from

144

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

bankruptcy, significant prepetition liabilities were discharged. The surviving liabilities and the assets acquired in the merger are shown at estimated fair value. Liabilities assumed reflects the discharge of $1.24 billion of liabilities for postretirement benefits, $868 million of liabilities related to the termination of US Airways’ defined benefit pension plans and $75 million of liabilities related to trade accounts payable and other liabilities. Most of these obligations were only entitled to receive such distributions of cash and common stock as provided for under the Plan of Reorganization. The surviving liabilities and the assets acquired in the merger are shown at estimated fair value. US Airways used an outside appraisal firm to assist in determining the fair value of long-lived tangible and identifiable intangible assets. Significant assets and liabilities adjusted to fair market value include expendable spare parts and supplies, property and equipment, airport take-off and landing slots, aircraft leases, deferred revenue and continuing debt obligations. The foregoing estimates and assumptions are inherently subject to significant uncertainties and contingencies beyond the control of US Airways. Accordingly, there can be no assurance that the estimates, assumptions, and values reflected in the valuations will be realized, and actual results could vary materially.

The excess of the reorganization value over tangible assets and identifiable intangible assets and liabilities has been reflected as goodwill on the balance sheet of December 31, 2005. The net assets acquired and liabilities assumed in connection with the merger and initial allocation of purchase price to US Airways are as follows (in millions):


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

	$	1

As a result of the adoption of fresh-start reporting, US Airways’ post-emergence financial statements are not comparable with its pre-emergence financial statements, because they are, in effect, those of a new entity. US Airways also recorded certain purchase accounting adjustments specifically related to the merger with America West Holdings. The purchase accounting adjustments include those made to conform the accounting policies of US Airways to those of America West Holdings, including an adjustment to reduce the air traffic liability by $124 million to conform its accounting policies for recognizing revenue from forfeited tickets, and an increase to noncurrent employee benefit liabilities and other of $16 million to conform to America West Holdings’ policy of not discounting its workers compensation liability. Adjustments to conform accounting policies were recorded as direct adjustments to goodwill. In connection with the merger, primarily due to the relocation of the corporate headquarters from Arlington, Virginia to Tempe, Arizona, US Airways accrued in purchase accounting $24 million of severance and benefits related to planned reductions in force for its non-union employees. US Airways Group incurred additional severance and benefits for reductions in force related to the merger; however, due to requirements for continued service during the integration period, these severance and benefits were not recorded as an adjustment to the purchase price allocation but were expensed. See Note 3 for discussion of amounts expensed for severance and benefits in the fourth quarter of 2005 and during 2006.

145

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

Adjustments made in the year ended December 31, 2007 and 2006 to previously recorded fair values are as follows (in millions):


Goodwill reported as of September 30, 2005	$	732
Utilization of pre-merger NOL		(85	)
Materials and supplies, net		32
Accounts receivable		(22	)
Other assets		(22	)
Noncurrent employee benefits and other		12
Related party payables		(9	)
Property and equipment		6
Long-term debt		(6	)
Accrued compensation and vacation		(4	)
Other accrued expenses		(3	)
Accrued taxes		(2	)
Accounts payable		(1	)
Other intangibles, net		1

Goodwill reported as of December 31, 2006		629

Utilization of pre-merger NOL		7

Goodwill reported as of December 31, 2007	$	622


*(c)*	*Reorganization Items, Net*

SOP 90-7 requires that the financial statements for periods following the Chapter 11 filing through emergence distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, revenues, expenses, realized gains and losses and provisions for losses directly associated with the reorganization and restructuring of the business are reported separately as reorganization items,

146

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

net in the statements of operations. Reorganization items, net as shown on the statements of operations related to the Chapter 11 proceedings consist of the following (in millions):


	Predecessor
	Company
	Nine Months Ended
	September 30,
	2005

Curtailment of postretirement benefits(a)	$	1,420
Termination of pension plans(b)		801
Discharge of liabilities(c)		75
Aircraft order cancellation penalties and reversals(d)		30
Interest income on accumulated cash		7
Damage and deficiency claims(e)		2
Revaluation of assets and liabilities(f)		(1,498	)
Severance including benefits(g)		(96	)
Professional fees		(57	)
Airbus equipment deposits and credits, net(h)		(35	)
Restructured aircraft financings(i)		(5	)
Write-off of deferred compensation		(4	)
Other		(4	)

	$	636


(a)		In January 2005, the Bankruptcy Court approved settlement agreements between US Airways and its unions and the court-appointed Section 1114 Committee, representing retirees other than those represented by the IAM and TWU, to begin the significant curtailment of postretirement medical benefits. US Airways recognized a gain of $183 million in connection with this curtailment in the first quarter of 2005. Upon the emergence from bankruptcy and effectiveness of the Plan of Reorganization, an additional gain of $1.24 billion was recognized as the liability associated with the postretirement medical benefits was reduced to fair market value. See also Note 6(a).

(b)		Also in January 2005, US Airways terminated three defined benefit plans related to the flight attendants, mechanics and certain other employees (see Note 6(a)). The PBGC was appointed trustee of the plans upon termination. US Airways recognized a curtailment gain of $24 million and a $91 million minimum pension liability adjustment in connection with the terminations in the first quarter of 2005. Upon the effective date of the Plan of Reorganization and in connection with the settlement with the PBGC, the remaining liabilities associated with these plans were written off, net of settlement amounts.

(c)		Reflects the discharge of trade accounts payable and other liabilities upon emergence from bankruptcy. Most of these obligations were only entitled to receive such distributions of cash and common stock as provided for under the plan of reorganization in each of the bankruptcies. A portion of the liabilities subject to compromise in the bankruptcies were restructured and continued, as restructured, to be liabilities of the Successor Company.

(d)		As a result of US Airways’ bankruptcy filing in September 2004, US Airways was not able to secure the financing necessary to take on-time delivery of three scheduled regional jet aircraft and therefore accrued penalties of $3 million until delivery of these aircraft was made to a US Airways Express affiliate in August 2005. Offsetting these penalties is the reversal of $33 million in penalties recorded by US Airways in the nine months ended December 31, 2003 due to its intention not to take delivery of certain aircraft scheduled for future delivery. In connection with the Airbus Memorandum of Understanding (“MOU”), the accrual for these penalties was reversed (see also Note 3).

147

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)


(e)		Damage and deficiency claims are largely a result of US Airways’ election to either restructure, abandon or reject aircraft debt and leases during the bankruptcy proceedings. As a result of the confirmation of the Plan of Reorganization and the effectiveness of the merger, these claims were withdrawn and the accruals reversed.

(f)		As of September 30, 2005, US Airways recorded $1.5 billion of adjustments to reflect assets and liabilities at fair value, including an initial net write-down of goodwill of $1.82 billion. Goodwill of $584 million was recorded to reflect the excess of the estimated fair value of liabilities and equity over identifiable assets. Subsequent to September 30, 2005, US Airways reduced goodwill by $103 million to reflect adjustments to the fair value of certain assets and liabilities. See Note 2(b) for a description of changes in goodwill subsequent to September 30, 2005.

(g)		In connection with filing for bankruptcy on September 12, 2004, US Airways achieved cost-savings agreements with its principal collective bargaining groups. In connection with the new labor agreements, approximately 5,000 employees across several of US Airways’ labor groups were involuntarily terminated or participated in voluntary furlough and termination programs.

(h)		In connection with the Airbus Memorandum of Understanding (the “Airbus MOU”) executed between AVSA S.A.R.L., an affiliate of Airbus S.A.S. (“Airbus”), US Airways Group, US Airways and AWA, US Airways was required to pay a restructuring fee of $39 million, which was paid by means of offset against existing equipment deposits held by Airbus. US Airways also received credits from Airbus totaling $4 million in 2005, primarily related to equipment deposits. See also Note 3.

(i)		The GE Merger MOU provided for the continued use of certain leased Airbus, Boeing and regional jet aircraft, the modification of monthly lease rates and the return of certain other leased Airbus and Boeing aircraft. The GE Merger MOU also provided for the sale-leaseback of assets securing various GE obligations. In connection with these transactions, US Airways recorded a net loss of $5 million.


3.	Special items, net

Special items, net as shown on the consolidated statements of operations include the following charges (credits) (in millions):


	Successor Company
	Years Ended						3 Months Ended
	December 31,						December 31,
	2007			2006			2005

Airbus restructuring	$	—		$	(90	)(a)	$	—
Merger related transition expenses		99	(b)		131	(b)		28	(b)
Power by the hour program penalties		—			—			7	(c)
Severance due to change in control		—			—			1	(d)
Settlement of bankruptcy claims		—			(3	)(e)		—

Total	$	99		$	38		$	36


(a)		In connection with the merger and the Airbus MOU, certain aircraft firm orders were restructured. In connection with that restructuring, US Airways Group and America West Holdings were required to pay non-refundable restructuring fees totaling $89 million by means of set-off against existing equipment deposits of US Airways and AWA held by Airbus of $39 million and $50 million respectively. In 2005, AWA’s restructuring fee of $50 million has been classified as a special charge, along with $7 million in associated capitalized interest. Also in connection with the Airbus MOU, US Airways and AWA entered into two loan agreements with aggregate commitments of up to $161 million and $89 million. On March 31, 2006, the outstanding principal and accrued interest on the $89 million loan was forgiven upon repayment in full of the $161 million loan in accordance with terms of the Airbus loans. As a result, in 2006, US Airways recognized a

148

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)


		gain associated with the return of these equipment deposits upon forgiveness of the loan totaling $90 million, consisting of the $89 million in equipment deposits and accrued interest of $1 million.

(b)		In 2007, in connection with the continuing effort to consolidate functions and integrate organizations, procedures, and operations with AWA, US Airways incurred $99 million of transition and merger integration costs. These items included $13 million of training and related expenses; $19 million in compensation expenses for equity awards granted in connection with the merger to retain key employees through the integration period; $20 million of aircraft livery costs; $37 million in professional and technical fees related to the integration of airline operations systems; $1 million in employee moving expenses; $4 million related to reservation system migration expenses and $5 million of other expenses.

		In 2006, US Airways incurred $131 million of transition and merger integration costs. These items included $6 million of training and related costs; $41 million in compensation expenses primarily for severance, retention payments and equity awards granted in connection with the merger to retain key employees through the integration period; $17 million of aircraft livery costs; $38 million in professional and technical fees, including continuing professional fees associated with US Airways’ bankruptcy proceedings and fees related to the integration of airline operations systems; $7 million of employee moving expenses; $11 million of net costs associated with the integration of the AWA FlightFund and US Airways Dividend Miles frequent traveler programs; $2 million in merger related aircraft lease return expenses and $9 million of other expenses.

		In 2005, US Airways incurred $28 million of transition and merger integration costs in the fourth quarter of 2005. These items included $8 million in compensation expenses primarily for severance and special stock awards granted under a program designed to retain key employees through the integration period; $1 million of aircraft livery costs; $3 million in professional and technical fees; $11 million in insurance premiums related to policies for former officers and directors; $2 million of sales and marketing program expenses related to notifying frequent traveler program members about the merger; $1 million of programming service expense and $2 million in other expenses.

Severance charges and payment activity related to the merger are as follows (in millions):


	Year Ended
	December 31,
	2006			2005

Balance beginning of year	$	9		$	—
Amount recorded by US Airways in purchase accounting		—			24
Severance expense		14			2
Payments		(23	)		(17	)

Balance end of year	$	—		$	9


(c)		In 2005, in connection with the return of certain leased aircraft, AWA incurred expenses of $7 million related to penalties incurred under an outsourced maintenance arrangement.

(d)		In 2005, AWA recorded severance expense totaling approximately $1 million for terminated employees resulting from the merger.

(e)		In 2006, US Airways recognized $3 million in gains in connection with the settlement of bankruptcy claims.


4.	Financial instruments


*(a)*	*General*

149

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

company. Each tranche included 3,000,000 stock options. In December 1999, US Airways exercised the first tranche of stock options at an exercise price of $27 per option and received proceeds of $81 million in January 2000 in lieu of receiving SHC Common Stock. In February 2000, SHC declared a cash dividend resulting in a dilution adjustment to the terms of the second tranche. The adjusted terms of the second tranche include stock options to acquire 3,406,914 shares of SHC Common Stock at an exercise price of $23.78 subject to a $111.83 per share cap on the fair market value of the underlying common stock. On December 12, 2006, Sabre announced that it had agreed to be acquired by several private equity groups for $32.75 per share in cash. The acquisition of Sabre was completed during March 2007 at which time the remaining options were exercised and the related shares sold. US Airways received proceeds of $31 million in connection with the transaction. Realized gains resulting from the exercise of Sabre options are subject to a clawback provision. Under the clawback provision, if US Airways elects to terminate its information technology service agreement with Sabre, it will be required to pay Sabre an amount equal to the gain multiplied by the ratio of the remaining months in the contract period over 180 months. The deferred gain from the 1999 and 2007 exercises is amortized on a straight-line basis over a contractually determined period ending December 2012. As of December 31, 2007, US Airways had $34 million of unamortized deferred gain related to the sale of Sabre options.


*(b)*	*Fuel Price Risk Management*

As of December 31, 2007, US Airways had entered into costless collar transactions hedging approximately 22% of US Airways’ projected 2008 fuel requirements. The fair value of the financial derivative instruments was a net asset of $121 million recorded in prepaid expenses and other at December 31, 2007 and a net liability of $66 million recorded in accounts payable at December 31, 2006. As of December 31, 2007, US Airways had no deposits held as collateral on open fuel hedge positions as these deposits are only required when the fair value of the hedges is in a liability position.

US Airways is exposed to credit risks in the event any counterparty to a hedge transaction fails to meet its obligations. US Airways does not anticipate such non-performance as counterparties are selected based on credit ratings and exposure to any one counterparty is closely monitored.


*(c)*	*Fair Values of Financial Instruments*

Cash, Cash Equivalents and Investments in Marketable Securities

As of December 31, 2007 and 2006, US Airways’ cash and cash equivalents are as follows (in millions):


	2007		2006

Cash and cash equivalents:
Corporate notes	$	90	$	731
Cash and money market funds		1,850		380

Total cash and cash equivalents	$	1,940	$	1,111

The carrying amount of cash equivalents approximates fair value because of the short-term nature of these instruments.

150

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

As of December 31, 2007 and 2006, US Airways’ investments in marketable securities are classified as follows (in millions):


			Unrealized
	Cost Basis		Loss		Fair Value

Investments in marketable securities
December 31, 2007
Held to maturity securities:
Corporate bonds	$	125	$	—	$	125
U.S. government sponsored enterprises		81		—		81
Certificates of deposit		20		—		20

Total investments in marketable securities-current	$	226	$	—	$	226

Available for sale securities:
Auction rate securities		401		48		353

Total investments in marketable securites-noncurrent	$	401	$	48	$	353

December 31, 2006
Held to maturity securities:
Corporate bonds	$	79	$	—	$	79
U.S. government sponsored enterprises		78		—		78
Commercial paper		20		—		20

Total held to maturity securities		177		—		177
Available for sale securities:
Auction rate securities		1,072		—		1,072

Total investments in marketable securities-current	$	1,249	$	—	$	1,249

All held to maturity securities mature in one year or less.

As of December 31, 2007, US Airways held auction rate securities totaling $411 million at par value, which are classified as available for sale securities and noncurrent assets on the US Airways’ balance sheet. Contractual maturities for these auction rate securities are greater than nine years with an interest reset date approximately every 28 days. Historically, the carrying value of auction rate securities approximated fair value due to the frequent resetting of the interest rates. With the liquidity issues experienced in the global credit and capital markets, US Airways’ auction rate securities have experienced multiple failed auctions. While US Airways continues to earn interest on these investments at the maximum contractual rate, the estimated market value of these auction rate securities no longer approximates par value.

Given the complexity of auction rate securities, US Airways engaged an investment advisor to assist in determining the fair values of its investments. US Airways, with the assistance of its advisor, estimated the fair value of these auction rate securities based on the following: (i) the underlying structure of each security; (ii) the present value of future principal and interest payments discounted at rates considered to reflect current market conditions; (iii) consideration of the probabilities of default, auction failure, or repurchase at par for each period; and (iv) estimates of the recovery rates in the event of default for each security. These estimated fair values could change significantly based on future market conditions.

US Airways concluded that the fair market value of these auction rate securities at December 31, 2007 was $353 million, a decline of $58 million from par value. Of this amount $48 million was deemed temporary as US Airways believes the decline in market value is due to general market conditions. Based upon US Airways’

151

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

evaluation of available information, US Airways believes these investments are of high credit quality, as substantially all of the investments carry a AAA credit rating, and approximately 30% of the par value of these auction rate securities is insured. In addition, US Airways has the intent and ability to hold these investments until anticipated recovery in market value occurs. Accordingly, US Airways has recorded an unrealized loss on these securities of $48 million in other comprehensive income. US Airways concluded that $10 million of the decline was other than temporary and recorded an impairment charge in other income, net. US Airways’ conclusion for the other than temporary impairment is based on the significant decline in fair value indicated for a certain investment, a portion of which is collateralized either directly or indirectly by sub-prime mortgages.

As of January 31, 2008, the commercial banks managing the investments provided US Airways with estimated fair market values, which indicated an additional decline in the aggregate fair market value of US Airways’ auction rate securities of approximately $70 million (from amounts provided as of December 31, 2007). US Airways currently believes that these additional declines in value are also temporary and are attributed to current credit market events and continued lack of market liquidity in early 2008. Such temporary declines, if sustained, would be recognized in other comprehensive income in the first quarter of 2008. It is possible that additional declines in fair value may occur. To the extent the fair market values of the auction rate securities were to subsequently increase, such increase would reduce the unrealized loss recorded in other comprehensive income.

US Airways continues to monitor the market for auction rate securities and consider its impact (if any) on the fair market value of its investments. If the current market conditions deteriorate further, or the anticipated recovery in market values does not occur, US Airways may be required to record additional unrealized losses in other comprehensive income or impairment charges in 2008.

Gross proceeds from sales of marketable securities for the years ended December 31, 2007, 2006 and three months ended December 31, 2005 were $3.2 billion, $1.79 billion and $112 million, respectively.

Long Term Debt

At December 31, 2007 and 2006, the fair value of long-term debt was approximately $1.55 billion and $1.64 billion, respectively. US Airways’ variable rate long-term debt with a carrying value of $532 million and $694 million at December 31, 2007 and 2006, respectively, approximates fair value because these borrowings have variable interest rate terms that approximate market interest rates for similar debt instruments. The fair value of US Airways’ other long-term debt is determined based on quoted market prices if available or market prices for comparable debt instruments.

152

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)


5.	Debt, including capital lease obligations

The following table details US Airways’ debt as of December 31, 2007 and 2006 (in millions). Variable interest rates listed are the rates as of December 31, 2007 unless noted.


	December 31,			December 31,
	2007			2006

Secured
Equipment notes payable, fixed and variable interest rates ranging from 6.55% to 9.62%, averaging 7.57% as of December 31, 2007	$	1,378		$	1,258
Slot financing, interest rate of 8%, installments due through 2015(a)		47			47
Capital lease obligations, interest rate of 8%, installments due through 2021(b)		41			41
Senior secured discount notes, variable interest rate of 8.24%, installments due 2005 through 2009(c)		32			33
GE credit facility(d)		—			21
Capital lease obligations, computer software, installments due through 2009		1			2

		1,499			1,402

Unsecured
GE Engine Maintenance term note, variable interest of 8.79%, installments due 2008 through 2011(e)		57			45
Industrial development bonds, fixed interest rate of 6.3% due 2023(f)		29			29
Barclays prepaid miles (formerly Juniper prepaid miles)(d)		—			325
Note payable to Pension Benefit Guaranty Corporation, interest rate of 6%, interest only payments until due 2012(g)		10			10

		96			409

Total long-term debt and capital lease obligations		1,595			1,811
Less: Unamortized discount on debt		(121	)		(133	)
Current maturities		(101	)		(95	)

Long-term debt and capital lease obligations, net of current maturities	$	1,373		$	1,583


(a)		In September 2005, US Airways entered into an agreement with Republic to sell and leaseback certain of its commuter slots at Ronald Reagan Washington National Airport and New York LaGuardia Airport. US Airways continues to hold the right to repurchase the slots anytime after the second anniversary of the slot sale-leaseback transaction. These transactions were accounted for as secured financings. Installments are due monthly through 2015. In December 2006, Republic and US Airways modified terms of the agreement to conform to subsequent regulatory changes at LaGuardia, and the slots were returned to US Airways. The need for a subsequent modification was fully contemplated in the original agreement.

(b)		Capital lease obligations consist principally of certain airport maintenance and facility leases which expire in 2018 and 2021.

(c)		On December 27, 2004, AWA raised additional capital by financing its Phoenix maintenance facility and flight training center. The flight training center was previously unencumbered, and the maintenance facility became unencumbered earlier in 2004 when AWA refinanced its term loan. Using its leasehold interest in these two facilities as collateral, AWA, through a wholly owned subsidiary named FTCHP LLC, raised $31 million through the issuance of senior secured discount notes. The notes were issued by FTCHP at a discount pursuant to the terms of a senior secured term loan agreement among AWA, FTCHP, Heritage Bank SSB, as

153

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)


		administrative agent, Citibank, N.A., as the initial lender, and the other lenders from time to time party thereto. Citibank, N.A. subsequently assigned all of its interests in the notes to third party lenders.

		AWA fully and unconditionally guaranteed the payment and performance of FTCHP’s obligations under the notes and the loan agreement. The notes require aggregate principal payments of $36 million with principal payments of $2 million due on each of the first two anniversary dates and the remaining principal amount due on the fifth anniversary date. The notes may be prepaid in full at any time (subject to customary LIBOR breakage costs) and in partial amounts of $2 million on the third and fourth anniversary dates. The unpaid principal amount of the notes bears interest based on LIBOR plus a margin subject to adjustment based on a loan to collateral value ratio.

		The loan agreement contains customary covenants applicable to loans of this type, including obligations relating to the preservation of the collateral and restrictions on the activities of FTCHP. In addition, the loan agreement contains events of default, including payment defaults, cross-defaults to other debt of FTCHP, if any, breach of covenants, bankruptcy and insolvency defaults and judgment defaults.

		In connection with this financing, AWA sold all of its leasehold interests in the maintenance facility and flight training center to FTCHP and entered into subleases for the facilities with FTCHP at lease rates expected to approximate the interest payments due under the notes. In addition, AWA agreed to make future capital contributions to FTCHP in amounts sufficient to cover principal payments and other amounts owing pursuant to the notes and the loan agreement. As part of the transfer of substantially all of AWA’s assets and liabilities to US Airways in connection with the combination of all mainline airline operations under one FAA operating certificate on September 26, 2007, AWA assigned its subleases for the facilities with FTCHP to US Airways. In addition, US Airways assumed all of the obligations of AWA in connection with the financing and joined the guarantee of the payment and performance of FTCHP’s obligations under the notes and the loan agreement.

(d)		On March 23, 2007, US Airways Group entered into a new term loan credit facility with Citicorp North America, Inc., as administrative agent, and a syndicate of lenders pursuant to which US Airways Group borrowed an aggregate principal amount of $1.6 billion. US Airways is a guarantor of the Citicorp credit facility.

		The proceeds of the Citicorp credit facility were used to repay in full the following indebtedness:


	•	The amended and restated loan agreement, dated April 7, 2006, entered into by US Airways Group with General Electric Capital Corporation (“GECC”) and a syndicate of lenders. At the time of the repayment, the total outstanding balance of the loan was $1.25 billion.

	•	The Barclays prepaid miles issued on October 3, 2005 in connection with the amended co-branded credit card agreement dated August 8, 2005 between pre-merger US Airways Group, AWA and Juniper Bank, a subsidiary of Barclays PLC that has since been renamed Barclays Bank Delaware (“Barclays”). At the time of the repayment, the total outstanding balance was $325 million.

	•	The credit facility with GECC, amended in July 2005 with an original balance of $28 million. At the time of the repayment, the total outstanding balance of the loan was $19 million.


(e)		In December 2004, deferred charges under US Airways’ maintenance agreements with GE Engine Systems, Inc. were converted into an unsecured term note. Interest on the note accrues at LIBOR plus 4%, and becomes payable beginning in January 2008, at which time principal and interest payments are due in 48 monthly installments.

(f)		The industrial development revenue bonds are due April 2023. Interest at 6.3% is payable semiannually on April 1 and October 1. The bonds are subject to optional redemption prior to the maturity date on or after April 1, 2008, in whole or in part, on any interest payment date at the following redemption prices: 102% on April 1 or October 1, 2008; 101% on April 1 or October 1, 2009; and 100% on April 1, 2010 and thereafter.

(g)		In connection with US Airways Group’s emergence from bankruptcy in September 2005, it reached a settlement with the PBGC related to the termination of three of its defined benefit pension plans. The settlement included the issuance of a $10 million note which matures in 2012 and bears interest at 6% payable annually in arrears.

154

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)


2008	$	101
2009		129
2010		105
2011		118
2012		123
Thereafter		1,019

	$	1,595

Certain of US Airways’ long-term debt agreements contain minimum cash balance requirements and other covenants with which US Airways was in compliance at December 31, 2007. Certain of US Airways’ long-term debt agreements contain cross-default provisions, which may be triggered by defaults by US Airways under other agreements relating to indebtedness.

Interest rates on $532 million principal amount of long-term debt as of December 31, 2007 are subject to adjustment to reflect changes in floating interest rates. As of December 31, 2007, the weighted average effective interest rate was 7.55% for the variable interest rate debt.


6.	Employee pension and benefit plans

Substantially all of US Airways’ employees meeting certain service and other requirements are eligible to participate in various pension, medical, dental, life insurance, disability and survivorship plans.


*(a)*	*Defined Benefit and Other Postretirement Benefit Plans*

On November 12, 2004, US Airways filed a motion requesting a determination from the Bankruptcy Court that US Airways satisfied the financial requirement for a “distress termination” under section 4041(c)(2)(B)(ii)(IV) of ERISA of the AFA Plan, the IAM Plan and the CE Plan, as well as approval of each plan’s termination. These plans had aggregate benefit obligations of $2.71 billion and aggregate plan assets of $1.76 billion, as of the plans’ termination dates in January 2005. On January 6, 2005, the Bankruptcy Court entered an order (i) finding that the financial requirements for distress terminations of the plans had been met and (ii) approving termination of the plans. The AFA Plan and the IAM Plan were terminated effective January 10, 2005, which was the date agreed to by the PBGC and US Airways. The CE Plan was terminated effective January 17, 2005, which was the date agreed to by the PBGC and US Airways. Effective February 1, 2005, the PBGC was appointed trustee for each of the three plans.

Upon termination of the plans, US Airways recognized a curtailment gain of $24 million and a $91 million charge related to the minimum pension liability, which was previously recorded in other comprehensive income. These amounts are included in reorganization items, net in the statements of operations. Upon emergence from bankruptcy on September 27, 2005, the Bankruptcy Court approved a settlement agreement between US Airways and the PBGC which required the PBGC to release all claims against US Airways in return for US Airways issuing (i) a $13.5 million cash payment, paid in October 2005, (ii) a 6.00% note payable for $10 million, and (iii) 70%, or 4,873,485 shares, of the unsecured creditors stock, net of the shares allocated to ALPA, valued at $57 million. Accordingly, US Airways eliminated the $948 million liability related to the three terminated plans, including the minimum liability adjustment, and recognized a net settlement gain of $868 million. This gain is included in reorganization items, net in the statements of operations.

155

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

During hearings in late 2004 and January 2005, the Bankruptcy Court approved various settlement agreements between US Airways and certain of its unions, and between US Airways and the court-appointed Section 1114 Committee (representing retirees other than those represented by unions) to begin the significant curtailments of postretirement benefits. Effective March 1, 2005, those benefits were significantly reduced. US Airways remeasured its postretirement benefit obligation based on the new terms, which resulted in a reduction in the postretirement benefit obligation of approximately $1.1 billion and a curtailment gain of $183 million. Since the remeasurement and reduction of the postretirement benefit obligation created a significant unrecognized prior service gain, US Airways recognized net periodic other postretirement benefit income until the emergence from bankruptcy on September 27, 2005. In accordance with SOP 90-7, US Airways revalued its postretirement benefit obligation on emergence and adjusted its liability to $229 million, a reduction of $1.25 billion. Of this, a $1.24 billion gain, including the recognition of the unamortized portion of the prior service gain created as a result of the benefit curtailment, is included in reorganization items, net in the statements of operations. Adjustments made subsequent to September 30, 2005 totaling $10 million were made directly to goodwill.

The following table sets forth changes in the fair value of plan assets, benefit obligations and the funded status of the plans as of the measurement date of September 30, 2007 and 2006, in addition to the amounts recognized in US Airways’ balance sheets as of December 31, 2007 and 2006 (in millions):


	Other Postretirement Benefits
	Year Ended			Year Ended
	December 31,			December 31,
	2007			2006

Fair value of plan assets at beginning of period	$	—		$	—
Actual return on plan assets		—			—
Employer contributions		23			31
Plan participants’ contributions		28			30
Gross benefits paid		(51	)		(61	)

Fair value of plan assets at end of period		—			—

Benefit obligation at beginning of period		217			229
Service cost		3			3
Interest cost		12			12
Plan participants’ contributions		28			30
Actuarial (gain) loss		(47	)		4
Gross benefits paid		(51	)		(61	)

Benefit obligation at end of period		162			217

Funded status of the plan		(162	)		(217	)
Contributions for October to December		6			5

Liability recognized in the consolidated balance sheet	$	(156	)	$	(212	)

Net actuarial gain recognized in accumulated other comprehensive income	$	47		$	—

The following table presents the weighted average assumptions used to determine benefit obligations:


	Other Postretirement Benefits
	Year Ended			Year Ended
	December 31,			December 31,
	2007			2006

Discount rate		5.94	%		5.67	%

156

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

US Airways assumed discount rates for measuring its other postretirement benefit obligations, based on a hypothetical portfolio of high quality publicly traded U.S. bonds (Aa rated, non-callable or callable with make-whole provisions), for which the timing and cash outflows approximate the estimated benefit payments of the other postretirement benefit plans.


	1% Increase		1% Decrease

Effect on total service and interest costs	$	1	$	(1	)
Effect on postretirement benefit obligation		11		(9	)

Weighted average assumptions used to determine net periodic benefit cost were as follows:


	Defined Benefit Pension
	Plans			Other Postretirement Benefits
	Predecessor Company			Successor Company									Predecessor Company
	Nine Months Ended			Year Ended			Year Ended			Three Months Ended			Nine Months Ended
	September 30,			December 31,			December 31,			December 31,			September 30,
	2005			2007			2006			2005			2005

Discount rate		6.00	%		5.67	%		5.3	%		5.30	%		5.80	%
Expected return on plan assets		7.33	%		—			—			—			—
Rate of compensation increase		3.73	%		—			—			—			—

Components of the net and total periodic cost for pension benefits (in millions):


	Predecessor Company
	Nine Months Ended
	September 30,
	2005

Service cost	$	1
Interest cost		6
Expected return on plan assets		(5	)

Net periodic costs		2
Curtailment/settlement gains		(801	)

Total periodic costs (benefits)	$	(799	)

157

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

Components of the net and total periodic cost for other postretirement benefits (in millions):


	Successor Company				Predecessor Company
	Year Ended		Year Ended		Three Months Ended		Nine Months Ended
	December 31,		December 31,		December 31,		September 30,
	2007		2006		2005		2005

Service cost	$	3	$	3	$	1	$	8
Interest cost		12		12		3		22
Amortization of:
Prior service costs		—		—		—		(76	)
Actuarial gain		—		—		—		(11	)

Net periodic costs (benefits)		15		15		4		(57	)
Curtailment/settlement gains		—		—		—		(183	)
Fresh-start gain		—		—		—		(1,247	)

Total periodic costs (benefits)	$	15	$	15	$	4	$	(1,487	)

In 2008, US Airways expects to contribute $19 million to its other postretirement plans. The following benefits, which reflect expected future service, as appropriate, are expected to be paid from the other postretirement plans (in millions):


	Other
	Postretirement
	Benefits before
	Medicare Subsidy		Medicare Subsidy

2008	$	19	$	—
2009		18		—
2010		16		—
2011		15		—
2012		14		—
2013 to 2017		58		3


*(b)*	*Defined Contribution Plans*

US Airways sponsors several defined contribution plans for certain employees. US Airways makes cash contributions to certain plans based on the employee’s age, compensation, a match that is annually determined by the Board of Directors, and elected contributions. US Airways also participates in a multi-employer plan for certain employees. Expenses related to these plans, excluding expenses related to US Airways’ pilot defined contribution plans (see below), were approximately $28 million, $28 million, $7 million and $24 million for the years ended December 31, 2007, 2006, three months ended December 31, 2005 and nine months ended September 30, 2005, respectively.

In connection with its first reorganization under Chapter 11 of the Bankruptcy Code, US Airways terminated the Retirement Income Plan for Pilots and the related nonqualified pilot plan effective March 31, 2003. US Airways implemented a qualified and nonqualified defined contribution plan for pilots effective April 1, 2003. The defined contribution amount was individually determined based on a target normal retirement date balance of approximately $1 million for a career US Airways pilot. The target balance included the estimated value of other retirement benefits including, but not limited to, the estimated benefit pilots are expected to receive from the PBGC, the trustee for the terminated pilot defined benefit plan. Effective October 15, 2004, each pilot’s contribution rate

158

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

became the lesser of the original rate or 10% of eligible compensation. Expenses for this plan were $31 million, $42 million, $10 million and $32 million for the year ended December 31, 2007, 2006, the three months ended December 31, 2005 and the nine months ended September 30, 2005, respectively.


*(c)*	*Postemployment Benefits*

US Airways provides certain postemployment benefits to its employees. These benefits include disability-related and workers’ compensation benefits for certain employees. US Airways accrues for the cost of such benefit expenses once an appropriate triggering event has occurred. In 2007, US Airways recorded a $99 million charge to increase long-term disability obligations for US Airways’ pilots as a result of a change in the FAA mandated retirement age for pilots from 60 to 65.


*(d)*	*Profit Sharing Plans*

Most non-executive employees of US Airways Group are eligible to participate in the 2005 Profit Sharing Plan, an annual bonus program, which was established subsequent to the merger. Annual bonus awards are paid from a profit-sharing pool equal to (i) ten percent of the annual profits of US Airways Group (excluding unusual items) for pre-tax profit margins up to ten percent, plus (ii) 15% of the annual profits of US Airways Group (excluding unusual items) for pre-tax profit margins greater than ten percent. Awards are paid as a lump sum no later than March 15 after the end of each fiscal year. The profit-sharing pool is shared among eligible employee groups in proportion to each group’s share of overall cost savings achieved through US Airways’ 2005 transformation plan; however, the represented pilots’ and flight attendants’ portions of the pool will not be less than 36% and 14.5%, respectively. An employee’s share of the pool is based on the ratio that the employee’s compensation bears to the respective employee group’s aggregate compensation. US Airways recorded $49 million and $59 million for profit sharing in 2007 and 2006, respectively, which is recorded in salaries and related costs.


7.	Income taxes

US Airways accounts for income taxes according to the provisions in SFAS No. 109, “Accounting for Income Taxes.” US Airways and its wholly owned subsidiaries are part of the US Airways Group consolidated income tax return.

The reorganization of US Airways Group and merger with America West Holdings on September 27, 2005 resulted in a statutory “ownership change” as defined for purposes of Section 382 of the Internal Revenue Code. When a company undergoes such an ownership change, Section 382 limits the company’s future ability to utilize any net operating losses, or NOL, generated before the ownership change and certain subsequently recognized “built-in” losses and deductions, if any, existing as of the date of the ownership change. As a result of the merger, a significant portion of US Airways Group’s common stock was beneficially owned by a small number of equity investors. Due to sales by some of these investors and purchases by other investors since the merger, an “ownership change” occurred in February of 2007 for US Airways Group, as that term is defined in Section 382 of the Internal Revenue Code. Accordingly, US Airways’ annual use of its NOL that existed as of the date of the ownership change is limited.

159

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

As of December 31, 2007, US Airways has approximately $761 million of gross NOL to reduce future federal taxable income. Of this amount, approximately $649 million is available to reduce federal taxable income in the calendar year 2008, as result of the February 2007 ownership change discussed above for US Airways Group. The NOL expires during the years 2022 through 2025. US Airways’ deferred tax asset, which includes the $649 million of NOL discussed above, has been subject to a full valuation allowance. US Airways also has approximately $60 million of tax affected state NOL as of December 31, 2007.

In assessing the realizability of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. US Airways has recorded a valuation allowance against its net deferred tax asset. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income (including reversals of deferred tax liabilities) during the periods in which those temporary differences will become deductible.

Throughout 2006 and 2007, US Airways utilized NOL that was generated prior to the merger. Utilization of the NOL results in a corresponding decrease in the valuation allowance. In accordance with SFAS No. 109, as this valuation allowance was established through the recognition of tax expense, the decrease in valuation allowance offsets US Airways’ tax provision dollar for dollar. US Airways recognized $7 million and $85 million of non-cash income tax expense for the years ended December 31, 2007 and 2006, respectively, as US Airways utilized NOL that was generated prior to the merger. In accordance with SFAS No. 109, as this was acquired NOL, the decrease in the valuation allowance associated with this NOL reduced goodwill instead of the provision for income taxes. As of December 31, 2007, the remaining federal valuation allowance is $40 million, all of which was established through the recognition of tax expense. In addition, US Airways has $33 million and $3 million, respectively, of unrealized federal and state tax benefit related to amounts recorded in other comprehensive income. The remaining state valuation allowance is $43 million, of which $19 million was established through the recognition of tax expense and $24 million is associated with acquired NOL.

US Airways is subject to Alternative Minimum Tax liability (“AMT”). In most cases, the recognition of AMT does not result in tax expense. However, since US Airways’ net deferred tax asset is subject to a full valuation allowance, any liability for AMT is recorded as tax expense. US Airways recorded AMT expense of $1 million and $10 million for the years ended December 31, 2007 and 2006, respectively. US Airways also recorded $1 million and $2 million of state income tax related to certain states where NOL was not available or limited, for the years ended December 31, 2007 and 2006, respectively.

The components of the provision (benefit) for income taxes are as follows (in millions):


								Predecessor
	Successor Company							Company
						Three Months		Nine Months
	Year Ended			Year Ended		Ended		Ended
	December 31,			December 31,		December 31,		September 30,
	2007			2006		2005		2005

Current provision:
Federal	$	1		$	10	$	—	$	—
State		1			2		—		(2	)

Total current		2			12		—		(2	)

Deferred provision:
Federal		(1	)		77		—		—
State		6			9		—		—

Total deferred		5			86		—		—

Provision (benefit) for income taxes	$	7		$	98	$	—	$	(2	)

160

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

Income tax expense (benefit) differs from amounts computed at the federal statutory income tax rate as follows (in millions):


										Predecessor
	Successor Company									Company
							Three Months			Nine Months
	Year Ended			Year Ended			Ended			Ended
	December 31,			December 31,			December 31,			September 30,
	2007			2006			2005			2005

Income tax expense (benefit) at the federal statutory income tax rate	$	170		$	155		$	(174	)	$	97
Book expenses not deductible for tax purposes		12			(5	)		(3	)		615
State income tax expense, net of federal income tax expense (benefit)		7			10			—			(1	)
Change in state deferred tax items		—			—			(12	)		—
Change in valuation allowance		(180	)		(73	)		193			(753	)
Reduction in net operating losses from discharge of indebtedness		—			—			—			40
AMT provision		1			10			—			—
Other, net		(3	)		1			(4	)		—

Total	$	7		$	98		$	—		$	(2	)

Effective tax rate		1.4	%		22.1	%		—	%		(1	)%

161

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of December 31, 2007 and 2006 are as follows (in millions):


	2007			2006

Deferred tax assets:
Net operating loss carryforwards	$	263		$	334
Property, plant and equipment		21			16
Investments		19			3
Aircraft leases		—			11
Financing transactions		18			—
Employee benefits		335			284
Dividend Miles awards		153			205
Restructuring reserve		—			2
AMT credit carryforward		38			37
Other deferred tax assets		15			45
Valuation allowance		(83	)		(263	)

Net deferred tax assets		779			674

Deferred tax liabilities:
Depreciation and amortization		478			457
Sale and leaseback transactions and deferred rent		146			126
Leasing transactions		59			21
Financing transactions		—			41
Long-lived intangibles		31			31
Other deferred tax liabilities		84			26

Total deferred tax liabilities		798			702

Net deferred tax liabilities		19			28

Less: current deferred tax liabilities		—			—

Non-current deferred tax liabilities	$	19		$	28

US Airways files tax returns in the U.S. federal jurisdiction, and in various states and foreign jurisdictions. As part of US Airways’ bankruptcy filings, the Internal Revenue Service and various state jurisdictions filed proofs of claim. Upon its emergence from bankruptcy, US Airways had established reserves for all IRS claims and state income tax claims as of the date of the bankruptcy filing on September 12, 2004. All creditors, including the IRS and state and local taxing jurisdictions, had to timely file a proof of claim to support any tax deficiencies per the tax authority records. On February 15, 2007, US Airways and the IRS agreed to settle the IRS’s outstanding proofs of claim for $7 million.

All federal and state tax filings for US Airways and AWA for fiscal years through December 31, 2006 have been timely filed. There are currently no federal or state audits in process. US Airways’ last federal income tax audit closed all tax years through December 31, 2002. AWA’s tax year 2002 was closed by operation of the statute of limitations expiring, and there were no extensions filed. US Airways is not currently under examination.

162

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

US Airways believes that its income tax filing positions and deductions related to tax periods subject to examination will be sustained upon audit and does not anticipate any adjustments that will result in a material adverse effect on US Airways’ financial condition, results of operations, or cash flow. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to FIN 48.


8.	Commitments and contingencies


*(a)*	*Commitments to Purchase Flight Equipment and Maintenance Services*

Aircraft and Engine Purchase Commitments

In June 2007, US Airways announced that it had agreed to terms with Airbus for the acquisition of 92 aircraft, including 60 single-aisle A320 family aircraft and 32 wide-body aircraft, including 22 A350 Xtra Wide-Body (“XWB”) aircraft and ten A330 aircraft. On October 2, 2007, US Airways and Airbus executed the following definitive agreements for these aircraft:


	•	An Amended and Restated Airbus A320 Family Aircraft Purchase Agreement, which supersedes the AWA A319/A320 Purchase Agreement discussed above. The terms of the amended and restated purchase agreement encompass the purchase of 60 new narrow-body aircraft, including ten A319 aircraft, 40 A320 aircraft, and ten A321 aircraft, with conversion rights, in addition to the 37 aircraft from the previous A319/A320 Purchase Agreement. Deliveries of the aircraft under this agreement will run through 2012. US Airways expects to use the 60 A320 family aircraft to replace 60 older aircraft in the airline’s fleet. The amended and restated purchase agreement also provides US Airways with certain conversion rights, as well as purchase rights for the acquisition of additional A320 family aircraft, subject to certain terms and conditions. In addition, the amended and restated purchase agreement revises the delivery schedule for 15 A318 aircraft and provides US Airways with certain other rights with respect thereto. On January 31, 2008, US Airways canceled its order for 12 of the 15 A318 aircraft.

	•	An Amended and Restated Airbus A350 XWB Purchase Agreement, which supersedes the A350 Purchase Agreement dated September 27, 2005 between US Airways Group, US Airways, AWA and AVSA, S.A.R.L. (now Airbus S.A.S.). The new purchase agreement increases the number of firm order aircraft from 20 A350 aircraft to 18 A350-800 XWB aircraft and four A350-900 XWB aircraft, with the option to convert these aircraft to other A350 models, subject to certain terms and conditions. Deliveries for the 22 A350 XWB aircraft will begin in 2014 and extend through 2017. US Airways expects to use these aircraft for modest international expansion or replacement of existing older technology aircraft, as market conditions warrant. The Amended and Restated Airbus A350 XWB Purchase Agreement also gives US Airways purchase rights for the acquisition of additional A350 XWB aircraft, subject to certain terms and conditions.

	•	An Airbus A330 Purchase Agreement, which provides for the purchase by US Airways of ten firm order A330-200 aircraft with deliveries in 2009 and 2010. The Airbus A330 Purchase Agreement also provides US Airways with purchase rights for the acquisition of additional A330-200 aircraft, subject to certain terms and conditions.

163

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

On November 15, 2007, US Airways and Airbus entered into Amendment No. 1 to the A330 Purchase Agreement adding an additional five firm A330-200 aircraft to the Airbus A330 Purchase Agreement. These additional aircraft allow US Airways to continue its international growth plans of adding approximately three to four new markets per year between 2009 and 2011.

On June 13, 2006, US Airways Group and Embraer executed an Amended and Restated Purchase Agreement and an Amended and Restated Letter Agreement. In accordance with the terms of these agreements, US Airways Group placed an initial firm order for 25 Embraer 190 aircraft and an additional order for 32 Embraer 190 aircraft. The progress and deposit payments totaling approximately $18 million previously paid by US Airways Group to Embraer in accordance with the terms of the Purchase Agreement dated as of May 9, 2003, are being applied to these orders in accordance with the terms of the amended and restated agreements. In addition, US Airways Group had the option to purchase up to 50 additional Embraer 190 aircraft and to convert certain of the Embraer 190 aircraft to Embraer 170, Embraer 175 or Embraer 195 aircraft, subject to availability and upon agreed notice. Embraer has agreed to provide financing for certain of the aircraft. On July 21, 2006, US Airways Group assigned 30 of the purchase options to Republic Airlines, Inc. On January 12, 2007, US Airways Group assigned eight additional purchase options to Republic Airlines. US Airways Group purchased and took delivery of two Embraer 190 aircraft in the fourth quarter of 2006 and nine Embraer 190 aircraft throughout 2007. US Airways Group expects to take delivery of 14 Embraer 190 aircraft in 2008. In June and August 2007, US Airways Group amended the Amended and Restated Purchase Agreement to revise the delivery schedule for the additional 32 Embraer 190 aircraft. On June 6, 2007, US Airways Group entered into another amendment to the Amended and Restated Purchase Agreement whereby Embraer granted US Airways Group an additional 140 purchase options. US Airways Group further amended the Amended and Restated Letter Agreement in August 2007 to revise previous provisions concerning price escalation limits and assignment of purchase rights to regional operators.

Under all of the aircraft and engine purchase agreements discussed above, US Airways’ total future commitments to Embraer, Airbus and IAE are expected to be approximately $7.5 billion through 2017 as follows: $798 million in 2008, $1.27 billion in 2009, $1.31 billion in 2010, $1.28 billion in 2011, $774 million in 2012 and $2.07 billion thereafter, which includes predelivery deposits and payments. US Airways expects to fund payments through future financings.

Engine Maintenance Commitments

164

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)


*(b)*	*Leases*

US Airways leases certain aircraft, engines, and ground equipment, in addition to the majority of its ground facilities and terminal space. As of December 31, 2007, US Airways had 312 aircraft under operating leases, with remaining terms ranging from two months to approximately 16 years. Ground facilities include executive offices, maintenance facilities and ticket and administrative offices. Public airports are utilized for flight operations under lease arrangements with the municipalities or agencies owning or controlling such airports. Substantially all leases provide that the lessee must pay taxes, maintenance, insurance and certain other operating expenses applicable to the leased property. Some leases also include renewal and purchase options.

As of December 31, 2007, obligations under noncancellable operating leases for future minimum lease payments were as follows (in millions):


2008	$	1,077
2009		990
2010		914
2011		826
2012		796
Thereafter		4,080

Total minimum lease payments		8,683
Less sublease rental receipts		(938	)

Total minimum lease payments	$	7,745

For the years ended December 31, 2007, 2006, three months ended December 31, 2005 and nine months ended September 30, 2005, rental expense under operating leases, excluding landing fees, was $1.24 billion, $1.24 billion, $296 million and $532 million, respectively.

US Airways also leases certain owned flight equipment to related parties (see Note 11(b)) under noncancellable operating leases expiring in various years through year 2022. The future minimum rental receipts associated with these leases are $78 million in 2008, $78 million in 2009, $78 million in 2010, $78 million in 2011, $78 million in 2012 and $548 million thereafter. The following amounts relate to aircraft leased under such agreements as reflected in flight equipment as of December 31, 2007 and 2006 (in millions):


	2007			2006

Flight equipment	$	286		$	286
Less accumulated amortization		(23	)		(13	)

	$	263		$	273


*(c)*	*Off Balance Sheet Arrangements*

US Airways has set up pass through trusts, which have issued pass through trust certificates, also known as “Enhanced Equipment Trust Certificates” or “EETCs”, covering the financing of 19 owned aircraft and 62 leased aircraft. These trusts are off-balance sheet entities, the primary purpose of which is to finance the acquisition of aircraft. Rather than finance each aircraft separately when such aircraft is purchased or delivered, these trusts allowed US Airways to raise the financing for several aircraft at one time and place such funds in escrow pending

165

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

the purchase or delivery of the relevant aircraft. The trusts were also structured to provide for certain credit enhancements, such as liquidity facilities to cover certain interest payments, that reduce the risks to the purchasers of the trust certificates and, as a result, reduce the cost of aircraft financing to US Airways.

AWA also had 18 pass through trusts that have issued over $1.4 billion of EETCs covering the financing of 54 aircraft and three engines that were leased to AWA. As part of the transfer of substantially all of AWA’s assets and liabilities to US Airways in connection with the combination of all airline operations under one FAA operating certificate on September 26, 2007, all off-balance sheet commitments of AWA were also transferred to US Airways. As of September 26, 2007, approximately $714 million of principal amount of pass through certificates was outstanding under these pass through trusts. All of AWA’s obligations with respect to those pass through trusts and the leases of the related aircraft and engines have now been transferred to US Airways. As a result of the transfer of AWA’s obligations, the leases are now direct obligations of US Airways. As of December 31, 2007, the total amount of US Airways’ obligations with respect to pass through trusts and leases of the related aircraft and engines, including those transferred from AWA, was $1.85 billion.

Neither US Airways Group nor US Airways guarantee or participate in any way in the residual value of the leased aircraft. All leased aircraft financed by these trusts are structured as leveraged lease financings, which are not reflected as debt on the balance sheets of either US Airways Group or US Airways. US Airways does not provide residual value guarantees under these lease arrangements. Each lease contains a purchase option that allows US Airways to purchase the aircraft at a fixed price, which at the inception of the lease approximated the aircraft’s expected fair market value at the option date, near the end of the lease term.

These leasing entities meet the criteria for variable interest entities. However, they do not meet the consolidation criteria under FIN 46(R) “Consolidation of Variable Interest Entities — An Interpretation of ARB No. 51” because US Airways is not the primary beneficiary under these arrangements.


*(d)*	*Regional Jet Capacity Purchase Agreements*

US Airways has entered into capacity purchase agreements with certain regional jet operators. The capacity purchase agreements provide that all revenues (passenger, mail and freight) go to US Airways. In return, US Airways agrees to pay predetermined fees to the regional airlines for operating an agreed upon number of aircraft, without regard to the number of passengers onboard. In addition, these agreements provide that certain variable costs, such as airport landing fees, will be reimbursed 100% by US Airways. US Airways controls marketing, scheduling, ticketing, pricing and seat inventories. The regional jet capacity purchase agreements have expirations from 2012 to 2020 and provide for optional extensions at US Airways’ discretion. The future minimum noncancellable commitments under the regional jet capacity purchase agreements are $1.06 billion in 2008, $1.11 billion in 2009, $1.13 billion in 2010, $1.16 billion in 2011, $1.02 billion in 2012 and $4.68 billion thereafter.

Certain entities with which US Airways has capacity purchase agreements are considered variable interest entities under FIN 46(R). In connection with its restructuring and emergence from bankruptcy, US Airways contracted with Air Wisconsin, a related party, and Republic to purchase a significant portion of these companies’ regional jet capacity for a period of ten years. US Airways has determined that it is not the primary beneficiary of

166

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

these variable interest entities, based on cash flow analyses. Additionally, US Airways has analyzed the arrangements with other carriers with which US Airways has long-term capacity purchase agreements and has concluded it is not required to consolidate any of these entities.


*(e)*	*Legal Proceedings*

On February 9, 2007, passengers Daphne Renard and Todd Robins filed a class action suit against US Airways in San Francisco Superior Court. The complaint, which was later amended to include only Robins as a lead plaintiff, alleges that US Airways breached its contract of carriage by charging additional fares and fees, after the purchase of tickets on the usairways.com website, for passengers under two years of age who travel as “lap children,” meaning that the child does not occupy his or her own seat but travels instead on the lap of an accompanying adult. The named plaintiffs allege that he and his wife purchased international tickets through the website for themselves and a lap child. Plaintiffs allege that after initially receiving an electronic confirmation that there would be no charge for the lap child, they were later charged an additional $242.50. The complaint alleges a class period from February 9, 2002 to the present. US Airways was served with an amended complaint in early March 2007 that continued the same allegations, but dropped plaintiff’s wife as a class representative. On May 1, 2007, US Airways filed an Answer to the complaint and also asked the court for a “complex case” designation, which the court granted on May 11, 2007. On September 25, 2007, the parties reached a settlement for an immaterial amount. That agreement must be approved by the court in order to become final.


*(f)*	*Guarantees and Indemnifications*

US Airways guarantees the payment of principal and interest on certain special facility revenue bonds issued by municipalities to build or improve certain airport and maintenance facilities which are leased to US Airways. Under such leases, US Airways is required to make rental payments through 2023, sufficient to pay maturing principal and interest payments on the related bonds. As of December 31, 2007, the principal amount outstanding on these bonds was $93 million. Remaining lease payments guaranteeing the principal and interest on these bonds will be $154 million.

US Airways enters into real estate leases in substantially all cities that it serves. It is common in such commercial lease transactions for US Airways as the lessee to agree to indemnify the lessor and other related third parties for tort liabilities that arise out of or relate to the use or occupancy of the leased premises. In some cases, this indemnity extends to related liabilities arising from the negligence of the indemnified parties, but usually excludes any liabilities caused by their gross negligence or willful misconduct. With respect to certain special facility bonds, US Airways agreed to indemnify the municipalities for any claims arising out of the issuance and sale of the bonds and use or occupancy of the concourses financed by these bonds. Additionally, US Airways typically indemnifies such parties for any environmental liability that arises out of or relates to its use or occupancy of the leased premises.

US Airways is the lessee under many aircraft financing agreements (including leveraged lease financings of aircraft under pass through trusts) and real estate leases. It is common in such transactions for US Airways as the lessee to agree to indemnify the lessor and other related third parties for the manufacture, design, ownership, financing, use, operation and maintenance of the aircraft, and for tort liabilities that arise out of or relate to

167

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

US Airways’ use or occupancy of the leased asset. In some cases, this indemnity extends to related liabilities arising from the negligence of the indemnified parties, but usually excludes any liabilities caused by their gross negligence or willful misconduct. In aircraft financing agreements structured as leveraged leases, US Airways typically indemnifies the lessor with respect to adverse changes in U.S. tax laws.

US Airways reviewed its long-term operating leases at a number of airports, including leases where US Airways is also the guarantor of the underlying debt. Such leases are typically with municipalities or other governmental entities. The arrangements are not required to be consolidated based on the provisions of FIN 46(R).

US Airways is a guarantor of the $1.6 billion Citicorp credit facility.

US Airways Group’s 7% Senior Convertible Notes are fully and unconditionally guaranteed, jointly and severally and on a senior unsecured basis, by US Airways and AWA.

(g) Concentration of Credit Risks

US Airways invests available cash in money market securities of various banks, commercial paper and asset-backed securities of various financial institutions, other companies with high credit ratings and securities backed by the U.S. government.

As of December 31, 2007, most of US Airways’ receivables related to tickets sold to individual passengers through the use of major credit cards or to tickets sold by other airlines and used by passengers on US Airways or its regional airline affiliates. These receivables are short-term, mostly being settled within seven days after sale. Bad debt losses, which have been minimal in the past, have been considered in establishing allowances for doubtful accounts. US Airways does not believe it is subject to any significant concentration of credit risk.


9.	Other comprehensive income (loss)

US Airways’ other comprehensive income (loss) for the years ended December 31, 2007, 2006, three months ended December 31, 2005 and nine months ended September 30, 2005 consist of the following (in millions):


	Successor Company								Predecessor Company
						Three Months Ended			Nine Months Ended
	Years Ended December 31,					December 31,			September 30,
	2007			2006		2005			2005

Net income (loss)	$	478		$	349	$	(256	)	$	280
Unrealized losses on available for sale securities		(48	)		—		—			—
Reclassification adjustment for fuel cash flow hedge gains included in net income (loss) during the period		—			—		—			(17	)
Actuarial gains associated with pension and other postretirement benefits		47			—		—			29
Adjustments in connection with reorganization		—			—		—			86

Total comprehensive income (loss)	$	477		$	349	$	(256	)	$	378

US Airways’ accumulated other comprehensive loss consisted of $48 million in unrealized losses on available for sale securities and $47 million of actuarial gain associated with pension and other postretirement benefits as of December 31, 2007. The accumulated other comprehensive loss is not presented net of tax as any tax effects resulting from the items above have been immediately offset by the recording of a valuation allowance through the same financial statement caption. US Airways did not have any accumulated other comprehensive income as of December 31, 2006.

168

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)


10.	Supplemental cash flow information

Supplemental disclosure of cash flow information and non-cash investing and financing activities were as follows (in millions):


	Successor Company						Predecessor Company
					Three Months Ended		Nine Months Ended
	Years Ended December 31,				December 31,		September 30,
	2007		2006		2005		2005

Non-cash transactions:
Equipment acquired through issuance of debt	$	—	$	3	$	—	$	99
Proceeds from sale leaseback transaction used to repay debt		—		—		—		633
Debt assumed by purchaser in sale of flight equipment		—		—		—		167
Equipment deposits used to repay debt and penalties		—		—		—		22
Loan proceeds received by parent		—		64		186		—
Conversion of 7.25% notes into common stock of US Airways Group		—		—		87		—
Conversion of 7.5% convertible senior notes, net of discount of $17 million to common stock		—		95		—		—
Notes payable canceled under aircraft purchase agreement		—		4		9		—
Repayment of ATSB, Airbus, and GECC loans by parent		—		981		—		—
Repayment of Barclays prepaid miles by parent		325		—		—		—
Forgiveness of intercompany payable to US Airways Group		1,834		—		—		—
Unrealized loss on available for sale securities		48		—		—		—
Cash transactions:
Interest paid, net of amounts capitalized		122		170		60		200
Income taxes paid		4		12		—		—

169

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)


11.	Related party transactions

The following represents net payable balances with related parties as of December 31, 2007 and 2006 (in millions):


	December 31,
	2007		2006

US Airways Group	$	986	$	2,542
US Airways Group wholly owned subsidiaries		81		62

	$	1,067	$	2,604


*(a)*	*Parent Company*

The net payable to US Airways Group consists of $1.1 billion due to debt previously recorded at US Airways which was refinanced with proceeds from the 2006 refinancing by US Airways Group. Prior to the contribution of 100% of US Airways Group’s equity interest in America West Holdings to US Airways on September 26, 2007, US Airways Group contributed all related party receivables from America West Holdings and AWA to the capital of America West Holdings and AWA resulting in a $1.8 billion decrease in the related party payable to US Airways Group. The remainder of the payable to US Airways Group is a result of funds provided to and received from US Airways Group that arise in the normal course of business.

US Airways recorded interest expense for the years ended December 31, 2007 and 2006, the three months ended December 31, 2005 and the nine months ended September 30, 2005 of $86 million, $70 million, $6 million and $1 million, respectively, related to the above transactions and other transactions with wholly owned subsidiaries of US Airways Group as described below. Interest is calculated at market rates, which are reset quarterly.


*(b)*	*Subsidiaries of US Airways Group*

The net payable to US Airways Group’s wholly owned subsidiaries consists of amounts due under regional capacity agreements with the other airline subsidiaries and fuel purchase arrangements with a non-airline subsidiary.

US Airways purchases all of the capacity (ASMs) generated by US Airways Group’s wholly owned regional airline subsidiaries at a rate per ASM that is periodically determined by US Airways and, concurrently, recognizes revenues that result primarily from passengers being carried by these affiliated companies. The rate per ASM that US Airways pays is based on estimates of the costs incurred to supply the capacity. US Airways recognized US Airways Express capacity purchase expense for the years ended December 31, 2007 and 2006, the three months ended December 31, 2005 and the nine months ended September 30, 2005 of $455 million, $433 million, $96 million and $306 million, respectively, related to this program.

US Airways provides various services to these regional airlines, including passenger handling, maintenance and catering. US Airways recognized other operating revenues for the years ended December 31, 2007 and 2006, the three months ended December 31, 2005 and the nine months ended September 30, 2005 of $95 million, $96 million, $22 million and $64 million, respectively, related to these services. These regional airlines also perform passenger and ground handling services for US Airways at certain airports, for which US Airways recognized other operating expenses for the years ended December 31, 2007 and 2006, the three months ended December 31, 2005 and the nine months ended September 30, 2005 of $156 million, $145 million, $32 million and $100 million, respectively. US Airways also leases or subleases certain aircraft to these regional airline subsidiaries. US Airways recognized other operating revenues related to these arrangements for the years ended December 31, 2007 and 2006, the three months ended December 31, 2005 and the nine months ended September 30, 2005 of $78 million, $80 million, $21 million and $65 million, respectively.

170

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

US Airways purchases a portion of its aviation fuel from US Airways Group’s wholly owned subsidiary, MSC, which acts as a fuel wholesaler to US Airways in certain circumstances. US Airways’ aviation fuel purchases from MSC for the years ended December 31, 2007 and 2006, the three months ended December 31, 2005 and the nine months ended September 30, 2005 were $839 million, $680 million, $120 million and $191 million, respectively.


12.	Operating segments and related disclosures

US Airways is managed as a single business unit that provides air transportation for passengers and cargo. This allows it to benefit from an integrated revenue pricing and route network that includes US Airways, Piedmont, PSA and third-party carriers that fly under capacity purchase agreements as part of US Airways’ Express operations. The flight equipment of all these carriers is combined to form one fleet that is deployed through a single route scheduling system. When making resource allocation decisions, the chief operating decision maker evaluates flight profitability data, which considers aircraft type and route economics, but gives no weight to the financial impact of the resource allocation decision on an individual carrier basis. The objective in making resource allocation decisions is to maximize consolidated financial results, not the individual results of US Airways and US Airways Express.

Information concerning operating revenues in principal geographic areas is as follows (in millions):


	Successor Company						Predecessor Company
	Year Ended		Year Ended		Three Months Ended		Nine Months Ended
	December 31,		December 31,		December 31,		September 30,
	2007		2006		2005		2005

United States	$	9,675	$	9,504	$	2,275	$	4,508
Foreign		2,138		2,188		314		944

Total	$	11,813	$	11,692	$	2,589	$	5,452

US Airways attributes operating revenues by geographic region based upon the origin and destination of each flight segment. US Airways’ tangible assets consist primarily of flight equipment, which are mobile across geographic markets and, therefore, have not been allocated.


13.	Stockholder’s equity and dividend restrictions

US Airways Group owns all of US Airways’ outstanding common stock, par value $1 per share. US Airways’ board of directors has not authorized the payment of dividends on the common stock since 1988.

US Airways, organized under the laws of the State of Delaware, is subject to Sections 160 and 170 of the Delaware General Corporation Law with respect to the payment of dividends on or the repurchase or redemption of its capital stock. US Airways is restricted from engaging in any of these activities unless it maintains a capital surplus. In addition, US Airways may not pay dividends in accordance with provisions contained in the Citicorp credit facility.


14.	Stock-based compensation

The Predecessor Company recorded stock-based employee compensation in accordance with SFAS 123 during 2005 until the merger. Effective with the merger on September 27, 2005, US Airways Group applied the provisions of APB 25 and related interpretations. Effective January 1, 2006, US Airways Group adopted SFAS 123R, using the modified prospective transition method. Under the modified prospective transition method, compensation cost is recognized in the financial statements beginning with the effective date, based on the requirements of SFAS 123R for all share-based payments granted after that date, and based on the requirements of SFAS 123 for all unvested awards granted prior to the effective date of SFAS 123R. Results for prior periods are not restated using the modified prospective transition method.

171

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)


*(a)*	*Predecessor Company*

Upon confirmation of the Plan of Reorganization, existing shares of US Airways Group’s common stock were canceled. The Plan of Reorganization resulted in holders of US Airways Group’s common stock and related equity securities receiving no distribution on account of their interest.

Prior to cancellation of the shares of US Airways Group’s common stock upon emergence from bankruptcy on September 27, 2005, there were 4,750,000 shares of US Airways Group Class A Common Stock and 2,220,570 each of Class A-1 Warrants and shares of Class A Preferred Stock authorized to be granted to US Airways’ management. Through September 27, 2005, 3,649,159 shares of US Airways Group Class A Common Stock, 2,101,240 each of Class A-1 Warrants and shares of Class A Preferred Stock, and 354,350 options to purchase Class A Common Stock were granted to US Airways’ management. Grants of Class A Common Stock, stock options and warrants generally vested over four years. The Predecessor Company recorded compensation expense over the vesting period. The following table summarizes the activity of the Predecessor Company’s stock options and warrants during 2005 prior to the merger:


				Weighted					Weighted
	Stock			Avg.					Avg.
	Options			Exercise Price		Warrants			Exercise Price

Balance at December 31, 2004		357,390		$	1.54		2,118,490		$	7.42
Granted		—			—		—			—
Canceled		(357,390	)		1.57		(2,118,490	)		7.42

Balance at September 27, 2005		—		$	—		—		$	—

US Airways Group did not grant any shares of restricted stock during the nine months ended September 30, 2005. There were 1,683,674 non-vested shares of restricted stock outstanding immediately prior to cancellation upon emergence from the second bankruptcy on September 27, 2005.

US Airways recognized compensation expense related to US Airways Group Class A Common Stock, stock option and stock warrant grants to US Airways employees of $11 million for the nine months ended September 30, 2005.


*(b)*	*Successor Company*

Effective with the merger on September 27, 2005, US Airways Group applied the provisions of APB 25 and related interpretations. Effective January 1, 2006, US Airways Group adopted SFAS 123R, using the modified prospective transition method.

172

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

US Airways’ net income for the year ended December 31, 2007 and 2006 includes $32 million and $34 million, respectively, of compensation costs related to share-based payments. Compensation expense of $4 million, calculated using the provisions of APB 25, was recorded for stock appreciation rights and restricted stock units granted to employees of US Airways Group in the fourth quarter of 2005. Upon adoption of SFAS 123R, US Airways Group recorded a cumulative benefit from the accounting change of $1 million, which reflects the impact of estimating future forfeitures for previously recognized compensation expense. Pursuant to APB 25, stock compensation expense was not reduced for estimated future forfeitures, but instead was reversed upon actual forfeiture. No income tax effect related to share-based payments or cumulative effect has been recorded as the effects have been immediately offset by the recording of a valuation allowance through the same financial statement caption.

Restricted Stock Unit Awards — As of December 31, 2007, US Airways Group has outstanding restricted stock unit awards (“RSUs”) with service conditions (vesting periods) and RSUs with service and performance conditions (which the performance condition of obtaining a combined operating certificate for AWA and US Airways was met on September 26, 2007). SFAS 123R requires that the grant-date fair value of RSUs be equal to the market price of the share on the date of grant if vesting is based on a service or a performance condition. The grant-date fair value of RSU awards that are subject to both a service and a performance condition are being expensed over the vesting period, as the performance condition has been met. Vesting periods for RSU awards range from two to four years. RSUs are classified as equity awards.

173

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

Restricted stock unit award activity for the years ending December 31, 2007, 2006 and 2005 is as follows (shares in thousands):


				Weighted
	Number of			Average Grant-
2005 Equity Incentive Plan	Shares			Date Fair Value

Nonvested balance at December 31, 2004		—		$	—
Granted		696			26.15
Vested and released		—			—
Forfeited		(9	)		24.68

Nonvested balance at December 31, 2005		687		$	26.17
Granted		254			38.55
Vested and released		(75	)		42.38
Forfeited		(52	)		24.85

Nonvested balances at December 31, 2006		814		$	28.63
Granted		242			41.51
Vested and released		(446	)		29.85
Forfeited		(18	)		31.26

Nonvested balance at December 31, 2007		592		$	32.91

As of December 31, 2007, there was $11 million of total unrecognized compensation costs related to RSUs. These costs are expected to be recognized over a weighted average period of 1.2 years. The total fair value of RSUs vested during 2007 and 2006 was $14 million and $3 million, respectively. No RSUs vested during 2005. The tax benefit realized from RSUs vesting during the years ended December 31, 2007 and 2006 was $5 million and $1 million, respectively. US Airways recognized no tax expense for RSUs vested and released with book expense exceeding the tax deduction.

Stock Options and Stock Appreciation Rights — Stock options and stock appreciation rights (“SARs”) are granted with an exercise price equal to the fair market value of US Airways Group’s common stock at the date of each grant, generally become exercisable over a three to four year period and expire if unexercised at the end of ten years. Stock options and SARs are classified as equity awards. The exercise of SARs will be settled with the issuance of shares of US Airways Group’s common stock.

174

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

Stock option and SARs activity for the years ending December 31, 2007, 2006 and 2005 is as follows (stock options and SARs in thousands):


						Weighted
						Average
	Stock			Weighted		Remaining
	Options			Average		Contractual Term		Aggregate
	and SARs			Exercise Price		(Years)		Intrinsic Value
								(In millions)

1994 Incentive Equity Plan
Balance at December 31, 2004		1,672		$	35.63
Granted		—			—
Exercised		(167	)		18.28
Forfeited		—			—
Expired		(238	)		33.74

Balance at December 31, 2005		1,267		$	38.28
Granted		—			—
Exercised		(455	)		23.64
Forfeited		—			—
Expired		(62	)		50.93

Balance at December 31, 2006		750		$	46.10
Granted		—			—
Exercised		(30	)		40.93
Forfeited		—			—
Expired		(75	)		46.38

Balance at December 31, 2007		645		$	46.30		1.43	$	—
Vested or expected to vest at December 31, 2007		645		$	46.30		1.43	$	—
Exercisable at December 31, 2007		645		$	46.30		1.43	$	—

2002 Incentive Equity Plan
Balance at December 31, 2004		2,094		$	15.80
Granted		806			14.52
Exercised		(786	)		11.37
Forfeited		(56	)		15.71
Expired		(10	)		19.85

Balance at December 31, 2005		2,048		$	16.98
Granted		—			—
Exercised		(1,250	)		16.12
Forfeited		—			—
Expired		—			—

Balance at December 31, 2006		798		$	18.33
Granted		—			—
Exercised		(36	)		14.36
Forfeited		—			—
Expired		—			—

Balance at December 31, 2007		762		$	18.52		5.95	$	1
Vested or expected to vest at December 31, 2007		754		$	18.49		5.85	$	1
Exercisable at December 31, 2007		659		$	18.13		5.70	$	1

175

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)


						Weighted
						Average
	Stock			Weighted		Remaining
	Options			Average		Contractual Term		Aggregate
	and SARs			Exercise Price		(Years)		Intrinsic Value
								(In millions)

2005 Equity Incentive Plan

Balance at December 31, 2004		—			—
Granted		2,034		$	23.08
Exercised		—			—
Forfeited		(61	)		20.64
Expired		—			—

Balance at December 31, 2005		1,973		$	23.15
Granted		1,310			40.30
Exercised		(701	)		24.49
Forfeited		(87	)		30.34
Expired		—			—

Balance at December 31, 2006		2,495		$	31.53
Granted		1,123			42.23
Exercised		(92	)		29.74
Forfeited		(93	)		35.00
Expired		(63	)		37.48

Balance at December 31, 2007		3,370		$	34.96		8.48	$	—
Vested or expected to vest at December 31, 2007		3,206		$	34.82		8.45	$	—
Exercisable at December 31, 2007		1,094		$	30.00		8.01	$	—

The fair value of stock options and SARs is determined at the grant date using a Black-Scholes option pricing model, which requires several assumptions. The risk-free interest rate is based on the U.S. Treasury yield curve in effect for the expected term of the stock option or SAR at the time of grant. The dividend yield is assumed to be zero since US Airways Group does not pay dividends and has no current plans to do so in the future. The volatility is based on the historical volatility of US Airways Group common stock over a time period equal to the expected term of the stock option or SAR. The expected life of stock options and SARs is based on the historical experience of US Airways Group.

The per share weighted-average grant-date fair value of stock options and SARs granted and the weighted-average assumptions used for the years ended December 31, 2007, 2006, 2005 were as follows:


	Year Ended
	December 31,			December 31,			December 31,
	2007			2006			2005

Weighted average fair value	$	16.57		$	16.77		$	8.50
Risk free interest rate		4.5	%		4.8	%		3.4	%
Expected dividend yield		—			—			—
Expected life		3.0 years			2.9 years			4.0 years
Volatility		52	%		57	%		54	%

176

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)

The total intrinsic value of stock options and SARs exercised during the years ended December 31, 2007, 2006 and 2005 was $4 million, $68 million and $13 million, respectively. Cash received from stock option and SAR exercises during the years ended December 31, 2007 and 2006 totaled $13 million and $51 million, respectively. The tax benefit realized from stock options and SARs exercised during the years ended December 31, 2007 and 2006 was $2 million and $25 million, respectively. US Airways recognized no tax expense for exercises with book expense exceeding the tax deduction for 2007 and $0.2 million was recognized for 2006.

Agreements with ALPA — US Airways Group and US Airways have a letter of agreement with the ALPA that provides that US Airways’ pilots designated by ALPA receive stock options to purchase 1.1 million shares of US Airways Group’s common stock. The first tranche of 500,000 stock options was granted on January 31, 2006 with an exercise price of $33.65. The second tranche of 300,000 stock options was granted on January 31, 2007 with an exercise price of $56.90. The third and final tranche of 300,000 stock options was granted on January 31, 2008 with an exercise price of $12.29. The stock options granted to ALPA pilots do not reduce the shares available for grant under any equity incentive plan. Any of these ALPA stock options that are forfeited or that expire without being exercised will not become available for grant under any of US Airways’ plans.

The per share fair value of the ALPA pilot stock options and assumptions used for the January 31, 2007 and 2006 grants were as follows:


	January 31,			January 31,
	2007			2006

Per share fair value	$	18.02		$	17.11
Risk free interest rate		4.9	%		4.4	%
Expected dividend yield		—			—
Contractual term		2.0 years			5.0 years
Volatility		53	%		69.8	%

As of December 31, 2007 there were no unrecognized compensation costs related to stock options granted to ALPA pilots as the stock options were fully vested on the grant date. There were 25,029 and 315,390 stock options exercised during 2007 and 2006, respectively, pursuant to this agreement. The total intrinsic value of options exercised during 2007 and 2006 was $0.6 million and $5 million, respectively. Cash received from stock options exercised during the years ended December 31, 2007 and 2006 totaled $1 million and $12 million, respectively. The tax benefit realized from stock options exercised during the years ended December 31, 2007 and 2006 was $0.2 million and $2 million, respectively. US Airways recognized no tax expense for exercises with book expense exceeding the tax deduction for 2007 and $0.5 million was recognized for 2006.

177

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)


15.	Valuation and qualifying accounts (in millions)


	Balance at								Balance
	Beginning								at End
Description	of Period		Additions			Deductions			of Period

Allowance for doubtful receivables:
Year ended December 31, 2007	$	8	$	9		$	13		$	4

Year ended December 31, 2006	$	10	$	7		$	9		$	8

Three months ended December 31, 2005	$	8	$	4	(a)	$	2		$	10

Nine months ended September 30, 2005	$	22	$	5		$	19		$	8

Allowance for inventory obsolescence:
Year ended December 31, 2007	$	29	$	10		$	1		$	38

Year ended December 31, 2006	$	24	$	9		$	4		$	29

Three months ended December 31, 2005	$	—	$	24	(a)	$	—		$	24

Nine months ended September 30, 2005	$	13	$	5		$	18	(b)	$	—

Valuation allowance on deferred tax asset, net:
Year ended December 31, 2007	$	263	$	—		$	180		$	83

Year ended December 31, 2006	$	440	$	—		$	177		$	263

Three months ended December 31, 2005	$	99	$	341	(a)	$	—		$	440

Nine months ended September 30, 2005	$	822	$	—		$	723		$	99


(a)		Allowance for doubtful receivables additions, allowance for inventory obsolescence additions and valuation allowance on deferred tax asset additions in the three months ended December 31, 2005 include $2 million, $14 million and $137 million, respectively, related to the transfer of substantially all of AWA’s assets and liabilities to US Airways, presented as though the transfer had occurred at the time of US Airways’ emergence from bankruptcy. See Note 1(b).

(b)		Allowance for obsolescence of inventories eliminated upon adoption of fresh start reporting. See Note 2(b).


16.	Selected quarterly financial information (unaudited)

Summarized quarterly financial information for 2007 and 2006, before the cumulative effect of change in accounting principle, are as follows (in millions):


2007	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter

Operating revenues	$	2,761		$	3,185		$	3,065		$	2,802
Operating expenses		2,631			2,890			2,863			2,905	(a)
Operating income (loss)		130			295			202			(103	)
Nonoperating expenses, net		(23	)		(4	)		(10	)		(2	)
Income tax provision (benefit)		3			8			5			(9	)
Income (loss)		104			283			187			(96	)

178

US Airways, Inc.

Notes to Consolidated Financial Statements — (Continued)


2006	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter

Operating revenues	$	2,663		$	3,207		$	3,006		$	2,816
Operating expenses		2,538			2,867			2,988			2,742
Operating income		125			340			18			74
Nonoperating expenses, net		(64	)		(20	)		(19	)		(8	)
Income tax provision		—			5			61			32
Income (loss) before cumulative effect of change in accounting principle		61			315			(62	)		34


(a)		In the fourth quarter of 2007, US Airways recorded a $99 million charge to increase long-term disability obligations for its pilots as a result of a change in the FAA mandated retirement age for pilots from 60 to 65.


17.	Subsequent events

179


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

None.


Item 9A.	*Controls and Procedures*

Section 404 of the Sarbanes-Oxley Act of 2002 requires management to include in this Annual Report on Form 10-K a report on management’s assessment of the effectiveness of US Airways Group’s and US Airways’ internal control over financial reporting, as well as an attestation report from US Airways Group’s and US Airways’ independent registered public accounting firm on the effectiveness of US Airways Group’s and US Airways’ internal control over financial reporting. Management’s annual report on internal control over financial reporting and the related attestation report from US Airways Group’s and US Airways’ independent registered public accounting firm are located in Item 8A. “Consolidated Financial Statements and Supplementary Data of US Airways Group, Inc.” and Item 8B. “Consolidated Financial Statements and Supplementary Data of US Airways, Inc.” and are incorporated herein by reference.

Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of US Airways Group’s and US Airways’ management, including the Chief Executive Officer (the “CEO”) and Chief Financial Officer (the “CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in the rules promulgated under the Exchange Act) as of December 31, 2007. Based on that evaluation, our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of December 31, 2007.

Changes in Internal Control over Financial Reporting

There has been no change to US Airways Group’s or US Airways’ internal control over financial reporting that occurred during the quarter ended December 31, 2007 that has materially affected, or is reasonably likely to materially affect, US Airways Group’s or US Airways’ internal control over financial reporting.

Limitation on the Effectiveness of Controls

We believe that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, and the CEO and CFO believe that our disclosure controls and procedures were effective at the “reasonable assurance” level as of December 31, 2007.


Item 9B.	*Other Information*

None.

PART III

The information required by Part III of this Form 10-K, pursuant to General Instruction G(3) of Form 10-K, will be set forth in US Airways Group’s definitive Proxy Statement to be filed pursuant to Regulation 14A relating to US Airways Group’s Annual Meeting of Stockholders on June 11, 2008 and is incorporated herein by reference. US Airways Group will, within 120 days of the end of its fiscal year, file with the SEC a definitive proxy statement pursuant to Regulation 14A.


Item 10.	*Directors, Executive Officers and Corporate Governance*

Information regarding US Airways Group’s and US Airways’ directors and executive officers required by this Item will be set forth under the caption “Proposal 1 — Election of Directors,” “Executive Officers”, “Section 16(a)

180

Beneficial Ownership Reporting Compliance” and “Information About Our Board of Directors and Corporate Governance” in US Airways Group’s definitive Proxy Statement and is incorporated by reference into this Annual Report on Form 10-K.

US Airways Group has adopted a Code of Business Conduct and Ethics (“Code”) within the meaning of Item 406(b) of Regulation S-K. The Code applies to the officers, directors and employees of US Airways Group and its subsidiaries. The Code, US Airways Group’s Corporate Governance Guidelines and the charters of our Board committees are publicly available on US Airways Group’s website at www.usairways.com. Printed copies of the Code, the Corporate Governance Guidelines and the charters of the Board committees are available at no charge to any stockholder upon request to our Corporate Secretary at US Airways, 111 West Rio Salado Parkway, Tempe, Arizona 85281. If US Airways Group makes substantive amendments to the Code or grants any waiver, including any implicit waiver, to its principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions, US Airways Group will disclose the nature of such amendment or waiver on its website or in a Current Report on Form 8-K in accordance with applicable rules and regulations. The information contained on or connected to US Airways Group’s website is not incorporated by reference into this Form 10-K and should not be considered part of this or any other report that US Airways Group files or furnishes with the SEC.

US Airways Group’s stock is listed on the NYSE. As a result, its Chief Executive Officer is required to make and will make a CEO’s Annual Certification to the New York Stock Exchange in accordance with Section 303A.12 of the New York Stock Exchange Listed Company Manual stating that he was not aware of any violations by US Airways Group of the NYSE corporate governance listing standards.


Item 11.	*Executive Compensation*

Information required by this Item will be set forth in US Airways Group’s definitive Proxy Statement under the captions “Information About Our Board of Directors and Corporate Governance,” “Executive Compensation” and “Director Compensation” in the definitive Proxy Statement and is incorporated by reference into this Annual Report on Form 10-K.


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

Information required by this Item will be set forth in US Airways Group’s definitive Proxy Statement under the captions “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in the Proxy Statement and is incorporated by reference into this Annual Report on Form 10-K.


Item 13.	*Certain Relationships and Related Transactions and Director Independence*

Information required by this Item will be set forth in US Airways Group’s definitive Proxy Statement under the captions “Certain Relationships and Related Party Transactions” and “Information About Our Board of Directors and Corporate Governance” in the Proxy Statement and is incorporated by reference into this Annual Report on Form 10-K.


Item 14.	*Principal Accountant Fees and Services*

Information required by this Item will be set forth in US Airways Group’s definitive Proxy Statement under the caption “Information about Our Independent Registered Public Accounting Firm” in the Proxy Statement and is incorporated by reference into this Annual Report on Form 10-K.

181

PART IV


Item 15.	*Exhibits and Financial Statement Schedules*

Consolidated Financial Statements

The following consolidated financial statements of US Airways Group, Inc. are included in Part II, Item 8A of this report:


—		Consolidated Statements of Operations for the years ended December 31, 2007, 2006 and 2005
—		Consolidated Balance Sheets as of December 31, 2007 and 2006
—		Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005
—		Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2007, 2006 and 2005
—		Notes to Consolidated Financial Statements

The following consolidated financial statements of US Airways, Inc. are included in Part II, Item 8B of this report:


—		Consolidated Statements of Operations for the years ended December 31, 2007 and 2006, the three months ended December 31, 2005 (Successor Company) and the nine months ended September 30, 2005 (Predecessor Company)
—		Consolidated Balance Sheets as of December 31, 2007 and 2006 (Successor Company)
—		Consolidated Statements of Cash Flows for the years ended December 31, 2007 and 2006, the three months ended December 31, 2005 (Successor Company) and the nine months ended September 30, 2005 (Predecessor Company)
—		Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2007 and 2006, the three months ended December 31, 2005 (Successor Company) and the nine months ended September 30, 2005 (Predecessor Company)
—		Notes to Consolidated Financial Statements

Consolidated Financial Statement Schedules

All financial statement schedules have been omitted because they are not applicable or not required, or because the required information is either incorporated herein by reference or included in the financial statements or notes thereto included in this report.

Exhibits

Exhibits required to be filed by Item 601 of Regulation S-K. Where the amount of securities authorized to be issued under any of the Company’s long-term debt agreements does not exceed 10 percent of the Company’s assets, pursuant to paragraph (b)(4)(iii) of Item 601 of Regulation S-K, in lieu of filing such as an exhibit, the Company hereby agrees to furnish to the Commission upon request a copy of any agreement with respect to such long-term debt.


Exhibit
Number			Description

	2	.1	Agreement and Plan of Merger, dated May 19, 2005, by and among US Airways Group and America West Holdings Corporation (incorporated by reference to Exhibit 2.1 to US Airways Group’s Registration Statement on Form S-4 filed on June 28, 2005) (Pursuant to item 601(b)(2) of Regulation S-K promulgated by the SEC, the exhibits and schedules to the Agreement and Plan of Merger have been omitted. Such exhibits and schedules are described in the Agreement and Plan of Merger. US Airways Group hereby agrees to furnish to the SEC, upon its request, any or all of such omitted exhibits or schedules) (Registration No. 333-126162).

182


Exhibit
Number			Description

	2	.2	Letter Agreement, dated July 7, 2005 by and among US Airways Group, America West Holdings Corporation, Barbell Acquisition Corp., ACE Aviation America West Holdings, Inc., Eastshore Aviation, LLC, Par Investment Partners, L.P., Peninsula Investment Partners, L.P. and Wellington Management Company, LLP (incorporated by reference to Exhibit 2.2 to Amendment No. 1 to US Airways Group’s Registration Statement on Form S-4 filed on August 8, 2005) (Registration No. 333-126162).
	2	.3	Joint Plan of Reorganization of US Airways, Inc. and Its Affiliated Debtors and Debtors-in-Possession (incorporated by reference to Exhibit 2.1 to US Airways Group’s Current Report on Form 8-K filed on September 22, 2005).
	2	.4	Findings of Fact, Conclusions of Law and Order Under 11 USC Sections 1129(a) and (b) of Fed. R. Bankr. P. 3020 Confirming the Joint Plan of Reorganization of US Airways, Inc. and Its Affiliated Debtors and Debtors-in-Possession (incorporated by reference to Exhibit 2.2 to US Airways Group’s Current Report on Form 8-K filed on September 22, 2005).
	3	.1	Amended and Restated Certificate of Incorporation of US Airways Group, effective as of September 27, 2005 (incorporated by reference to Exhibit 3.1 to US Airways Group’s Current Report on Form 8-K filed on October 3, 2005).
	3	.2	Amended and Restated Bylaws of US Airways Group, effective as of September 27, 2005 (incorporated by reference to Exhibit 3.1 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007).
	3	.3	Amended and Restated Certificate of Incorporation of US Airways, effective as of March 31, 2003 (incorporated by reference to Plan Exhibit C-2 to the First Amended Joint Plan of Reorganization of US Airways Group and Its Affiliated Debtors and Debtors-in-Possession, As Modified (incorporated by reference to Exhibit 2.1 to US Airways’ Current Report on Form 8-K dated March 18, 2003).
	3	.4	Amended and Restated By-Laws of US Airways, effective as of March 31, 2003 (incorporated by reference to Exhibit 3.1 to US Airways’ Quarterly Report on Form 10-Q for the quarter ended March 31, 2003).
	4	.1	Indenture, dated as of September 30, 2005, between US Airways Group, the guarantors listed therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to US Airways Group’s Current Report on Form 8-K filed on October 3, 2005).
	4	.2	Registration Rights Agreement, dated as of September 30, 2005, between US Airways Group, AWA and US Airways, as guarantors, and the initial purchaser named therein (incorporated by reference to Exhibit 4.2 to US Airways Group’s Current Report on Form 8-K filed on October 3, 2005).
	10	.1	Master Memorandum of Understanding, dated as of November 24, 2004, among US Airways Group, US Airways, and General Electric Capital Corporation acting through its agent GE Capital Aviation Services, Inc. and General Electric Company, GE Transportation Component (incorporated by reference to Exhibit 10.9 to US Airways Group’s Annual Report on Form 10-K/A for the year ended December 31, 2004).*
	10	.2	Master Merger Memorandum of Understanding, dated as of June 13, 2005, among US Airways, US Airways Group, America West Holdings, Inc., AWA, General Electric Capital Corporation, acting through its agent GE Commercial Aviation Services LLC, GE Engine Services, Inc., GE Engine Services — Dallas, LP and General Electric Company, GE Transportation Component (incorporated by reference to Exhibit 10.9 to US Airways Group’s Quarterly Report on Form 10-Q/A for the quarter ended June 30, 2005).*
	10	.3	Amended and Restated Airbus A320 Agreement dated as of October 2, 2007 between US Airways, Inc. and Airbus S.A.S.*
	10	.4	A330 Purchase Agreement dated as of October 2, 2007 between US Airways, Inc. and Airbus S.A.S.*
	10	.5	Amendment No. 1 dated as of November 15, 2007 to A330 Purchase Agreement dated as of October 2, 2007 between US Airways, Inc. and Airbus S.A.S.*
	10	.6	A330/A340 Purchase Agreement dated as of November 24, 1998 between US Airways Group and AVSA, S.A.R.L. (incorporated by reference to Exhibit 10.4 to US Airways Group’s Annual Report on Form 10-K for the year ended December 31, 1998).*

183


Exhibit
Number			Description

	10	.7	Amendment No. 1 dated as of March 23, 2000 to A330/A340 Purchase Agreement dated November 24, 1998 between US Airways Group and AVSA, S.A.R.L. (incorporated by reference to Exhibit 10.2 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2000).*
	10	.8	Amendment No. 2 dated as of June 29, 2000 to A330/A340 Purchase Agreement dated November 24, 1998 between US Airways Group and AVSA, S.A.R.L. (incorporated by reference to Exhibit 10.2 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000).*
	10	.9	Amendment No. 3 dated as of November 27, 2000 to A330/A340 Purchase Agreement dated November 24, 1998 between US Airways Group and AVSA, S.A.R.L. (incorporated by reference to Exhibit 10.14 to US Airways Group’s Annual Report on Form 10-K for the year ended December 31, 2000).*
	10	.10	Amendment No. 4 dated as of September 20, 2001 to A330/A340 Purchase Agreement dated November 24, 1998 between US Airways Group and AVSA, S.A.R.L. (incorporated by reference to Exhibit 10.16 to US Airways Group’s Annual Report on Form 10-K for the year ended December 31, 2001).*
	10	.11	Amendment No. 5 dated as of July 17, 2002 to A330/A340 Purchase Agreement dated November 24, 1998 between US Airways Group and AVSA, S.A.R.L. (incorporated by reference to Exhibit 10.2 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002).*
	10	.12	Amendment No. 6 dated as of March 29, 2003 to A330/A340 Purchase Agreement dated November 24, 1998 between US Airways Group and AVSA, S.A.R.L. (incorporated by reference to Exhibit 10.2 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003).*
	10	.13	Amendment No. 7 dated August 30, 2004 to the Airbus A330/A340 Purchase Agreement dated November 24, 1998 between US Airways Group and AVSA, S.A.R.L. (incorporated by reference to Exhibit 10.3 to US Airways’ Group’s Quarterly Report on Form 10-Q/A for the quarter ended September 30, 2004).*
	10	.14	Amendment No. 8 dated December 22, 2004 to the Airbus A330/A340 Purchase Agreement dated as of November 24, 1998 between US Airways Group and AVSA, S.A.R.L. (incorporated by reference to Exhibit 10.6 to US Airways Group’s Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2005).*
	10	.15	Amendment No. 9 dated January 2005 to the Airbus A330/A340 Purchase Agreement dated November 24, 1998 between US Airways Group and AVSA, S.A.R.L. (incorporated by reference to Exhibit 10.7 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005).*
	10	.16	Letter Agreement dated December 17, 2004 between US Airways Group and US Airways and Airbus North America Sales Inc. (incorporated by reference to Exhibit 99.1 to US Airways Group’s Current Report on Form 8-K filed on February 9, 2005).
	10	.17	Amendment No. 10 dated September 2005 to the Airbus A330/A340 Purchase Agreement dated November 24, 1998 between US Airways Group and AVSA, S.A.R.L. (incorporated by reference to Exhibit 10.7 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005).*
	10	.18	Amendment No. 11 dated as of October 2, 2007 to the Airbus A330/A340 Purchase Agreement dated November 24, 1998 between US Airways Group and AVSA, S.A.R.L.*
	10	.19	Amended and Restated Airbus A350 XWB Purchase Agreement, dated as of October 2, 2007, among AVSA, S.A.R.L. and US Airways, Inc., AWA and US Airways Group.*
	10	.20	Amended and Restated Embraer Aircraft Purchase Agreement dated as of June 13, 2006 between US Airways Group and Embraer — Empresa Brasileira de Aeronautica S.A. (incorporated by reference to Exhibit 10.3 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006).*
	10	.21	Amendment No. 1 dated as of June 1, 2007 to Amended and Restated Embraer Aircraft Purchase Agreement dated June 13, 2006 between US Airways Group and Embraer — Empresa Brasileira de Aeronautica S.A. (incorporated by reference to Exhibit 10.1 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007).*

184


Exhibit
Number			Description

	10	.22	Amendment No. 2 dated as of June 6, 2007 to Amended and Restated Embraer Aircraft Purchase Agreement dated June 13, 2006 between US Airways Group and Embraer — Empresa Brasileira de Aeronautica S.A. (incorporated by reference to Exhibit 10.2 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007).*
	10	.23	Amendment No. 3 dated as of August 15, 2007 to Amended and Restated Embraer Aircraft Purchase Agreement dated as of June 13, 2006 between US Airways Group and Embraer — Empresa Brasileira de Aeronautica S.A. (incorporated by reference to Exhibit 10.2 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007).*
	10	.24	Amendment No. 1 dated as of August 15, 2007 to Amended and Restated Letter Agreement DCT-022/33 dated as of June 13, 2006 between US Airways Group and Embraer — Empresa Brasileira de Aeronautica S.A. (incorporated by reference to Exhibit 10.3 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007).*
	10	.25	Bombardier CRJ Aircraft Master Purchase Agreement dated as of May 9, 2003 between US Airways Group and Bombardier, Inc. (incorporated by reference to Exhibit 10.2 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003).*
	10	.26	Contract Change Order 1 dated January 27, 2004 to Bombardier CRJ Aircraft Master Purchase Agreement dated as of May 9, 2003 between US Airways Group and Bombardier, Inc. (incorporated by reference to Exhibit 10.6 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004).*
	10	.27	Contract Change Order 2 dated February 9, 2004 to Bombardier CRJ Aircraft Master Purchase Agreement dated as of May 9, 2003 between US Airways Group and Bombardier, Inc. (incorporated by reference to Exhibit 10.7 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004).*
	10	.28	Contract Change Order 3 dated February 26, 2004 to Bombardier CRJ Aircraft Master Purchase Agreement dated as of May 9, 2003 between US Airways Group and Bombardier, Inc. (incorporated by reference to Exhibit 10.8 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004).*
	10	.29	Global Settlement Letter, dated November 10, 2006, among US Airways Group and Bombardier Inc. (incorporated by reference to Exhibit 10.46 to US Airways Group’s Annual Report on Form 10-K for the year ended December 31, 2006).*
	10	.30	Investment Agreement, dated as of May 19, 2005, by and among Peninsula Investment Partners, L.P., US Airways, US Airways Group and its successors and America West Holdings Corporation (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed by America West Holdings Corporation on May 25, 2005).
	10	.31	Investment Agreement, dated as of May 19, 2005, by and among ACE Aviation Holdings Inc., US Airways Group and its successors and America West Holdings Corporation (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed by America West Holdings Corporation on May 25, 2005).
	10	.32	Investment Agreement, dated as of May 19, 2005, by and among Par Investment Partners, L.P., US Airways, US Airways Group and its successors and America West Holdings Corporation (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by America West Holdings Corporation on May 25, 2005).
	10	.33	Investment Agreement, dated as of May 19, 2005, by and among Eastshore Aviation, LLC, US Airways, US Airways Group and its successors and America West Holdings Corporation (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by America West Holdings Corporation on May 25, 2005).
	10	.34	Investment Agreement, dated May 27, 2005, by and among Wellington Investment Management Company, LLP, America West Holdings Corporation and US Airways Group (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by America West Holdings Corporation on June 2, 2005).

185


Exhibit
Number			Description

	10	.35	Investment Agreement, dated July 7, 2005, among Tudor Proprietary Trading, L.L.C. and certain investors listed on Schedule 1 thereto for which Tudor Investment Corp. acts as investment advisor, US Airways Group and America West Holdings Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by US Airways Group on July 13, 2005).
	10	.36	Letter Agreement dated September 16, 2005 by and among US Airways Group, America West Holdings Corporation, Barbell Acquisition Corp., ACE Aviation America West Holdings, Inc., Eastshore Aviation, LLC, Par Investment Partners, L.P., Peninsula Investment Partners, L.P. and Wellington Management Company, LLP (incorporated by reference to Exhibit 10.11 to US Airways Group’s Quarterly Report on From 10-Q for the quarter ended September 30, 2005).
	10	.37	Junior Secured Debtor-in-Possession Credit Facility Agreement dated as of February 18, 2005 among US Airways, a Debtor and Debtor-in-Possession under Chapter 11 of the Bankruptcy Code as Borrower, US Airways Group, PSA Airlines, Inc., and Material Services, Inc., Debtors and Debtors-in-Possession under Chapter 11 of the Bankruptcy Code as Guarantors, and Eastshore Aviation, LLC, as Lender (incorporated by reference to Exhibit 99 to US Airways Group’s Current Report on Form 8-K filed on March 2, 2005).
	10	.38	Amendment No. 1 dated as of May 19, 2005 to Junior Secured Debtor-in-Possession Credit Facility Agreement dated as of February 18, 2005 among US Airways, as Debtor and Debtor-in- Possession under Chapter 11 of the Bankruptcy Code as Borrower, US Airways Group, PSA Airlines, Inc., and Material Services, Inc., Debtors and Debtors-in-Possession under Chapter 11 of the Bankruptcy Code as Guarantors, and Eastshore Aviation, LLC, as Lender (incorporated by reference to Exhibit 10.105 to US Airways Group’s Registration Statement on Form S-4 filed with the SEC on June 28, 2005) (Registration No. 333-126162).
	10	.39	Amended and Restated Participation Agreement, dated as of July 7, 2005, between America West Holdings Corporation and Par Investment Partners, L.P. (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by America West Holdings Corporation on July 13, 2005).
	10	.40	Amended and Restated Participation Agreement, dated as of July 7, 2005, between America West Holdings Corporation and Peninsula Investment Partners, L.P. (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed by America West Holdings Corporation on July 13, 2005).
	10	.41	Merchant Services Bankcard Agreement, dated as of April 16, 2003, between AWA, The Leisure Company, JPMorgan Chase Bank, and Chase Merchant Services L.L.C. (incorporated by reference to Exhibit 10.113 to Amendment No. 2 to the Registration Statement on Form S-4 filed by US Airways Group on August 11, 2005) (Registration No. 333-126162).*
	10	.42	First Amendment to Merchant Services Bankcard Agreement, dated as of August 8, 2005, among AWA, JPMorgan Chase Bank, N.A., and Chase Merchant Services, L.L.C. (incorporated by reference to Exhibit 10.111 to Amendment No. 2 to the Registration Statement on Form S-4 filed by US Airways Group on August 11, 2005) (Registration No. 333-126162).*
	10	.43	America West Co-Branded Card Agreement, dated as of January 25, 2005, between AWA and Juniper Bank (incorporated by reference to Exhibit 10.112 to Amendment No. 2 to the Registration Statement on Form S-4 filed by US Airways Group on August 11, 2005) (Registration No. 333-126162).*
	10	.44	Assignment and First Amendment to America West Co-Branded Card Agreement, dated as of August 8, 2005, between AWA, US Airways Group and Juniper Bank (incorporated by reference to Exhibit 10.110 to Amendment No. 2 to the Registration Statement on Form S-4 filed by US Airways Group on August 11, 2005) (Registration No. 333-126162).*
	10	.45	Amendment No. 2 to America West Co-Branded Credit Card Agreement, dated as of September 26, 2005, between AWA, US Airways Group and Juniper Bank.*
	10	.46	Amendment No. 3 to America West Co-Branded Credit Card Agreement, dated as of December 29, 2006, between US Airways Group and Barclays Bank Delaware.*
	10	.47	Amendment No. 4 to America West Co-Branded Credit Card Agreement, dated as of December 5, 2007, between US Airways Group and Barclays Bank Delaware.*
	10	.48	Airport Use Agreement, dated as of July 1, 1989, among the City of Phoenix, The Industrial Development Authority of the City of Phoenix, Arizona and AWA (“Airport Use Agreement”) (incorporated by reference to Exhibit 10-(D)(9) to AWA’s Annual Report on Form 10-K for the year ended December 31, 1989).

186


Exhibit
Number			Description

	10	.49	First Amendment to Airport Use Agreement, dated as of August 1, 1990 (incorporated by reference to Exhibit 10-(D)(9) to AWA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1990).
	10	.50	Financing Agreement, dated as of April 1, 1998, between the Industrial Development Authority of the City of Phoenix, Arizona and AWA (incorporated by reference to Exhibit 10.29 to America West Holdings’ Quarterly Report on Form 10-Q for the quarter ended June 30, 1998).
	10	.51	Indenture of Trust, dated as of April 1, 1998, from the Industrial Development Authority of the City of Phoenix, Arizona to Norwest Bank, Arizona N.A. (incorporated by reference to Exhibit 10.30 to America West Holdings’ Quarterly Report on Form 10-Q for the quarter ended June 30, 1998).
	10	.52	Second Amendment to Airport Use Agreement, dated as of August 25, 1995 (incorporated by reference to Exhibit 10.34 to AWA’s Annual Report on Form 10-K for the year ended December 31, 1998).
	10	.53	Indenture of Trust, dated as of June 1, 1999, from The Industrial Development Authority of the City of Phoenix, Arizona to Bank One, Arizona, N.A. (incorporated by reference to Exhibit 10.35 to AWA’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999).
	10	.54	Amended and Restated V2500 Support Contract, dated as of October 7, 1998 between AWA and IAE International Aero Engines AG and Side Letters Nos. 1 and 2 thereto (incorporated by reference to Exhibit 10.20 to America West Holdings’ and AWA’s Annual Report on Form 10-K for the year ended December 31, 1998).*
	10	.55	Side Letter No. 15, dated May 26, 2004, to the Amended and Restated V2500 Support Contract, dated October 7, 1998, between AWA and IAE International Aero Engines AG (incorporated by reference to Exhibit 10.16 to America West Holdings’ and AWA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).*
	10	.56	Purchase Agreement, dated as of December 27, 2000, between America West Holdings, AWA and Continental Airlines, Inc., including Letter Agreement (incorporated by reference to Exhibit 10.40 to America West Holdings’ and AWA’s Annual Report on Form 10-K for the year ended December 31, 2000).
	10	.57	Priority Distribution Agreement, dated as of August 25, 1994, between TPG Partners, L.P., TPG Parallel I, L.P., Air Partners II, L.P., and Continental Airlines, Inc. (incorporated by reference to Exhibit 3 to Schedule 13D filed by TPG Partners, L.P. on September 6, 1994).
	10	.58	Disposition and Redevelopment Agreement, dated as of February 5, 2001, between AWA and the City of Phoenix, AZ (incorporated by reference to Exhibit 10.44 to AWA’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001).
	10	.59	Unsubordinated Ground Lease, dated as of February 5, 2001, between AWA and the City of Phoenix, AZ (incorporated by reference to Exhibit 10.45 to AWA’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001).*
	10	.60	Loan Agreement [Engines], dated as of September 3, 2004, among AWA, GECC, as administrative agent, original Series A lender and original Series B lender, Wells Fargo Bank Northwest, National Association (“Wells Fargo”), as security trustee and the lenders from time to time party thereto (incorporated by reference to Exhibit 10.1 to America West Holdings’ and AWA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).
	10	.61	Engine Mortgage and Security Agreement, dated as of September 3, 2004, between AWA and Wells Fargo (incorporated by reference to Exhibit 10.2 to America West Holdings’ and AWA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).
	10	.62	Mortgage and Security Agreement Supplement No. 1, dated September 10, 2004, of AWA (incorporated by reference to Exhibit 10.3 to America West Holdings’ and AWA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).
	10	.63	Subordinated Engine Mortgage and Security Agreement, dated as of September 3, 2004, between AWA and Wells Fargo (incorporated by reference to Exhibit 10.4 to America West Holdings’ and AWA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).
	10	.64	Subordinated Mortgage and Security Agreement Supplement No. 1, dated September 10, 2004, of AWA (incorporated by reference to Exhibit 10.5 to America West Holdings’ and AWA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).

187


Exhibit
Number			Description

	10	.65	Security Trustee Agreement [Engines], dated as of September 3, 2004, among Wells Fargo, as security trustee and the beneficiaries named therein (incorporated by reference to Exhibit 10.6 to America West Holdings’ and AWA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).
	10	.66	Payment and Indemnity Agreement [Engines], dated as of September 3, 2004, among AWA, certain beneficiaries listed on Schedule 1 and Wells Fargo (incorporated by reference to Exhibit 10.7 to America West Holdings’ and AWA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).
	10	.67	Spare Parts Mortgage and Security Agreement, dated as of September 3, 2004, between AWA and Wells Fargo (incorporated by reference to Exhibit 10.10 to America West Holdings’ and AWA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).
	10	.68	Subordinated Spare Parts Mortgage and Security Agreement, dated as of September 3, 2004, between AWA and Wells Fargo (incorporated by reference to Exhibit 10.11 to America West Holdings’ and AWA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).
	10	.69	Security Trustee Agreement [Spare Parts], dated as of September 3, 2004, among Wells Fargo, as security trustee and the beneficiaries named therein (incorporated by reference to Exhibit 10.12 to America West Holdings’ and AWA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).
	10	.70	Payment and Indemnity Agreement [Spare Parts], dated as of September 3, 2004, among AWA, certain beneficiaries listed on Schedule 1 and Wells Fargo (incorporated by reference to Exhibit 10.13 to America West Holdings’ and AWA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).
	10	.71	Restructure Letter Agreement [Spare Parts], dated as of September 3, 2004, among AWA and GECC (incorporated by reference to Exhibit 10.14 to America West Holdings’ and AWA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).
	10	.72	$30,790,000 Senior Secured Term Loan Agreement, dated December 23, 2004, among FTCHP LLC, as Borrower, AWA, as Guarantor, Heritage Bank, SSB, as Administrative Agent and Citibank, N.A. (and other lenders named therein) as Lenders (incorporated by reference to Exhibit 10.41 to America West Holdings’ and AWA’s Annual Report on Form 10-K for the year ended December 31, 2004).
	10	.73	Senior Secured Discount Note, dated December 23, 2004, issued by FTCHP LLC (incorporated by reference to Exhibit 10.42 to America West Holdings’ and AWA’s Annual Report on Form 10-K for the year ended December 31, 2004).
	10	.74	Unconditional Guaranty Agreement, dated December 23, 2004, by AWA in favor of Citibank, N.A. (incorporated by reference to Exhibit 10.43 to America West Holdings’ and AWA’s Annual Report on Form 10-K for the year ended December 31, 2004).
	10	.75	Loan Agreement, dated March 23, 2007, among US Airways Group as Borrower, certain subsidiaries of US Airways Group party to the agreement from time to time, Citicorp North America, Inc., as Administrative Agent, the lenders party to the agreement from time to time, Citigroup Global Markets Inc., as Joint Lead Arranger and Bookrunner, Morgan Stanley Senior Funding, Inc., as Joint Lead Arranger and Bookrunner and Syndication Agent, and General Electric Capital Corporation, as Documentation Agent (incorporated by reference to Exhibit 4.1 to US Airways Group’s Current Report on Form 8-K filed on March 26, 2007).
	10	.76	Amended and Restated Loan Agreement, dated as of April 7, 2006, among US Airways Group, General Electric Capital Corporation, as Administrative Agent, the lenders party to the agreement from time to time, and certain subsidiaries of US Airways Group party to the agreement from time to time (incorporated by reference to Exhibit 4.1 to US Airways Group’s Current Report on Form 8-K dated April 7, 2006, filed on April 10, 2006).
	10	.77	Stockholders’ Agreement, dated as of September 27, 2005, among US Airways Group and ACE Aviation America West Holdings Inc. (incorporated by reference to Exhibit 10.1 to US Airways Group’s Current Report on Form 8-K filed on October 3, 2005).
	10	.78	Stockholders’ Agreement, dated as of September 27, 2005, among US Airways Group and Eastshore Aviation LLC (incorporated by reference to Exhibit 10.2 to US Airways Group’s Current Report on Form 8-K filed on October 3, 2005).

188


Exhibit
Number			Description

	10	.79	Stockholders’ Agreement, dated as of September 27, 2005, among US Airways Group and Par Investment Partners, L.P. (incorporated by reference to Exhibit 10.3 to US Airways Group’s Current Report on Form 8-K filed on October 3, 2005).
	10	.80	Stockholders’ Agreement, dated as of September 27, 2005, among US Airways Group and Peninsula Investment Partners, L.P. (incorporated by reference to Exhibit 10.4 to US Airways Group’s Current Report on Form 8-K filed on October 3, 2005).
	10	.81	Stockholders’ Agreement, dated as of September 27, 2005, among US Airways Group and the group of investors named therein under the management of Wellington Management Company, LLP (incorporated by reference to Exhibit 10.5 to US Airways Group’s Current Report on Form 8-K filed on October 3, 2005).
	10	.82	Stockholders’ Agreement, dated as of September 27, 2005, among US Airways Group, Tudor Proprietary Trading L.L.C. and the group of investors named therein for which Tudor Investment Corp. acts as investment advisor (incorporated by reference to Exhibit 10.6 to US Airways Group’s Current Report on Form 8-K filed on October 3, 2005).
	10	.83	US Airways Funded Executive Defined Contribution Plan (incorporated by reference to Exhibit 10.1 to US Airways’ Annual Report on Form 10-K for the year ended December 31, 2003).†
	10	.84	First Amendment to the US Airways Funded Executive Defined Contribution Plan dated January 26, 2004 (incorporated by reference to Exhibit 10.4 to US Airways’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2004).†
	10	.85	Second Amendment to the US Airways Funded Executive Defined Contribution Plan dated May 20, 2004 (incorporated by reference to Exhibit 10.5 to US Airways’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2004).†
	10	.86	Third Amendment to the US Airways Funded Executive Defined Contribution Plan dated June 24, 2004 (incorporated by reference to Exhibit 10.6 to US Airways’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2004).†
	10	.87	US Airways Unfunded Executive Defined Contribution Plan (incorporated by reference to Exhibit 10.2 to US Airways’ Annual Report on Form 10-K for the year ended December 31, 2003).†
	10	.88	First Amendment to the US Airways Unfunded Executive Defined Contribution Plan dated January 26, 2004 (incorporated by reference to Exhibit 10.7 to US Airways’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2004).†
	10	.89	Second Amendment to the US Airways Unfunded Executive Defined Contribution Plan dated May 20, 2004 (incorporated by reference to Exhibit 10.8 to US Airways’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2004).†
	10	.90	Third Amendment to the US Airways Unfunded Executive Defined Contribution Plan dated June 24, 2004 (incorporated by reference to Exhibit 10.9 to US Airways’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2004).†
	10	.91	US Airways Group 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to US Airways Group’s Current Report on Form 8-K filed on October 3, 2005).†
	10	.92	Stock Unit Award Agreement, dated as of September 27, 2005, between US Airways Group and W. Douglas Parker (incorporated by reference to Exhibit 10.6 to US Airways Group’s Current Report on Form 8-K filed on October 3, 2005).†
	10	.93	Form of Stock Unit Agreement under US Airways Group’s 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007).†
	10	.94	Form of Stock Appreciation Rights Award Agreement under US Airways Group’s 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.75 to US Airways Group’s Annual Report on Form 10-K for the year ended December 31, 2005).†
	10	.95	Form of Nonstatutory Stock Option Award Agreement under US Airways Group’s 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.5 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006).†

189


Exhibit
Number			Description

	10	.96	Form of Stock Bonus Award Agreement for Non-Employee Directors under US Airways Group’s 2005 Equity Incentive Plan.†
	10	.97	Form of Indemnity Agreement (incorporated by reference to Exhibit 10.1 to US Airways Group’s Current Report on Form 8-K filed on October 6, 2005).†
	10	.98	Amended and Restated America West 1994 Incentive Equity Plan (incorporated by reference to Exhibit 10.21 to AWA’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001).†
	10	.99	America West Holdings 2002 Incentive Equity Plan as amended through May 23, 2002 (incorporated by reference to Exhibit 10.1 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006).†
	10	.100	2007 Performance-Based Award Program under the US Airways Group 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007).†
	10	.101	Form of Offer Letter (incorporated by reference to Exhibit 10.47 to America West Holdings’ and AWA’s Annual Report on Form 10-K for the year ended December 31, 2004).†
	10	.102	Form of Executive Change in Control Agreement for Presidents (incorporated by reference to Exhibit 10.2 to US Airways Group’s Current Report on Form 8-K filed on November 29, 2007).†
	10	.103	Form of Executive Change in Control Agreement for Executive Vice Presidents (incorporated by reference to Exhibit 10.3 to US Airways Group’s Current Report on Form 8-K filed on November 29, 2007).†
	10	.104	Form of Executive Change in Control Agreement for Senior Vice Presidents (incorporated by reference to Exhibit 10.4 to US Airways Group’s Current Report on Form 8-K filed on November 29, 2007).†
	10	.105	Summary of Director Compensation and Benefits (incorporated by reference to Exhibit 10.4 to US Airways Group’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007).†
	10	.106	Form of Letter Agreement for Directors Travel Program.†
	10	.107	Amended and Restated Employment Agreement dated as of November 28, 2007 by and among US Airways Group, US Airways, Inc. and W. Douglas Parker (incorporated by reference to Exhibit 10.1 to US Airways Group’s Current Report on Form 8-K filed on November 29, 2007).†
	10	.108	Annual Incentive Bonus Plan (incorporated by reference to Exhibit 10.1 to America West Holdings’ and America West Airlines, Inc.’s Quarterly Report on form 10-Q for the quarter ending March 31, 2005).†
	10	.109	US Airways Group Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to US Airways Group’s Current Report on Form 8-K filed on January 23, 2006).†
	21	.1	Subsidiaries of US Airways Group, Inc.
	23	.1	Consents of KPMG LLP, Independent Registered Public Accounting Firm of US Airways Group.
	24	.1	Powers of Attorney, pursuant to which amendments to this Annual Report on Form 10-K may be filed, is included on the signature pages of this Annual Report on Form 10-K
	31	.1	Certification of US Airways Group’s Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
	31	.2	Certification of US Airways Group’s Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
	31	.3	Certification of US Airways’ Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
	31	.4	Certification of US Airways’ Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
	32	.1	Certification of US Airways Group’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32	.2	Certification of US Airways’ Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


*		Portions of this exhibit have been omitted under a request for confidential treatment and filed separately with the United States Securities and Exchange Commission.
†		Management contract or compensatory plan or arrangement.

190

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized.

US Airways Group, Inc.


	By:	/s/ W. Douglas Parker

W. Douglas Parker

Chairman and Chief Executive Officer

Date: February 20, 2008

US Airways, Inc.


	By:	/s/ W. Douglas Parker

W. Douglas Parker

Chairman and Chief Executive Officer

Date: February 20, 2008

191

KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints W. Douglas Parker and Derek J. Kerr and each or any of them, his or her true and lawful attorneys and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to the Registrants’ Annual Report on Form 10-K for the fiscal year ended December 31, 2007, and to file the same with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys and agents, and each or any of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys and agents, and each of them, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons in the capacities and on the dates indicated.


Signatures	Title	Date


/s/ W. Douglas Parker W. Douglas Parker	Chairman and Chief Executive Officer (Principal Executive Officer)	February 20, 2008

/s/ Derek J. Kerr Derek J. Kerr	Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	February 20, 2008

/s/ Bruce R. Lakefield Bruce R. Lakefield	Director	February 20, 2008

/s/ Richard Bartlett Richard Bartlett	Director	February 20, 2008

/s/ Herbert M. Baum Herbert M. Baum	Director	February 20, 2008

/s/ Matthew J. Hart Matthew J. Hart	Director	February 20, 2008

/s/ Richard C. Kraemer Richard C. Kraemer	Director	February 20, 2008

/s/ Cheryl G. Krongard Cheryl G. Krongard	Director	February 20, 2008

/s/ Denise M. O’Leary Denise M. O’Leary	Director	February 20, 2008

/s/ George M. Philip George M. Philip	Director	February 20, 2008

/s/ Edward L. Shapiro Edward L. Shapiro	Director	February 20, 2008

/s/ J. Steven Whisler J. Steven Whisler	Director	February 20, 2008

192

EXHIBIT INDEX


Exhibit
Number			Description

	10	.3	Amended and Restated Airbus A320 Agreement dated as of October 2, 2007 between US Airways, Inc. and Airbus S.A.S.*
	10	.4	A330 Purchase Agreement dated as of October 2, 2007 between US Airways, Inc. and Airbus S.A.S.*
	10	.5	Amendment No. 1 dated as of November 15, 2007 to A330 Purchase Agreement dated as of October 2, 2007 between US Airways, Inc. and Airbus S.A.S.*
	10	.18	Amendment No. 11 dated as of October 2, 2007 to the Airbus A330/A340 Purchase Agreement dated November 24, 1998 between US Airways Group and AVSA, S.A.R.L.*
	10	.19	Amended and Restated Airbus A350 XWB Purchase Agreement, dated as of October 2, 2007, among AVSA, S.A.R.L. and US Airways, Inc., AWA and US Airways Group.*
	10	.45	Amendment No. 2 to America West Co-Branded Credit Card Agreement, dated as of September 26, 2005, between AWA, US Airways Group and Juniper Bank.*
	10	.46	Amendment No. 3 to America West Co-Branded Credit Card Agreement, dated as of December 29, 2006, between US Airways Group and Barclays Bank Delaware.*
	10	.47	Amendment No. 4 to America West Co-Branded Credit Card Agreement, dated as of December 5, 2007, between US Airways Group and Barclays Bank Delaware.*
	10	.96	Form of Stock Bonus Award Agreement for Non-Employee Directors under US Airways Group’s 2005 Equity Incentive Plan.†
	10	.106	Form of Letter Agreement for Directors Travel Program.†
	21	.1	Subsidiaries of US Airways Group, Inc.
	23	.1	Consents of KPMG LLP, Independent Registered Public Accounting Firm of US Airways Group.
	31	.1	Certification of US Airways Group’s Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
	31	.2	Certification of US Airways Group’s Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
	31	.3	Certification of US Airways’ Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
	31	.4	Certification of US Airways’ Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
	32	.1	Certification of US Airways Group’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32	.2	Certification of US Airways’ Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


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

†		Management contract or compensatory plan or arrangement.

193

EXHIBIT 10.3

AMENDED AND RESTATED

AIRBUS A320 FAMILY AIRCRAFT PURCHASE AGREEMENT

Dated as of October 2, 2007

between

AIRBUS S.A.S.
Seller

and

US AIRWAYS, INC.
Buyer

USA — Amended and Restated Airbus A320 Family Purchase Agreement


EXECUTION		PRIVILEGED AND CONFIDENTIAL

CONTENTS


0 - DEFINITIONS			8

1 - SALE AND PURCHASE			18

2 - SPECIFICATION			19

2.1 Specification Documents			19
2.2 Customization Milestones Chart			20
2.3 Propulsion Systems			20

3 - PRICE			24

3.1. Price of the A318 Aircraft			24
3.2. Price of the A319 Aircraft			24
3.3. Price of the A320 Aircraft			26
3.4. Price of the A321 Aircraft			28
3.5 Taxes, Duties and Imposts			30

4 - PRICE REVISION			32

4.1 Airframe Price Revision Formula			32
4.2 Propulsion System Price Revision			32

5 -PAYMENT TERMS			33

5.1 Payments			33
5.2 Predelivery Payments			33
5.3 Predelivery Payments and Initial Payments Received			34
5.4 Payment of Balance of the Final Contract Price			34
5.5 Application of Payments			35
5.6 Overdue Payments			35
5.7 Proprietary Interest			36
5.8 Payment in Full			36

6 -MANUFACTURE PROCEDURE — INSPECTION			37

6.1 Manufacture Procedures			37
6.2 Inspection Procedures			37
6.3 Representatives			38

7 -CERTIFICATION			39

7.1 Type Certification			39
7.2 Export Certificate of Airworthiness			39
7.3 Additional FAA Requirements			39
7.4 Additional EASA Requirements			40
7.5 Specification Changes After Delivery			40

8 - TECHNICAL ACCEPTANCE			41



USA — Amended and Restated Airbus A320 Family Purchase Agreement		ii


EXECUTION		PRIVILEGED AND CONFIDENTIAL


8.1 Technical Acceptance Process			41
8.2 Buyer’s Attendance			41
8.3 Certificate of Acceptance			42
8.4 Finality of Acceptance			42
8.5 Aircraft Utilization			42

9 - DELIVERY			43

9.1 Delivery Schedule			43
9.2 Delivery Process			45
9.3 Flyaway			45

10 - EXCUSABLE DELAY AND TOTAL LOSS			46

10.1 Scope of Excusable Delay			46
10.2 Consequences of Excusable Delay			47
10.3 Termination on Excusable Delay			47
10.4 Total Loss, Destruction or Damage			48
10.5 Remedies			48

11 - INEXCUSABLE DELAY			50

11.1 Liquidated Damages			50
11.2 Renegotiation			50
11.3 Termination			51
11.4 Setoff Payments			51
11.5 Remedies			51
12 - WARRANTIES AND SERVICE LIFE POLICY			52
12.1 Warranty			52
12.2 Seller Service Life Policy			64
12.3 Supplier Warranties and Service Life Policy			69
12.4 Interface Commitment			69
12.5 Exclusivity of Warranties			71
12.6 Duplicate Remedies			74
12.7 Negotiated Agreement			74
12.8 Survivability			74

13 - PATENT AND COPYRIGHT INDEMNITY			75

13.1 Indemnity			75
13.2 Administration of Patent and Copyright Indemnity Claims			76

14 - TECHNICAL DATA AND SOFTWARE SERVICES			78

14.1 Supply			78
14.2 Aircraft Identification for Technical Data			78
14.3 Integration of Equipment Data			78
14.4 Delivery			79
14.5 Revision Service			80



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — iii


EXECUTION		PRIVILEGED AND CONFIDENTIAL


14.6 Service Bulletins Incorporation			80
14.7 Future Developments			81
14.8 Technical Data Familiarization			81
14.9 Customer Originated Changes			81
14.10 Software Products			83
14.11 Warranties			85
14.12 Proprietary Rights			86

15 - SELLER REPRESENTATIVES			87

15.1 Seller Representatives			87
15.2 Resident Customer Support Representatives			87
15.3 Customer Support Director			87
15.4 Buyer’s Support			88
15.5 Temporary Assignment and Withdrawal of Resident Customer Support Representative			88
15.6 Representatives’ Status			88

16 - TRAINING AND TRAINING AIDS			89

16.1 General			89
16.2 Scope			89
16.3 Training Organization / Location			89
16.4 Training Courses			89
16.5 Prerequisites			90
16.6 Logistics			91
16.7 Training Aids for the Buyer’s Training Organization			93
16.8 Proprietary Rights			95
Appendix A to Clause 16			96
Appendix B to Clause 16			97

17 SUPPLIER PRODUCT SUPPORT			100

17.1 Equipment Supplier Product Support Agreements			100
17.2 Supplier Compliance			100
17.3 Supplier Part Repair Stations			101

18 BUYER FURNISHED EQUIPMENT			102

18.1 Administration			102
18.2 Requirements			103
18.3 Buyer’s Obligation and Seller’s Remedies			103
18.4 Title and Risk of Loss			104
18.5 Disposition of BFE Following Termination			104

19 INDEMNITIES AND INSURANCE			106

19.1 Seller’s Indemnities			106
19.2 Buyer’s Indemnities			106



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — iv


EXECUTION		PRIVILEGED AND CONFIDENTIAL


19.3 Notice and Defense of Claims			107
19.4 Insurance			107

20 - ASSIGNMENTS AND TRANSFERS			109

20.1 Assignments by Buyer			109
20.2 Assignments on Sale, Merger or Consolidation			109
20.3 Designations by Seller			109
20.4 Transfer Prior to Delivery			110
20.5 Post Delivery Resale or Lease			110

21. TERMINATION			110

21.1 Termination Events			110
21.2 Remedies In Event of Termination			112
21.3 Definitions			112
21.4 Notice of Termination Event			112
21.5 Adequate Assurance of Performance			112
21.6 Information Covenants			112

22 MISCELLANEOUS			116

22.1 Data Retrieval			116
22.2 Notices			116
22.3 Waiver			117
22.4 Interpretation and Law			117
22.5 Waiver of Jury Trial			119
22.6 No Representations outside of this Agreement			119
22.7 Confidentiality			119
22.8 Severability			120
22.9 Alterations to Contract			120
22.10 Scope of Agreement and Original Agreement			120
22.11 Inconsistencies			120
22.12 Language			121
22.13 Headings			121
22.14 Counterparts			121

23 CERTAIN REPRESENTATIONS OF THE PARTIES			122

23.1. Buyer’s Representations			122
23.2 Seller’s Representations			122



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — v


EXECUTION		PRIVILEGED AND CONFIDENTIAL

C O N T E N T S


EXHIBITS

EXHIBIT A-1		A318-100 STANDARD SPECIFICATION

EXHIBIT A-2		A319-100 STANDARD SPECIFICATION

EXHIBIT A-3		A320-200 STANDARD SPECIFICATION

EXHIBIT A-4		A321-200 STANDARD SPECIFICATION

EXHIBIT B-1A		FORM OF SPECIFICATION CHANGE NOTICE

EXHIBIT B-1B		FORM OF MANUFACTURER SPECIFICATION CHANGE NOTICE

EXHIBIT B-2		A318 SPECIFICATION CHANGE NOTICES

EXHIBIT B-3		A319 SPECIFICATION CHANGE NOTICES

EXHIBIT B-4		A320 SPECIFICATION CHANGE NOTICES

EXHIBIT B-5		A321 SPECIFICATION CHANGE NOTICES

EXHIBIT C		SELLER SERVICE LIFE POLICY – ITEMS COVERED

EXHIBIT D		FORM OF CERTIFICATE OF ACCEPTANCE

EXHIBIT E		FORM OF BILL OF SALE

EXHIBIT F		TECHNICAL DATA INDEX

EXHIBIT G-1		AIRFRAME PRICE REVISION FORMULA

EXHIBIT G-2		INTERNATIONAL AERO ENGINES (IAE) PROPULSION SYSTEM PRICE REVISION FORMULA

EXHIBIT G-3		CFM PROPULSION SYSTEM PRICE REVISION FORMULA

EXHIBIT H		GENERAL CONDITIONS OF LICENSING OF SOFTWARE



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — vi


EXECUTION		PRIVILEGED AND CONFIDENTIAL

AMENDED AND RESTATED

AIRBUS A320 FAMILY

PURCHASE AGREEMENT

This Agreement is made this 2 ^nd day of October, 2007.

between

AIRBUS S.A.S. organized and existing under the laws of the Republic of France, having its registered office located at

1, rond-point Maurice Bellonte
31700 BLAGNAC
FRANCE

(hereinafter referred to as the “ Seller ”)

and

US Airways, Inc., a corporation, organized and existing under the laws of the State of Delaware, United States of America, having its principal corporate offices located at 111 West Rio Salado Parkway, Tempe, Arizona 85281 (the “ Buyer ”).

WHEREAS the Buyer and the Seller have entered into an A319/A320 Purchase Agreement, dated as of September 12, 1997 as amended from time to time (the “ Original Agreement ”), relating to, inter alia, the sale by the Seller and the purchase by the Buyer of certain firmly ordered Airbus A318, A319, A320 and A321 model aircraft.

WHEREAS, the Buyer wishes to purchase and the Seller is willing to sell certain additional Airbus A319, A320 and A321 model aircraft.

WHEREAS, the Buyer and the Seller wish to amend and restate the Original Agreement to (a) incorporate relevant amendments to such Original Agreement into a single document and (b) make the Original Aircraft, the A318 Aircraft and the New Aircraft subject to the terms of such amended and restated Original Agreement to the extent set forth herein.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 7 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

NOW THEREFORE IT IS AGREED AS FOLLOWS:

0 — DEFINITIONS

For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following terms will have the following meanings:

A318 Aircraft – any or all of the Airbus A318-100 model aircraft to be sold by the Seller and purchased by the Buyer pursuant to this Agreement, together with all components, equipment, parts and accessories installed in or on such aircraft and the A318 Propulsion System installed thereon.

A318 Propulsion System – the two Pratt and Whitney PW6124 powerplants to be installed on an A318 Aircraft or installed on an A318 Aircraft at delivery, each composed of the powerplant (but limited to the equipment, components, parts and accessories included in the powerplant), that have been sold to the Seller by Pratt & Whitney, butspecifically not including a nacelle and thrust reverser for each such powerplant.

A318 Specification – the A318-100 Standard Specification, as amended from time to time in accordance with this Agreement.

A318-100 Standard Specification — the A318-100 Standard Specification, Issue 2, dated January 2005, as may be modified from time to time, pursuant to the provisions of Clause 2 of the Agreement, which includes a maximum take-off weight (MTOW ) of 66 metric tons, a maximum landing weight (MLW) of 57.5 metric tons and a maximum zero fuel weight (MZFW) of 54.5 metric tons, a copy of which is annexed as Exhibit A-1.

A319 Aircraft – any or all of the Original A319 Aircraft and the New A319 Aircraft.

A319 Airframe — any or all of the A319 Original Aircraft and A319 New Aircraft, excluding the A319 Propulsion System therefor.

A319 CFM Propulsion System – the two (2) CFM56-5B6 CFM International powerplants to be installed on an A319 Aircraft at delivery, each composed of the powerplant, (but limited to the equipment, components, parts and accessories included in the powerplant,), that have been sold to the Seller by CFM International, but specifically not including a nacelle and thrust reverser for each such powerplant.

A319 CFM56-5B6 Reference Price – as set forth in Clause 3.2.1.2.2

A319 IAE Propulsion System — the two (2) V2524-A5 powerplants to be installed on an A319 Aircraft at delivery, each composed of the powerplant (but limited to the equipment, components, parts and accessories included in the powerplant), that have been



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 8 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

sold to the Seller by International Aero Engines AG, but specifically not including a nacelle and thrust reverser for each such powerplant.

A319 Propulsion System – one set of either (i) the A319 CFM Propulsion System or (ii) the A319 IAE Propulsion System. The applicable A319 Propulsion System will be determined as set forth in Clause 2.2.

A319 Specification – the A319-100 Standard Specification, as amended from time to time in accordance with this Agreement.

A319-100 Standard Specification — the A319-100 Standard Specification No. J.000.01000, Issue 5, dated January 31, 2005, which includes a maximum take-off weight (MTOW) of 75.5 metric tons, a maximum landing weight ( MLW ) of 62.5 metric tons and a maximum zero fuel weight ( MZFW ) of 58.5 metric tons, a copy of which is annexed as Exhibit A-2.

A319 V2524-A5 Reference Price – as set forth in Clause 3.2.1.2.1.

A320 Aircraft – any or all of the Original A320 Aircraft and the New A320 Aircraft.

A320 Airframe — any or all of the A320 Original Aircraft and A320 New Aircraft, excluding the A320 Propulsion System therefor.

A320 CFM Propulsion System — the two (2) CFM56-5B4 CFM International powerplants to be installed on an A320 Aircraft at delivery, each composed of the powerplant, (but limited to the equipment, components, parts and accessories included in the powerplant), that have been sold to the Seller by CFM International, but specifically not including a nacelle and thrust reverser for each such powerplant.

A320 CFM56-5B4 Reference Price – as set forth in Clause 3.3.1.2.2.

A320 IAE Propulsion System — the two (2) V2527-A5 powerplants to be installed on an A320 Aircraft at delivery, each composed of the powerplant (but limited to the equipment, components, parts and accessories included in the powerplant), that have been sold to the Seller by International Aero Engines AG, but specifically not including a nacelle and thrust reverser for each such powerplant.

A320 Propulsion System – one set of either (i) the A320 CFM Propulsion System or (ii) the A320 IAE Propulsion System. The applicable A320 Propulsion System will be determined as set forth in Clause 2.2.

A320 Specification – the A320-200 Standard Specification, as amended from time to time in accordance with this Agreement.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 9 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

A320-200Standard Specification — the A320-200 Standard Specification No. D.000.02000, Issue 6, dated January 31, 2005, which includes a maximum take-off weight ( MTOW ) of 77 metric tons, a maximum landing weight ( MLW ) of 66 metric tons and a maximum zero fuel weight ( MZFW ) of 58.5 metric tons, a copy of which is annexed as A-3.

A320 V2527 A5 Reference Price – as set forth in Clause 3.3.2.1.2.1

A321 Aircraft – any or all of the Original A321 Aircraft and the New A321 Aircraft.

A321 Airframe — any or all of the A321 Original Aircraft and A321 New Aircraft, excluding the A321 Propulsion System therefor.

A321 CFM Propulsion System – the two (2) CFM56-5B3 CFM International powerplants to be installed on an A321 Aircraft at delivery, each composed of the powerplant (but limited to the equipment, components, parts and accessories included in the powerplant), that have been sold to the Seller by CFM International, but specifically not including a nacelle and thrust reverser for each such powerplant.

A321 CFM56-5B3 Reference Price – as set forth in Clause 3.4.1.2.2.

A321 IAE Propulsion System – the two (2) V2533-A5 powerplants to be installed on an A321 Aircraft at delivery, each composed of the powerplant (but limited to the equipment, components, parts and accessories included in the powerplant), that have been sold to the Seller by International Aero Engines AG, but specifically not including a nacelle and thrust reverser for each such powerplant.

A321 Propulsion System – one set of either (i) the A321 CFM Propulsion System or (ii) the A321 IAE Propulsion System. The applicable A321 Propulsion System will be determined as set forth in Clause 2.2.

A321 Specification — the A321-200 Standard Specification, as amended from time to time in accordance with this Agreement.

A321-200 Standard Specification — the A321-200 Standard Specification No. E.000.02000, Issue 3, dated January 30, 2005, which includes a maximum take-off weight ( MTOW ) of 93 metric tons, a maximum landing weight ( MLW ) of 77.8 metric tons and a maximum zero fuel weight ( MZFW ) of 73.8 metric tons, a copy of which is annexed as Exhibit A-4.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 10 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

A321 V2533-A5 Reference Price – as set forth in Clause 3.4.1.2.1.

Affiliate — with respect to any person or entity, any other person or entity directly or indirectly controlling, controlled by or under common control with such person or entity.

Agreement — this amended and restated Airbus A320 Family purchase agreement, including all exhibits and appendices attached hereto as the same may be amended or modified and in effect from time to time.

Aircraft — any or all of the A318 Aircraft, Original Aircraft and New Aircraft for which the delivery schedule is set forth in Clause 9.1.1 sold by the Seller and purchased by the Buyer pursuant to this Agreement, together with all components, equipment, parts and accessories installed in or on such aircraft and the Propulsion System installed thereon upon delivery.

Aircraft Training Services — all on-aircraft training courses and training support provided to the Buyer pursuant to this Agreement, including flight training, line training, flight assistance, line assistance, and maintenance support.

Airframe Price Revision Formula — the price revision formula set forth in Exhibit G-1.

ANACS — Airbus North America Customer Services, Inc., a corporation organized and existing under the laws of Delaware, having its registered office located at 198 Van Buren Street, Suite 300, Herndon, VA 20170, or any successor thereto.

ATA Specification — recommended specifications developed by the Air Transport Association of America reflecting consensus in the commercial aviation industry on accepted means of communicating information, conducting business, performing operations and adhering to accepted practices.

Aviation Authority — when used with respect to any jurisdiction, the government entity that, under the laws of such jurisdiction, has control over civil aviation or the registration, airworthiness or operation of civil aircraft in such jurisdiction.

Balance of the Final Contract Price — means the amount payable by the Buyer to the Seller on the Delivery Date for an Aircraft after deducting from the Final Contract Price for such Aircraft the amount of all Predelivery Payments received by the Seller from the Buyer in respect of such Aircraft on or before the Delivery Date less any amounts supplied by the Seller in accordance with Clause 5.5 for such Aircraft.

Base Price — for any Aircraft, Airframe, SCNs or Propulsion Systems, as more completely described in Clause 3.1.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 11 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

BFE – see Buyer Furnished Equipment

Buyer Furnished Equipment or BFE — for any Aircraft, all the items of equipment that will be furnished by the Buyer and installed in the Aircraft by the Seller, pursuant to Clause 18, as listed in the Specification.

Certificate of Acceptance – as defined in Clause 8.3.

CFM Propulsion System Price Revision Formula – as set forth in Exhibit G-3.

CFM Propulsion System Reference Price – means the A319 CFM56-5B6 Reference Price or the A320 CFM56-5B4 Reference Price or the A321 CFM56-5B3 Reference Price according to each type of Aircraft.

Change in Law – as defined in Clause 7.4.1.

COC – See Customer Originated Changes.

Customer Originated Changes or COC – data originating from the Buyer that is introduced into Seller’s Technical Data and Documentation, as more completely set forth in Clause 14.9.

Delivery — the transfer of title to the Aircraft from the Seller to the Buyer in accordance with Clause 9.

Delivery Date — the date on which Delivery occurs.

Delivery Location — the facilities of the Seller at the location of final assembly of the Aircraft, which is currently at Airbus France S.A.S works in Toulouse, France, for the A320 model aircraft, and at Airbus Deutschland GmbH works in Hamburg, Germany, for the A318, A319 and A321 model aircraft or any other mutually agreed upon location.

Development Changes — as defined in Clause 2.1.4.

DGAC — the Direction Générale de l’Aviation Civile of France or any successor agency thereto.

EASA - European Aviation Safety Agency or any successor agency thereto.

Excusable Delay — as defined in Clause 10.1.

Export Certificate of Airworthiness — an export certificate of airworthiness issued by the Aviation Authority of the Delivery Location.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 12 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

FAA — the U.S. Federal Aviation Administration or any successor agency thereto.

FCA – see Free Carrier.

Final Contract Price — as defined in Clause 3.1.2 for the A318 Aircraft, in Clause 3.2.2 for the A319 Aircraft, in Clause 3.3.2 for the A320 Aircraft and in Clause 3.4.2 for the A321 Aircraft.

Free Carrier or FCA – as defined in Incoterms 2000: ICC Official Rules for the Interpretation of Trade Terms, published by the International Chamber of Commerce.

Goods and Services – means any goods, excluding Aircraft, and services that may be purchased by the Buyer from the Seller or its designee from the Airbus Customer Services Catalog.

IAE Propulsion System Reference Price – means the A319 V2524-A5 Reference Price or the A320 V2527-A5 Reference Price or the A321 V2533-A5 Reference Price according to each type of Aircraft.

International Aero Engines (IAE) Propulsion System Price Revision Formula – as set forth in Exhibit G-2.

Inexcusable Delay — as defined in Clause 11.1.

In-house Warranty Labor Rate — as defined in Clause 12.1.8(v)(b).

In-house Warranty Repair - as defined in Clause 12.1.8(i).

Interface Problem — as defined in Clause 12.4.1.

LBA — Luftfahrt-Bundesamt of Germany or any successor agency thereto.

LIBOR — the London Interbank Offered Rate determined on the basis of the offered rates for deposits in US dollars for a stated interest period (or for six-month deposits in US dollars, if no interest period is stated), which appears on the Reuters Screen LIBO Page as of 11:00 a.m., London time, on the second Working Day prior to the start of the relevant interest period. If at least two (2) such offered rates appear on the Reuters Screen LIBO Page, the rate for that interest period will be the arithmetic mean of such offered rates rounded to the nearest one-hundred thousandth of a basis point. If only one (1) offered rate appears, the rate for that interest period will be “LIBOR” as quoted by National Westminster Bank, plc or any successor thereto. “Reuters Screen LIBO Page” means the display designated as page “LIBO” on the Reuters Monitor Money Rates Service (or any successor to such page or service).



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 13 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

Manufacturer Specification Change Notice (MSCN) -as defined in Clause 2.1.3.

MSCN – see Manufacturer Specification Change Notice.

New A319 Aircraft – any or all of the firmly ordered A319-100 aircraft to be sold by the Seller and purchased by the Buyer pursuant to this Agreement, except Original A319 Aircraft, together with all components, equipment, parts and accessories installed in or on such aircraft and the A319 Propulsion System installed thereon.

New A320 Aircraft – any or all of the firmly ordered A320-200 aircraft to be sold by the Seller and purchased by the Buyer pursuant to this Agreement, except Original A320 Aircraft, together with all components, equipment, parts and accessories installed in or on such aircraft and the A320 Propulsion System installed thereon.

New A321 Aircraft – any or all of the firmly ordered A321-100 aircraft sold by the Seller and purchased by the Buyer pursuant to this Agreement, except the Original A321 Aircraft, together with all components, equipment, parts and accessories installed in or on such aircraft and the A321 Propulsion System installed thereon.

New Aircraft – any or all of the New A319 Aircraft, any or all of the New A320 Aircraft and any or all of the New A321 Aircraft

Original A319 Aircraft – any or all of the Airbus A319-100 model aircraft originally to be sold by the Seller and purchased by the Buyer pursuant to the Original Agreement and as of the date hereof to be sold by the Seller and purchased by the Buyer pursuant to the Agreement, together with all components, equipment, parts and accessories installed in or on such aircraft and the A319 Propulsion System installed thereon.

Original A319 Airframe – any Original A319 Aircraft, excluding the A319 Propulsion System therefor, but including nacelles and thrust reversers.

Original A320 Aircraft – any or all of the Airbus A320-200 model aircraft originally to be sold by the Seller to the Buyer pursuant to the Original Agreement and as of the date hereof to be sold by the Seller and purchased by the Buyer pursuant to this Agreement together with all components, equipment, parts and accessories installed in or on such aircraft and the A320 Propulsion System installed thereon.

Original A320 Airframe - any Original A320 Aircraft, excluding the A320 Propulsion System therefor, but including nacelles and thrust reversers.

Original A321 Aircraft – any or all of the Airbus A321-200 model aircraft originally to be sold by the Seller and purchased by the Buyer pursuant to the Original Agreement and as of the date hereof, to be sold by the Seller and purchased by the Buyer pursuant to this



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 14 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

Agreement, together with all components, equipment, parts and accessories installed in or on such aircraft and the A321 Propulsion System installed thereon.

Original A321 Airframe – any Original A321 Aircraft, excluding the A321 Propulsion System therefor, but including nacelles and thrust reversers.

Original Agreement – the A319/A320 Purchase Agreement, dated as of September 12, 1997 as amended from time to time, entered into by the Buyer and the Seller, relating to, inter alia, the sale by the Seller and the purchase by the Buyer of certain firmly ordered Airbus A318, A319, A320 and A321 model aircraft.

Original Aircraft – any or all of the Original A319 Aircraft, Original A320 Aircraft and the Original A321 Aircraft.

Predelivery Payment — any of the payments made in accordance with Clause 5.2.

Predelivery Payment Reference Price — as defined in Clause 5.2.2.

Propulsion System — as set forth in Clause 2.3.

Propulsion System Price Revision Formula – either the International Aero Engines (IAE) Propulsion System Price Revision Formula or the CFM Propulsion System Price Revision Formula set forth respectively in Exhibits G-2 and G-3 hereto.

Ready for Delivery – with respect to any Aircraft, the term applicable to such Aircraft when (i) the Technical Acceptance Process has been successfully completed for such Aircraft and (ii) the Export Certificate of Airworthiness has been issued therefor.

Resident Customer Support Representative – as set forth in Clause 15.2.1.

Scheduled Delivery Month — as defined in Clause 9.1.1.

SCN – see Specification Change Notice

SSBFE – see Seller Supplied Buyer Furnished Equipment.

Seller Supplied Buyer Furnished Equipment or SSBFE – BFE that will be purchased by the Seller at the commercial terms agreed between the Buyer and its BFE supplier(s).

Seller’s Representatives — the representatives of the Seller referred to in Clause 15.

Service Life Policy — as set forth in Clause 12.2.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 15 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

Specification — the applicable Standard Specification as amended by the SCNs set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3, or Exhibit A-4, hereto, as applicable, as may be further amended or modified in accordance with this Agreement.

Specification Change Notice — as defined in Clause 2.1.2.

Standard Specification — collectively or individually, the A318-100 Standard Specification, the A319-100 Standard Specification, the A320-200 Standard Specification, and the A321-200 Standard Specification.

Supplier — any supplier of Supplier Parts.

Supplier Part — any component, equipment, accessory or part installed in an Aircraft at the time of Delivery thereof, not including the Propulsion System or Buyer Furnished Equipment, for which there exists a Supplier Product Support Agreement.

Supplier Product Support Agreement — an agreement between the Seller and a Supplier containing, among other things, enforceable and transferable warranties (and in the case of landing gear suppliers, service life policies for selected structural landing gear elements).

Technical Data — technical data as provided by the Seller pursuant to Exhibit F.

Technical Acceptance Process – as defined in Clause 8.1.1

Termination Event — as defined in Clause 21.1.

Total Loss — as defined in Clause 10.4

Training Conference — as defined in Clause 16.4.1.

Training Course Catalog – as defined in Clause 16.4.1.

Type Certificate — as defined in Clause 7.1

Warranted Part — as defined in Clause 12.1.1.

Warranty Claim — as defined in Clause 12.1.7(v).

Working Day – with respect to any action to be taken hereunder, a day other than Saturday, Sunday or other day designated as a holiday in the jurisdiction in which such action is required to be taken.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 16 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

The terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement, and not a particular Clause thereof. The definition of a singular in this Clause 0 will apply to plurals of the same words.

Except for the purposes of and as provided in Clause 22.10, references in this Agreement to an exhibit, schedule, article, section, subsection or clause refer to the appropriate exhibit or schedule to, or article, section, subsection or clause in this Agreement.

Except for the preceding sentence, each agreement defined in this Clause 0 will include all appendixes, exhibits and schedules to such agreement. If the prior written consent of any person is required hereunder for an amendment, restatement, supplement or other modification to any such agreement and the consent of each such person is obtained, references in this Agreement to such agreement will be to such agreement as so amended, restated, supplemented or modified.

References in this Agreement to any statute will be to such statute as amended or modified and in effect at the time any such reference is operative.

The term “including” when used in this Agreement means “including without limitation” except when used in the computation of time periods.

Technical and trade terms not otherwise defined herein will have the meanings assigned to them as generally accepted in the airline and/or aircraft manufacturing industries.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 17 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

1 - SALE AND PURCHASE

The Seller will manufacture, sell and deliver to the Buyer, and the Buyer will purchase and take delivery of the thirty-seven (37) Original Aircraft, fifteen (15) A318 Aircraft, ten (10) New A319 Aircraft, forty (40) New A320 Aircraft and ten (10) New A321 Aircraft from the Seller, subject to the terms and conditions in this Agreement.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 18 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

2 - SPECIFICATION

2.1		Specification Documents

2.1.1		The Aircraft will be manufactured in accordance with the applicable Specification.

2.1.2		Specification Change Notice

		The Specification may be amended in writing by the Buyer and the Seller by a Specification Change Notice in substantially the form set out in Exhibit B-1 (each, an “ SCN ” ). An SCN will set out the SCN’s effectivity and the particular change to be made to the Specification and the effect, if any, of such change on design, performance, weight, Scheduled Delivery Month of the Aircraft affected thereby, interchangeability or replaceability requirements of the Specification and text of the Specification. An SCN may result in an adjustment of the Base Price of the Aircraft, which adjustment, if any, will be specified in the SCN. SCNs will not be binding on either party until signed by persons duly authorized by the Buyer and the Seller, but upon being so signed, will constitute amendments to this Agreement.

2.1.3		Manufacturer Specification Change Notice

		The Specification may also be amended in writing by the Seller by a Manufacturer’s Specification Change Notice. Each MSCN will be substantially in the form set out in Exhibit B-2 and will set out the MSCN’s effectivity and the particular change to be made to the Specification and the effect, if any, of such change on design, performance, weight, Scheduled Delivery Month of the Aircraft affected thereby, interchangeability or replaceability requirements of the Specification and text of the Specification. MSCNs will be subject to the Buyer’s acceptance, except in the case of Development Changes (as defined below) or changes resulting from Airworthiness Directives, government-mandated regulations arising after the date of the Specification or equipment obsolescence.

2.1.4		Development Changes

		As stated in Clause 2.1.3, changes may be made by the Seller without the Buyer’s consent when changes to the Aircraft do not adversely affect price, Scheduled Delivery Month, weight of the Aircraft affected thereby, ** interchangeability requirements or replaceability requirements of the Specifications of the Aircraft affected thereby are deemed by the Seller to be necessary to improve the Aircraft affected thereby, prevent delay or ensure compliance with this Agreement ( “ Development Changes ” ). Development Changes will be made by either an MSCN or a manufacturer’s information document prior to Delivery of the relevant Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 19 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.2		Customization Milestones Chart

		Within a reasonable period after signature of this Agreement, the Seller will provide the Buyer with a chart called the “Customization Milestones Chart” defining the lead times before Delivery needed for agreeing on items requested by the Buyer from the Standard Specifications and Configuration Guides CD-ROM.

2.3		Propulsion Systems

2.3.1		New Aircraft Propulsion System

		The Buyer shall select the Propulsion System to be installed on each New Airframe in accordance with this Clause 2 no later than **months before the first day of the Scheduled Delivery Month of the first New Aircraft for each type of New Aircraft.

2.3.1.1		A319 New Aircraft

		The Buyer shall select either one set of CFM International 56-5B6/P propulsion system (the “ A319 CFM Propulsion System ”) or one set of International Aero Engines V2524-A5 Propulsion System (the “ A319 IAE Propulsion System ”).

2.3.1.2		A320 New Aircraft

		The Buyer shall select either one set of CFM International 56-5B4/P propulsion system (the “ A320 CFM Propulsion System ”, or one set of International Aero Engines V2527-A5 propulsion system (the “ A320 IAE Propulsion System ”).


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 20 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.3.1.3		A321 New Aircraft

		The Buyer shall select either one set of CFM International 56-5B3/P propulsion system (the “ A321 CFM Propulsion System ”), or one set of International Aero Engines V2533-A5 propulsion system (the “ A321 IAE Propulsion System ”).

2.3.2		Original Aircraft Propulsion System

		The Buyer has selected the Propulsion System to be installed on each Original Aircraft as set out below:

2.3.2.1		Original A319 Aircraft


	Month of
Aircraft	Delivery	Year		Propulsion Systems
Original A319 Aircraft	**		2009	A319 CFM Propulsion System
Original A319 Aircraft	**		2009	A319 IAE Propulsion System
Original A319 Aircraft	**		2009	A319 CFM Propulsion System
Original A319 Aircraft	**		2010	A319 CFM Propulsion System
Original A319 Aircraft	**		2010	A319 CFM Propulsion System
Original A319 Aircraft	**		2010	A319 CFM Propulsion System
Original A319 Aircraft	**		2010	A319 CFM Propulsion System
Original A319 Aircraft	**		2010	A319 CFM Propulsion System
Original A319 Aircraft	**		2010	A319 CFM Propulsion System
Original A319 Aircraft	**		2010	A319 CFM Propulsion System
Original A319 Aircraft	**		2010	A319 CFM Propulsion System
Original A319 Aircraft	**		2010	A319 CFM Propulsion System
Original A319 Aircraft	**		2010	A319 CFM Propulsion System


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 21 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.3.2.2

Original A320 Aircraft


	Month of
Aircraft	Delivery	Year		Propulsion System
Original A320 Aircraft	**		2009	A320 IAE Propulsion System
Original A320 Aircraft	**		2009	A320 IAE Propulsion System
Original A320 Aircraft	**		2009	A320 IAE Propulsion System
Original A320 Aircraft	**		2009	A320 IAE Propulsion System
Original A320 Aircraft	**		2009	A320 IAE Propulsion System
Original A320 Aircraft	**		2009	A320 IAE Propulsion System
Original A320 Aircraft	**		2009	A320 IAE Propulsion System
Original A320 Aircraft	**		2010	A320 CFM Propulsion System
Original A320 Aircraft	**		2010	A320 CFM Propulsion System

2.3.2.3

Original A321 Aircraft


	Month of
Aircraft	Delivery	Year		Propulsion System
Original A321 Aircraft	**		2008	A321 CFM Propulsion System
Original A321 Aircraft	**		2008	A321 CFM Propulsion System
Original A321 Aircraft	**		2008	A321 CFM Propulsion System
Original A321 Aircraft	**		2008	TBC*
Original A321 Aircraft	**		2008	TBC*
Original A321 Aircraft	**		2009	TBC*
Original A321 Aircraft	**		2009	A321 IAE Propulsion System
Original A321 Aircraft	**		2009	A321 CFM Propulsion System
Original A321 Aircraft	**		2009	A321 IAE Propulsion System
Original A321 Aircraft	**		2009	A321 IAE Propulsion System
Original A321 Aircraft	**		2009	A321 CFM Propulsion System
Original A321 Aircraft	**		2009	TBC *
Original A321 Aircraft	**		2009	TBC *
Original A321 Aircraft	**		2009	TBC*
Original A321 Aircraft	**		2009	TBC*


*		Where there is no selection, that is, “TBC” is noted in the column of the above table specifying the Propulsion System, the Buyer will make an irrevocable decision with respect to selection of the Propulsion System by October 31, 2007.

2.3.2.4

For the Original A321 Aircraft with respect for which no Propulsion System has been selected at the date of execution of this Agreement, the Buyer will notify the Seller, in writing, at least **months prior to delivery of that Original A321 Aircraft of the propulsion system it selects to have installed on such Original A321 Aircraft. Such


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 22 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

selection will be made between the A321 IAE Propulsion System and the A321 CFM Propulsion System.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 23 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

3 -		PRICE

3.1.		Price of the A318 Aircraft

3.1.1		Base Price of the A318 Aircraft

		The Base Price of each A318 Aircraft as defined in the A318-100 Standard Specification including A318 Propulsion System, BFE and SCNs set forth in Exhibit B-2 at delivery conditions prevailing in **, is:

		US $ **

		(US dollars—**

3.1.2		Final Contract Price of the A318 Aircraft

		The Final Contract Price of an A318 Aircraft will be the sum of:

	(i)		the Base Price of the A318 Aircraft, as adjusted to the Delivery Date of such Aircraft in accordance with the Airframe Price Revision Formula;

	(ii)		the Base Price (as of delivery conditions prevailing in **) of any SCNs constituting a part of such A318 Aircraft that are entered after the date of execution of this Amendment, as adjusted to the Delivery Date in accordance with the Airframe Price Revision Formula;

	(ii)		any other amount resulting from any other provisions of this Agreement and/or any other written agreement between the Buyer and the Seller relating to the A318 Aircraft.

3.2.		Price of the A319 Aircraft

3.2.1		Base Price of the A319 Aircraft

		The Base Price of the A319 Aircraft is the sum of:

	(i)		the Base Price of the A319 Airframe and

	(ii)		the Base Price of the A319 Propulsion System.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 24 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.2.1.1		Base Price of the A319 Airframe

		The Base Price of the A319 Airframe, as defined in the A319-100 Standard Specification at delivery conditions prevailing in **,

		US $**

		(US Dollars – **.

3.2.1.2		Base Price of the A319 Propulsion System

3.2.1.2.1		Base Price of the A319 IAE Propulsion System

		The Base Price of the A319 IAE Propulsion System, at delivery conditions prevailing in **, is:

		US $**

		(US Dollars—**).

		Said Base Price has been calculated with reference to the V2524-A5 reference price for two (2) engines indicated by International Aero Engines of US $ in accordance with economic conditions prevailing in (the “ A319 V2524-A5 Reference Price ”).

3.2.1.2.2		Base Price of the A319 CFM Propulsion System

		The Base Price of the A319 CFM Propulsion System, at delivery conditions prevailing in **, is:

		US $**

		(US Dollars—**).

		Said Base Price has been calculated with reference to the CFM56-5B6 reference price for two (2) engines indicated by CFM International of US $ in accordance with delivery conditions prevailing in (the “ A319 CFM56-5B6 Reference Price ”).


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 25 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.2.2		Final Price of the A319 Aircraft

3.2.2.1		The Final Contract Price of the A319 Aircraft will be the sum of:

	(i)		the Base Price of the A319 Airframe, as adjusted to the applicable Delivery Date of such A319 Aircraft in accordance with the Airframe Price Revision Formula;

	(ii)		the Base Price of any SCNs for the A319 Airframe entered into after the date of signature of this Agreement, as adjusted to the Delivery Date in accordance with the Airframe Price Revision Formula;

	(iii)		the A319 V2524-A5 Reference Price or the A319 CFM56-5B6 Reference Price according to which Propulsion System has been selected for each A319 Aircraft (the “A319 Propulsion System Reference Price”) as adjusted to the Delivery Date of in accordance with Clause 4.2;

	(iv)		any other amount resulting from any other provisions of this Agreement and/or any other written agreement between the Buyer and the Seller relating to the Aircraft.

3.3.		Price of the A320 Aircraft

3.3.1		Base Price of the A320 Aircraft

		The Base Price of the A320 Aircraft is the sum of:

	(i)		the Base Price of the A320 Airframe and

	(ii)		the Base Price of the A320 Propulsion System.

3.3.1.1		Base Price of the A320 Airframe

		The Base Price of the A320 Airframe, as defined in the A320-200 Standard Specification at delivery conditions prevailing in **, is:

		US $**

		(US Dollars – **).


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 26 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.3.1.2		Base Price of the A320 Propulsion System

3.3.1.2.1		Base Price of the A320 IAE Propulsion System

		The Base Price of the A320 IAE Propulsion System, at delivery conditions prevailing in **, is:

		US $**

		(US Dollars—**).

		Said Base Price has been calculated with reference to the V2527-A5 reference price for two (2) engines indicated by International Aero Engines of US $ in accordance with economic conditions prevailing in (the “ A320 V2527-A5 Reference Price ”).

3.3.1.2.2		Base Price of the A320 CFM Propulsion System

		The Base Price of the A320 CFM Propulsion System, at delivery conditions prevailing in **, is:

		US $**

		(US Dollars—**).

		Said Base Price has been calculated with reference to the CFM56-5B4 reference price indicated by CFM International of US $ in accordance with delivery conditions prevailing in (the “ A320 CFM56-5B4 Reference Price ”).

3.3.2		Final Price of the A320 Aircraft

3.3.2.1		The Final Contract Price of an A320 Aircraft will be the sum of:

	(i)		the Base Price of the A320 Airframe, as adjusted to the applicable Delivery Date of such A320 Aircraft in accordance with the Airframe Price Revision Formula;

	(ii)		the Base Price of any SCNs for the A320 Airframe entered into after the date of signature of this Agreement, as adjusted to the Delivery Date in accordance with the Airframe Price Revision Formula;

	(iii)		the A320 V2527-A5 Reference Price or the A320 CFM56-5B4 Reference Price according to which Propulsion System has been selected for each


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 27 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

			A320 Aircraft (the “ A320 Propulsion System Reference Price ”) as adjusted to the Delivery Date of in accordance with Clause 4.2;

	(iv)		any other amount resulting from any other provisions of this Agreement and/or any other written agreement between the Buyer and the Seller relating to the Aircraft.

3.4.		Price of the A321 Aircraft

3.4.1		Base Price of the A321 Aircraft

		The Base Price of the A321 Aircraft is the sum of:

	(i)		the Base Price of the A321 Airframe and

	(ii)		the Base Price of the A321 Propulsion System.

3.4.1.1		Base Price of the A321 Airframe

		The Base Price of the A321 Airframe as defined in the Standard Specification at delivery conditions prevailing in **,

		US $**

		(US Dollars – **).

3.4.1.2		Base Price of the A321 Propulsion System

3.4.1.2.1		Base Price of the A321 IAE Propulsion System

		The Base Price of the A321 IAE Propulsion System, at delivery conditions prevailing in **, is:

		US $**

		(US Dollars—**).

		Said Base Price has been calculated with reference to the V2533-A5 reference price for two (2) engines indicated by International Aero Engines (IAE) of US $ in accordance with delivery conditions prevailing in (the “ A321 V2533-A5 Reference Price ”).

3.4.1.1.2		Base Price of the A321 CFM Propulsion System


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 28 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

		The Base Price of the A321 CFM Propulsion System, at delivery conditions prevailing in **, is:

		US $**

		(US Dollars—**).

		Said Base Price has been calculated with reference to the CFM56-5B3 reference price for (2) engines indicated by CFM International of US $ in accordance with delivery conditions prevailing in (the “ A321 CFM56-5B3 Reference Price ”)

3.4.2		Final Price of the A321 Aircraft

		The Final Contract Price of an A321 Aircraft will be the sum of:

	(i)		the Base Price of the A321 Airframe, as adjusted to the applicable Delivery Date of such A321 Aircraft in accordance with the Airframe Price Revision Formula;

	(ii)		the Base Price of any SCNs for the A321 Airframe entered into after the date of signature of this Agreement, as adjusted to the Delivery Date in accordance with the Airframe Price Revision Formula;

	(iii)		the A321 V2533-A5 Reference Price or the A321 CFM56-5B3 Reference Price according to which Propulsion System has been selected for each A320 Aircraft (the “ A321 Propulsion System Reference Price ”) as adjusted to the Delivery Date of in accordance with Clause 4.2;


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 29 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

(iv)

any other amount resulting from any other provisions of this Agreement and/or any other written agreement between the Buyer and the Seller relating to the Aircraft.

3.5		Taxes, Duties and Imposts

3.5.1		The Seller will pay any and all taxes, duties, imposts or similar charges of any nature whatsoever, except for taxes based on or measured by the income of the Buyer, or any taxes of a similar nature or charges levied against the Buyer or its Affiliates for the privilege of doing business in any jurisdiction, that are (i) imposed upon the Buyer, (ii) imposed upon the Seller with an obligation on the Buyer to withhold or collect the amount thereof from the Seller or (iii) imposed upon the Buyer with an obligation on the Seller to withhold or collect such amount from the Buyer, and that are levied, assessed, charged or collected for or in connection with the fabrication, manufacture, modification, assembly, sale, delivery, use of, or payment by it under this Agreement for, any Aircraft, component, accessory, equipment or part delivered or furnished by it hereunder, provided such taxes, duties, imposts or similar charges have been promulgated and are enforceable under the laws of any country, province, municipality or other jurisdiction or government entity thereof and are asserted with respect to events or circumstances occurring on or before Delivery of such Aircraft.

		Notwithstanding anything to the contrary in this Clause 3.5.1, the Seller will not be required to bear or pay or to indemnify the Buyer for taxes, imposts, charges, or duties, (i) to the extent imposed as the result of the Buyer’s engaging in activities in the jurisdiction imposing such tax which activities are unrelated to the transactions contemplated by this Agreement or as the result of being incorporated or organized in such jurisdiction or maintaining an office or having a place of business or other presence therein, (ii) arising out of or caused by the willful misconduct or gross negligence of the Buyer, (iii) that are interest, penalties, fines or additions to tax that would not have been imposed but for any failure by the Buyer to file any tax return or information return in a timely and proper manner, (iv) that are being contested by the Seller in good faith by appropriate proceedings during the pendency of such contest, or (v) that are imposed on or payable by a transferee of all or any part of the interest of the Buyer in the Aircraft or any of its rights or obligations under this Agreement to the extent in excess of the taxes that would have been imposed on or payable by the Buyer in the absence of any such transfer.

3.5.2		The Buyer will pay any and all taxes, duties, imposts or similar charges of any nature whatsoever, except for taxes based on or measured by the income of the Seller or any taxes of a similar nature or charges levied against the Seller or its Affiliates for the privilege of doing business in any jurisdiction, that are (i) imposed upon the Seller, (ii)


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 30 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

		imposed upon the Buyer with an obligation on the Seller to collect the amount thereof for the Buyer or (iii) imposed upon the Seller with an obligation on the Buyer to withhold such amount from the Seller, and that are levied, assessed, charged or collected for or in connection with the fabrication, manufacture, modification, assembly, sale, delivery or use of or payment under this Agreement for any Aircraft, component, accessory, equipment or part delivered or furnished by it hereunder, provided such taxes, duties, imposts or similar charges have been levied, assessed, charged or collected under laws promulgated and enforceable under the laws of any country, province, municipality or other jurisdiction or government entity thereof and are asserted with respect to events or circumstances occurring after Delivery of such Aircraft.

		Notwithstanding anything to the contrary in this Clause 3.5.2, the Buyer will not be required to bear or pay or to indemnify the Seller for taxes, imposts, charges, or duties, (i) to the extent imposed as the result of Seller’s engaging in activities in the jurisdiction imposing such tax which activities are unrelated to the transactions contemplated by this Agreement or as the result of being incorporated or organized in such jurisdiction or maintaining an office or having a place of business or other presence therein, (ii) arising out of or caused by the willful misconduct or gross negligence of the Seller, (iii) that are interest, penalties, fines or additions to tax that would not have been imposed but for any failure by the Seller to file any tax return or information return in a timely and proper manner, (iv) that are being contested by the Buyer in good faith by appropriate proceedings during the pendency of such contest, or (v) that are imposed on or payable by a transferee of all or any part of the interest of the Seller in the Aircraft or any of its rights or obligations under this Agreement to the extent in excess of the taxes that would have been imposed on or payable by the Seller in the absence of any such transfer.

3.5.3		The Seller will arrange for the exportation of the Aircraft from the country of the Delivery Location and will pay any customs duties, taxes and fees required to be paid with respect to such exportation of the Aircraft.

3.5.4		The Buyer will arrange for the importation of the Aircraft into any country or jurisdiction and will pay any customs duties, taxes and fees required to be paid with respect to such importation of the Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 31 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

4 -		PRICE REVISION

4.1		Airframe Price Revision Formula

		The Base Price of the A318 Aircraft, the Base Price of the A319 Airframe, the Base Price of the A320 Airframe and the Base Price of the A321 Airframe and of SCNs are quoted in delivery conditions prevailing in ** and are subject to revision up to and including the Delivery Date in accordance with the Airframe Price Revision Formula set forth in Exhibit G-1 to this Agreement

4.2		Propulsion System Price Revision

4.2.1		The IAE Propulsion System Reference Price is subject to revision up to and including the Delivery Date in accordance with the International Aero Engines (IAE) Propulsion System Price Revision Formula as set out in Exhibit G-2.

4.2.2		The CFM Propulsion System Reference Price is subject to revision up to and including the Delivery Date in accordance with the CFM Propulsion System Price Revision Formula as set out in Exhibit G-3.

4.2.3		Modification of Propulsion System Reference Price and Propulsion System Price Revision Formula

		The Reference Price of the Propulsion System, the prices of the related equipment and the Propulsion System Price Revision Formula are based on information received from the Propulsions System manufacturer and are subject to amendment by the Propulsion System manufacturer at any time prior to Delivery. If the Propulsion System manufacturer makes any such amendment, the amendment will be deemed to be incorporated into this Agreement and the Reference Price of the Propulsion System, the prices of the related equipment and the Propulsion System Price Revision Formula will be adjusted accordingly. The Seller agrees to notify the Buyer as soon as the Seller receives notice of any such amendment from the Propulsion System manufacturer.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 32 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

5 -		PAYMENT TERMS

5.1		Payments

5.1.1		The Buyer will pay the Predelivery Payments, the Balance of the Final Contract Price and any other amount due hereunder in immediately available funds in United States dollars to the Seller’s account with **, or to such other account within the United States as may be designated by the Seller.

5.1.2		Payments with payment due dates that fall on Saturday, Sunday or a bank holiday will be due on the first Working Day following such payment due date.

5.2		Predelivery Payments

5.2.1		**

5.2.2		**

5.2.3		Predelivery Payments will be paid according to the following schedule.

		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 33 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

5.2.4		**

5.2.5		SCN Predelivery Payment

		In addition to Predelivery Payments payable under Clause 5.2.3, the Seller will be entitled to request Predelivery Payments for each SCN executed after signature of this Agreement to the extent that the aggregate price of all SCNs selected by the Buyer exceeds US$ (US dollars – ).

	(i)		For each such SCN executed **

	(ii)		For each such SCN executed **

5.3		Predelivery Payments and Initial Payments Received

5.3.1		The Seller acknowledges that it has received from the Buyer certain amounts which represent Predelivery Payments for the Original Aircraft. Such amounts will be credited without interest against the Predelivery Payments for the relevant Original Aircraft.

5.3.2		The Seller acknowledges that it has received from the Buyer a certain amount which represents a non-refundable initial payment on account of each New Aircraft. The initial payment paid with respect to each New Aircraft will be credited without interest against the first Predelivery Payment for such New Aircraft.

5.4		Payment of Balance of the Final Contract Price


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 34 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

		Concurrent with each Delivery, the Buyer will pay to the Seller the Balance of the Final Contract Price for the applicable Aircraft. The Seller’s receipt of the full amount of all Predelivery Payments and of the Balance of the Final Contract Price, including any amounts due under Clause 5.6, are a condition precedent to the Seller’s obligation to deliver such Aircraft to the Buyer.

5.5		Application of Payments

		Notwithstanding any other rights the Seller may have at contract or at law, the Buyer and the Seller hereby agree that should any amount (whether under this Agreement or under any other agreement between the Buyer or any of its Affiliates and the Seller or any of its Affiliates and whether at the stated maturity of such amount, by acceleration or otherwise) become due and payable by the Buyer or its Affiliates, and not be paid in full in immediately available funds on the date due, then the Seller will have the right to debit and apply, in whole or in part, the Predelivery Payments paid to the Seller by the Buyer hereunder against such unpaid amount. The Seller will promptly notify the Buyer in writing after such debiting and application, and the Buyer will immediately pay to the Seller the amount owed to comply with Clause 5.2.3.

5.6		Overdue Payments

		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 35 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

5.7		Proprietary Interest

		Notwithstanding any provision of law to the contrary, the Buyer will not, by virtue of anything contained in this Agreement (including, without limitation, the making of any Commitment Fee or Predelivery Payments hereunder, or any designation or identification by the Seller of a particular aircraft as an Aircraft to which any of the provisions of this Agreement refers) acquire any proprietary, insurable or other interest whatsoever in any Aircraft before Delivery of and payment for such Aircraft, as provided in this Agreement.

5.8		Payment in Full

		The Buyer’s obligation to make payments to the Seller hereunder will not be affected by and will be determined without regard to any setoff, counterclaim, recoupment, defense or other right that the Buyer may have against the Seller or any other person and all such payments will be made without deduction or withholding of any kind. The Buyer will ensure that the sums received by the Seller under this Agreement will be equal to the full amounts expressed to be due the Seller hereunder, without deduction or withholding on account of and free from any and all taxes, levies, imposts, duties or charges of whatever nature, except that if the Buyer is compelled by law to make any such deduction or withholding the Buyer will pay such additional amounts to the Seller as may be necessary so that the net amount received by the Seller after such deduction or withholding will equal the amounts that would have been received in the absence of such deduction or withholding.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 36 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

6		- MANUFACTURE PROCEDURE — INSPECTION

6.1		Manufacture Procedures

		The Airframe will be manufactured in accordance with the requirements of the laws of the jurisdiction of incorporation of the Seller or of its relevant Affiliate as enforced by the Aviation Authority of such jurisdiction.

6.2		Inspection Procedures

6.2.1		All work to be carried out on the Aircraft and all materials and parts thereof will be at all reasonable times open to inspection during business hours by duly authorized representatives of the Buyer or its designee at the works of the relevant manufacture facility of the Seller or its Affiliates and, if possible, at the works of their respective subcontractors. These representatives will have access to such relevant technical data as are reasonably necessary for this purpose (except that, if access to any part of the respective works where construction is in progress or materials or parts are stored is restricted for security reasons, the Seller, its Affiliates and relevant subcontractors, as the case may be, will be allowed a reasonable time to make the items available for inspection elsewhere). The actual detailed inspection of the Aircraft, materials and parts thereof will take place only in the presence of the respective inspection department personnel of the Seller, its Affiliates or relevant subcontractors. The procedures for such inspections will be agreed on with the Buyer before any inspection. The Seller will ensure that such personnel will be available at all reasonable times during business hours as described above.

6.2.2		All inspections, examinations and discussions with the Seller’s or its subcontractors’ engineering or other personnel by the Buyer and its representatives will be performed in such a manner as not to delay or hinder either the work to be carried out on the Aircraft or the proper performance of this Agreement. In no event will the Buyer or its representatives be permitted to inspect any aircraft other than the Aircraft. **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 37 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

6.3		Representatives

		For the purposes of Clause 6.2, starting at a mutually agreed date and continuing until Delivery of the last Aircraft, the Seller will furnish free-of-charge secretarial assistance and suitable space, office equipment and facilities in or conveniently located with respect to the Delivery Location for the use of not more than ** representatives of the Buyer during the aforementioned period. The Seller will provide internet access, electronic mail, facsimile and a telephone at the Seller’s cost.

6.4		The Seller and its Affiliates will correct or otherwise resolve any deviations from the applicable Specification discovered during any inspection or examination conducted under this Clause 6.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 38 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

7 -		CERTIFICATION

		Except as set forth in this Clause 7, the Seller will not be required to obtain any certificate or approval with respect to the Aircraft.

7.1		Type Certification

		The Aircraft have been type certificated under EASA procedures for joint certification in the transport category. The Seller will obtain or cause to be obtained an FAA type certificate (the “ Type Certificate ”) to allow the issuance of the Export Certificate of Airworthiness.

7.2		Export Certificate of Airworthiness

		Subject to the provisions of Clause 7.3, the Aircraft will be delivered to the Buyer with an Export Certificate of Airworthiness issued by the DGAC for the A320 Aircraft and the LBA for the A318 Aircraft, the A319 Aircraft and the A321 Aircraft or EASA, as applicable, and in a condition enabling the Buyer (or an eligible person under then applicable law) to obtain at the time of Delivery a Standard Airworthiness Certificate issued pursuant to Part 21 ** of the US Federal Aviation Regulations and a Certificate of Sanitary Construction issued by the U.S. Public Health Service of the U.S. Food and Drug Administration. However, the Seller will have no obligation to make and will not be responsible for any costs of alterations or modifications to such Aircraft to enable such Aircraft to meet FAA or U.S. Department of Transportation requirements for specific operation on the Buyer’s routes, except as may be provided for in this Agreement, whether before, at or after Delivery of any Aircraft.

7.3		Additional FAA Requirements

		If the FAA requires additional or modified data before the issuance of a Standard Airworthiness Certificate for an Aircraft, the Seller will provide such data at the expense of the Buyer.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 39 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

7.4		Additional EASA Requirements

7.4.1		If, is Ready for Delivery, any law, rule or regulation is enacted, promulgated, becomes effective and/or an interpretation of any law, rule or regulation is issued (a “ Change in Law ”) by the EASA , that requires any change to the Specification for the purposes of obtaining the Export Certificate of Airworthiness, the Seller will make the required modification and the parties will sign an SCN for such modification.

7.4.2		The Seller will as far as practicable, but at its sole discretion and without prejudice to the requirements of Clause 7.4.3, take into account the information available to it concerning any proposed law, rule or regulation or interpretation by the EASA that could become a Change in Law in order to minimize the costs of changes to the Specification if the same becomes such a Change in Law.

7.4.3		The cost of implementing any modifications referred to in Clause 7.4.1 will be shared equally by the Seller and the Buyer if a Change in Law by the EASA becomes effective after issuance of a Type Certificate by the EASA but before the Aircraft is Ready for Delivery;

7.4.4		Notwithstanding the provisions of Clauses 7.4.3, if a Change in Law relates to an item of BFE or to the Propulsion System (including to engine accessories, quick engine change units or thrust reversers) the costs relating thereto will be borne in accordance with such arrangements as may be made separately between the Buyer and the manufacturer of the BFE or the Propulsion System, as applicable, and the Seller will have no obligation with respect thereto.

7.5		Specification Changes After Delivery

		Nothing in Clause 7.4 will require the Seller to make any changes or modifications to, or to make any payments or take any other action with respect to, any Aircraft that is Ready for Delivery before the compliance date of any law or regulation referred to in Clause 7.4. Any such changes or modifications made to an Aircraft after it is Ready for Delivery will be at the Buyer’s expense.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 40 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

8 -		TECHNICAL ACCEPTANCE

8.1		Technical Acceptance Process

8.1.1		Prior to Delivery, the Aircraft will undergo a technical acceptance process developed by the Seller, ** (the “ Technical Acceptance Process ”). Completion of the Technical Acceptance Process will demonstrate the satisfactory functioning of the Aircraft and will be deemed to demonstrate compliance with the applicable Specification. Should it be established that the Aircraft fails to complete the Technical Acceptance Process satisfactorily, the Seller will without hindrance from the Buyer be entitled to and will carry out any necessary changes to correct the reason for such failure and, as soon as practicable thereafter, resubmit the Aircraft in order to complete the Technical Acceptance Process.

8.1.2		The Technical Acceptance Process will

	(i)		commence on a date notified by the Seller to the Buyer at least ** in advance,

	(ii)		take place at the Delivery Location,

	(iii)		be carried out by the personnel of the Seller, (iv) include a technical acceptance flight (the “ Technical Acceptance Flight ”)that will not exceed **, and

	(iv)		conclude in **.

8.2		Buyer’s Attendance

8.2.1		The Buyer is entitled to attend and observe the Technical Acceptance Process.

8.2.2		If the Buyer attends the Technical Acceptance Process, the Buyer

(i)

will comply with the reasonable requirements of the Seller, with the intention of completing the Technical Acceptance Process within **, and


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 41 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

(ii)

may have a maximum of ** of its representatives (no more than ** of whom will have access to the cockpit at any one time) accompany the Seller’s representatives on the technical acceptance flight, during which the Buyer’s representatives will comply with the instructions of the Seller’s representatives.

8.2.3		If the Buyer does not attend or fails to cooperate in the Technical Acceptance Process, the Seller will be entitled to complete the Technical Acceptance Process in compliance with Clause 8.1 without the Buyer’s attendance, and the Buyer will be deemed to have accepted that the Aircraft is functioning satisfactorily and is in compliance with the Specification, in all respects.

8.3		Certificate of Acceptance

		Upon successful completion of the Technical Acceptance Process, the Buyer will, on or before the Delivery Date, sign and deliver to the Seller a certificate of acceptance in respect of the Aircraft in the form of Exhibit D (the “ Certificate of Acceptance ”). Any discrepancies in the condition of the Aircraft, and any agreements between the Buyer and the Seller with respect thereto, will be documented in a separate agreement, but the same will not, unless otherwise agreed, affect the Buyer’s rights under Clause 12 with respect to such discrepancy.

8.4		Finality of Acceptance

		The Buyer’s signature of the Certificate of Acceptance for the Aircraft will constitute waiver by the Buyer of any right it may have under the Uniform Commercial Code as adopted by the State of New York or otherwise to revoke acceptance of the Aircraft for any reason, whether known or unknown to the Buyer at the time of acceptance.

8.5		Aircraft Utilization

		The Seller will, without payment or other liability, be entitled to use the Aircraft before Delivery to obtain the certificates required under Clause 7. Such use will not limit the Buyer’s obligation to accept Delivery hereunder.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 42 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

The Seller will be authorized to use the Aircraft for up to a maximum of ** flight hours before Delivery for any other purpose without specific agreement of the Buyer. The Seller will provide the Buyer with a summary of the accumulated hours and cycles for each Aircraft together with the main reason for, and result of, each flight.

9 - DELIVERY

9.1 Delivery Schedule

9.1.1

Subject to any delay contemplated by Clauses 2, 7, 8, 10 and 18, the Seller will have the Aircraft Ready for Delivery at the Delivery Location within the following months (each a “ Scheduled Delivery Month ”):

CAC ID

Aircraft

Delivery Month

Year

CAC ID

Aircraft

Delivery Month

Year

233146

Original A321 Aircraft

2008

TBC

New A320 Aircraft

2011

233147

Original A321 Aircraft

2008

TBC

New A320 Aircraft

2011

233148

Original A321 Aircraft

2008

TBC

New A320 Aircraft

2011

233149

Original A321 Aircraft

2008

TBC

New A320 Aircraft

2011

233150

Original A321 Aircraft

2008

TBC

New A321 Aircraft

2011

233066

Original A321 Aircraft

2009

TBC

New A319 Aircraft

2011

184158

Original A321 Aircraft

2009

TBC

New A320 Aircraft

2011

233067

Original A321 Aircraft

2009

TBC

New A321 Aircraft

2011

184159

Original A321 Aircraft

2009

TBC

New A319 Aircraft

2011

184197

Original A321 Aircraft

2009

TBC

New A320 Aircraft

2011

233068

Original A321 Aircraft

2009

TBC

New A320 Aircraft

2011

233069

Original A321 Aircraft

2009

TBC

New A319 Aircraft

2011

233070

Original A321 Aircraft

2009

TBC

New A320 Aircraft

2011

184161

Original A320 Aircraft

2009

TBC

New A321 Aircraft

2011

184167

Original A320 Aircraft

2009

TBC

New A320 Aircraft

2011

233151

Original A321 Aircraft

2009

TBC

New A320 Aircraft

2011

184162

Original A320 Aircraft

2009

TBC

New A321 Aircraft

2011

184163

Original A320 Aircraft

2009

TBC

New A320 Aircraft

2012

233152

Original A321 Aircraft

2009

TBC

New A320 Aircraft

2012

184164

Original A320 Aircraft

2009

TBC

New A319 Aircraft

2012

233074

Original A319 Aircraft

2009

TBC

New A320 Aircraft

2012

184165

Original A320 Aircraft

2009

TBC

New A320 Aircraft

2012

184160

Original A319 Aircraft

2009

TBC

New A320 Aircraft

2012

233075

Original A319 Aircraft

2009

TBC

New A320 Aircraft

2012

184166

Original A320 Aircraft

2009

TBC

New A320 Aircraft

2012

233071

Original A319 Aircraft

2010

TBC

New A320 Aircraft

2012


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 43 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

CAC ID

Aircraft

Delivery Month

Year

CAC ID

Aircraft

Delivery Month

Year

233072

Original A319 Aircraft

2010

TBC

New A320 Aircraft

2012

TBC

New A319 Aircraft

2010

TBC

New A320 Aircraft

2012

233073

Original A319 Aircraft

2010

TBC

New A321 Aircraft

2012

TBC

New A320 Aircraft

2010

TBC

New A320 Aircraft

2012

233076

Original A319 Aircraft

2010

TBC

New A320 Aircraft

2012

TBC

New A321 Aircraft

2010

TBC

New A320 Aircraft

2012

233077

Original A319 Aircraft

2010

TBC

New A320 Aircraft

2012

233078

Original A319 Aircraft

2010

TBC

New A320 Aircraft

2012

233083

Original A320 Aircraft

2010

TBC

New A319 Aircraft

2012

233084

Original A320 Aircraft

2010

TBC

New A320 Aircraft

2012

TBC

New A320 Aircraft

2010

TBC

New A321 Aircraft

2012

233079

Original A319 Aircraft

2010

TBC

New A320 Aircraft

2012

TBC

New A321 Aircraft

2010

TBC

New A320 Aircraft

2012

233080

Original A319 Aircraft

2010

TBC

New A320 Aircraft

2012

233081

Original A319 Aircraft

2010

TBC

New A320 Aircraft

2012

233082

Original A319 Aircraft

2010

53959

A318 Aircraft

2013

TBC

New A320 Aircraft

2010

53979

A318 Aircraft

2013

TBC

New A319 Aircraft

2011

53980

A318 Aircraft

2013

TBC

New A320 Aircraft

2011

53981

A318 Aircraft

2013

TBC

New A320 Aircraft

2011

53982

A318 Aircraft

2013

TBC

New A320 Aircraft

2011

53983

A318 Aircraft

2013

TBC

New A321 Aircraft

2011

53984

A318 Aircraft

2013

TBC

New A319 Aircraft

2011

53985

A318 Aircraft

2013

TBC

New A320 Aircraft

2011

53986

A318 Aircraft

2013

TBC

New A319 Aircraft

2011

53987

A318 Aircraft

2013

TBC

New A320 Aircraft

2011

53988

A318 Aircraft

2013

TBC

New A320 Aircraft

2011

53989

A318 Aircraft

2013

TBC

New A320 Aircraft

2011

53990

A318 Aircraft

2014

TBC

New A321 Aircraft

2011

53991

A318 Aircraft

2014

TBC

New A319 Aircraft

2011

53992

A318 Aircraft

2014

9.1.2		Delivery Notices

9.1.2.1		**

9.1.2.2		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 44 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

9.2		Delivery Process

9.2.1		The Buyer will send its representatives to the Delivery Location to take Delivery within ** after the date on which the Aircraft is Ready for Delivery.

9.2.2		The Seller will transfer title to the Aircraft to the Buyer free and clear of all encumbrances other than those arising by or through the Buyer, provided that the Balance of the Final Contract Price has been paid by the Buyer pursuant to Clause 5.4. and that the Certificate of Acceptance has been signed and delivered to the Seller pursuant to Clause 8.3. The Seller will provide the Buyer with a bill of sale in the form of Exhibit E and/or such other documentation confirming transfer of title and receipt of the Final Contract Price as may reasonably be requested by the Buyer. Property interest in and risk of loss of or damage to the Aircraft will pass to the Buyer contemporaneously with the delivery by the Seller to the Buyer of such bill of sale.

9.2.3		If the Buyer fails to (i) deliver the signed Certificate of Acceptance to the Seller on or before the Delivery Date, or (ii) pay the Balance of the Final Contract Price for the Aircraft to the Seller on the Delivery Date, then the Buyer will be deemed to have rejected Delivery wrongfully when the Aircraft was duly tendered pursuant to this Agreement. If such a deemed rejection arises, the Seller will retain title to the applicable Aircraft and the Buyer will indemnify and hold the Seller harmless against any and all costs (including but not limited to any parking, storage, and insurance costs) and consequences resulting from the Buyer’s rejection. These rights of the Seller will be in addition to the Seller’s other rights and remedies in this Agreement.

9.3		Flyaway

9.3.1		The Buyer and the Seller will cooperate to obtain any licenses that may be required by the relevant Aviation Authority for the purpose of exporting the Aircraft.

9.3.2		All expenses of, or connected with, flying the Aircraft from the Delivery Location after Delivery will be borne by the Buyer. The Buyer will make direct arrangements with the supplying companies for the fuel and oil required for all delivery flights.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 45 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

10 -		EXCUSABLE DELAY AND TOTAL LOSS

10.1		Scope of Excusable Delay

		Neither the Seller nor any Affiliate of the Seller, will be responsible for or be deemed to be in default on account of delays in delivery or failure to deliver or otherwise in the performance of this Agreement or any part hereof due to causes reasonably beyond the Seller’s, control or not occasioned by the Seller’s, fault or negligence (“ Excusable Delay ”), including, but not limited to: (i) acts of God or the public enemy, natural disasters, fires, floods, storms beyond ordinary strength, explosions or earthquakes; epidemics or quarantine restrictions; serious accidents; total or constructive total loss; any law, decision, regulation, directive or other act (whether or not having the force of law) of any government or of the Council of the European Union or the Commission of the European Union or of any national, Federal, State, municipal or other governmental department, commission, board, bureau, agency, court or instrumentality, domestic or foreign; governmental priorities, regulations or orders affecting allocation of materials, facilities or a completed Aircraft; war, civil war or warlike operations, terrorism, insurrection or riots; failure of transportation; strikes or labor troubles causing cessation, slow down or interruption of work;; inability after due and timely diligence to procure materials, accessories, equipment or parts; or to cause a subcontractor or Supplier to furnish materials, components, accessories, equipment or parts; (iii) any delay caused directly or indirectly by the action or inaction of the Buyer and (iv) delay in delivery or otherwise in the performance of this Agreement by the Seller due in whole or in part to any delay in or failure of the delivery of, or any other event or circumstance relating to **BFE.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 46 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

10.2		Consequences of Excusable Delay

10.2.1		If an Excusable Delay occurs the Seller will

	(i)		notify the Buyer of such Excusable Delay as soon as practicable after becoming aware of the same;

	(ii)		not be deemed to be in default in the performance of its obligations hereunder as a result of such Excusable Delay;

	(iii)		not be responsible for any damages arising from or in connection with such Excusable Delay suffered or incurred by the Buyer;

	(iv)		subject to the provisions of Clause 10.3 below as soon as practicable after the removal of the cause of such Excusable Delay resume performance of its obligations under this Agreement and in particular will notify the Buyer of the revised Scheduled Delivery Month; and **

10.3		Termination on Excusable Delay

10.3.1		If any Delivery is delayed as a result of an Excusable Delay for a period of more than after the last day of the Scheduled Delivery Month, then either party may terminate this Agreement with respect to the affected Aircraft, by giving written notice to the other party within after the expiration of such **. However, the Buyer will not be entitled to terminate this Agreement pursuant to this Clause 10.3.1 if the Excusable Delay is caused directly or indirectly by the action or inaction of the Buyer.

10.3.2		If the Seller advises the Buyer of a revised Scheduled Delivery Month pursuant to Clause 10.2.1(iv) that there will be a delay in Delivery of an Aircraft of more than after the last day of the Scheduled Delivery Month, then the Buyer may terminate this Agreement with respect to the affected Aircraft. Termination will be made by giving written notice to the other party within after the Buyer’s receipt of the notice of a revised Scheduled Delivery Month. However, the Buyer will not be entitled to terminate this Agreement pursuant to this Clause 10.3.2 if the Excusable Delay is caused directly or indirectly by the action or inaction of the Buyer.

10.3.3		Any termination pursuant to Clause 10.3.1 or 10.3.2 with respect to an affected Aircraft will discharge the obligations and liabilities of the parties hereunder with respect to such Aircraft, **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 47 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

10.3.4		If this Agreement is not terminated under the terms of Clause 10.3.1 or 10.3.2, then the Seller and the Buyer will mutually agree upon a new Scheduled Delivery Month after the ** period referred to in Clause 10.3.1 or 10.3.2, and this new Scheduled Delivery Month will be deemed to be an amendment to an applicable Scheduled Delivery Month in Clause 9.1.1.

10.4		Total Loss, Destruction or Damage

		If, prior to Delivery, any Aircraft is lost, destroyed or in the reasonable opinion of the Seller is damaged beyond economic repair (“ Total Loss ”), the Seller will notify the Buyer to this effect within of such occurrence. The Seller will include in said notification (or as soon after the issue of the notice as such information becomes available to the Seller) the earliest date consistent with the Seller’s other commitments and production capabilities that an aircraft to replace the Aircraft may be delivered to the Buyer and the Scheduled Delivery Month will be extended as specified in the Seller’s notice to accommodate the delivery of the replacement aircraft. However, if the Scheduled Delivery Month is extended to a month that is later than after the last day of the original Scheduled Delivery Month, then this Agreement will terminate with respect to said Aircraft unless:

	(i)		the Buyer notifies the Seller within ** of the date of receipt of the Seller’s notice that it desires the Seller to provide a replacement aircraft during the month quoted in the Seller’s notice; and

	(ii)		the parties execute an amendment to this Agreement recording the variation in the Scheduled Delivery Month.

		Nothing herein will require the Seller to manufacture and deliver a replacement aircraft if such manufacture would require the reactivation of its production line for the model or series of aircraft that includes the Aircraft. Any termination pursuant to this Clause 10.4 as to a particular Aircraft will discharge the obligations and liabilities of the parties hereunder with respect to such Aircraft **

10.5		Remedies

		THIS CLAUSE 10 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE BUYER FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER, OTHER THAN SUCH DELAYS AS ARE COVERED BY CLAUSE 11, AND THE BUYER HEREBY WAIVES ALL RIGHTS TO WHICH IT WOULD OTHERWISE BE ENTITLED IN RESPECT THEREOF, INCLUDING,


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 48 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

WITHOUT LIMITATION, ANY RIGHTS TO INCIDENTAL AND CONSEQUENTIAL DAMAGES OR SPECIFIC PERFORMANCE. THE BUYER WILL NOT BE ENTITLED TO CLAIM THE REMEDIES AND RECEIVE THE BENEFITS PROVIDED IN THIS CLAUSE 10 WHERE THE DELAY REFERRED TO IN THIS CLAUSE 10 IS CAUSED DIRECTLY OR INDIRECTLY BY THE NEGLIGENCE OR FAULT OF THE BUYER OR ITS REPRESENTATIVES.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 49 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

11 -		INEXCUSABLE DELAY

11.1		Liquidated Damages

		Should an Aircraft not be Ready for Delivery within after the last day of the Scheduled Delivery Month (as such month may be changed pursuant to Clauses 2, 7 or 10) and such delay is not as a result of an Excusable Delay or Total Loss, then such delay will be termed an “ Inexcusable Delay .” In the event of an Inexcusable Delay, the Buyer will have the right to claim, and the Seller will pay the Buyer liquidated damages of US$

		In no event will the amount of liquidated damages exceed the total of US$ (US dollars-) in respect of any one Aircraft.

		The Buyer’s right to liquidated damages in respect of an Aircraft is conditioned on the Buyer’s submitting a written claim for liquidated damages to the Seller not later than ** after the last day of the Scheduled Delivery Month.

11.2		Renegotiation

		If, as a result of an Inexcusable Delay, Delivery does not occur within after the last day of the Scheduled Delivery Month the Buyer will have the right, exercisable by written notice to the Seller given between , to require from the Seller a renegotiation of the Scheduled Delivery Month for the affected Aircraft. Unless otherwise agreed between the Seller and the Buyer during such renegotiation, the said renegotiation will not prejudice Buyer’s right to receive liquidated damages in accordance with Clause 11.1.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 50 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

11.3		Termination

		If, as a result of an Inexcusable Delay, Delivery does not occur within after the last day of the Scheduled Delivery Month and the parties have not renegotiated the Delivery Date pursuant to Clause 11.2, then both parties will have the right exercisable by written notice to the other party, given between , to terminate this Agreement in respect of the affected Aircraft. In the event of termination, neither party will have any claim against the other, except that the Seller will pay to the Buyer any amounts due pursuant to Clause 11.1 and will pay the Buyer an amount equal to the Predelivery Payments received from the Buyer hereunder in respect of the Aircraft as to which this Agreement has been terminated.

11.4		Setoff Payments

		Notwithstanding anything to the contrary contained herein, before being required to make any payments under Clauses 11.1 or 11.3 above, the Seller will have the right to apply any and all sums previously paid by the Buyer to the Seller with respect to an Aircraft as to which this Agreement has been terminated to the payment of any other amounts that any Buyer or any Affiliate of the Buyer owes to the Seller or any Affiliate thereof under any agreement between them.

11.5		Remedies

		THIS CLAUSE 11 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE BUYER FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER, OTHER THAN SUCH DELAYS AS ARE COVERED BY CLAUSE 10, AND THE BUYER HEREBY WAIVES ALL RIGHTS TO WHICH IT WOULD OTHERWISE BE ENTITLED IN RESPECT THEREOF, INCLUDING WITHOUT LIMITATION ANY RIGHTS TO INCIDENTAL AND CONSEQUENTIAL DAMAGES OR SPECIFIC PERFORMANCE. THE BUYER WILL NOT BE ENTITLED TO CLAIM THE REMEDIES AND RECEIVE THE BENEFITS PROVIDED IN THIS CLAUSE 11 WHERE THE DELAY REFERRED TO IN THIS CLAUSE 11 IS CAUSED BY THE NEGLIGENCE OR FAULT OF THE BUYER OR ITS REPRESENTATIVES.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 51 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

12 -		WARRANTIES AND SERVICE LIFE POLICY

12.1		Warranty

12.1.1		Nature of Warranty

		Subject to the limitations and conditions hereinafter provided, and except as provided in Clause 12.1.2, the Seller warrants to the Buyer that each Aircraft and each Warranted Part will at the time of Delivery hereunder be free from defects:

	(i)		in material,

	(ii)		in workmanship, including, without limitation, processes of manufacture,

	(iii)		in design (including, without limitation, selection of materials, parts and components) having regard to the state of the art at the date of such design, and

	(iv)		arising from failure to conform to the Specification, except as to immaterial deviations from those portions of the Specification that are expressly stated in the Specification to be estimates or approximations or design aims.

	For the purposes of this Agreement, the term “ Warranted Part ” will mean any Seller proprietary component, equipment, accessory or part that (a) is installed on or incorporated into an Aircraft at Delivery, (b) is manufactured to the detail design of the Seller or a subcontractor of the Seller and (c) bears a part number of the Seller at the time of Delivery.

12.1.2		Exceptions

		The warranties set forth in Clause 12.1.1 will not apply to Buyer Furnished Equipment, Propulsion System, or to any component, accessory, equipment or part purchased by the Buyer or the Seller **that is not a Warranted Part, provided, however, that:


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 52 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(i)		any defect in the Seller’s workmanship in respect of the installation of such items in or on the Aircraft, including any failure by the Seller to conform to the installation instructions of the manufacturers of such items that invalidates any applicable warranty from such manufacturers, will constitute a defect in workmanship for the purpose of this Clause 12.1 and be covered by the warranty set forth in Clause 12.1.1(ii), and

	(ii)		any defect inherent in the Seller’s design of the installation, considering the state of the art at the date of such design, that impairs the use or function of such items will constitute a defect in design for the purposes of this Clause 12.1 and be covered by the warranty set forth in Clause 12.1.1(iii).

12.1.3		Warranty Periods

		The warranties described in Clauses 12.1.1 and 12.1.2 will be limited to those defects that become apparent within ** after Delivery of the affected Aircraft (the “ Warranty Period ”).

12.1.4		Limitations of Warranty

(i)

The Buyer’s remedy and the Seller’s obligation and liability under Clauses 12.1.1 and 12.1.2 are limited to, at the Seller’s expense and option, the repair, replacement or correction of, or the supply of modification kits rectifying the defect to any defective Warranted Part, as mutually agreed between and satisfactory to the Buyer and the Seller, ** However, the Seller may furnish a credit to the Buyer for the future purchase of Goods and Services (not including Aircraft) equal to the price at which the Buyer is then entitled to acquire a replacement for the defective Warranted Part.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 53 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(ii)		If the Seller corrects a defect covered by Clause 12.1.1(iii) that becomes apparent within the Warranty Period, on the written request of the Buyer the Seller will correct any such defect in any Aircraft that has not already been delivered to the Buyer. The Seller will not be responsible for, nor deemed to be in default on account of, any delay in Delivery of any Aircraft or otherwise, in respect of performance of this Agreement, due to the Seller’s undertaking to make such correction. In the alternative, the Buyer and the Seller may agree to deliver such Aircraft with subsequent correction of the defect by the Buyer at the Seller’s expense, or the Buyer may elect to accept Delivery and thereafter file a Warranty Claim as though the defect had become apparent immediately after Delivery of such Aircraft.

	(iii)		**

12.1.5

Cost of Inspection

(i)

In addition to the remedies set forth in Clauses 12.1.4(i) and 12.1.4(ii), the Seller will reimburse the direct labor costs spent by the Buyer in performing inspections of the Aircraft that are conducted:

	(a)		to determine whether a defect exists in any Warranted Part within the Warranty Period; or

	(b)		pending the Seller’s provision of a corrective technical solution.

(ii)

The Seller’s liability under Clause 12.1.5(i) is subject to the following conditions:

	(a)		such inspections are recommended by a Seller Service Bulletin to be performed within the Warranty Period;

	(b)		the labor rate for the reimbursements will be the In-house Warranty Labor Rate, and

	(c)		the hours used to determine such reimbursement will not exceed the Seller’s estimate of the labor hours required for such inspections. **

12.1.6

Warranty Claim Requirements


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 54 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

The Buyer’s remedy and the Seller’s obligation and liability under this Clause 12.1, with respect to each claimed defect, are subject to the following conditions precedent:

	(i)		the existence of a defect covered by the provisions of this Clause 12.1,

	(ii)		the defect becomes apparent within the Warranty Period, **

	(iii)		the Buyer submits to the Seller evidence reasonably satisfactory to the Seller that the claimed defect is due to a matter covered under the provisions of this Clause 12. **, the Buyer will submit additional information as deemed necessary by the Seller to make a determination that such defect did not result from any act or omission of the Buyer, including but not limited to, any failure to operate and maintain the affected Aircraft or part thereof in accordance with the standards set forth in Clause 12.1.11 or from any act or omission of any third party,

	(iv)		the Buyer returns as soon as practicable the Warranted Part claimed to be defective to the repair facilities designated by the Seller, unless the Buyer elect to repair a defective Warranted Part in accordance with the provisions of Clause 12.1.8,

	(v)		the Seller receives a “Warranty Claim” complying with the provisions of Clause 12.1.7(v).

12.1.7		Warranty Administration

		The warranties set forth in Clause 12.1 will be administered as hereinafter provided:

	(i)		Claim Determination . Determination as to whether any claimed defect in any Warranted Part entitles the Buyer to a remedy under this Clause 12.1 will be made by the Seller, in consultation with the Buyer, and will be based on claim details, reports from the Seller’s regional representative, historical data logs, inspections, tests, findings during repair, defect analysis and other relevant documents and information.

	(ii)		Transportation Costs . Transportation costs associated with (a) the sending of a defective Warranted Part as to which a remedy is available under this Clause 12 to the facilities designated by the Seller **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 55 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(iii)		On-Aircraft Work by the Seller . If either (a) the Seller determines that a defect subject to this Clause 12.1 requires the dispatch by the Seller of a working team to the facilities of the Buyer to repair or correct such defect, ** or (b) the Seller accepts the return of an Aircraft to perform or have performed a repair or correction, then, the labor costs for such on-Aircraft work will be borne by the Seller.

			On-Aircraft work by the Seller will be undertaken only if, in the Seller’s opinion, the work requires the Seller’s technical expertise. In such case, the Seller and the Buyer will agree on a schedule and place for the work to be performed.

	(iv)		Return of an Aircraft . If the Buyer desires to return an Aircraft to the Seller for consideration of a Warranty Claim, the Buyer will notify the Seller of its intention to do so, and the Seller will, prior to such return, have the right to inspect such Aircraft, and without prejudice to the Seller’s rights hereunder, to repair such Aircraft either at the Buyer’s facilities or at another mutually acceptable location at the Seller’s expense. If the Seller agrees that the return or movement of the Aircraft to another facility is necessary to effect the repair or correction, the Aircraft will be transported to and from such facility at the Seller’s expense.

			If the Seller does not agree that the return of an Aircraft is necessary for the handling of a Warranty Claim, then the return of such Aircraft by the Buyer to the Seller and return of such Aircraft to the Buyer’s facilities will be at the Buyer’s expense.

	(v)		Warranty Claim Substantiation . For each claim under this Clause 12.1, the Buyer will give written notice to the Seller that contains at least the data listed below, , with respect to an Aircraft or Warranted Part, as applicable (“ Warranty Claim ”). The Buyer will to provide to the Seller a Warranty Claim within but in no event later than of discovering each defect giving rise to a warranty claim under Clause 12.1.

	(a)		Description of the defect and any action taken

	(b)		Date of incident and/or removal

	(c)		Description of the Warranted Part claimed to be defective

	(d)		Part number


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 56 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(e)		Serial number (if applicable)

	(f)		Position on Aircraft, according to Catalog Sequence Number of the Illustrated Parts Catalog, **, Component Maintenance Manual or Structural Repair Manual, as applicable

	(g)		Total flying hours or calendar times, as applicable, at the date of appearance of a defect **

	(h)		Time since last shop visit at the date of appearance of defect **

	(i)		Manufacturer’s serial number (MSN) of the Aircraft and/or its registration number

	(j)		Aircraft total flying hours and/or number of landings at the date of appearance of defect

	(k)		Claim number

	(l)		Date of claim

	(m)		Date of delivery of an Aircraft or Warranted Part to the Buyer


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 57 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

			Warranty Claims are to be addressed as follows:

			Airbus S.A.S. Customer Services Directorate Warranty Administration Rond-Point Maurice Bellonte B.P. 33 F-31707 Blagnac Cedex, France

	(vi)		Replacements . ** Replaced components, equipment, accessories or parts will become the Seller’s property.

			Title to and risk of loss of any Aircraft, component, accessory, equipment or part returned by the Buyer to the Seller will at all times remain with the Buyer, except that (i) when the Seller has possession of a returned Aircraft, component, accessory, equipment or part to which the Buyer has title, the Seller will have such responsibility therefor as is chargeable by law to a bailee for hire, but the Seller will not be liable for loss of use, and (ii) title to and risk of loss of a returned component, accessory, equipment or part will pass to the Seller on shipment by the Seller to the Buyer of any item furnished by the Seller to the Buyer as a replacement therefor or on the Seller’s issuance of a credit with respect thereto. Upon the Seller’s shipment to the Buyer of any replacement component, accessory, equipment or part provided by the Seller pursuant to this Clause 12.1, title to and risk of loss of such component, accessory, equipment or part will pass to the Buyer.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 58 of 123


EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(vii)		Seller’s Acceptance and Rejection . The Seller will provide reasonable written substantiation in case of rejection of a Warranty Claim. The Buyer will pay the Seller (a) reasonable inspection and test charges incurred by the Seller in connection with the investigation and processing of a rejected Warranty Claim,

	(viii)		Inspection . The Seller will have the right to inspect the affected Aircraft and documents and other records relating thereto in the event of any claim under this Clause 12.1 on reasonable prior written notice to the Buyer and such inspection will not unreasonably interfere with the Buyer’s operation and personnel.

12.1.8 In-house Warranty Repair

	(i)		Authorization . The Buyer is hereby authorized to repair Warranted Parts, subject to the terms of this Clause 12.1.8 (“ In-house Warranty Repair ”). When the estimated labor cost of an In-house Warranty Repair exceeds US$ (US-), the Buyer will notify the Resident Customer Support Representative if available of its decision to perform any In-house Warranty Repairs before such repairs are commenced. Such Buyer’s notice will include sufficient detail regarding the defect, estimated or actual labor hours and material, as applicable, to allow the Seller to ascertain the reasonableness of the estimate. **

	(ii)		Conditions of Authorization . The Buyer will be entitled to the benefits under this Clause 12.1.8 for repair of Warranted Parts:

	(a)		**

	(b)		if adequate facilities and qualified personnel are available to the Buyer,

	(c)		if repairs are to be performed in accordance with the Seller’s written instructions set forth in applicable Technical Data, **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 59 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

(d)

only to the extent reasonably necessary to correct the defect, in accordance with the standards set forth in Clause 12.1.11.

	(iii)		Seller’s Rights . The Seller will have the right to require the delivery to it of any Warranted Part, or any part removed therefrom that is claimed to be defective, if, in the Seller’s judgment, the nature of the claimed defect requires technical investigation. Such delivery will be subject to the provisions of Clause 12.1.7(ii).

			Subject to applicable safety rules, the Seller will have the right to have a representative present as an observer during the disassembly, inspection and testing of any Warranted Part claimed to be defective. Such representatives will not unreasonably interfere with the Buyer’s operation and personnel.

	(iv)		In-house Warranty Claim Substantiation . Claims for In-house Warranty Repair credit will comply with the requirements in Warranty Claims under Clause 12.1.7(v) and in addition, to the extent ascertainable, will include:

	(a)		A report of technical findings with respect to the defect, if applicable

	(b)		For parts required to remedy the defect

	§		part numbers,

	§		serial numbers (if applicable),

	§		description of the parts,

	§		quantity of parts,

	§		unit price of parts,

	§		related Seller’s or third party’s invoices (if applicable),

	§		total price of parts

	(c)		Detailed number of labor hours

	(d)		In-house Warranty Labor Rate

	(e)		Total claim amount



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 60 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

(v)

Credit . The Buyer’s sole remedy, and the Seller’s sole obligation and liability, in respect of In-house Warranty Repair claims, will be a credit to the Buyer’s account. Such credit will be equal to the sum of the direct labor cost expended in performing such repair and the direct cost of materials incorporated in the repair. Such costs will be determined as set forth below.

	(a)		To determine direct labor costs, only the labor hours spent on , disassembly, inspection, repair, reassembly, and final inspection and test of the Warranted Part alone will be counted. The hours required for maintenance work concurrently being carried out on the Aircraft or Warranted Part will not be included.

	(b)		The labor hours counted as set forth above will be multiplied by the In-house Warranty Labor Rate. Such rate is deemed to represent the Buyer’s composite average hourly labor rate paid to the Buyer’s employees or to a third party that the Buyer has authorized to perform the repair, whose jobs, in both cases, are directly related to the performance of the repair. This labor rate is US$ (US dollars ) at economic conditions prevailing in ** (the “ In-house Warranty Labor Rate ”).

			The In-house Warranty Labor Rate is subject to adjustment annually by multiplying the same by the ratio ECIn/ECIb. For the purposes of this Clause 12.1.8(v) only, ECIn is equal to the Labor Index defined in the Seller Price Revision Formula for January of the year in which the hours are spent and ECIb is equal to such Labor Index for **.

	(c)		Direct material costs are determined by the prices at which the Buyer acquired such replacement material, excluding any parts and materials used for overhaul or repair furnished free of charge by the Seller.

	(vi)		Limitation on Credit . The Buyer will in no event be credited for repair costs (including labor and material) for any Warranted Part to the extent that such repair costs exceed, the lower of, (x) of the Seller’s then current catalog price for a replacement of such Warranted Part

			The Seller will substantiate the costs referred to in Clause 12.1.8(vi)(y) in writing on reasonable request by the Buyer.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 61 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

(vii)

(vii) Scrapped Material . The Buyer may, with the agreement of the Resident Customer Support Representative, scrap any defective Warranted Parts that are beyond economic repair and not required for technical evaluation. If the Buyer does not obtain the written agreement of the Resident Customer Support Representative to scrap a Warranted Part, then the Buyer will retain such Warranted Part and any defective part removed from a Warranted Part during repair for a period of either ** after the date of completion of repair or ** after submission of a claim for In-house Warranty Repair credit relating thereto, whichever is longer. Such parts will be returned to the Seller within ** of receipt of the Seller’s request therefor, at the Seller’s expense **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 62 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(viii)		DISCLAIMER OF SELLER LIABILITY FOR BUYER’S REPAIR

			THE SELLER WILL NOT BE LIABLE FOR, AND THE BUYER WILL INDEMNIFY THE SELLER AGAINST, CLAIMS OF ANY THIRD PARTIES FOR LOSSES DUE TO ANY DEFECT, NONCONFORMANCE OR PROBLEM OF ANY KIND, ARISING OUT OF OR IN CONNECTION WITH ANY REPAIR OF WARRANTED PARTS UNDERTAKEN BY THE BUYER UNDER THIS CLAUSE 12.1.8 OR ANY OTHER ACTIONS UNDERTAKEN BY THE BUYER UNDER THIS CLAUSE 12.1.8, WHETHER SUCH CLAIM IS ASSERTED IN CONTRACT OR IN TORT, OR IS PREMISED ON ALLEGED, ACTUAL, IMPUTED, ORDINARY OR INTENTIONAL ACTS OR OMISSIONS OF THE BUYER OR THE SELLER.

12.1.9 Warranty Transferability

The warranties provided for in this Clause 12.1 for any Warranted Part will accrue to the benefit of any operator other than the Buyer if the Warranted Part enters into the possession of such operator as a result of a pooling agreement between such operator and the Buyer, in accordance with the terms and subject to the limitations and exclusions of the foregoing warranties and to applicable laws or regulations.

12.1.10 Warranty for Corrected, Replacement or Repaired Warranted Parts

Whenever any Warranted Part that contains a defect for which the Seller is liable under this Clause 12.1 has been corrected, repaired or replaced pursuant to the terms of this Clause 12, the period of the Seller’s warranty with respect to such corrected, repaired or replacement Warranted Part, will be the remaining portion of the original Warranty Period in respect of such corrected, repaired or replaced Warranted Part. If a defect is attributable to a defective repair or replacement by the Buyer, a Warranty Claim with respect to such defect will be rejected, notwithstanding any subsequent correction or repair, and will immediately terminate the remaining warranties under this Clause 12.1 in respect of the affected Warranted Part.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 63 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

12.1.11 Standard Airline Operation — Normal Wear and Tear

The Buyer’s rights under this Clause 12.1 are subject to the Aircraft and each component, equipment, accessory and part thereof being maintained, overhauled, repaired and operated in accordance with FAA regulations **

The Seller’s liability under this Clause 12.1 will not extend to normal wear and tear nor, to the extent caused by any of the following:

	(i)		any Aircraft or component, equipment, accessory or part thereof that has been repaired, altered or modified after Delivery in a manner inconsistent with the requirements of the applicable Aviation Authority or the aircraft repair manuals, as applicable;

	(ii)		any component, equipment or accessory or part thereof that has been operated in a damaged state **

	(iii)		any component, equipment, accessory or part from which the trademark, trade name, part or serial number or other identification marks have been removed.

The limitations of the Seller’s liability under this Clause 12.1.11 resulting from causes described in Clauses 12.1.11(i) and 12.1.11(ii) will apply only to the extent the Seller submits reasonable evidence that the defect arose from or was contributed to by such causes.

12.2 Seller Service Life Policy

12.2.1 Scope and Definitions

In addition to the warranties set forth in Clause 12.1, the Seller agrees that, should a Failure occur in any Item (as such terms are defined below), then, subject to the general conditions and limitations set forth in Clauses 12.2.3 and 12.2.4, the provisions of this Clause 12.2 will apply.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 64 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

For the purposes of this Clause 12.2,

	(i)		“ Item ” means any of the Seller components, equipment, accessories or parts listed in Exhibit C that are installed on an Aircraft at any time during the period of effectiveness of the Service Life Policy as defined below in Clause 12.2.2;

	(ii)		“ Failure ” means any breakage of, or defect in, an Item that

	(a)		materially impairs the utility or safety of the Item,

	(b)		did not result from any breakage or defect in any other Aircraft part or component or from any other extrinsic force, and

	(c)		has occurred or can reasonably be expected to occur, but does not necessarily occur, on a repetitive or fleetwide basis.

The Seller’s obligations under this Clause 12.2 are referred to as the " Service Life Policy ”.

12.2.2 Periods and Seller’s Undertaking

Subject to the general conditions and limitations set forth in Clause 12.2.4, the Seller agrees that if a Failure occurs in an Item within ** after the Delivery of the Aircraft on which such Item is installed, the Seller will, at its discretion, as promptly as practicable and for a price that reflects the Seller’s financial participation as hereinafter provided:

	(i)		design and furnish to the Buyer a ** correction for such Item and provide any parts required for such correction (including Seller designed standard parts but excluding industry standard parts), or

	(ii)		replace such Item.

12.2.3 Seller’s Participation in the Cost

Any part or Item that the Seller is required to furnish to the Buyer under this Service Life Policy will be furnished at the Seller’s current sales price therefor, less the Seller’s financial participation, which will be determined in accordance with the following formula:


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 65 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

P = C ( N — T ) / N

where

	P:		financial participation of the Seller,

	C:		the Seller’s then current sales price for the required Item or required Seller designed parts,

	T:		total time in months since Delivery of the Aircraft in which the Item subject to a Failure was originally installed, and

	N:		** months.

12.2.4 General Conditions and Limitations


12.2.4.1		Notwithstanding any provision of this Clause 12.2, during the Warranty Period, all Items will be covered by the provisions of Clause 12.1 and not by the provisions of this Clause 12.2.


12.2.4.2		The Buyer’s remedies and the Seller’s obligations and liabilities under this Service Life Policy are subject to compliance by the Buyer with the following conditions:

	(i)		The Buyer will generate and maintain log books and other historical records as required by the FAA, and will retain the same for the duration of this Service Life Policy, with respect to each Item adequate to enable the determination as to whether the alleged Failure is covered by this Service Life Policy and, if so, to allocate the portion of the cost to be borne by the Seller in accordance with Clause 12.2.3.

	(ii)		The Buyer will keep the Seller informed, by making available any relevant records **, of any significant incidents relating to an Aircraft, howsoever occurring or recorded.

	(iii)		The conditions of Clause 12.1.11 will have been complied with.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 66 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(iv)		The Buyer will implement specific structural inspection programs for monitoring purposes as may be established from time to time by the Seller and the Buyer. Such programs will be, to the extent possible, compatible with the Buyer’s operational requirements and will be carried out at the Buyer’s expense. Reports relating thereto will be regularly furnished to the Seller **

	(v)		The Buyer will report in writing any breakage or defect that may be covered by the Service Life Policy to the Seller within ** after such breakage or defect becomes apparent, whether or not the same can reasonably be expected to occur in any other Aircraft, and the Buyer will inform the Seller in sufficient detail about such breakage or defect to enable the Seller to determine whether the same is subject to this Service Life Policy.


12.2.4.3		Except as otherwise provided in this Clause 12.2, any claim under this Service Life Policy will be administered as provided in, and will be subject to the terms and conditions of, Clause 12.1.6.


12.2.4.4		If the Seller has issued a service bulletin modification applicable to an Aircraft, the purpose of which is to avoid a Failure, the Seller will offer the necessary modification kit free of charge or under a pro rata formula established by the Seller. If such a kit is so offered to the Buyer, then, in respect of such Failure and any Failures that could ensue therefrom, the Seller’s commitment under this Clause 12.2 will be subject to the Buyer’s incorporating such modification in the relevant Aircraft, within a reasonable time, as promulgated by the Seller and in accordance with the Seller’s instructions.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 67 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL


12.2.4.5		THIS SERVICE LIFE POLICY IS NEITHER A WARRANTY, PERFORMANCE GUARANTEE, NOR AN AGREEMENT TO MODIFY ANY AIRCRAFT OR AIRFRAME COMPONENTS TO CONFORM TO NEW DEVELOPMENTS OCCURRING IN THE STATE OF AIRFRAME DESIGN AND MANUFACTURING ART. THE SELLER’S OBLIGATION UNDER THIS CLAUSE 12.2 IS TO MAKE ONLY THOSE CORRECTIONS TO THE ITEMS OR FURNISH REPLACEMENTS THEREFOR AS PROVIDED IN THIS CLAUSE 12.2. THE BUYER’S SOLE REMEDY AND RELIEF FOR THE NONPERFORMANCE OF ANY OBLIGATION OR LIABILITY OF THE SELLER ARISING UNDER OR BY VIRTUE OF THIS SERVICE LIFE POLICY WILL BE IN **, LIMITED TO THE AMOUNT THE BUYER REASONABLY EXPENDS IN PROCURING A CORRECTION OR REPLACEMENT FOR ANY ITEM THAT IS THE SUBJECT OF A FAILURE COVERED BY THIS SERVICE LIFE POLICY AND TO WHICH SUCH NONPERFORMANCE IS RELATED, LESS THE AMOUNT THAT THE BUYER OTHERWISE WOULD HAVE BEEN REQUIRED TO PAY UNDER THIS CLAUSE 12.2 IN RESPECT OF SUCH CORRECTED OR REPLACEMENT ITEM. WITHOUT LIMITING THE EXCLUSIVITY OF WARRANTIES AND GENERAL LIMITATIONS OF LIABILITY PROVISIONS SET FORTH IN CLAUSE 12.5, THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL CLAIMS TO ANY FURTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF PROFITS AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES, ARISING UNDER OR BY VIRTUE OF THIS SERVICE LIFE POLICY.

12.2.5 Transferability

The Buyer’s rights under this Clause 12.2 will not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise, without the Seller’s prior written consent.

Any unauthorized assignment, sale, transfer or other alienation of the Buyer’s rights under this Service Life Policy will, as to the Aircraft involved, immediately void this Service Life Policy in its entirety.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 68 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

12.3		Supplier Warranties and Service Life Policy

12.3.1		Seller’s Support

Before Delivery of the first Aircraft, the Seller will provide the Buyer with the warranties and service life policies that the Seller has obtained pursuant to the Supplier Product Support Agreements.

12.3.2

Supplier’s Default

12.3.2.1

If any Supplier under any warranty referred to in Clause 12.3.1 defaults in the performance of any material obligation under such warranty with respect to a Supplier Part, the Buyer has used its best efforts to enforce its rights under such warranty, and the Buyer submits reasonable evidence, within a reasonable time, that such default has occurred, then Clause 12.1 of this Agreement will apply to the extent it would have applied had such Supplier Part been a Warranted Part, to the extent the Seller can reasonably perform said Supplier’s obligations, except that the Supplier’s warranty period indicated in the applicable Supplier Product Support Agreement will apply.

12.3.2.2

If any Supplier under any service life policy referred to in Clause 12.3.1 defaults in the performance of any material obligation under such service life policy with respect to a Supplier Part, the Buyer has used best efforts to enforce its rights under such service life policy, and the Buyer submits within a reasonable time to the Seller reasonable evidence that such default has occurred, then Clause 12.2 will apply to the extent the same would have applied had such Supplier Part been listed in Exhibit C, to the extent that the Seller can reasonably perform said Supplier’s service life policy.

12.3.2.3

At the Seller’s request, the Buyer will assign to the Seller, and the Seller will be subrogated to, all of the Buyer’s rights against the relevant Supplier with respect to, and arising by reason of, such default and the Buyer will provide reasonable assistance to enable the Seller to enforce the rights so assigned.

12.4		Interface Commitment

12.4.1		Interface Problem

If the Buyer experiences any technical problem in the operation of an Aircraft or its systems, the cause of which, after due and reasonable investigation, is not


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 69 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

readily identifiable by the Buyer, but which the Buyer reasonably believes to be attributable to the design characteristics of one or more components of the Aircraft and/or its systems (an “ Interface Problem ”), the Seller will, if requested by the Buyer, and without additional charge to the Buyer, promptly conduct or have conducted an investigation and analysis of such problem to determine, if possible, the cause or causes of the problem and to recommend such corrective action as may be feasible, provided, however, that if the Seller determines, after such investigation, that the Interface Problem was due to or caused by any act or omission of the Buyer in its performance of its obligations hereunder, the Buyer will pay to the Seller all reasonable costs and expenses incurred by the Seller during such investigation. The Buyer will furnish to the Seller all data and information relevant to the Interface Problem in its possession and will reasonably cooperate with the Seller in the conduct of the Seller’s investigations and such tests as may be required. At the conclusion of such investigation the Seller will promptly advise the Buyer in writing of the Seller’s opinion as to the cause or causes of the Interface Problem and the Seller’s recommendations as to corrective action.

12.4.2 Seller’s Responsibility

If the Seller determines that the Interface Problem is primarily attributable to the design of a Warranted Part, the Seller will, if requested by the Buyer, take prompt action to correct the design of such Warranted Part, pursuant to the terms and conditions of Clause 12.1.

12.4.3 Supplier’s Responsibility

If the Seller determines that the Interface Problem is primarily attributable to the design of any Supplier Part, the Seller will at the Buyer’s request, assist the Buyer in processing any warranty claim the Buyer may have against the manufacturer of such Supplier Part. **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 70 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

12.4.4 Joint Responsibility

If the Seller determines that the Interface Problem is attributable partially to the design of a Warranted Part and partially to the design of any Supplier Part, the Seller will, if requested by the Buyer, seek a solution to the Interface Problem through cooperative efforts of the Seller and any Supplier(s) involved. The Seller will promptly advise the Buyer of any corrective action proposed by the Seller and any such Supplier(s). Such proposal will be consistent with any then existing obligations of the Seller hereunder and of any such Supplier to the Buyer. Such corrective action, unless reasonably rejected by the Buyer, will constitute full satisfaction of any claim the Buyer may have against either the Seller or any such Supplier(s) with respect to such Interface Problem, unless such corrective action does not resolve the Interface Problem.

12.4.5 General

12.4.5.1

All requests under this Clause 12.4 will be directed both to the Seller and the affected Suppliers.

12.4.5.2

Except as specifically set forth in this Clause 12.4, this Clause 12.4 will not be deemed to impose on the Seller any obligations not expressly set forth elsewhere in this Agreement.

12.4.5.3

All reports, recommendations, data and other documents furnished by the Seller to the Buyer pursuant to this Clause 12.4 will be deemed to be delivered under this Agreement and will be subject to the terms, covenants and conditions set forth in this Clause 12 and in Clause 22.7.

12.5 Exclusivity of Warranties

THIS CLAUSE 12 (INCLUDING ITS SUBPROVISIONS) SETS FORTH THE EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE OBLIGATIONS OF THE SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO THE BUYER, WHETHER UNDER THIS AGREEMENT OR OTHERWISE, ARISING FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE DELIVERED BY THE SELLER UNDER THIS AGREEMENT.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 71 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN THIS CLAUSE 12 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYER FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN THE GOODS AND SERVICES SUPPLIED UNDER THIS AGREEMENT. THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS, GUARANTEES AND LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, WHETHER EXPRESS OR IMPLIED BY CONTRACT, TORT, STATUTORY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT OR PROBLEM OF ANY KIND IN ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE DELIVERED BY THE SELLER UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO:

	(1)		ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE;

	(2)		ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

	(3)		ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

	(4)		ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO, ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE, INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;

	(5)		ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;

	(6)		ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL STATUTE OR AGENCY;

	(7)		ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 72 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(a)		LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;

	(b)		LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;

	(c)		LOSS OF PROFITS AND/OR REVENUES;

	(d)		ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.

THE WARRANTIES AND SERVICE LIFE POLICY PROVIDED BY THIS AGREEMENT WILL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE SELLER AND THE BUYER. IF ANY PROVISION OF THIS CLAUSE 12 SHOULD FOR ANY REASON BE HELD UNLAWFUL, OR OTHERWISE UNENFORCEABLE, THE REMAINDER OF THIS CLAUSE 12 WILL REMAIN IN FULL FORCE AND EFFECT.

FOR THE PURPOSE OF THIS CLAUSE 12.5, “SELLER” WILL BE UNDERSTOOD TO INCLUDE THE SELLER, ITS AFFILIATES AND SUPPLIERS.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 73 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

12.6 Duplicate Remedies

The remedies provided to the Buyer under this Clause 12 as to any defect in respect of the Aircraft or any part thereof are mutually exclusive and not cumulative. The Buyer will be entitled to the remedy that provides the maximum benefit to it, as the Buyer may elect, pursuant to the terms and conditions of this Clause 12 for any defect for which remedies are provided under this Clause 12 provided, however, that the Buyer will not be entitled to elect a remedy under more than one part of this Clause 12 for the same defect. The Buyer’s rights and remedies herein for the nonperformance of any obligations or liabilities of the Seller arising under these warranties will be in monetary damages limited to the amount the Buyer expends in procuring a correction or replacement for any covered part subject to a defect or nonperformance covered by this Clause 12, and the Buyer will not have any right to require specific performance by the Seller.

12.7 Negotiated Agreement

The Buyer specifically recognizes that:

	(i)		the Specification has been agreed upon after careful consideration by the Buyer using its judgment as professional operators of, and maintenance providers with respect to, aircraft used in public transportation and as such is are professionals within the same industry as the Seller;

	(ii)		this Agreement, and in particular this Clause 12, has been the subject of discussion and negotiation and is fully understood by the Buyer;

	(iii)		the price of the Aircraft and the other mutual agreements of the Buyer set forth in this Agreement were arrived at in consideration of, inter alia, the provisions of this Clause 12, specifically including the Exclusivity of Warranties set forth in Clause 12.5.

12.8 Survivability

In respect of all delivered Aircraft, the provisions of this Clause 12 will survive any termination of this Agreement, except any termination following a Termination Event referred to in Clause 21(1), (2), (3) or (4).



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 74 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

13 — PATENT AND COPYRIGHT INDEMNITY

13.1 Indemnity

13.1.1

Subject to the provisions of Clause 13.2.3, the Seller will indemnify the Buyer from and against any damages, costs and expenses including legal costs (excluding damages, costs, expenses, loss of profits and other liabilities in respect of or resulting from loss of use of the Aircraft) resulting from any infringement or claim of infringement by the Airframe or any part or software installed therein at Delivery of

	(i)		any British, French, German, Spanish or U.S. patent;

	(ii)		any patent issued under the laws of any other country in which the Buyer may lawfully operate the Aircraft, provided that from the time of design of such Airframe or any part or software installed therein at Delivery and until infringement claims are resolved, the country of the patent and the flag country of the Aircraft are both parties to:

	(a)		the Chicago Convention on International Civil Aviation of December 7, 1944, and are each fully entitled to all benefits of Article 27 thereof, or,

	(b)		the International Convention for the Protection of Industrial Property of March 20, 1883 ; and

(iii)

in respect of computer software installed on the Aircraft, any copyright, provided that the Seller’s obligation to indemnify will be limited to infringements in countries which, at the time of design are members of The Berne Union and recognize computer software as a “work” under the Berne Convention.

13.1.2 Clause 13.1.1 will not apply to

	(i)		Buyer Furnished Equipment;

	(ii)		the Propulsion Systems;

	(iii)		Supplier Parts; or

	(iv)		software not developed by the Seller.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 75 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

13.1.3

If the Buyer is, due to circumstances contemplated in Clause 13.1.1, prevented from using the Aircraft (whether by a valid judgment of a court of competent jurisdiction or by a settlement arrived at among the claimant, the Seller and the Buyer), the Seller will at its expense either

	(i)		procure for the Buyer the right to use the affected Airframe, part or software free of charge; or

	(ii)		replace the infringing part or software as soon as possible with a non-infringing substitute.

13.2 Administration of Patent and Copyright Indemnity Claims

13.2.1

If the Buyer receives a written claim or a suit is threatened or begun against the Buyer for infringement of a patent or copyright referred to in Clause 13.1, the Buyer will

	(i)		forthwith notify the Seller, giving particulars thereof;

	(ii)		furnish to the Seller all data, papers and records within the Buyer’s control or possession relating to such patent or claim;

	(iii)		refrain from admitting any liability or making any payment, or assuming any expenses, damages, costs or royalties, or otherwise acting in a manner prejudicial to the defense or denial of the suit or claim, it being agreed that nothing in this Clause 13.2.1(iii) will prevent the Buyer from paying the sums that may be required to obtain the release of the Aircraft, provided that payment is accompanied by a denial of liability and is made without prejudice;

	(iv)		fully cooperate with, and render all assistance to, the Seller as may be pertinent to the defense or denial of the suit or claim; and

	(v)		act to mitigate damages and/or to reduce the amount of royalties that may be payable, and act to minimize costs and expenses.

13.2.2

The Seller will be entitled either in its own name or on behalf of the Buyer to conduct negotiations with the party or parties alleging infringement and may assume and conduct the defense or settlement of any suit or claim in the manner that, in the Seller’s opinion, it deems proper.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 76 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

13.2.3

The Seller’s liability hereunder will be conditional on the strict and timely compliance by the Buyer with the terms of this Clause 13 and is in lieu of any other liability to the Buyer, whether express or implied, that the Seller might incur at law as a result of any infringement or claim of infringement of any patent or copyright.

THE INDEMNITY PROVIDED IN THIS CLAUSE 13 AND THE OBLIGATIONS AND LIABILITIES OF THE SELLER UNDER THIS CLAUSE 13 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER INDEMNITIES, WARRANTIES, OBLIGATIONS, GUARANTEES AND LIABILITIES ON THE PART OF THE SELLER AND RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE (INCLUDING WITHOUT LIMITATION ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY ARISING FROM OR WITH RESPECT TO LOSS OF USE OR REVENUE OR CONSEQUENTIAL DAMAGES), WITH RESPECT TO ANY ACTUAL OR ALLEGED PATENT INFRINGEMENT OR THE LIKE BY ANY AIRFRAME, PART OR SOFTWARE INSTALLED THEREIN AT DELIVERY, OR THE USE OR SALE THEREOF, PROVIDED THAT, IN THE EVENT THAT ANY OF THE AFORESAID PROVISIONS SHOULD FOR ANY REASON BE HELD UNLAWFUL OR OTHERWISE INEFFECTIVE, THE REMAINDER OF THIS CLAUSE WILL REMAIN IN FULL FORCE AND EFFECT. THIS INDEMNITY AGAINST PATENT AND COPYRIGHT INFRINGEMENTS WILL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE SELLER AND THE BUYER.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 77 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

14 TECHNICAL DATA AND SOFTWARE SERVICES

The Seller will make available or will cause the Seller’s designee ANACS to make available to the Buyer the Technical Data and certain additional services under the terms and conditions set forth in this Clause 14.

14.1 Supply

The Technical Data will be supplied in the English language using the aeronautical terminology in common use.

Range, form, type, format, Air Transport Association (“ ATA ”) compliance or non-compliance, quantity and delivery schedule of the Technical Data to be provided under this Agreement are covered in Exhibit F. **

The Buyer will not receive compensation or credits of any kind for return of unused or partially used Technical Data.

14.2 Aircraft Identification for Technical Data

14.2.1

For Technical Data customized to the Aircraft, the Buyer agrees to the allocation of fleet serial numbers (“ FSN(s) ”) in the form of block of numbers selected in the range from 001 to 999.

14.2.2

The sequence will not be interrupted except if two (2) different Propulsion Systems or two (2) different Aircraft models are selected.

14.2.3

The Buyer will indicate to the Seller the FSNs allocated to each Aircraft corresponding to the Aircraft rank in the delivery schedule set forth in Clause 9.1.1 not later than ** prior to the Scheduled Delivery Month for the first Aircraft to be delivered hereunder. The allocation of such FSNs to such Aircraft will not constitute any proprietary, insurable or other interest of the Buyer in any Aircraft prior to its Delivery.

14.3 Integration of Equipment Data

14.3.1 Supplier Equipment

If necessary for the understanding of the affected systems, information relating to Supplier Equipment that is installed on the Aircraft by the Seller, will be introduced **into the first issue, subsequent to the installation of the Supplier equipment of the customized Technical Data supplied to the Buyer, provided Clause 14.3.2.2 is complied with (the “ First Issue ”).


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 78 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

14.3.2 Buyer Furnished Equipment

14.3.2.1

The Seller will introduce BFE data, for equipment installed on the Aircraft by the Seller, into the customized Technical Data at no additional charge to the Buyer for the First Issue, provided such data are provided in accordance with the conditions set forth in Clauses 14.3.2.2 through 14.3.2.5.

14.3.2.2

The Buyer will ** supply the BFE data to the Seller at least ** before the scheduled delivery of the customized Technical Data and the full set of BFE data will be provided to the Seller at the latest ** before the scheduled delivery of the customized Technical Data. The BFE data supplied to the Buyer by the Seller will be in English.

14.3.2.3

The Buyer will use reasonable efforts to supply the BFE Data to the Seller, in English and in a format compliant with the applicable ATA specification and all applicable revisions.

14.3.2.4

The Buyer and the Seller will agree on the requirements for the provision to the Seller of BFE data for “on-aircraft maintenance.” These requirements include but are not limited to time frame, media and format, to facilitate the efficient, expedited and economic integration of BFE data into Technical Data.

14.3.2.5		The BFE data will be delivered in digital format and/or in Portable Document Format, as agreed between the Buyer and the Seller.

14.3.2.6		All costs related to the delivery to the Seller of BFE data will be borne by the Buyer.

14.3.2.7

Clause 14.3.2 will apply to the BFE data provided by the Seller under the terms of Clause 18.1.3.

14.4 Delivery

14.4.1 The Technical Data are delivered on-line and/or off-line, as set forth in Exhibit F.

14.4.2

For Technical Data delivered off-line, the Technical Data and corresponding revisions will be sent to one address only. The Buyer will specify such address.

14.4.3

Packing and shipment of the Technical Data and their revisions will be carried out by the quickest transportation methods. Shipment will be Delivery-Duty Unpaid (FCA) as defined in Incoterms 2000 published by the International Chamber of


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 79 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

Commerce, Toulouse, France, FCA Hamburg, Germany, and/or FCA Ashburn, VA, USA.

14.4.4

The delivery schedule of the First Issue will be phased as mutually agreed to correspond with Aircraft deliveries. The Buyer agrees to provide ** notice when requesting a change to the delivery schedule.

14.4.5

The Buyer will be responsible for coordinating with and satisfying the requirements of the FAA for Technical Data. ** FCA Toulouse, France, FCA Hamburg, Germany, and/or FCA Ashburn, VA, USA.

14.4.6 **

14.5 Revision Service

Unless otherwise specifically stated, revision service will be provided on a free-of-charge basis for a period of ** after Delivery of the last Aircraft (the “Revision Service Period”). Thereafter revision service will be provided at the standard conditions set forth in the then current Seller Customer Services Catalog.

14.6 Service Bulletins Incorporation

During the period of revision service and upon the Buyer’s request for incorporation, which will be made within ** after issuance of a Service Bulletin, Seller’s Service Bulletin information will be incorporated into the Technical Data for the Aircraft after formal notification by the Buyer of its intention to accomplish a Service Bulletin. The split effectivity for a Service Bulletin will remain in the Technical Data until notification from the Buyer that accomplishment has been completed on all the applicable Aircraft, except that for the Flight Manual, Configuration Deviation List, Weight and Balance Manual and the MMEL only the pre- or post-Service Bulletin status will be shown.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 80 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

14.7 Future Developments

The Seller will continuously monitor technological developments and apply them to data and document production and methods of transmission where beneficial and economical. The Buyer agrees to give reasonable consideration to any new development proposed by the Seller for implementation.

14.8 Technical Data Familiarization

Upon request by the Buyer, the Seller will provide a ** Technical Data familiarization training at the Seller’s or at the facilities of one of the Buyer. If such familiarization is conducted at the Buyer’s facilities, the Buyer will **.

14.9 Customer Originated Changes

14.9.1

Data on Customer Originated Changes may be incorporated into the following Technical Data when customized to the Buyer’s

	–		Aircraft Maintenance Manual

	–		Illustrated Parts Catalog

	–		Trouble Shooting Manual

	–		Aircraft Wiring Manual

	–		Aircraft Schematics Manual

	–		Aircraft Wiring Lists

	–		Flight Crew Operating Manual

	–		Quick Reference Handbook

14.9.2

COC data will be developed by the Buyer according to the “Customer Guide for Customer Originated Changes” issued by the Seller. The Buyer will ensure that any such COC data is in compliance with the requirements of the FAA.

COC data will be incorporated by the Seller into all affected customized Technical Data unless the Buyer specifies in writing the documents into which the Buyer desires the COC to be incorporated. Following incorporation of the COC into the customized Technical Data, the relevant Technical Data will show only the aircraft configuration that reflects the COC data and not the configuration before such COC data are incorporated.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 81 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL


14.9.3.	(i)	The Buyer hereby acknowledges and accepts that the incorporation of any COC data into the Technical Data issued by the Seller will be at the Buyer’s sole risk, that the Seller will have no obligation to check the COC data for accuracy or validity, and that the Seller will have no liability whatsoever with respect to (a) the contents of any COC data (including omissions or inaccuracies therein) (b) any effect that the incorporation of such COC data may have on the Technical Data or (c) any costs of any nature that the COC data may add to subsequent Service Bulletins or modifications.

	(ii)	THE SELLER HEREBY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OR LIABILITIES, EXPRESSED OR IMPLIED, ORAL OR WRITTEN, ARISING BY LAW, COURSE OF DEALING OR OTHERWISE, AND WITHOUT LIMITATION ALL WARRANTIES AS TO QUALITY, OPERATION, MERCHANTABILITY, FITNESS FOR ANY INTENDED PURPOSE, AND ALL OTHER CHARACTERISTICS WHATSOEVER, INCLUDING ANY OMISSIONS OR INACCURACIES THEREIN, OF ANY COC DATA INCORPORATED INTO THE TECHNICAL DATA ISSUED BY THE SELLER.

	(iii)	The Buyer will indemnify and hold the Seller harmless from and against any losses (including reasonable attorneys’ fees) arising from claims by any third party for injury, loss or damage incurred directly or indirectly as a result of the incorporation of any COC data into the Technical Data issued by the Seller.

	(iv)	If the Buyer sells, leases or otherwise transfers any Aircraft to which the COC data apply:

	(a)		the Buyer will remain fully liable for the COC data and any and all effects of their incorporation, as set forth in this Clause 14.9;

	(b)		the Seller may disclose the COC data to the subsequent owner(s) or operator(s) of the transferred Aircraft;

	(c)		it will be the sole responsibility of the Buyer to notify, or cause notification to be made to, the subsequent owner(s) or operator(s) of the existence of the such COC data in the Technical Data applicable to the corresponding Aircraft.

The Seller hereby disclaims any and all liabilities whatsoever for the COC data in the event of transfer, sale or lease of any Aircraft to which COC data apply.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 82 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

14.9.4

The incorporation of any COC will be performed under the conditions specified in the Seller’s then current Customer Services Catalog.

14.10 Software Products

Software Products are available to the Buyer exclusively from ANACS and may be licensed under the General Terms and Conditions of Licensing set forth in Exhibit H.

14.10.1 Performance Engineer’s Programs

	(i)		In addition to the standard operational manuals, the Seller will provide to the Buyer software components and databases composing the Performance Engineer’s Programs (“ PEP " ) for the Aircraft.

	(ii)		The license to use the PEP will be granted ** for as long as the revisions of the PEP are free of charge in accordance with Clause 14.5. At the end of such period, license fees may be charged and yearly revision service for the PEP will be provided to the Buyer at the standard commercial conditions set forth in the then current ANACS Customer Services Catalog.

14.10.2 AirN@v and/or ADOC N@vigator Based Consultation

The affected Technical Data covered under an Advanced Consultation Tool based on ADOC N@vigator browser are:

	-		Engineering Drawings Parts Usage

	-		Engineering Drawings Parts List

The Technical Data listed below will be provided on DVD and include integrated software (the “ AirN@v Services ”):

AirN@v Planning

AirN@v Repair

AirN@v Workshop

AirN@v Associated Data

AirN@v Engineering

AirN@v Maintenance:

The applicable Technical Data pursuant to each of the above AirN@v Services is listed in Exhibit F.


**		Requested Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 83 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

The licensing conditions for the use of AirN@v Services will be as set forth in Exhibit H. The license to use AirN@v and/or ADOC N@vigator based products for the Aircraft will be granted free of charge for as long as the revisions of such Technical Data are free of charge in accordance with Clause 14.5. At the end of such period, license fees may be charged and the yearly revision service for AirN@v and/or ADOC N@vigator will be provided to the Buyer at the standard commercial conditions set forth in the then current ANACS Customer Services Catalog.

14.10.3 AirbusWorld Customer Portal

14.10.3.1

The Buyer will be entitled to obtain access to a wide range of information and services, including Technical Data, available in the secure zone of the Seller’s Customer Portal AirbusWorld (“ AirbusWorld ”). Access will be free of charge for as long as the Buyer operates the Aircraft.

Access to the secure zone of AirbusWorld (the “ Secure Zone ”) is reserved to Airbus owners and operators and is subject to the prior signature by the Buyer of the “General Terms and Conditions of Access to and Use of Airbus Secure Area of Customer Portal”.

A description of the basic services available to the Buyer in the Secure Zone is set forth in the ANACS Customer Services Catalog.

14.10.3.2 On-Line Technical Data

	(i)		The Technical Data specified in Exhibit F as being provided on-line will be made available to the Buyer through the Secure Zone at no cost as long as revision service for such Technical Data is free of charge in accordance with Clause 14.5.

	(ii)		The list of the Technical Data available on-line may be amended from time to time.

			For any Technical Data that are or become available on-line, the Seller will notify the Buyer thereof and the Seller reserves the right to discontinue other formats for such Technical Data. On-line and old formats of such Technical Data are to be available in parallel for a period of twelve (12) months or two (2) revision cycles, whichever is shorter.

14.10.3.3

Access to the Secure Zone will be granted free of charge for a reasonable number, to be agreed by the parties, of the Buyer’s users (including one Buyer administrator) for the Technical Data related to the Aircraft that will be operated by the Buyer.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 84 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

14.11 Warranties

14.11.1

The Seller warrants that the Technical Data (exclusive of COC) are prepared in accordance with the state of art at the date of their conception. Should any Technical Data prepared by the Seller contain any nonconformity or defect, the sole and exclusive liability of the Seller will be to take all reasonable and proper steps, at its option, to correct or replace such Technical Data.

14.11.2

THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND/OR ITS SUPPLIERS AND REMEDIES OF THE BUYER SET FORTH IN THIS CLAUSE 14 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND/OR ITS SUPPLIERS AND RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, ITS SUPPLIERS AND/OR THEIR INSURERS, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT IN ANY TECHNICAL DATA DELIVERED UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO:

	(A)		ANY WARRANTY AGAINST HIDDEN DEFECTS

	(B)		ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;

	(C)		ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

	(D)		ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY, WHETHER CONTRACTUAL OR DELICTUAL AND WHETHER OR NOT ARISING FROM THE SELLER’S AND/OR ITS SUPPLIERS’ NEGLIGENCE, ACTUAL OR IMPUTED; AND

	(E)		ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OR DAMAGE TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART THEREOF OR ANY TECHNICAL DATA DELIVERED HEREUNDER.

THE SELLER AND/OR ITS SUPPLIERS WILL HAVE NO OBLIGATION OR LIABILITY, HOWSOEVER ARISING, FOR LOSS OF USE, REVENUE OR PROFIT OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT IN ANY TECHNICAL DATA DELIVERED UNDER THIS AGREEMENT.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		PA — 85 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

FOR THE PURPOSES OF THIS CLAUSE 14.11.2, “THE SELLER” WILL INCLUDE THE SELLER, ITS AFFILIATES AND ANY OF THEIR RESPECTIVE INSURERS.

14.12 Proprietary Rights

All proprietary rights, including but not limited to patent, design and copyrights, relating to Technical Data will remain with the Seller and/or its Affiliates as the case may be. All Technical Data are supplied for the sole use by the Buyer in maintaining and operating the Aircraft and the Buyer undertakes not to modify, copy the contents of, or use the Technical Data to manufacture any parts or components of the Aircraft, save as explicitly permitted herein or in the Technical Data, or as otherwise expressly authorized by the Seller. These proprietary rights will also apply to any translation of Technical Data into a language or languages or medium or media that may have been performed or caused to be performed by the Buyer.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		PA — 82 of 123 PRIVILEGED AND CONFIDENTIAL

15 -		SELLER REPRESENTATIVES

15.1		Seller Representatives

		The Seller will provide or cause to be provided ** to the Buyer the services described in this Clause 15, at the Buyer’s main base or at other locations to be mutually agreed.

15.2		Resident Customer Support Representatives

15.2.1		The Seller will cause ANACS to provide representatives to act in an advisory capacity (“ Resident Customer Support Representative ”) at the Buyer’s main base or at such other locations as the Buyer and Seller may agree.

	(i)		The Seller will provide dedicated Resident Customer Support Representative for a period beginning at .

	(ii)		The Seller may provide additional man-months of Seller’s Representatives, as may be mutually agreed.

15.2.2		The Seller will provide to the Buyer an annual written account of the consumed months and any remaining balance of months.

15.2.3		Should the Buyer request additional services that exceed the amounts set forth in Clause 15.2.1(ii), the Seller may provide additional service subject to the terms and conditions agreed by the Buyer and the Seller at the time of such request.

15.2.4		The Seller will cause similar services to be provided by the representatives of the Propulsion System manufacturer and by representatives of the Suppliers when necessary and applicable.

15.3		Customer Support Director

		The Seller will cause ANACS to assign the services of Customer Support Director based in Herndon, Virginia, to liaise between the Seller and the Buyer on product support matters after signature of this Agreement for as long as .


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 87 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

15.4		Buyer’s Support

15.4.1		From the date of arrival of the first Resident Customer Support Representative and for the duration of the assignment, the Buyer will provide, , suitable office space, office equipment and facilities for the sole use of the Resident Customer Support Representative in or conveniently near the maintenance facilities of the Buyer.

15.4.2		**

	(i)		**

	(ii)		when said Resident Customer Support Representative is assigned away from the locations mentioned above in Clause 15.2.1 at the Buyer’s request, transportation on similar basis between the said locations and the place of assignment.

15.4.3		The parties will give each other all necessary reasonable assistance with general administrative functions specific to their respective countries and procurement of the documents necessary to live and work there.

15.5		Temporary Assignment and Withdrawal of Resident Customer Support Representative

		The Seller will have the right upon written notice to and communication with the Buyer to transfer or recall any Resident Customer Support Representative on a temporary or permanent basis if, in the Seller’s opinion, conditions are dangerous to the Resident Customer Support Representative’s safety or health or prevent the fulfillment of such Resident Customer Support Representative’s contractual tasks. The Buyer will ** for the man-days during which any Resident Customer Support Representative is absent from the Buyer’s facility pursuant to this Clause 15.

15.6		Representatives’ Status

		In providing the above technical service, the Seller’s employees, including all Resident Customer Support Representative(s) and the Customer Support Director, are deemed to be acting in an advisory capacity only and at no time will they be deemed to be acting, either directly or indirectly, as the employees or agents of the Buyer.


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 88 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

16		TRAINING AND TRAINING AIDS

16.1		General

		This Clause 16 covers the terms and conditions for the supply of training and training aids for the Buyer’s personnel to support the Aircraft operation.

16.2		Scope

16.2.1		The range and quantity of training and training aids to be provided free of charge under this Agreement are covered in Appendix A to this Clause 16. The Seller will arrange availability of such training and training aids in relation to the delivery schedule for the Aircraft set forth in Clause 9.1.1.

16.2.2		The Maintenance Training and Flight Training courses described in Appendix A to this Clause 16 will be provided **

16.2.3		**, no compensation or credit of any sort will be provided for unused or partially used training or training aids offered pursuant to this Clause 16.

16.3		Training Organization / Location

16.3.1		The Seller will provide the training at the Airbus Training Center in Miami, Florida (the “ Seller’s Training Center ” ), and/or at its affiliated training center in Blagnac, France (the “ Affiliated Training Center ” ).

16.3.2		If unavailability of facilities or scheduling difficulties make training by the Seller impractical at the training centers listed in Clause 16.3.1, the Seller will ensure that the Buyer is provided such training at locations other than those named in Clause 16.3.1.

16.3.3		Upon the Buyer’s request, the Seller may also provide certain training at one of the Buyer’s bases, if and when practicable for the Seller, under terms and conditions to be mutually agreed upon. In this event, all additional charges listed in Clause 16.6.2 will be borne by the Buyer.

16.4		Training Courses

16.4.1		Training courses, as well as the minimum and maximum numbers of trainees per course provided for the Buyer’s personnel, are defined in the applicable training course catalog (the “ Training Course Catalog ”) and will be scheduled as mutually agreed.

16.4.2		The following terms will apply when training is performed by the Seller:


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 89 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(i)		Training courses will be the Seller’s standard courses as described in the Seller’s applicable Training Course Catalog valid at the time of execution of the course. The Seller will be responsible for all training course syllabi, training aids and training equipment necessary for the organization of the training courses.

	(ii)		The training curricula and the training equipment may not be fully customized. However, they may be modified to include the most significant aspects of the Specification as known, at the latest, ** prior to the date of the first training course planned for the Buyer and will be configured in order to obtain the relevant Aviation Authority’s approval and to support the Seller’s training programs.

	(iii)		Training data and documentation necessary for training detailed in Appendix A to this Clause 16 will **. Training data and documentation will be marked “FOR TRAINING ONLY” and as such will be supplied for the sole and express purpose of training.

	(iv)		Upon the request of the Buyer **, the Seller will collect and pack for consolidated shipment to the facility of the Buyer, all training data and documentation of the Buyer’s trainees attending training at the Airbus Training Center in Miami, Florida or Blagnac, France, as applicable. This training data and documentation will be delivered FCA Miami International Airport. The Buyer will designate in writing one Buyer to receive title to such training data and documentation and title to and risk of loss of the training data and documentation will pass to the Buyer upon delivery.

16.4.3		If the Buyer decides to cancel or reschedule a training course, a minimum advance notice of ** will be required. Any later cancellation or change from the Buyer, when courses cannot be allocated to other customers, will be deducted from the training allowances defined herein or will be charged to the Buyer, as applicable.

16.4.4		The Seller will deliver, or will cause any third party training provider to deliver, to the trainees a certificate of completion at the end of any such training course. No such certificate will represent authority or qualification by any Aviation Authority but may be presented to such officials in order to obtain relevant formal qualification.

16.4.5		**

16.5		Prerequisites


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 90 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

16.5.1		Training will be conducted in English and all training aids are written in English using common aeronautical terminology. Trainees must have the prerequisite experience set forth in Appendix B to this Clause 16.

		The Seller’s training courses are “Transition Training Courses” and not “Ab Initio Training Courses.”

		The Buyer will be responsible for the selection of the trainees and for any liability with respect to the entry knowledge level of the trainees.

16.5.2		The Buyer will provide the Seller with an attendance list of the trainees for each course with the validated qualification of each trainee. The Seller reserves the right to verify the trainees’ proficiency and previous professional experience. The Seller will in no case warrant or otherwise be held liable for any trainee’s performance as a result of any training services provided.

16.5.3		The Seller will provide to the Buyer an Airbus Pre-Training Survey, and/or the “Maintenance Training Survey,” as applicable, to obtain the trainee’s associated background. The Buyer will complete such survey(s) and return them to the Seller at least ** prior to the start of the training course.

16.5.4		If the Buyer makes a change to any trainee attendance list within the one (1) month period stated in Clause 16.5.3, the Buyer will immediately inform the Seller thereof and send the Seller an updated Airbus Pre-Training Survey and/or Maintenance Training Survey reflecting requested information for the replacement trainee(s).

16.6		Logistics

16.6.1		Trainees

	(i)		When training is done at the Airbus Training Center in Miami, Florida, the Seller will provide for the duration of the training course on the basis of

	(ii)		When training is done at the Airbus Training Center in Blagnac, France, the Seller will **

	(iii)		**.

16.6.2

Training at External Location


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 91 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(i)		Seller’s Instructors

			If at the Buyer’s request, training is provided by the Seller’s instructors at any location other than the Seller’s training centers, **.

	(ii)		Living Expenses for the Seller’s Instructors

			Such expenses, covering the entire period from day of secondment to day of return to the Seller’s base, will include but will not be limited to lodging, food and local transportation to and from the place of lodging and the training course location. **.

	(iii)		Air Travel

			**.


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 92 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(iv)		Training Material

			The Buyer will reimburse the Seller for the reasonable cost of shipping the training material needed to conduct such courses.

	(v)		Buyer’s Indemnity

			The Buyer will be solely liable for any and all cancellation or delay in the performance of the training outside of the Seller’s training centers that is associated with the transportation provided under Clause 16.6.2(iii) **.

	(vi)		Training Equipment Availability

			Training equipment necessary for course performance at any course location other than the Seller’s training centers or the facilities of the training provider selected by the Seller will be provided by the Buyer in accordance with the Seller’s specifications.

16.7		Training Aids for the Buyer’s Training Organization

16.7.1		The Seller will provide to the Buyer Airbus computer based training (“Airbus CBT”), training aids, as used in the Seller’s Training Centers and the Virtual Aircraft (Walk Around and Component Location), free of charge as set forth in Appendix A to this Clause 16.

		The Airbus CBT and training aids supplied to the Buyer will be similar to those used at the Airbus Training Centers for training. The Seller has no obligation to revise the Airbus CBT. The Airbus CBT in use at the Seller’s Training Center may be revised on a regular basis, and such revisions, if any, will be provided to the Buyer until the expiration of the period when training courses provided under this Clause 16 are performed for the Buyer, or up to three (3) years after delivery of the Airbus CBT or Virtual Aircraft to the Buyer, whichever occurs first.


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 93 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

16.7.2

Delivery

	(i)		The Seller will deliver to the Buyer the Airbus CBT and training aids, at a date to be mutually agreed during the Training Conference, but no later than ** before the Delivery Date of the first Aircraft.

	(ii)		Those items supplied to the Buyer pursuant to Clause 16.10.1 will be delivered FCA Toulouse, France, and/or FCA Hamburg, Germany. Title to and risk of loss of said items will pass to the Buyer pursuant to Clause 16.4.2(iv) upon delivery.

16.7.3

Installation of Airbus CBT System

	(i)		Before the initial delivery of the Airbus CBT, the Seller will provide an “Airbus CBT Administrator Course” to up to ** trainees of the Buyer, at the facilities of the Buyer. To conduct the course, the workstations and/or servers, as applicable, will be ready for use and will comply with the latest “Airbus CBT Workstation Technical Specification” or “Airbus CBT Server Technical Specification”, as applicable.

	(ii)		The Buyer will provide any and all the necessary hardware on which the Airbus CBT will be installed and Seller will not be responsible for any incompatibility of such hardware with the Airbus CBT.

	(iii)		The Airbus CBT will be installed by the Buyer’s personnel who have completed the Airbus CBT training, and the Seller will be held harmless from any damage to person and/or to property caused by or in any way connected with the handling and/or installation of the Airbus CBT by the Buyer’s personnel.

	(iv)		In accordance with Clause 16.6.2, **.

16.7.4

License

(i)

The Seller will grant the Buyer a license to use the Airbus CBT and the Virtual Aircraft that will incorporate Exhibit H, “ Terms and Conditions for License for Use of Software .”


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 94 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

(ii)

Supply of additional sets of Virtual Aircraft. Software and courseware supports, as well as any extension to the license for such courseware, will be subject to terms and conditions to be mutually agreed.

16.7.5		The Seller will not be responsible for, and hereby disclaims any and all liabilities resulting from or in connection with the use by the Buyer of the Airbus CBT, the Virtual Aircraft and any other training aids at the Buyer’s facilities.

16.8		Proprietary Rights

		The Seller’s training data and documentation, Airbus CBT and training aids are proprietary to the Seller and its suppliers. All such training materials are supplied for the sole use by the Buyer in training its personnel to maintain and operate the Aircraft. These proprietary rights will also apply to any translation of such Material into a language or languages or medium or media that may have been performed or caused to be performed by the Buyer.


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 95 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

Appendix A to Clause 16

1		TRAINING AIDS FOR BUYER’S TRAINING ORGANIZATION

1.1		Delivery

		The Seller will provide to the Buyer free of charge:

	–		Airbus CBT (flight and/or maintenance) related to the Aircraft type(s) as covered by this Agreement (including of CBT Courseware and of CBT Software for flight and of CBT Courseware and ** of CBT Software for maintenance, as applicable). The detailed description of the Airbus CBT will be provided to the Buyer;

	–		** Virtual Aircraft (Walk around and Component Location) related to the Aircraft type(s) as covered in this Agreement;

	–		** set of training documentation on CD-ROM; and

	–		** CD-ROM of cockpit panels for training.

1.2		Revision Service

		The Airbus CBT and Virtual Aircraft in use at the Seller’s Training Center are revised on a regular basis and such revision will be provided to the Buyer during the period when training courses provided under this Clause 16 are performed for the Buyer or up to ** after initial delivery of the Airbus CBT or the Virtual Aircraft to the Buyer under this Agreement, whichever occurs first.


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 96 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX B TO CLAUSE 16

Appendix B to Clause 16
MINIMUM RECOMMENDED QUALIFICATION
IN RELATION TO TRAINING REQUIREMENTS
(Standard Transition Courses)

The prerequisites listed below are the minimum recommended requirements specified for Airbus training. If the appropriate Aviation Authority or the specific airline policy of the trainee demands greater or additional requirements, such requirements will be prerequisites.

CAPTAIN prerequisites

	•		Previously qualified on JAR/FAR/CS 25 aircraft and commercial operations

	•		Valid and current Airlines Transport License (ATPLY)

	•		Previous command experience

	•		Fluency in English

	•		Jet experience

	•		** minimum flying experience as pilot

	•		** experience on FAR/JAR 25/CS 25 aircraft

	•		** experience as airline, corporate pilot or military transport pilot

	•		Must have flown transport type aircraft, as flying pilot, within the last 12 months.

FIRST OFFICER prerequisites

	•		Previously qualified on JAR/FAR/CS 25 aircraft and commercial operations

	•		Aircraft and commercial operations valid and current commercial pilot license with instrument rating

	•		Fluency in English

	•		Jet experience

	•		** minimum flying experience as pilot of fixed wing aircraft

	•		** experience on FAR/JAR/CS 25 aircraft

	•		** flying experience as airline pilot or a corporate pilot or military transport pilot

For both CAPTAIN and FIRST OFFICER, if one or several of the above criteria are not met, the trainee must follow

	(i)		an adapted course or

	(ii)		an entry level training program before entering the regular or the adapted course.

Such course(s), if required, will be at the Buyer’s expense.


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 97 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX B TO CLAUSE 16

FIRST TYPE RATING COURSE

This course is designed for ab initio pilots who do not hold an aircraft type rating on their pilot licenses

PILOT prerequisites

	•		Valid and current commercial pilot license

	•		Valid and current instrument rating on multi engine aircraft

	•		Airlines Transport License (ATPLY) written examination

	•		Fluency in English

	•		Flight experience:

	•		** as pilot

	•		** as pilot in command

	•		on multi engine aircraft (up to can be completed in a simulator)

In addition to the above conditions and in accordance with the JAR Flight Crew Licensing and the Airbus Training Policy, a pilot applying for a first type rating must have followed either an approved JAR Multi Crew Cooperation (“ MCC ” ) program or regulatory equivalent or the Airbus Entry Level Training program (combined MCC and jet familiarization course). Such course, if required, will be at the Buyer’s expense.

CQ ADDITIONAL prerequisites

In addition to the prerequisites set forth for the Flight Crew Standard Transition Course, both CAPTAIN and FIRST OFFICER must:

	•		be qualified and current on the base aircraft type

	•		have minimum and minimum of operations on the base aircraft type.

TRI COURSE ADDITIONAL prerequisites

In addition to the prerequisites set forth for the Flight Crew Standard Transition Course, it is the responsibility of the Buyer to:

–

select instructor candidate(s) with airmanship and behavior corresponding to the role and responsibility of an airline instructor, and


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 98 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX B TO CLAUSE 16

–

designate instructor candidate(s) that have met the Seller prerequisite that corresponds to the JAR requirements (ref JAR – FCL 1 – Requirements/ Subparts H – Instructor rating (Aeroplane) C.

MAINTENANCE PERSONNEL prerequisites

	(i)		For all maintenance courses:

			Fluency in English Experience on first or second generation jet transport category aircraft

	(ii)		Additional prerequisites for Aircraft Rigging Engine Run-Up and Maintenance Initial Operating Course:

Qualified as line or line and base mechanic on the relevant aircraft type (for Maintenance Initial Operating Experience Course).

	(iii)		Additional prerequisites — Maintenance Initial Operating Experience

			Be currently qualified as line or base mechanic on the base Aircraft

	(iv)		Additional prerequisites

MAINTENANCE TRAINING DIFFERENCE COURSE

Be current and operating on the base aircraft.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 99 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

17		SUPPLIER PRODUCT SUPPORT

17.1		Equipment Supplier Product Support Agreements

17.1.1		The Seller will, **, transfer to the Buyer the Supplier Product Support Agreements transferable to the Buyer from Suppliers of equipment listed as “Seller Furnished Equipment” in the Specification on Delivery. These agreements are based on the “World Airlines and Suppliers Guide” and include Supplier commitments contained in the Supplier Product Support Agreements, which include the following:

	(i)		Technical data and manuals required to operate, maintain, service and overhaul the Supplier items will (a) be prepared in accordance with the provisions of the applicable ATA Specification in accordance with Clause 14, (b) include revision service, and (c) be published in the English language. The Seller will make reasonable efforts to ensure that software data, supplied in the form of an appendix to the Component Maintenance Manual, be provided in compliance with the applicable ATA Specification to protect Suppliers’ proprietary interests,

	(ii)		Warranties and guarantees, including Suppliers’ standard warranties, and in the case of Suppliers of landing gear, service life policies for selected landing gear structures,

	(iii)		Training to ensure efficient operation, maintenance and overhaul of the Suppliers’ items for the Buyer’s instructors, shop and line service personnel.

	(iv)		Spares data in compliance with the applicable ATA Specification, initial provisioning recommendations, spares and logistics service, including routine and emergency deliveries, and

	(v)		Technical service to assist the Buyer with maintenance, overhaul, repair, operation and inspection of Supplier items as well as required tooling and spares provisioning.

17.2		Supplier Compliance

		The Seller will monitor Supplier compliance with support commitments defined in the Supplier Product Support Agreements and will take action together with the Buyer, if necessary.

		**


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 100 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

17.3		Supplier Part Repair Stations

		The Seller has developed with the Suppliers a comprehensive network of repair stations in the United States of America and Canada for those Supplier Parts originating from outside these countries. **


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 101 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

18		BUYER FURNISHED EQUIPMENT

18.1		Administration

18.1.1		Without additional charge and in accordance with the Specification, the Seller will provide for the installation of the Buyer Furnished Equipment, provided that the BFE is referred to in the Airbus BFE Catalog of Approved Suppliers by Products valid at the time the BFE is ordered.

		The Seller will advise the Buyer of the dates by and location to which, in the planned release of engineering for the Aircraft, the Seller requires a written detailed engineering description. This description will include the dimensions and weight of BFE, the information related to its certification and information necessary for the installation and operation thereof. The Buyer will furnish such detailed description and information by the dates specified. Thereafter, no information, dimensions or weights will be revised unless authorized by an SCN.

		The Seller will also provide the Buyer in due time with a schedule of dates and shipping addresses for delivery of BFE and (when requested by the Seller) additional spare BFE in order permit installation of the BFE in the Aircraft and delivery of the Aircraft in accordance with the delivery schedule. The Buyer will provide the BFE by such dates in a serviceable condition, to allow performance of any assembly, test, or acceptance process in accordance with the Seller’s industrial schedule.

		The Buyer will also provide, when requested by the Seller, at Airbus France S.A.S. works and/or at Airbus Deutschland GmbH works, as applicable and needed, adequate field service, including support from BFE suppliers to act in a technical advisory capacity to the Seller in the installation, calibration and possible repair of any BFE.

18.1.2		The BFE will be imported into France or into Germany by the Buyer under a suspensive customs system (“ Régime de l’entrepôt industriel pour fabrication coordonnée ” or “ Zollverschluss ”) without application of any French or German tax or customs duty, and will be Delivered Duty Unpaid (DDU) (as defined in Incoterms 2000: ICC Official Rules for the Interpretation of Trade Terms, published by the International Chamber of Commerce), to

Airbus France S.A.S.
316 Route de Bayonne
31300 Toulouse, France
or


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 102 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

Airbus Deutchland GmbH
Division Hamburger Flugzeugbau
Kreetslag 10
21129 Hamburg
Federal Republic of Germany

		as provided in Clause 18.1.1.

18.1.3		If the Buyer requests the Seller to supply directly certain items that are considered BFE according to the Specification, and if such request is notified to the Seller in due time in order not to affect the Delivery Date of the Aircraft, the Seller may agree to order such items subject to the execution of an SCN reflecting the effect on price, escalation adjustment, and any other customary conditions of the Agreement. In such a case the Seller will be entitled to the payment of a handling charge not to exceed ** and will bear no liability in respect of delay and product support commitments for such items.

18.2		Requirements

		The Buyer is responsible for assuring and warranting, at its expense, that BFE will (i) be manufactured by a qualified supplier in accordance with the provisions of Clause 18.1.1, (ii) meet the requirements of the applicable Specification, (iii) comply with applicable requirements incorporated by reference to the Type Certificate and listed in the Type Certificate Data Sheet, and (iv) be approved by the applicable Aviation Authority delivering the Export Certificate of Airworthiness and by the FAA for installation and use on the Aircraft at the time of Delivery of such Aircraft. The Seller will be entitled to refuse any item of BFE that it considers incompatible with the Specification, the engineering description mentioned above in Clause 18.1.1 or the certification requirements.

18.3		Buyer’s Obligation and Seller’s Remedies

18.3.1		Any delay or failure in

	(i)		furnishing the BFE in serviceable condition at the requested delivery date,

	(ii)		complying with the warranty in Clause 18.2 or in providing the descriptive information or service representatives mentioned in Clause 18.1.1, or

	(iii)		in obtaining any required approval for such equipment under the regulations of the above mentioned Aviation Authorities


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 103 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		may delay the performance of any act to be performed by the Seller, and cause the Final Contract Price of the Aircraft to be adjusted in accordance with the updated delivery schedule, including, in particular, the costs the Seller incurs that are attributable to the delay or failure described above, such as storage, taxes, insurance and costs of out-of sequence installation.

18.3.2		In addition to the consequences outlined in Clause 18.3.1, in the event of a delay or failure described in Clause 18.3.1,

	(i)		the Seller may select, purchase and install equipment similar to the BFE at issue, in which event the Final Contract Price of the affected Aircraft will also be increased by the purchase price of such equipment, plus reasonable costs and expenses incurred by the Seller for handling charges, transportation, insurance, packaging and, if required and not already provided for in the price of the Aircraft, for adjustment and calibration; or

	(ii)		if the BFE is delayed more than beyond, or unapproved within of the date specified in Clause 18.1.1, then the Seller may deliver or the Buyer may elect to have the Aircraft delivered without the installation of such equipment, notwithstanding the terms of Clause 7.2 insofar as it may otherwise have applied, whereupon the Seller will be relieved of all obligations to install such equipment.

18.4		Title and Risk of Loss

		Title to (subject to Clause 18.5(iv)) and risk of loss of BFE will at all times remain with the Buyer that is the owner thereof, except that risk of loss (limited to cost of replacement of said BFE and excluding in particular loss of use) will be with the Seller for as long as the BFE is in the care, custody and control of the Seller.

18.5		Disposition of BFE Following Termination

		If a termination of this Agreement pursuant to the provisions of Clause 21 occurs with respect to an Aircraft in which all or any part of the BFE has been installed prior to the date of such termination, the Seller will be entitled, but not required, to remove all items of BFE that can be removed without causing damage to the Aircraft or rendering any system in the Aircraft unusable and to undertake commercially reasonable efforts to facilitate the sale of such items of BFE to other customers, retaining and applying the proceeds of such sales to reduce Seller’s damages resulting from the termination. In addition, the following terms will apply in the case of such a termination:

(i)


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 104 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

			Buyer will reimburse the Seller for all such costs within ** of receiving documentation of such costs from the Seller.

	(ii)		The Seller will notify the Buyer as to those items of BFE not sold by the Seller pursuant to the first paragraph of this Clause 18.5, and, at the Seller’s request, the Buyer will remove such items from the Seller’s facility within thirty (30) days of the date of such notice. The Buyer will have no claim against the Seller for damage or destruction of any item of BFE removed from the Aircraft and not removed from Seller’s facility within such period.

	(iii)		The Buyer will have no claim against the Seller for damage to or destruction of any item of BFE damaged or destroyed in the process of being deinstalled from the Aircraft, provided that the Seller will use reasonable care in such deinstallation.

	(iv)		The Buyer will grant title to the Seller for any BFE items that cannot be removed from the Aircraft.


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 105 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

19		INDEMNITIES AND INSURANCE

19.1		Seller’s Indemnities

		The Seller will, except in the case of gross negligence or willful misconduct of the Buyer, its directors, officers, agents, and employees, be solely liable for and will indemnify and will hold the Buyer and its respective directors, officers, agents and employees, Affiliates, the Buyer’s representatives, and the respective assignees, directors, officers, agents and employees of each of the foregoing harmless against all losses, liabilities, claims, damages, costs and expenses, including court costs and reasonable attorneys’ fees (“ Losses ”), arising from claims for

	(i)		injuries to, or deaths of, the Seller’s directors, officers, agents or employees, or loss or damage to property of the Seller, or its employees or agents when such losses occur during or are incidental to (a) the exercise by the Buyer of its inspection rights under Clause 6, (b) the Technical Acceptance Process described in Clause 8, (c) the provision of Resident Customer Support Representative support pursuant to Clause 15 or (iv) the provision of training pursuant to Clause 16; and

	(ii)		injuries to or deaths of third parties, or loss of property of third parties, occurring during, or incidental to (a) the exercise by the Buyer of its inspection rights pursuant to Clause 6 or (b) the Technical Acceptance Process described in Clause 8.

19.2		Buyer’s Indemnities

		The Buyer will, except in the case of gross negligence or willful misconduct of the Seller, its directors, officers, agents and employees, be solely liable for and will indemnify and will hold the Seller and its subcontractors and Affiliates, the Seller’s representatives, and the respective assignees, directors, officers, agents and employees of each of the foregoing, harmless against all Losses arising from:

(i)

injuries to or deaths of the Buyer’s directors, officers, agents or employees, or loss or damage to property of the Buyer or to its employees or agents, when such losses occur during or are incidental to (a) the exercise by the Buyer of its inspection rights under Clause 6; (b) the Technical Acceptance Process described in Clause 8, (c) the provision of Resident Customer Support Representative support pursuant to Clause 15, or (d) the provision of training pursuant to Clause 16; and


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 106 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

(ii)

claims for injuries to or deaths of third parties, or loss of property of third parties occurring during or incidental to (a) the provision of Resident Customer Support Representative support under Clause 15 or (b) arise out of the provision of training pursuant to Clause 16 and are not caused by a defect of the type specified in Clause 12.1.1 that is not excluded under Clause 12.1.2.

19.3

Notice and Defense of Claims

	(i)		If any claim is made or suit is brought against a party or entity entitled to indemnification under this Clause 19 (the “ Indemnitee ”) for damages for which liability has been assumed by the other party under this Clause 19, (the “ Indemnitor ”), the Indemnitee will promptly give notice to the Indemnitor and the Indemnitor (unless otherwise requested by the Indemnitee) will assume and conduct the defense, or settlement, of such suit, as the Indemnitor will deem prudent. Notice of the claim or suit will be accompanied by all information pertinent to the matter as is reasonably available to the Indemnitee and will be followed by such cooperation by the Indemnitee as the Indemnitor or its counsel may reasonably request at the expense of the Indemnitor.

	(ii)		If the Indemnitor fails or refuses to assume the defense of any claim or lawsuit notified to it under this Clause 19, the Indemnitee will have the right to proceed with the defense or settlement of the claim or lawsuit as it deems prudent and will have a claim over against the Indemnitor for any judgments, reasonable settlements, costs or expenses, including reasonable attorneys’ fees. Further, in such event, the Indemnitor will be deemed to have waived any objection or defense to the Indemnitee’s claim based on the reasonableness of any settlement.

19.4		Insurance

		For all training periods on aircraft, the Buyer will cause the Seller and its Affiliates, as defined in this Clause 19.4 to be named as additional insured under its aviation legal liability insurance policies, including passenger legal liability, bodily injury liability, products liability (exclusive of manufacturer’s product liability insurance), property damage liability, contractual liability and war risks and allied perils liability, to the extent of the Buyer’s undertaking set forth in Clause 19.2. With respect to the Buyer’s hull all risks and hull war risks insurances and allied perils, the Buyer will cause its hull insurance underwriters to waive all rights of subrogation against the Seller, as defined in this Clause 19.4 to the extent of the Buyer’s undertaking set forth in Clause 19.2.

		Any applicable deductible will be borne by the Buyer. With respect to the above policies, the Buyer will furnish to the Seller, not less than seven (7) Working Days prior to the start of any such training period, certificates of insurance, in English, evidencing the limit of liability cover and period of insurance in a form acceptable to the Seller from


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 107 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

its respective insurance broker(s) certifying that such policies have been endorsed as follows:

	(i)		under the aviation legal liability insurances referred to above, the Buyer’s policies are primary and non-contributory to any insurance maintained by the Seller;

	(ii)		such insurance can only be cancelled or materially altered by the giving of not less than thirty (30) days (but seven (7) days or such lesser period as may be customarily available in respect of war risks and allied perils) and ten (10) days in respect of cancellation for non-payment of premium) prior written notice thereof to the Seller; and

	(iii)		under any such cover, all rights of subrogation against the Seller and its Affiliates have been waived to the extent of the Buyer’s undertaking and specially referring to Clause 19.2 and to this Clause 19.4.

For the purposes of this Clause 19, “the Seller and its Affiliates” includes but is not limited to the Seller, its shareholders, its Affiliates, ANACS, and Hua-Ou Airbus – CASC Aviation Training Center, the assignees of each of the foregoing, and their respective directors, agents and employees and Suppliers.


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 108 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

20 -		ASSIGNMENTS AND TRANSFERS

20.1		Assignments by Buyer

		Except as hereinafter provided, the Buyer may not sell, assign or transfer its rights or obligations under this Agreement to any person without the prior written consent of the Seller.

20.2		Assignments on Sale, Merger or Consolidation

		The Buyer will be entitled to assign its rights under this Agreement at any time due to a merger or consolidation involving the Buyer, provided the Buyer first obtains the written consent of the Seller. The Seller will provide its consent if:

	(i)		the surviving or acquiring entity is organized and existing under the laws of the United States;

	(ii)		the surviving or acquiring entity has executed an assumption agreement, in form and substance reasonably acceptable to the Seller, agreeing to assume all of the Buyer’s obligations under this Agreement;

	(iii)		at the time, and immediately following the consummation, of the merger, consolidation or sale, no event of default exists or will have occurred and be continuing;

	(iv)		there exists with respect to the surviving or acquiring entity no basis for a Termination Event within the meaning of Clause 21; and

	(v)		the surviving or acquiring entity holds an air carrier operating certificate issued by the FAA at the time, and immediately following the consummation, of such sale, merger or consolidation.

20.3		Designations by Seller

		The Seller may at any time by notice to the Buyer designate facilities or personnel of ANACS or any Affiliate of the Seller at which or by whom the services to be performed under this Agreement will be performed. The Seller may also designate any of its Affiliates as the party responsible on behalf of the Seller for providing to the Buyer all or any of the services to be performed under this Agreement. Notwithstanding such designation, the Seller will remain ultimately responsible for fulfillment of all obligations undertaken by the Seller in this Agreement.


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 109 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

20.4		**

20.5		**

21.		TERMINATION

21.1		Termination Events

		Each of the following will constitute a “ Termination Event”:

	(1)		The Buyer commences in any jurisdiction any case, proceeding or other action with respect to the Buyer or its properties relating to bankruptcy, insolvency, reorganization, winding-up, liquidation, dissolution or other relief from, or with respect to, or readjustment of, its debts or obligations.

	(2)		An action is commenced in any jurisdiction seeking the appointment of a receiver, trustee, custodian or other similar official for the Buyer or for all or any substantial part of its assets, and such action remains unstayed, undismissed or undischarged for **, or the Buyer makes a general assignment for the benefit of its creditors.

	(3)		An action is commenced in any jurisdiction against the Buyer seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets, and such action remains unstayed, undismissed or undischarged for **.

	(4)		The Buyer becomes the object, in any jurisdiction, of a case, proceeding or action similar or analogous to any of the events mentioned in Clause 21.1(1), (2) or (3).

	(5)		The Buyer is generally not, or is unable to, or admits in writing its inability to, pay its debts as they become due.

	(6)		The Buyer commences negotiations with significant creditors, existing or potential, with the intention of restructuring all or substantially all of its outstanding obligations or in preparation for a bankruptcy filing under the U.S. Bankruptcy Code.

	(7)		The Buyer or any of its respective Affiliates fails to make (i) payment of all or part of the Final Contract Price of any Aircraft required to be made under this Agreement on the due date therefore; when such payment is due, (ii) any Predelivery Payment required to be made under this Agreement within ** after the date on which such amount is due (iii) any other payment required to be made


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 110 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

under this Agreement or any other material agreement between the Buyer or any of its Affiliates and the Seller or any of its Affiliates within ** , of such failure to pay which such payment is due.


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 111 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(8)		The Buyer repudiates, cancels or terminates this Agreement in whole or in part.

	(9)		The Buyer defaults in its obligation to take delivery of an Aircraft as provided in Clause 9.

	(10)		The Buyer or any of its Affiliates defaults in the observance or performance of any other covenant, undertaking or obligation contained in this Agreement or any other material agreement between the Buyer or its Affiliates, on the one hand, and the Seller or its Affiliates on the other hand, provided that, if such breach or default is capable of being cured, such breach or default is not cured within any specified cure period, **

	(11)		Any other event that the parties will have agreed in writing constitutes a Termination Event hereunder.

21.2

21.3

21.4		Notice of Termination Event

		Promptly upon obtaining knowledge of the occurrence of a Termination Event by the Buyer, the Buyer will notify the Seller of such occurrence in writing, provided, that any failure by the Buyer to notify the Seller will not prejudice the Seller’s rights or remedies hereunder.

21.5

21.6		Information Covenants

		The Buyer hereby covenants and agrees that, from the date of this Agreement until no further Aircraft are to be delivered hereunder, the Buyer will furnish or cause to be furnished to the Seller the following, it being understood that this covenant with respect to Clauses 21.6 (a), (b) and (c) will be deemed satisfied if the information requested in those clauses is filed, un-redacted, with the U.S. Securities and Exchange Commission and is publicly available on EDGAR (or any successor online resource):

(a)

Annual Financial Statements. As soon as available and in any event no later than the date that the Buyer furnish such annual statements to the Securities and Exchange Commission or successor thereto (the “ SEC ” ) (i) a copy of the SEC


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 112 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

			Form 10-K filed by the Buyer with the SEC for such fiscal year, or, if no such Form 10-K was filed by the Buyer for such fiscal year, ** following the close of such fiscal year of the Buyer, the consolidated balance sheet of the Buyer and its Subsidiaries, as at the end of such fiscal year and the related consolidated statements of operations, of common stockholders’ equity (deficit) (in the case of the Buyer and its Subsidiaries) and of cash flows for such fiscal year, setting forth comparative consolidated figures as of the end of and for the preceding fiscal year, and examined by any firm of independent public accountants of recognized standing selected by the Buyer and reasonably acceptable to the Seller, whose opinion will not be qualified as to the scope of audit or as to the status of the Buyer as a going concern, and (ii) a certificate of such accounting firm stating that its audit of the business of the Buyer was conducted in accordance with generally accepted auditing standards.

	(b)		Quarterly Financial Statements . As soon as available and in any event no later than the date that the Buyer furnish such quarterly statements to the SEC, a copy of the SEC Form 10-Q filed by the Buyer, as a group, with the SEC for such quarterly period, or, if no such Form 10-Q was filed by the Buyer with respect to any such quarterly period, no later than the ** following the close of such quarterly period, the consolidated balance sheet of the Buyer and its Subsidiaries, as at the end of such quarterly period and the related consolidated statements of operations for such quarterly period and for the elapsed portion of the fiscal year ended with the last day of such quarterly period and in each case setting forth comparative consolidated figures as of the end of and for the related periods in the prior fiscal year, all of which will be certified by an Authorized Officer of the Buyer, subject to changes resulting from audit and normal year-end audit adjustments.

	(c)		Other Information . Promptly upon transmission thereof, copies of any filings and registrations with, and reports to, the SEC by the Buyer or any of its Affiliates, and, with reasonable promptness, such other information or documents (financial or otherwise) as the Seller may reasonably request from time to time.

		For the purposes of this Clause 21.6, (x) an “ Authorized Officer ” of the Buyer will mean the Chief Executive Officer, the Chief Financial Officer or any Vice President and above thereof who reports directly or indirectly to the Chief Financial Officer and (y) “ Subsidiaries ” will mean, as of any date of determination, those companies owned by the Buyer whose financial results the Buyer is required to include in its statements of consolidated operations and consolidated balance sheets.

21.7		Information Undertakings


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 113 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

The Buyer undertakes, from the date of this Agreement until no further Aircraft are to be delivered, to use best efforts to furnish or cause to be furnished to the Seller the following information:


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 114 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(a)		Debt Rescheduling. (i) Promptly upon the commencement by the Buyer of negotiations with one or more of its significant creditors with a view to general readjustment or rescheduling of all or any material part of its indebtedness under circumstances in which a reasonable business person, in the exercise of prudent business judgment, would conclude that the Buyer would otherwise not be able to pay such indebtedness as it falls due, notice of commencement of such negotiations, and (ii) thereafter timely advice of the progress of such negotiations until such negotiations are terminated or completed.

	(b)		Acceleration of other indebtedness . Immediately upon knowledge by the Buyer that the holder of any bond, debenture, promissory note or any similar evidence of indebtedness of the Buyer or Affiliate thereof ( “ Other Indebtedness ” ) has demanded payment, given notice or exercised its right to a remedy having the effect of acceleration with respect to a claimed event of default under any Other Indebtedness, where the impact of the acceleration is likely to have a material adverse effect on the Buyer’s ability to perform its obligations under or in connection with the transactions contemplated by this Agreement, notice of the demand made, notice given or action taken by such holder and the nature and status of the claimed event of default and what the action the Buyer is taking with respect thereto.


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 115 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

22		MISCELLANEOUS

22.1		Data Retrieval

		On the Seller’s reasonable request, the Buyer will provide the Seller with all the necessary data, as customarily compiled by it and pertaining to the operation of the Aircraft, to assist the Seller in making an efficient and coordinated survey of all reliability, maintenance, operational and cost data with a view to improving the safety, availability and operational costs of the Aircraft.

22.2		Notices

		All notices and requests required or authorized hereunder will be given in writing either by personal delivery to a responsible officer of the party to whom the same is given or by commercial courier, certified air mail (return receipt requested) or facsimile at the addresses and numbers set forth below. The date on which any such notice or request is so personally delivered, or if such notice or request is given by commercial courier, certified air mail or facsimile the date on which it is given, will be deemed to be the effective date of such notice or request.

		The Seller will be addressed at:

1, rond-point Maurice Bellonte
31700 Blagnac France
Attention: Director – Contracts

Telephone: 33 05 61 30 40 12
Telecopy: 33 05 61 30 40 11

The Buyer will be addressed, in the case of any item to be delivered other than via courier or personal service or delivery, at:

4000 East Sky Harbor Blvd.
Phoenix, AZ 85034
Attention: Senior Vice President and Chief Financial Officer
Telephone: (480) 693-5710
Fax: (480) 693-2899

cc: General Counsel
Fax: (480) 693-5932


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 116 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

And, in the case of any item to be delivered via commercial courier or personal service or delivery,

111 West Rio Salado Parkway
Tempe, AZ 85281
Attention: Senior Vice President and Chief Financial Officer

		From time to time, the party receiving the notice or request may designate another address or another person.

22.3		Waiver

		The failure of either party to enforce at any time any of the provisions of this Agreement, to exercise any right herein provided or to require at any time performance by the other party of any of the provisions hereof will in no way be construed to be a present or future waiver of such provisions nor in any way to affect the validity of this Agreement or any part hereof or the right of the other party thereafter to enforce each and every such provision. The express waiver by either party of any provision, condition or requirement of this Agreement will not constitute a waiver of any future obligation to comply with such provision, condition or requirement.

22.4		Interpretation and Law

		THIS AGREEMENT WILL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE THEREOF WILL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

		THE PARTIES HEREBY ALSO AGREE THAT THE UNITED NATIONSCONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS WILL NOT APPLY TO THIS TRANSACTION.

		REGARDING THE CAPE TOWN CONVENTION ON INTERNATIONAL INTERESTS IN MOBILE EQUIPMENT, THE BUYER AGREES THAT IT WILL NOT, AND IT WILL NOT PERMIT ANY LENDER OR FINANCIER FINANCING EITHER AIRCRAFT OR PREDELIVERY PAYMENTS TO, REGISTER ANY INTEREST IN AN UNDELIVERED AIRCRAFT OR IN ANY PROPULSION SYSTEM INSTALLED THEREON AT THE


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 117 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		INTERNATIONAL REGISTRY IN CONNECTION WITH SUCH FINANCING.

		Each party (i) hereby irrevocably submits itself to the nonexclusive jurisdiction of the courts of the state of New York in New York County and, to the extent permitted by applicable law, of the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement or any of the transactions contemplated hereby brought by any party or parties hereto, and (ii) hereby waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any such suit, action or proceeding, to the extent permitted by applicable law, the defense of sovereign immunity, any claim that it is not personally subject to the jurisdiction of the above-named courts by reason of sovereign immunity or otherwise or that it or its property is exempt or immune from jurisdiction of such court or from legal process (whether through service of notice, attachment prior to judgment, attachment in aid of execution or judgment, execution of judgment or otherwise) and to the extent permitted by applicable law, that the suit, action or proceeding which is referred to in clause (i) above is brought in an inconvenient forum, that the venue of such suit, action or proceeding is improper, or that this Agreement or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by these courts.

22.4.1		Service of process in any suit, action or proceeding in respect of any matter as to which the Buyer has submitted to jurisdiction under Clause 22.4 may be made on the Buyer by delivery of the same personally or by dispatching the same via Federal Express, UPS, or similar international air courier, service prepaid to, CT Corporation, 111 Hudson St., New York, NY (or such other office in the City of New York as such agent will then be occupying), as agent for the Buyer, it being agreed that service upon CT Corporation will constitute valid service upon the Buyer or by any other method authorized by the laws of the State of New York.

22.4.2		Service of process in any suit, action or proceeding in respect of any matter as to which the Seller has submitted to jurisdiction under Clause 22.4 may be made on the Seller by delivery of the same personally or by dispatching the same via Federal Express, UPS, or similar international air courier, service prepaid to, CT Corporation, 111 Hudson St., New York, NY (or such other office in the City of New York as such agent will then be occupying), as agent for the Seller, it being agreed that service upon CT Corporation will constitute valid service upon the Seller or by any other method authorized by the laws of the State of New York.


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 118 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

22.5		Waiver of Jury Trial

		EACH OF THE PARTIES HERETO WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM OR CROSS-CLAIM THEREIN.

22.6		No Representations outside of this Agreement

		The parties declare that, prior to the execution of this Agreement, they, with the advice of their respective counsel, apprised themselves of sufficient relevant data in order that they might intelligently exercise their own judgments in deciding whether to execute this Agreement and in deciding on the contents of this Agreement. Each party further declares that its decision to execute this Agreement is not predicated on or influenced by any declarations or representations by any other person, party, or any predecessors in interest, successors, assigns, officers, directors, employees, agents or attorneys of any said person or party, except as set forth in this Agreement. This Agreement resulted from negotiation involving counsel for all of the parties hereto and no term herein will be construed or interpreted against any party under the contra proferentum or any related doctrine.

22.7		Confidentiality

		Subject to any legal or governmental requirements of disclosure, or a request in a judicial proceeding (in which case, the party subject to the request will duly inform the other parties to the Agreement of such request so that such parties may seek appropriate protective order) the parties (which for this purpose will include their employees, agents and advisors) will maintain the terms and conditions of this Agreement and any reports or other data furnished hereunder (including, but not limited to, Clauses 14 and 16) strictly confidential. Without limiting the generality of the foregoing, the Buyer and the Seller will each use its best efforts to limit the disclosure of the contents of this Agreement to the extent legally permissible in any filing required to be made by the Buyer with any governmental agency and will make such applications as will be necessary to implement the foregoing.

		With respect to any public disclosure or filing, the Buyer agrees to submit to the Seller a copy of the proposed document to be filed or disclosed and will give the Seller a reasonable period of time in which to review said document. The Buyer and the Seller will consult with each other prior to the making of any public


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 119 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		disclosure or filing, permitted hereunder, of this Agreement or the terms and conditions thereof.

		The provisions of this Clause 22.7 will survive any termination of this Agreement.

22.8		Severability

		If any provision of this Agreement should for any reason be held to be without effect, the remainder of this Agreement will remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Agreement prohibited or unenforceable in any respect.

22.9		Alterations to Contract

		This Agreement, including its Exhibits and Appendices, together with other agreements between the parties executed as of the date hereof, contains the entire agreement between the parties with respect to the subject matter hereof and thereof and supersedes any previous understanding, commitments or representations whatsoever, whether oral or written including that certain term sheet between the Seller and the Buyer, dated June 14, 2007. This Agreement will not be amended or modified except by an instrument in writing of even date herewith or subsequent hereto executed by both parties or by their fully authorized representatives.

22.10		Scope of Agreement and Original Agreement

22.10.1		This Agreement contains the entire agreement between the parties with respect to the sale and purchase of the Original Aircraft, the A318 Aircraft and the New Aircraft and supersedes any previous understanding, commitments or representations whatsoever, whether oral or written, including but not limited to the terms and conditions of the Original Agreement, with respect thereto.

22.10.2		The terms and conditions of the Original Agreement will apply to all Aircraft delivered under such Original Agreement prior to the date of this Agreement.

22.11		Inconsistencies

		In the event of any inconsistency between the terms of this Agreement and the terms contained in either (i) the Specification, or (ii) any other Exhibit attached to this Agreement, in each such case the terms of such Specification, Exhibit will prevail over this Agreement. For the purpose of this Clause 22.11, the term Agreement will not include either Specification or any Exhibit **.


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 120 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

22.12		Language

		All correspondence, documents and any other written matters in connection with this Agreement will be in English.

22.13		Headings

		All headings in this Agreement are for convenience of reference only and do not constitute a part of this Agreement.

22.14		Counterparts

		This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered will be an original, but all such counterparts will together constitute one and the same instrument.


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 121 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

23		CERTAIN REPRESENTATIONS OF THE PARTIES

23.1.		Buyer’s Representations

		The Buyer represents and warrants to the Seller:

	(i)		it is a corporation organized and existing in good standing under the laws of the State of Delaware and has the corporate power and authority to enter into and perform its obligations under this Agreement;

	(ii)		neither the execution and delivery by it of this Agreement, nor the consummation of any of the transactions by it contemplated hereby, nor the performance by it of the obligations hereunder, constitutes a breach of any agreement to which it is a party or by which its assets are bound; and

	(iii)		this Agreement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

23.2		Seller’s Representations

		The Seller represents and warrants to the Buyer:

	(i)		the Seller is a societe à responsabilité limitée organized and existing in good standing under the laws of the Republic of France and has the corporate power and authority to enter into and perform its obligations under this Agreement;

	(ii)		neither the execution and delivery by the Seller of this Agreement, nor the consummation of any of the transactions by the Seller contemplated hereby, nor the performance by the Seller of the obligations hereunder, constitutes a breach of any agreement to which the Seller is a party or by which its assets are bound; and

	(iii)		this Agreement has been duly authorized, executed and delivered by the Seller and constitutes the legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms.


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 122 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

IN WITNESS WHEREOF, these presents were entered into as of the day and year first above written.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir Title: Vice President and Treasurer	By:	/s/ John J. Leahy Title: Chief Operating Officer Customers



USA – Amended and Restated Airbus A320 Family Purchase Agreement		PA – 123 of 123
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT A-1

THE STANDARD SPECIFICATION FOR THE A318 AIRCRAFT IS CONTAINED IN A SEPARATE FOLDER.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		Exh A-1 – 1 of 1
Execution		PRIVILEGED AND CONFIDENTIAL

EXHIBIT A-2

THE STANDARD SPECIFICATION FOR THE A319 AIRCRAFT IS CONTAINED IN A SEPARATE FOLDER



USA – Amended and Restated Airbus A320 Family Purchase Agreement		Exh A-2 – 1 of 1
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT A-3

THE STANDARD SPECIFICATION FOR THE A320 AIRCRAFT IS CONTAINED IN A SEPARATE FOLDER.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		Exh A-3 – 1 of 1
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT A-4

THE STANDARD SPECIFICATION FOR THE A321 AIRCRAFT IS CONTAINED IN A SEPARATE FOLDER.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		Exh A-4 – 1 of 1
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT B-1A


AIRBUS		SCN No.
SPECIFICATION CHANGE NOTICE		Issue
(SCN)		Dated
		Page No.

TITLE

DESCRIPTION

EFFECT ON WEIGHT

Manufacturer’s Weight Empty Change:

Operational Weight Empty Change:

Allowable Payload Change:

REMARKS/REFERENCES

Response to RFC

SPECIFICATION CHANGED BY THIS SCN

THIS SCN REQUIRES PRIOR OR CONCURRENT ACCEPTANCE OF THE FOLLOWING SCN(s)

PRICE PER AIRCRAFT

US DOLLARS:

AT DELIVERY CONDITIONS

This change will be effective on Aircraft No. and subsequent

provided approval is received by .


BUYER APPROVAL		SELLER APPROVAL

By:		By:

Title: (Authorized Finance Department Officer)		Date:



USA – Amended and Restated Airbus A320 Family Purchase Agreement		Exh B-1A – 1 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-1A

By:

Title: (Authorized maintenance or flight operations officer)

Date:



USA – Amended and Restated Airbus A320 Family Purchase Agreement		Exh B-1A – 2 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-1A



AIRBUS		SCN No.
SPECIFICATION CHANGE NOTICE		Issue
(SCN)		Dated
		Page No.



USA – Amended and Restated Airbus A320 Family Purchase Agreement		Exh B-1A – 3 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-1B


AIRBUS		Airline

MANUFACTURER’S SPECIFICATION		MSCN Number
CHANGE NOTICE		Issue
		Dated
(MSCN)		Page 1 of 3

Title:

Description :

Effect on weight

Manufacturer’s Weight Empty :
Change :
Operational Weight Empty Change:
Allowable Payload Change :

Remarks / References

Specification changed by this MSCN

Price per aircraft

US DOLLARS

AT DELIVERY CONDITIONS :

This change will be effective on AIRCRAFT N° and subsequent.

Provided MSCN is not rejected by


Buyer Approval		Seller Approval

By :		By :

Date :		Date :



USA – Amended and Restated Airbus A320 Family Purchase Agreement		Exh B-1B – 1 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-1B


AIRBUS		Airline

MANUFACTURER’S SPECIFICATION		MSCN Number
CHANGE NOTICE		Issue
		Dated
(MSCN)		Page 2 of 3

Specification repercussion:

After contractual agreement with respect to weight, performance, delivery, etc, the indicated part of the specification wording will read as follows:

Price per aircraft

US DOLLARS :

AT DELIVERY CONDITIONS :

This change will be effective on AIRCRAFT N° and subsequent.

Provided MSCN is not rejected by


Buyer Approval		Seller Approval

By :		By :

Date :		Date :



USA – Amended and Restated Airbus A320 Family Purchase Agreement		Exh B-1B – 2 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-1B


AIRBUS		Airline

MANUFACTURER’S SPECIFICATION		MSCN Number
CHANGE NOTICE		Issue
		Dated
(MSCN)		Page 3 of 3

Scope of change (FOR INFORMATION ONLY)

Price per aircraft

US DOLLARS :

AT DELIVERY CONDITIONS :

This change will be effective on AIRCRAFT N° and subsequent.

Provided MSCN is not rejected by


Buyer Approval		Seller Approval

By :		By :

Date :		Date :



USA – Amended and Restated Airbus A320 Family Purchase Agreement		Exh B-1B – 3 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-2

A318 TECHNICAL SCN LIST


A318 RFC
(TBD)	TITLE	ATA Chapter A319 RFC	COMMENTS
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		ExhB-2 — Page 1 of 2 PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-2

A318 TECHNICAL SCN LIST


A318 RFC
(TBD)	TITLE	ATA Chapter A319 RFC	COMMENTS
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**
	**	**	**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		ExhB-2 — Page 2 of 2 PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-3

A319 TECHNICAL SCN LIST


A319
RFC NO		RFC TITLE
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		Exh B-3 — Page 1 of 4 PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-3

A319 TECHNICAL SCN LIST


A319
RFC NO		RFC TITLE
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		Exh B-3 — Page 2 of 4 PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-3

A319 TECHNICAL SCN LIST


A319
RFC NO		RFC TITLE
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		Exh B-3 — Page 3 of 4 PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-3

A319 TECHNICAL SCN LIST


A319
RFC NO		RFC TITLE
**		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		Exh B-3 — Page 4 of 4 PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-4

A320 TECHNICAL SCN LIST


A320
RFC No		RFC TITLE
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		Exh B-4 — Page 1 of 3 PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-4

A320 TECHNICAL SCN LIST


A320
RFC No		RFC TITLE
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		Exh B-4 — Page 2 of 3 PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-4

A320 TECHNICAL SCN LIST


A320
RFC No		RFC TITLE
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**
**		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		Exh B-4 — Page 3 of 3 PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-5

US Airways
A321 Aircraft — Technical SCN List (See Notes)


RFC	TITLE	REMARKS
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**


**		Confidential Treatment Requested.



USA - Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		Exhibit B-5 — Page 1 of 4 PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-5

US Airways
A321 Aircraft — Technical SCN List (See Notes)


RFC	TITLE	REMARKS
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**


**		Confidential Treatment Requested.



USA - Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		Exhibit B-5 — Page 2 of 4 PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-5

US Airways
A321 Aircraft — Technical SCN List (See Notes)


RFC	TITLE	REMARKS
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**


		Notes:

		**

		**

		**

		**

		**


**		Confidential Treatment Requested.



USA - Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		Exhibit B-5 — Page 3 of 4 PRIVILEGED AND CONFIDENTIAL

EXHIBIT C

SELLER SERVICE LIFE POLICY

1.		The items covered by the Service Life Policy pursuant to Clause 12.2 are those Seller items of primary and auxiliary structure described hereunder.

2.		WINGS — CENTER AND OUTER WING BOX

2.1.1		**

2.1.2		**

2.1.3		**

2.2		Fittings

2.2.1		**

2.2.2		**

2.2.3		**

2.2.4		**

2.3		Auxiliary Support Structure

2.3.1		**

2.3.1.1		**

2.3.1.2		**

2.3.2		**

2.3.2.1		**

2.3.2.2		**

2.3.3		**


**		Confidential Treatment Requested.

Exh. C — 1 of 3


USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT C


2.3.3.1		**

2.3.3.2		**

2.4		Pylon

2.4.1		**

2.4.1.1		**

2.4.1.2		**

2.4.1.3		**

2.4.1.4		**

3.		FUSELAGE

3.1		Fuselage Structure

3.1.1		**

3.1.2		**

3.1.3		**

3.1.4		**

3.1.5		**

3.1.6		**

3.1.7		**

3.1.8		**

3.2		Fittings

3.2.1		**

3.2.2		**

3.2.3		**

4.		STABILIZERS


**		Confidential Treatment Requested.

Exh. C — 2 of 3


USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT C


4.1		**

4.1.1		**

4.1.2		**

4.1.3		**

4.1.4		**

4.1.5		**

4.1.5.1		**

4.1.5.2		**

4.2		Vertical Stabilizer Main Structural Box

4.2.1		**

4.2.2		**

4.2.3		**

4.2.4		**

4.2.5		**

4.2.5.1		**

4.2.5.2		**

5.		**


**		Confidential Treatment Requested.

Exh. C — 3 of 3


USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT D

Form of

CERTIFICATE OF ACCEPTANCE
for [A3 ] Aircraft

In accordance with the terms of that certain A320 Family Aircraft Purchase Agreement dated as of , between , (“Buyer”) and AIRBUS S.A.S. (“AIRBUS”) (the “Purchase Agreement”), the acceptance inspections relating to the Airbus A3[ ] aircraft, Manufacturer’s Serial Number: , U.S. Registration Number: with two (2) [Propulsion System manufacturer] [Propulsion System model] Propulsion System [Engines] installed thereon, serial nos. (position #1) and (position #2) (the “[A3___-___] Aircraft”), have taken place in [Blagnac/Hamburg] on the day of , ___.

In view of said inspections having been carried out with satisfactory results, and with any remaining discrepancies note separately, Buyer hereby approves the [A3 ] Aircraft as being in conformity with the provisions of the Purchase Agreement.

This acceptance does not impair the rights of the Buyer that may be derived from the warranties relating to the [A3 ] Aircraft set forth in the Purchase Agreement.


	RECEIPT AND ACCEPTANCE OF THE ABOVE- DESCRIBED [A3] AIRCRAFT ACKNOWLEDGED US AIRWAYS, INC.
	By:

	Its:



USA — Amended and Restated Airbus A320 Purchase Agreement		Exh. D — 1 of 1
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT E

BILL OF SALE
for [A318/A319/A320/A321] Aircraft

Know all persons by these presents that AIRBUS S.A.S. (“ AIRBUS ”), organized and existing under the laws of the Republic of France, whose address is 1 rond-point Maurice Bellonte, 31700 Blagnac, FRANCE, is the owner of the full legal and beneficial title to the following airframe (the“ Airframe ”), the attached propulsion systems as specified (the “ Propulsion System ”) and all appliances, components, parts, instruments, accessories, furnishings, modules and other equipment of any nature, excluding buyer furnished equipment, incorporated therein, installed thereon or attached thereto on the date hereof (the “ Parts ”):


MANUFACTURER OF AIRFRAME:		MANUFACTURER OF PROPULSION SYSTEM:

AIRBUS		[ ]

MODEL: [A3___]		MODEL: [ ]

MANUFACTURER’S		SERIAL NUMBERS:
SERIAL NUMBER:	[ ]	LH : [ ]
		RH : [ ]

REGISTRATION NO :	[ ]

The Airframe, Propulsion System and Parts are hereafter together referred to as the aircraft (the “ [A3___] Aircraft ”).

AIRBUS does this ___day of sell, transfer and deliver all of its above described rights, title and interest to the [A3___] Aircraft to the following company forever, said “[A3___] Aircraft to be the property thereof:

US Airways, Inc. (the “Buyer”)

AIRBUS hereby warrants to the Buyer, its successors and assigns that it has on the date hereof good and lawful right to sell, deliver and transfer title to the “ [A3___] Aircraft to the Buyer and that there is hereby conveyed to the Buyer on the date hereof good, legal and valid title to the “ [A3___] Aircraft free and clear of all liens, claims, charges, encumbrances and rights of others, other than those arising by or through the Buyer and that the Seller will warrant and defend such title forever against all claims and demands whatsoever.



USA — Amended and Restated Airbus A320 Purchase Agreement		Exh. E — 1 of 2
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT E

IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed by its duly authorized representative this day of [ ]

AIRBUS S.A.S.
By:
Title:
Signature:
Location:



USA — Amended and Restated Airbus A320 Purchase Agreement		Exh. E — 2 of 2
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT F

EXHIBIT F

TECHNICAL DATA INDEX



**Confidential Treatment Requested.
		Exh. F — 1 of 13
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT F

TECHNICAL DATA INDEX



**Confidential Treatment Requested.
		Exh. F — 2 of 13
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments

OPERATIONAL MANUALS AND DATA



**Confidential Treatment Requested.
		Exh. F — 3 of 13
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments

OPERATIONAL MANUALS AND DATA



**Confidential Treatment Requested.
		Exh. F — 4 of 13
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments

MAINTENANCE AND ASSOCIATED MANUALS



**Confidential Treatment Requested.
		Exh. F — 5 of 13
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments

MAINTENANCE AND ASSOCIATED MANUALS (Cont’d)



**Confidential Treatment Requested.
		Exh. F — 6 of 13
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments

MAINTENANCE AND ASSOCIATED MANUALS (Cont’d)



**Confidential Treatment Requested.
		Exh. F — 7 of 13
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments

MAINTENANCE AND ASSOCIATED MANUALS (Cont’d)



**Confidential Treatment Requested.
		Exh. F — 8 of 13
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments

STRUCTURAL MANUALS



**Confidential Treatment Requested.
		Exh. F — 9 of 13
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments

OVERHAUL DATA



**Confidential Treatment Requested.
		Exh. F — 10 of 13
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments

ENGINEERING DOCUMENTS



**Confidential Treatment Requested.
		Exh. F — 11 of 13
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments

MISCELLANEOUS PUBLICATIONS



**Confidential Treatment Requested.
		Exh. F — 12 of 13
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments

MISCELLANEOUS PUBLICATIONS



**Confidential Treatment Requested.
		Exh. F — 13 of 13
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT G-1

AIRFRAME PRICE REVISION FORMULA

	1		BASE PRICE

			The Base Price of the A318 Aircraft, the Airframe of the applicable New Aircraft and the Airframe of applicable Original Aircraft are as quoted in Clause 3 of the Agreement.

	2		BASE PERIOD

			The Base Price of the A318 Aircraft, the Airframe of the applicable New Aircraft and the Airframe of the applicable Original Aircraft have been established in accordance with the average economic conditions prevailing in and corresponding to a theoretical delivery in as defined by “ECIb” and “ICb” index values indicated in Paragraph 4 of this Exhibit G-1.

			This Base Price is subject to adjustment for changes in economic conditions as measured by data obtained from **, and in accordance with the provisions of Paragraphs 4 and 5 of this Exhibit G-1.

			**

	3		INDEXES

			Labor Index : **

			Material Index : **

	4		**


**Confidential Treatment Requested.
		Exh. G-1 — 1 of 3
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT G-1

AIRFRAME PRICE REVISION FORMULA

	5		**

	5.1		**

5.2


**Confidential Treatment Requested.
		Exh. G-1 — 2 of 3
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT G-1

AIRFRAME PRICE REVISION FORMULA

5.3


**Confidential Treatment Requested.
		Exh. G-1 — 3 of 3
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT G-2

INTERNATIONAL AERO ENGINES (IAE) PROPULSION SYSTEM
PRICE REVISION FORMULA

	1		REFERENCE PRICE

			The Reference Prices of the IAE propulsion systems are as quoted in Clauses 3.2.2.1, 3.3.2.1 and 3.4.2.1

			These Reference Prices are subject to adjustment for changes in economic conditions as measured by data obtained from **, and in accordance with the provisions of Paragraphs 4 and 5 of this Exhibit G-2.

	2		REFERENCE PERIOD

			The Reference Prices have been established in accordance with the average economic conditions prevailing in ), as defined, according to International Aero Engines by the values indicated in Paragraph 4 of this Exhibit H-1.

	3		INDEXES

			Labor Index : **

			Material Index : **

	4		**

**Confidential Treatment Requested.

Exh G-2 — 1 of 2


USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT G-2

INTERNATIONAL AERO ENGINES (IAE) PROPULSION SYSTEM
PRICE REVISION FORMULA

	5.		**

	5.1		**

	5.2		**

	5.3		**

	5.4		**


**Confidential Treatment Requested.
		Exh. G-2 — 2 of 2
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT G-3

CFM PROPULSION SYSTEM PRICE REVISION FORMULA

	1		REFERENCE PRICE

			The Reference Prices of the CFM Propulsion Systems are as quoted in the Clauses 3.2.2.2.2, 3.3.2.2 and 3.4.1.1.2 of the Agreement.

			These CFM Propulsion Systems Reference Prices are subject to adjustment for changes in economic conditions as measured by data obtained from ** and in accordance with the provisions of Paragraph 4 and 5 to this Exhibit G-3.

	2		REFERENCE PERIOD

			The above Reference Prices have been established in accordance with the economic conditions prevailing for a theoretical delivery in as defined by CFM International by the .

	3		INDEXES

			Labor Index : **

			Material Index : **

	4		**

	5		**

	5.1		**

	5.2		**

	5.3		**

	5.4		**


**Confidential Treatment Requested.
		Exh. G-3 — 1 of 1
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL INFORMATION

EXHIBIT H

General Conditions of Licensing of Software

These General Conditions of Licensing of Software (the “ General Conditions ”) will provide the conditions for the supply of software developed by and proprietary to Airbus S.A.S (“ Airbus ”) and licensed to Airbus North America Customer Services, Inc . (” ANACS ”) for supply and license to any user (such user, whether provided with the software on a chargeable or free of charge basis is referred to hereinafter as the “ Buyer ”). These General Conditions will be incorporated into any product-specific license agreement entered into between the Buyer and ANACS and will apply to any software license granted to the Buyer to the extent not in conflict with any such product-specific agreement that post-dates execution of these General Conditions.

10. MISCELLANEOUS

10.1 Severability

If a court holds any provision of these General Conditions or any part thereof to be illegal, invalid or unenforceable, the remaining provisions and remainder of the relevant provision will remain in full force and effect and the parties will amend these General Conditions to give effect to the remainder of the clause to the maximum extent possible.

10.2 Injunctive relief

The Buyer agrees that money damages would not be a sufficient remedy for any breach of these General Conditions by the Buyer or its representatives and that ANACS will be entitled to injunctive relief, specific performance and any other appropriate equitable remedies for any such breach, in addition to all other remedies available at law or equity.

10.3 No Waiver

The failure of either party to enforce at any time any obligations hereunder or to require performance of the same by the other party shall in no way be construed to be a present or future waiver of such obligation.

10.4 Notices

All notices and requests required or authorized hereunder shall be given in writing either by registered mail (return receipt requested) or by telefax. In the case of any such notice or request being given by registered mail, the date upon which the answerback is recorded by the addressee or, in case of a telefax, the date upon which it is sent a correct confirmation printout, shall be deemed to be the effective date of such notice or request.

10.5 Applicable Law

These General Conditions shall be governed by and construed in accordance with the laws of the State of New York, without application of conflict of laws principles, which could result in the

**Confidential Treatment Requested.


		Exh. H- 1 of 2
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT H

application of the law of any other jurisdiction. The United Nations Convention on the International Sale of Goods, 1988, shall not apply hereto.


		Exh. H- of 2
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 1

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: SPARE PARTS PROCUREMENT

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into an Amended and Restated Airbus A320 Family Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 1 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement will have the meanings assigned thereto in the Agreement. The terms “herein,” “hereof” and “hereunder” and words of similar import refer to this Letter Agreement.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions which are inconsistent, the specific provisions contained in this Letter Agreement will govern.


**Confidential Treatment Requested.		LA1 — 1 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

CONTENTS

PARAGRAPHS


1 -		GENERAL

2 -		INITIAL PROVISIONING

3 -		STORES

4 -		DELIVERY

5 -		PRICE

6 -		PAYMENT PROCEDURES AND CONDITIONS

7 -		TITLE

8 -		PACKAGING

9 -		DATA RETRIEVAL

10 -		BUY-BACK

11 -		WARRANTIES

12 -		**

13 -		TERMINATION

14 -		ASSIGNMENT

15 -		COUNTERPARTS


		LA1 — 2 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

1.		GENERAL

1.1		Material

		This Letter Agreement covers the terms and conditions for the services offered by the Seller to the Buyer in respect of the Aircraft spare parts and other equipment (“ Material Support ”) listed below in Paragraphs 1.1(a) through 1.1(f) (“ Material ”) and is intended by the parties to be and will constitute an agreement of sale of all Material furnished to the Buyer by the Seller pursuant hereto.

		The Material will comprise:

	(a)		Seller Parts (defined as industrial proprietary components, equipment, accessories or parts of the Seller manufactured to the detailed design of the Seller or a subcontractor of it and bearing official part numbers of the Seller or material for which the Seller has exclusive sales rights in the United States).

	(b)		Supplier Parts classified as Repairable Line Maintenance Parts in accordance with the applicable ATA Specification.

	(c)		Supplier Parts classified as Expendable Line Maintenance Parts in accordance with the applicable ATA Specification.

	(d)		Ground Support Equipment (GSE) and Specific (To-Type) tools.

	(e)		Hardware and standard material.

	(f)		Consumables and raw material as a package.

It is expressly understood that Seller Parts will not include parts manufactured pursuant to a parts manufacturing authority.

Material covered under Paragraphs 1.1(e) and 1.1(f) is available only as a package when supplied as part of the Initial Provisioning defined in Paragraph 1.2.1.


		LA1 — 3 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1.2		Scope of Material Support

1.2.1		The Material Support to be provided by the Seller hereunder covers all Material purchased by the Buyer from the Seller during the Initial Provisioning Period (defined below in Paragraph 2) (the “ Initial Provisioning ”) and all items in Paragraphs 1.1(a) through 1.1(d) for purchases additional to the Initial Provisioning.

1.2.2		Propulsion Systems, including associated parts and spare parts therefor, are not covered under this Letter Agreement and will be subject to direct negotiations between the Buyer and the Propulsion Systems manufacturer(s). **

1.2.3		During a period commencing on the date hereof and continuing as long as at least aircraft of the type of the Aircraft are operated in commercial air transport service of which, at least is operated by the Buyer (the “ Term ”), the Seller will maintain or cause to be maintained such stock of Seller Parts as the Seller deems reasonable and will furnish at reasonable prices Seller Parts adequate to meet the Buyer’s needs for maintenance of the Aircraft. Such Seller Parts will be sold and delivered in accordance with Paragraphs 4 and 5 of this Letter Agreement, upon receipt of the Buyer’s orders.

		The Seller will use its reasonable efforts to obtain a similar service from all Suppliers of parts that are originally installed on the Aircraft and not manufactured by the Seller.

1.3		Purchase Source of Material

		The Buyer agrees to purchase from the Seller, or another source in compliance with FAA requirements, the Seller Parts required for the Buyer’s own needs during the Term, and in addition, the Buyer may purchase Seller Parts of other airlines operating aircraft of the type of the Aircraft, or may purchase items equivalent to Seller Parts from airlines or from distributors or dealers, on the condition that the Seller Parts have been designed and manufactured by, or obtained from, the Seller, and the Buyer may also exercise its rights under Paragraph 1.4.


		LA1 — 4 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

1.4		Manufacture of Material by the Buyer

1.4.1		The provisions of Paragraph 1.3 of this Letter Agreement notwithstanding, the Buyer may manufacture or have manufactured Seller Parts for its own use or may purchase for its own use Seller Parts from any source other than those listed in Paragraph 1.3 in the following cases:

	(a)		after expiration of the Term, provided that at such time the Seller is out of stock of a required Seller Part;

	(b)		at any time, to the extent Seller Parts are needed to effect AOG repairs on any Aircraft and are not available from the Seller within a lead time shorter than or equal to the time in which the Buyer can procure said Seller Parts from another source, provided the Buyer will sell or lease such Seller Parts only if they are assembled in an Aircraft that is sold or leased;

	(c)		at any time, if the Seller fails to fulfill its obligations with respect to any Seller Parts pursuant to Paragraph 1.2 above within a reasonable period after written notice thereof from the Buyer;

	(d)		at any time, if with respect to certain Seller Parts, the Seller has granted, under the Illustrated Parts Catalog supplied in accordance with this Letter Agreement, the right of local manufacture of Seller Parts; and

	(e)		after written approval by the Seller, such approval not to be unreasonably withheld.

1.4.2		The Buyer may manufacture the Seller’s proprietary tooling from drawings and other data supplied by the Seller or the manufacturer.

1.4.3		The rights granted to the Buyer in Paragraph 1.4.1 will not in any way be construed as a license, nor will they in any way obligate the Buyer to pay any license fee, royalty or obligation whatsoever, nor will they in any way be construed to affect the rights of third parties.

1.4.4		The Seller will provide the Buyer with all technical data reasonably necessary to manufacture Seller Parts and the Seller’s proprietary tooling, in the event the Buyer is entitled to do so pursuant to Paragraphs 1.4.1 and 1.4.2. The proprietary rights to such technical data will be subject to the terms of Clause14.12 of the Agreement.


		LA1 — 5 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.		INITIAL PROVISIONING

		The period up to and including the ** after delivery of the last Aircraft will hereinafter be referred to as the Initial Provisioning Period.

2.1		Seller-Supplied Data

		The Seller will prepare and supply to the Buyer the following data:

2.1.1		Initial Provisioning Data — Seller

		The Seller will provide to the Buyer initial provisioning data provided for in the applicable ATA Specification (“ Initial Provisioning Data ”) in a form, format and within a time period to be mutually agreed upon.

		A revision service will be effected every , up to the end of the Initial Provisioning Period.

		The Seller will ensure that Initial Provisioning Data is released to the Buyer in time to allow the necessary evaluation time by the Buyer and the on-time delivery of ordered Material.

2.1.2		Supplementary Data

		The Seller will provide the Buyer with Local Manufacture Tables (X-File), as part of the Illustrated Parts Catalog (Additional Cross-Reference Tables), which will be a part of the Initial Provisioning Data package.

2.1.3		Data for Standard Hardware

		The Initial Provisioning Data provided to the Buyer will include data for hardware and standard material.

2.2		Supplier-Supplied Data


		LA1 — 6 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

2.2.1		General

		Suppliers will prepare and issue CMM parts and IPL parts (T-files) in the English language for those Supplier components for which the Buyer has elected to receive data and the Seller will make reasonable efforts to ensure that the Suppliers take such actions.

		Said data (initial issue and revisions) will be transmitted to the Buyer through the Suppliers and/or the Seller. The Seller will **

		The Seller will ensure the supply of Initial Provisioning Data to the Buyer in time to allow the necessary evaluations by the Buyer and on-time deliveries.

2.2.2		Initial Provisioning Data — Supplier

		Initial Provisioning Data for Supplier products provided for in the applicable ATA Specification will be furnished as mutually agreed upon during a Preprovisioning Meeting (defined below), with free of charge revision service assured up to the end of the Initial Provisioning Period, or until it reflects the configuration of the delivered Aircraft.

2.3		Preprovisioning Meeting

2.3.1		The Seller will organize a meeting (i) at the Manufacturer’s spares center in Hamburg, Germany (“ MSC ”), (ii) at ANACS or (iii) at a place to be mutually agreed, in order to formulate an acceptable schedule and working procedure to accomplish the Initial Provisioning of Material (the “ Preprovisioning Meeting ”).

2.3.2		The date of the Preprovisioning Meeting will be mutually agreed upon, but it will take place no earlier than after the Agreement will have taken effect and no later than before delivery of the first Aircraft.

2.4		Initial Provisioning Training

		The Seller will furnish, at the Buyer’s request and at no charge to the Buyer, training courses related to the Seller’s provisioning documents, purchase order administration and handling at MSC or at a mutually agreed location. The areas covered in these training courses are (i) familiarization of the Buyer with the provisioning; (ii) explanation of the technical function as well as the necessary technical and commercial Initial Provisioning Data; and (iii) familiarization with the Seller’s


		LA1 — 7 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

		purchase order administration system.

2.5		Initial Provisioning Conference

		The Seller will organize an Initial Provisioning conference at MSC, ANACS or a location to be mutually agreed upon that will include participation of major Suppliers, as agreed upon during the Pre-provisioning Meeting (the “ Initial Provisioning Conference ”).

		Such Initial Provisioning Conference will take place no earlier than eight (8) weeks after Buyer Furnished Equipment (BFE) selection or Customer Definition Freeze (CDF), whichever last occurs.

2.6		Initial Provisioning Data Compliance

2.6.1		Initial Provisioning Data generated by the Seller and supplied to the Buyer will comply with the latest configuration of the Aircraft to which such data relate, as known ** before the data are issued. Said data will enable the Buyer to order Material conforming to its Aircraft as required for maintenance and overhaul.

		This provision will not cover Buyer modifications unknown to the Seller, or modifications not agreed to or designed by the Seller.

2.7		Delivery of Initial Provisioning Material

2.7.1		During the Initial Provisioning Period, Material will conform with the latest configuration standard of the affected Aircraft and with the Initial Provisioning Data transmitted by the Seller. The Seller, in addition, will use its reasonable efforts to cause Suppliers to provide a similar service for their items. Should the Seller default in this obligation, it will immediately replace such Seller parts and/or authorize return shipment at no transportation cost to the Buyer. The Buyer will make reasonable efforts to minimize such cost.

2.7.2		The Seller will use its reasonable efforts to deliver Initial Provisioning Material in Paragraph 1.1(a) of this Letter Agreement against the Buyer’s orders from the Seller and according to the following schedule, provided the orders are received by the Seller in accordance with published leadtime.

		Initial Provisioning Material will be delivered as provided below:


		LA1 — 8 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

	(a)		At least of the ordered quantity of each Line Replacement or Line Maintenance item: (for items identified as line station items, ** before delivery of the first Aircraft of each block of Aircraft for which the Buyer has placed Initial Provisioning orders for Material defined above in Paragraph 1.1(a).

	(b)		**

	(c)		of the ordered quantity of each item, including line station items: after delivery of the first Aircraft of each block of Aircraft for which the Buyer has placed Initial Provisioning orders for Material, as defined above in Paragraph 1.1(a). If said ** cannot be accomplished, the Seller will endeavor to have such items available at its facilities for immediate supply, in case of an AOG.

		The size of each block of Aircraft referred to in the schedule above will be defined at the Pre-Provisioning Conference and the Material will be delivered in sequence.

2.7.3		**

2.7.4		The Buyer may cancel or modify Initial Provisioning orders placed with the Seller with no cancellation charge as follows:

	(a)		“ Long Lead-Time Material ” (lead time exceeding , not later than before scheduled delivery of said Material.

	(b)		Normal lead time Material, not later than before scheduled delivery of said Material, provided however, that for Material that has a lead time of or less, the published lead time for the Buyer’s right to cancel or modify orders will be equal to the published lead time for such Material plus **.

	(c)		Buyer-specific Material and Material described in Paragraphs 1.1(b) through 1.1(f), not later than the quoted lead time before scheduled delivery of said Material.

2.7.5		Should the Buyer cancel or modify any orders for Material outside the time limits defined above in Paragraph 2.7.4, the Seller will have no liability for the cancellation or modification, and the Buyer will reimburse the Seller for any direct cost incurred in connection therewith.

2.7.6		Except as otherwise set forth herein, all transportation costs for the return of Material


		LA1 — 9 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

		under this Paragraph 2, including any insurance and customs duties applicable or other related expenditures, will be borne by the Buyer.

3.		STORES

3.1		ANACS Spares Center

		The Seller has established and will maintain or cause to be maintained, as long as at least aircraft of the type of the Aircraft are in commercial air transport service of which at least is operated by the Buyer (the “ US Term ”), a US store in North America known as the ANACS Spares Center (“ ANACS Spares Center ”). The ANACS Spares Center will be operated for the handling of AOG and critical orders for Seller Parts. **

3.2		Material Support Center, Germany

		The Manufacturer has established and will maintain or cause to be maintained during the Term a store of Seller Parts at MSC. MSC will be operated **

3.3		Other Points of Shipment

		The Seller reserves the right to effect deliveries from distribution centers other than the ANACS Spares Center or MSC and from any of the production facilities of the Associated Contractors.

4.		DELIVERY

4.1		General

		The Buyer’s purchase orders will be administered in accordance with **.

		The provisions of Paragraph 4.2 of this Letter Agreement do not apply to Initial Provisioning Data or Material as described in Paragraph 2 of this Letter Agreement.

4.2		Lead Times

4.2.1		In general, the lead times are (and, unless otherwise agreed, will at all times be) in accordance with the definition in the “World Airline and Suppliers Guide” (latest edition).


		LA1 — 10 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

4.2.2		Material will be dispatched within the lead times quoted in the published Seller’s price catalog for Material described in Paragraph 1.1(a), and within the Supplier’s or supplier’s lead time augmented by the Seller’s own order and delivery processing time (such in-house processing time not to exceed **) for Material described in Paragraphs 1.1(b) through 1.1(d). The Seller will endeavor to improve its lead times and neither the Seller, the Manufacturer nor any of their Affiliates will discriminate against the Buyer in delivery processing time.

4.2.3		Expedite Service

		The Seller operates a ** expedite service to supply the relevant Seller Parts available in the Seller’s stock, workshops and assembly line, including high-cost/long-lead-time items, to the international airport nearest the location of such items (the “ Expedite Service ”).

		The Expedite Service is operated in accordance with the “World Airlines and Suppliers Guide.” Accordingly, the Seller will notify the Buyer of the action taken to effect the Expedite Service as follows:

	(a)		** after receipt of an AOG order,

	(b)		** after receipt of a critical order (imminent AOG or work stoppage),

	(c)		** after receipt of an expedite order from the Buyer (nil stock at the Buyer’s for no-go items).

		The Seller and its subcontractors will deliver Seller Parts requested on expedite basis against normal orders previously placed by the Buyer or upon requests by telephone or facsimile by the Buyer’s representatives, such requests to be confirmed by the Buyer’s subsequent order for such Seller Parts within a reasonable time.

4.3		Delivery Status

		The Seller agrees to report to the Buyer the status of supplies against orders on a monthly basis or on a mutually agreed timeframe.

4.4		Excusable Delay

		Clause 10.1 of the Agreement will apply to the Material support as defined in Paragraph 1 of this Letter Agreement.


		LA1 — 11 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

4.5		Shortages, Overshipments, Nonconformance in Orders

4.5.1		Within ** after receipt of Material delivered pursuant to a purchase order, the Buyer will advise the Seller of any alleged shortages or overshipments with respect to such purchase order and of all claimed nonconformance to specification of parts in such order.

		In the event that the Buyer has not reported such alleged shortages, overshipments or nonconformance within such period, the Buyer will be deemed to have accepted the deliveries unless, in the case of shortages, the Buyer can prove within a reasonable period of time that it did not receive the Material.

4.5.2		In the event that the Buyer reports over-shipments or nonconformance to the specifications within the period specified in Paragraph 4.5.1, the Seller will, if such report is accepted, either replace the Material concerned or credit the Buyer for Material paid for but returned to the Seller. In such case, transportation charges will be borne by the Seller.

		The Buyer will endeavor to minimize such costs.

4.6		**

4.7		**

4.8		Cessation of Deliveries

		The Seller reserves the right to stop or otherwise suspend deliveries if the Buyer fails to meet its obligations under Paragraph 6.

5.		PRICE

5.1		The Material prices will be:

5.1.1		**

5.1.2		**


		LA1 — 12 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

5.2		Validity of Prices

5.2.1		The Material prices are the Seller’s published prices in effect on the date of receipt of the purchase order (subject to reasonable quantities and delivery time) and will be expressed in US dollars. Payment will be made by the Buyer to the Seller in US dollars as set forth below in Paragraph 6.1.

5.2.2		Prices of Seller Parts will be in accordance with the then current Airbus Spare Parts Catalog and Repair Guide. Prices will be firm for each calendar year, except that the Seller reserves the right to revise the prices of Seller Parts during the course of the calendar year in the following cases:

	•		significant revision in manufacturing costs,

	•		significant revision in Manufacturer’s purchase price of materials (including significant variation of exchange rates),

	•		significant error in estimation of expression of any price.

		**

5.2.3		**

5.2.4		The Seller warrants that, should the Buyer purchase from the Seller of the recommended Initial Provisioning of Material identified in Paragraphs 1.1(b) through 1.1(d), above, the average handling charge on the total package will not exceed . This average handling charge will be increased to on any orders placed less than prior to delivery of the first Aircraft, provided, however, that the handling charge on any individual item will not exceed ().

6.		PAYMENT PROCEDURES AND CONDITIONS

6.1		Currency

		Payment will be made in US dollars.

6.2		Time and Means of Payment

6.2.1		Payment will be made by transfer of immediately available funds from the Buyer to the Seller within from the date of invoice.


		LA1 — 13 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

6.2.2		All invoices from Seller to Buyer pursuant to this Letter Agreement, (the “ Invoices ”) will be paid within the terms hereof except in the case of any disputed charges. The Buyer will provide notice of any such disputed charges to the Seller promptly following identification thereof, and in all cases prior to the initial due date of the Invoice. Each such notice of dispute shall be in writing and set forth the disputed amount(s), the invoice number(s) a reasonably detailed description of such disputed amount(s), and in reasonable detail, the basis of the dispute. The Buyer will pay all undisputed amount(s) on or prior to the due date therefor in accordance with the terms of the Invoice. The Buyer and Seller agree to negotiate in good faith any disputed charges, and any balance due either party at conclusion of those negotiations will be netted against other amounts, if any, due from such party hereunder or, if there are no such other amounts, within ** of resolution, or the original due date, whichever is later.

6.3		Bank Accounts

		The Buyer will make all payments hereunder in full without setoff, counterclaim, deduction or withholding of any kind to the accounts listed below, unless otherwise directed by the Seller:

	(a)		For wire transfer, in favor of Airbus North America Customer Services, Inc.:

			**

	(b)		For direct deposit (lockbox), in favor of Airbus North America Customer Services, Inc.:

			**

6.4		Taxes

		All payments due the Seller hereunder will be made in full without setoff or counterclaim and without deduction or withholding of any kind. Consequently, the Buyer will assure that the sums received by the Seller under this Letter Agreement are equal to the full amounts expressed to be due the Seller hereunder, without deduction or withholding on account of and free from any and all taxes, levies, imposts, dues or charges of whatever nature except that if the Buyer is compelled by law to make any such deduction or withholding the Buyer will pay such additional amounts as may be necessary in order that the net amount received by the Seller after such deduction or withholding will equal the amounts that would have been received


		LA1 — 14 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

		in the absence of such deduction or withholding.

6.5		If any payment due the Seller is not received in accordance with the time period provided in Paragraph 6.2, the Seller will have the right to claim from the Buyer and the Buyer will promptly pay to the Seller interest on the unpaid amount at an annual rate equal to LIBOR for deposits of a similar amount plus per year to be calculated from (and including) the due date to (but excluding) the date payment is received by the Seller, on the basis of a ** year and actual number of days elapsed. The Seller’s claim to such interest will not prejudice any other rights the Seller may have under this Letter Agreement or applicable law.

7.		TITLE

		Title to any Material purchased under this Letter Agreement will remain with the Seller until full payment of the invoices therefore and any interest thereon has been received by the Seller.

		The Buyer will undertake that Material to which title has not passed to the Buyer will be kept free from any lien, security interest mortgage or other charge or claim in favor of any third party.

8.		PACKAGING

		All Material will be packaged in accordance with the applicable ATA Specification, Category III for consumable/expendable Material and Category II for rotables. Category I containers will be used if requested by the Buyer and the difference between Category I and Category II packaging costs will be paid by the Buyer together with payment for the respective Material.

9.		DATA RETRIEVAL

		The Buyer undertakes to provide periodically to the Seller, as the Seller may reasonably request, during the Term, a quantitative list of the parts used for maintenance and overhaul of the Aircraft. The range and contents of this list will be established by mutual agreement between the Seller and the Buyer.

10.		BUY-BACK

10.1		Buy-Back of Obsolete Material


		LA1 — 15 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

The Seller agrees to buy back unused Seller Parts that may become obsolete for the Buyer’s fleet ** as a result of mandatory modifications required by the Buyer’s or Seller’s Aviation Authorities, subject to the following:

	(a)		the Seller Parts involved will be those which the Seller directs the Buyer, or the Aviation Authority determines are unusable, to scrap or dispose of and which cannot be reworked or repaired to satisfy the revised standard;

	(b)		the Seller will grant the Buyer a credit equal to the purchase price paid by the Buyer for any such obsolete parts, such credit will not exceed the value of the provisioning quantities recommended by the Seller in the Initial Provisioning recommendation as mutually agreed upon at the Initial Provisioning Conference;

	(c)		the Seller will use its reasonable efforts to obtain for the Buyer the same protection from Suppliers and will promptly assist the Buyer if so requested by the Buyer.

10.2		Buy-Back of Surplus Material

10.2.1		The Seller agrees that at any time after and within after delivery of the first Aircraft to the Buyer, the Buyer will have the right to return to the Seller, , unused and undamaged Material described in Paragraphs 1.1(a) and 1.1(b) originally purchased from the Seller under the terms hereof, provided (i) that the selected protection level does not exceed with a turnaround time of , (ii) that said Material does not exceed the provisioning quantities recommended by the Seller in the Initial Provisioning recommendations, does not have a limited shelf life nor contain any shelf-life limited components with less than of their shelf life remaining when returned to the Seller, and (iii) that the Material is returned with the Seller’s original documentation and any such documentation (including tags, certificates) required to identify, substantiate the condition of and enable the resale of such Material.

10.2.2		The Seller’s agreement in writing is necessary before any Material in excess of the Seller’s recommendation may be considered for buy-back.

10.2.3		It is expressly understood and agreed that the rights granted to the Buyer under this Paragraph 10.2 will not apply to Material that may become obsolete at any time or for any reason other than as set forth in Paragraph 10.1.


		LA1 — 16 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

10.2.4		**

10.3		Except as otherwise set forth herein, all transportation costs for the return of surplus Material under this Paragraph 10, including any applicable insurance and customs duties or other related expenditures, will be borne by the Seller.

10.4		The Seller’s obligation to repurchase surplus and obsolete Material depends upon the Buyer’s demonstration, by the Buyer’s compliance with the requirements set forth in Paragraph 9 of this Letter Agreement, that such Material exceeds the Initial Provisioning requirements.

11		WARRANTIES

11.1		WARRANTIES ON SELLER PARTS

11.1.1		Nature of Warranty

		Subject to the limitations and conditions hereinafter provided, and except as provided in Paragraph 11.1.2, the Seller warrants to the Buyer that each Seller Part will at the time of Delivery to the Buyer be free from defects:

	(i)		in material,

	(ii)		in workmanship, including, without limitation, processes of manufacture,

	(iii)		in design (including, without limitation, selection of materials) having regard to the state of the art at the date of such design, and

	(iv)		arising from failure to conform to the Specification, except as to those portions of the Specification that are expressly stated in the Specification to be estimates or approximations or design aims.

11.1.2		**

11.1.3		Exceptions

		The warranties set forth in Paragraph 11.1.1 will not apply to Buyer Furnished Equipment, Propulsion Systems, or to any component, accessory, equipment or part purchased by the Buyer that is not a Seller Part, provided, however, that any defect inherent in the Seller’s design of the installation, considering the state of the art at the


		LA1 — 17 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

		date of such design, that impairs the use of such items will constitute a defect in design for the purposes of this Paragraph 11.1 and be covered by the warranty set forth in Paragraph 11.1.1(iii).

11.1.4		Warranty Period

		The warranties described in Paragraphs 11.1.1 will be limited to those defects that become apparent within ** after delivery of the Seller Part (the “Seller Part Warranty Period”).

11.1.5		Buyer’s Remedy and Seller’s Obligation

		The Buyer’s remedy and the Seller’s obligation and liability under Paragraph 11.1 are limited to, at the Seller’s expense, the repair, replacement or correction of, or the supply of modification kits rectifying the defect to any defective Seller Part, **.

		The provisions of Clauses 12.1.6, 12.1.7, 12.1.8 and 12.1.9 of the Agreement will, as applicable, also apply to this Paragraph 11.


		LA1 — 18 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

11.2		EXCLUSIVITY OF WARRANTIES

		THIS PARAGRAPH 11 (INCLUDING ITS SUBPARTS) SETS FORTH THE EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE OBLIGATIONS OF THE SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO THE BUYER, WHETHER UNDER THIS LETTER AGREEMENT OR OTHERWISE, ARISING FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY SELLER PART DELIVERED BY THE SELLER UNDER THIS AGREEMENT.

		THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN THIS PARAGRAPH 11 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYER FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN THE SELLER PARTS SUPPLIED UNDER THIS LETTER AGREEMENT. THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS, GUARANTEES AND LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, WHETHER EXPRESS OR IMPLIED BY CONTRACT, TORT, STATUTORY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT OR PROBLEM OF ANY KIND IN ANY SELLER PART DELIVERED BY THE SELLER UNDER THIS LETTER AGREEMENT, INCLUDING BUT NOT LIMITED TO:

	(1)		ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE;

	(2)		ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

	(3)		ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

	(4)		ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO, ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE, INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;


		LA1 — 19 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(5)		ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;

	(6)		ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL STATUTE OR AGENCY;

	(7)		ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

	(a)		LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, OR PART PROVIDED UNDER THE AGREEMENT DUE TO A DEFECT, NONCONFORMITY OR OTHER PROBLEM IN ANY SELLER PART;

	(b)		LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART DUE TO A DEFECT, NONCONFORMITY OR OTHER PROBLEM IN ANY SELLER PART;

	(c)		LOSS OF PROFITS AND/OR REVENUES;

	(d)		ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.

		THE WARRANTIES PROVIDED BY THIS LETTER AGREEMENT WILL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE SELLER AND THE BUYER. IN THE EVENT THAT ANY PROVISION OF THIS PARAGRAPH 11 SHOULD FOR ANY REASON BE HELD UNLAWFUL, OR OTHERWISE UNENFORCEABLE, THE REMAINDER OF THIS PARAGRAPH 11 WILL REMAIN IN FULL FORCE AND EFFECT.

		FOR THE PURPOSE OF THIS PARAGRAPH 11.2, “SELLER” WILL BE UNDERSTOOD TO INCLUDE THE SELLER, ITS AFFILIATES, SUPPLIERS AND ASSOCIATED CONTRACTORS.


		LA1 — 20 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		THE FOREGOING DOES NOT APPLY TO CLAIMS BY THE BUYER AGAINST THE SELLER FOR CONTRIBUTION TOWARD THIRD PARTY CLAIMS FOR BODILY INJURY OR PROPERTY DAMAGE TO THE EXTENT SUCH CLAIMS RESULT IN AN ORDER OF A COURT OF COMPETENT JURISDICTION NOT SUBJECT TO APPEAL FINDING LIABILITY ON THE PART OF THE SELLER WITH RESPECT TO SUCH CLAIM.

11.3		DUPLICATE REMEDIES

		The remedies provided to the Buyer under Paragraph 11 are mutually exclusive and not cumulative. The Buyer will be entitled to the remedy that provides the maximum benefit to it, as the Buyer may elect, pursuant to the terms and conditions of this Paragraph 11 for any such particular defect for which remedies are provided under this Paragraph 11, provided, however, that the Buyer will not be entitled to elect a remedy under more than one part of this Paragraph 11 for the same defect. **

11.4		NEGOTIATED AGREEMENT

		The Buyer and Seller agree that this Paragraph 11 has been the subject of discussion and negotiation and is fully understood by the parties, and that the price of the Aircraft and the other mutual agreements of the parties set forth in the Agreement were arrived at in consideration of, inter alia, the Exclusivity of Warranties and General Limitations of Liability provisions and Duplicate Remedies provisions set forth in this Paragraph 11.

12.		**


		LA1 — 21 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

13.		TERMINATION

		Any termination under Paragraph 10, 11 or 21 of the Agreement or under the Letter Agreements thereto will discharge all obligations and liabilities of the parties hereunder with respect to undelivered Material, services, data or other items to be purchased hereunder that are applicable to those Aircraft as to which the Agreement has been terminated, provided that the Seller will nevertheless repurchase new and unused Material in excess of the Buyer’s requirements due to an Aircraft cancellation pursuant to Paragraph 10 or 11 of the Agreement, as provided in Paragraph 10.2. In the case of any termination of this Letter Agreement in connection with a termination under Clause 21 of the Agreement, the Seller will not have any obligation to repurchase Material delivered in respect of any undelivered Aircraft and the Seller’s rights to payment for services or spare parts actually delivered to the Buyer or, in the case of spare parts, the return thereof in new and unused condition, in their original packaging with all applicable documentation will not be limited by the liquidated damages provision included in Clause 21 of the Agreement.

14.		MISCELLANEOUS

		**

15.		NEGOTIATED AGREEMENT

		THE BUYER AND THE SELLER AGREE THAT THIS LETTER AGREEMENT HAS BEEN THE SUBJECT OF DISCUSSIONS AND NEGOTIATION BY THE PARTIES AND THAT THE AGREEMENTS OF THE PARTIES SET FORTH IN THE AGREEMENT WERE ARRIVED AT IN CONSIDERATION OF, INTER ALIA, THE PROVISIONS OF THIS LETTER AGREEMENT.


		LA1 — 22 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

16.		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this paragraph will be void and of no force or effect.

17.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument.


		LA1 — 23 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


		LA1
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX A TO LETTER AGREEMENT NO. 1

AILERONS

AUXILIARY POWER UNIT (APU) DOORS

CARGO DOORS

PASSENGER DOORS

ELEVATORS

FLAPS

LANDING GEAR DOORS

RUDDER

TAIL CONE

WING SLATS

SPOILERS

AIRBRAKES

WING TIPS

RADOMES (If such part is a Seller Part in respect of the Aircraft)


Confidential Treatment Requested.		LA1 — 25 of 25
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 2

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281


Re:		PREDELIVERY PAYMENTS

Ladies and Gentlemen:

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A320 Family Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 2 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement will have the meanings assigned thereto in the Agreement. The terms “herein”, “hereof” and “hereunder” and words of similar import refer to this Letter Agreement.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions that are inconsistent, the specific provisions contained in this Letter Agreement will govern.


		LA 2 — 1 of 3
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

1.		PREDELIVERY PAYMENTS

1.1		Predelivery Payment Schedule

1.1.1		**

		QUOTE

		UNQUOTE

2.		**

		QUOTE

5.3

		UNQUOTE

2.		ASSIGNMENT

		Notwithstanding any other provision of this Letter Agreement or of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Paragraph 2 will be void and of no force or effect.

3.		COUNTERPARTS

		This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.


		LA 2 — 2 of 3
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


		LA 2
USA Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

LETTER AGREEMENT NO. 3

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281


Re:		**

Ladies and Gentlemen:

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A320 Family Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 3 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.


		LA 3 — 1 of 3
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
		**Confidential Treatment Requested.

13.		ASSIGNMENT

		Notwithstanding any other provision of this Letter Agreement or of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Paragraph 13 will be void and of no force or effect.

14.		COUNTERPARTS

		This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.


		LA 3 — 2 of 3
USA — Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
		**Confidential Treatment Requested.

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


		LA 3
USA Amended and Restated Airbus A320 Family Purchase Agreement
EXECUTION
		**Confidential Treatment Requested.

LETTER AGREEMENT NO. 4

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A320 Family Aircraft Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 4 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 4 — 1 of 3
EXECUTION		Privileged and Confidential

2.		COUNTERPARTS

		This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 4 — 2 of 3
EXECUTION		Privileged and Confidential

If the foregoing correctly sets forth your understanding, please execute the original and two (2) copy hereof in the space provided below and return a copy to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir Name: Thomas T. Weir	By:	/s/ John J. Leahy Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 4
EXECUTION		Privileged and Confidential

LETTER AGREEMENT NO. 5

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A320 Family Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 5 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 5 — 1 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

7.		ASSIGNMENT

		Notwithstanding any other provision of this Letter Agreement or of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Paragraph 7 will be void and of no force or effect.

8.		COUNTERPARTS

		This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 5 — 2 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir Name: Thomas T. Weir	By:	/s/ John J. Leahy Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.


USA Amended and Restated Airbus A320 Family Purchase Agreement		LA 5
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 6

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: SPECIFICATION MATTERS

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A320 Family Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 6 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 6 — 1 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.		ASSIGNMENT

		Notwithstanding any other provision of this Letter Agreement or of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Paragraph 3 will be void and of no force or effect.

4.		COUNTERPARTS

		This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.


USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 6 — 2 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir Name: Thomas T. Weir	By:	/s/ John J. Leahy Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 6
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 7

As of October 2, 2007

U.S. Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: PRODUCT SUPPORT

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A320 Family Purchase Agreement dated as even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 7 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 7 — 1 of 5
EXECUTION		PRIVILEGED AND CONFIDENTIAL

ORIGINAL AIRCRAFT

		**

2.2		TECHNICAL DATA AND SOFTWARE SERVICES The Seller will provide to the Buyer the following software tools during the ** period preceding the first day of the Scheduled Delivery Month of the first New Aircraft:

	(i)		**

	(ii)		**

(collectively, the “ Software Tools ”).

The Buyer will be granted a license for the use of the Software Tools, or any successor product thereto. Such license will be subject to the provisions of Exhibit H, except that if any provision of this Letter Agreement conflicts with any provision of Exhibit H, this Letter Agreement will govern to the extent of such inconsistency.

The license to use Software Tools will be granted **following Delivery of the last New Aircraftand will be subject to termination by the Seller during such period (a) immediately, in the event of a breach by the Buyer of Paragraph 2.2 of Exhibit H and (b) in the event of any other material breach by the Buyer of the terms of such license, following notice to the Buyer and the Buyer’s failure to cure such other material breach **the date of such Seller’s notice. **

Notwithstanding the provisions of Paragraph 2.3 of Exhibit H herein, the Buyer may install Software Tools on its computer network, provided that the Buyer takes adequate measures satisfactory to the Seller to preclude any unauthorized access to Software Tools, which measures include but are not limited to (i) control of access to Software (with respect to Software Tools) strictly by the head of information systems and his/her designee (ii) control of access to the Product (with respect to Software Tools) only by Authorized Users of the Buyer, the aggregate of which Authorized Users shall not exceed the number agreed by the Seller and (iii) any other reasonable measures deemed appropriate by the Seller.

Provided that the Seller gives the Buyer **prior notice, the Buyer will permit the Seller to review the network installation to assure it meets the Seller’s security requirements. In the event that the Seller deems the Buyer’s network installation to be inadequate, at the Seller’s request the Buyer will remove Software Tools from the Buyer’s network. Failure to do shall be a cause for termination of the Buyer’s license for Software Tools.

2.3		Performance Engineering Program

		The Seller will provide to the Buyer the Performance Engineering Program for the New Aircraft under the same terms and conditions as set forth in Paragraph 2.2 above, **from


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 7 — 2 of 5
EXECUTION		PRIVILEGED AND CONFIDENTIAL

the Delivery of the first New Aircraft for **

3-		ORIGINAL AIRCRAFT AND NEW AIRCRAFT

3.1		Warranty and Service Life Policy

		The provisions in Clauses 12.1.3 and 12.1.4 of the Agreement are deleted in their entirety and replaced with the following text between the QUOTE and UNQUOTE:

		QUOTE

12.1.3

Warranty Periods

12.1.4

Limitations of Warranty

	(ii)		If the Seller corrects a defect covered by Clause 12.1.1(iii) that becomes apparent within the Warranty Period, on the written request of the Buyer the Seller will correct any such defect in any Aircraft that has not already been delivered to the Buyer. Subject to the provisions of Clause 8 to the Agreement, the Seller will not be responsible for, nor deemed to be in default on account of, any delay in Delivery of any Aircraft or otherwise, in respect of performance of this Agreement, due to the Seller’s undertaking to make such correction. In the alternative, the Buyer and the Seller may agree to deliver such Aircraft with subsequent correction of the defect by the Buyer at the Seller’s expense, or the Buyer may elect to accept Delivery and thereafter file a Warranty Claim as though the defect had become apparent immediately after Delivery of such Aircraft. **

	(iii)		If a defect that would otherwise be covered under this Clause 12 becomes apparent and the Buyer has complied with the requirements of Clause 12, and the Seller has no then available correction for the defect and the Seller believes the defect can reasonably be expected to affect all or a substantial portion of the Aircraft, then the Buyer will be deemed to have given notice of such defect for all Aircraft that thereafter experience such defect.


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 7 — 3 of 5
EXECUTION		PRIVILEGED AND CONFIDENTIAL

UNQUOTE

3.2

SERVICE LIFE POLICY

3.2.1

The provisions in Clause 12.2.2 of the Agreement are deleted in their entirety and replaced with the following text between the QUOTE and UNQUOTE:

QUOTE

6-		ASSIGNMENT

		Notwithstanding any other provision of this Letter Agreement or of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Paragraph 6 will be void and of no force or effect.

7-		COUNTERPARTS

		This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.


USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 7 — 4 of 5
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir Name: Thomas T. Weir	By:	/s/ John J. Leahy Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 7
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8A-1

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: A318-100 PERFORMANCE GUARANTEE (PW/66 METRIC TONS)

Ladies and Gentlemen,

US Airways, Inc. (the “Buyer”) and Airbus S.A.S. (the “Seller”) have entered into an Amended and Restated A320 Family Aircraft Purchase Agreement dated as of the date hereof, (the “Agreement”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain A318 Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8A-1 (the “Letter Agreement”) certain additional terms and conditions regarding the sale of the A318 Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions that are inconsistent, the specific provisions contained in this Letter Agreement will govern.


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8A-1 — 1 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		PREAMBLE

		The guarantees defined below (the “Guarantees”) are applicable to the A318 Aircraft as described in the A318-100 Standard Specification ** for:

	(i)		the fitting of Pratt and Whitney PW6124 Propulsion Systems,

	(ii)		**

and without taking into account any further changes thereto as provided in the Agreement as amended by the Amendment. The Guarantees are contingent upon the signature by the Buyer and the Seller **

GUARANTEED PERFORMANCE

1.1		Speed

		Level flight speed at an A318 Aircraft gross weight of at a pressure altitude of using a thrust not exceeding maximum cruise thrust will not be less than a guaranteed true Mach number of **.

1.2		Specific Range

1.2.1		The nautical miles per pound of fuel at an A318 Aircraft gross weight of at a pressure altitude of conditions at a true Mach number of will be not less than a guaranteed value of .

1.2.2		The nautical miles per pound of fuel at an A318 Aircraft gross weight of at a pressure altitude of conditions at a true Mach number of will be not less than a guaranteed value of .

1.3		Take-off

1.3.1		FAR take-off field length at an A318 Aircraft gross weight of at the start of ground run at sea level pressure altitude conditions will be not more than a guaranteed value of **

1.3.2		FAR take-off field length at an A318 Aircraft gross weight of at the start of ground run at sea level pressure altitude at an ambient temperature of will be not more than a guaranteed value of **


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8A-1 — 2 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1.3.3

When operated under the following conditions **:


Pressure altitude:	*	*
Ambient temperature:	*	*
Take-off run available (“TOR”):	*	*
Take-off distance available:	*	*
Accelerate-stop distance available:	*	*
Slope:	*	*
Wind:	*	*
Obstacles (height and distance	*	*
from end of TOR)	*	*
	*	*

the maximum permissible weight at the start of ground run will **

1.4		Second Segment Climb

		The A318 Aircraft will **

1.5		Altitude Capability

At an A318 Aircraft gross weight of ** conditions, the A318 Aircraft will be capable of maintaining:

	—		a rate of climb of **,

	—		a rate of climb of **,

	—		a maneuver of **

at a guaranteed pressure altitude of not less than **

1.6		En-route One Engine Inoperative

		The A318 Aircraft will **

1.7		Approach Climb

		The A318 Aircraft will **

1.8		Landing Climb


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8A-1 — 3 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

FAR minimum landing climb gradient requirements using the landing flap configuration required to show compliance with Paragraph 1.9.1 will **

1.9		Landing Field Length

1.9.1		FAR certified dry landing field length at an A318 Aircraft gross weight of at sea level pressure altitude will not be more than a guaranteed value of

1.9.2		When operated according to FAR regulations and under the following conditions **:


Pressure altitude:	*	*
Ambient temperature:	*	*
Landing distance available:	*	*
Wind:	*	*

the maximum permissible landing weight will be **

2		MISSION GUARANTEES

2.1		The A318 Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.1.1		The departure airport conditions are as defined in Paragraph 1.3.3.

		**

2.1.2		An allowance of of fuel is included for take-off and climb to above the departure airport with acceleration to climb speed at an ambient temperature of **.

2.1.3		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at a pressure altitude of above the destination airport are conducted in . Climb and descent profiles are respectively Mach number and .

2.1.4		An allowance of ** of fuel is included for approach and land at the destination airport.

2.1.5		Stage distance is defined as the distance covered during climb, cruise and descent as described in Paragraph 2.1.3 above.


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8A-1 — 4 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		**

2.1.6		At the end of approach and land ** of fuel will remain in the tanks.

2.2		In carrying a fixed payload of over a still air stage distance of the guaranteed trip fuel will be not more than ** when operated under the conditions defined in Paragraph 2.1 above.

2.3		The A318 Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.3.1		The departure airport conditions are as follows:


Pressure altitude:	**
Ambient temperature:	**
Take-off run available (“TOR”):	**
Take-off distance available:	**
Accelerate-stop distance available:	**
Slope:	**
Wind:	**
Obstacles (height and distance	**
from end of TOR):	**
	**
	**
	**	**	**
	**	**

The destination airport conditions are such as to allow the required landing weight to be used without restriction. **

2.3.2		An allowance of of fuel is included for take-off and climb to above the departure airport with acceleration to climb speed at an ambient temperature of **.

2.3.3		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at a pressure altitude of above the destination airport are conducted in . Climb and descent profiles are respectively Mach number and .

2.3.4		An allowance of ** of fuel is included for approach and land at the destination airport.


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8A-1 — 5 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.3.5		Stage distance is defined as the distance covered during climb, cruise and descent as described in Paragraph 2.3.3 above.

		**

2.3.6		At the end of approach and land ** of fuel will remain in the tanks.

2.4		In carrying a fixed payload of over a still air stage distance of the guaranteed trip fuel will be not more than ** when operated under the conditions defined in Paragraph 2.3 above.

2.5		The mission guarantees are based on a fixed Operating Weight Empty of ** (For information only a Weight Breakdown is provided in Appendix A hereto.)

3		MANUFACTURER’S WEIGHT EMPTY

		The Seller guarantees a Manufacturer’s Weight Empty of **

		This is the Manufacturer’s Weight Empty as defined in Section **, as amended as defined in the Preamble to this Letter Agreement and is subject to adjustment as defined in Paragraph 7.2.

4		NOISE

		The A318 Aircraft will be certified in accordance with the requirements of , which is equivalent to . This is applicable for approach at maximum brake release gross weight of and at maximum landing gross weight of

		**

5		GUARANTEE CONDITIONS

5.1		The performance certification requirements for the A318 Aircraft, except where otherwise noted, will be as stated in Section **.

5.2		For the determination of FAR take-off performance a hard dry level runway surface with no runway strength limitations, no obstacles, zero wind, atmosphere according to , except as otherwise noted, and the use of speed brakes, flaps, landing gear and engines in the conditions liable to provide the best results


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8A-1 — 6 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

5.2.1		When establishing take-off and second segment performance **

5.3		When establishing the approach and landing climb performance cabin **

5.4		The en-route one engine inoperative climb performance will be established with the amount of engine air bleed associated with the maximum cabin altitude as specified in and an average ventilation rate not less than the amount defined in the , but no air will be bled from the engines for anti-icing. All performance data are based on normal air conditioning mode.

5.5		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with maximum cabin differential pressure as defined in Section . Cabin air conditioning management during performance demonstration as described in Paragraph 6.3 below may be such as to optimize the A318 Aircraft performance while meeting . Unless otherwise stated **.

5.6		The engines will be operated using not more than **

5.7		Where applicable the Guarantees assume the use of an approved fuel having a density of **.


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8A-1 — 7 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

6		GUARANTEE COMPLIANCE

6.1		Compliance with the Guarantees will be demonstrated using operating procedures and limitations in accordance with those defined by the certifying airworthiness authority and by the Seller unless otherwise stated.

6.2		Compliance with the take-off, second segment, approach climb, en-route one engine inoperative climb, landing and external noise elements of the Guarantees will be demonstrated with reference to the approved flight manual.

6.3		Compliance with those parts of the Guarantees defined in Paragraphs 1 and 2 above not covered by the requirements of the certifying airworthiness authority will be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) A318 aircraft of the same aerodynamic configuration as the A318 Aircraft and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the A318 Aircraft.

6.4		Compliance with the Manufacturer’s Weight Empty guarantee defined in Paragraph 3 will be demonstrated with reference to a weight compliance report.

6.5		Data derived from tests will be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices to show compliance with the Guarantees.

6.6		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.

6.7		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at the Delivery of each of the A318 Aircraft.

6.8		Notwithstanding the provisions of the Agreement, the warranties contained in this Letter Agreement will apply with respect to defects resulting from non-compliance with the Guarantees, and be limited to those defects which become apparent within one (1) year after Delivery of the affected A318 Aircraft excepting those defects which are caused by engine deterioration. In the event such defects are discovered within one (1) year after Delivery of an A318 Aircraft the Seller and the Buyer will agree on the procedure and location for new performance tests to be carried out with respect to such A318 Aircraft to determine whether such defects in fact exist.


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8A-1 — 8 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

7		ADJUSTMENT OF GUARANTEES

7.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“Rule Change”) by any governmental agency made subsequent to the date of the Amendment and such Rule Change affects the A318 Aircraft configuration or performance or both required to obtain certification the Guarantees will be appropriately modified to reflect the effect of any such change on the weight or performance of the A318 Aircraft.

7.2		The Guarantees apply to the A318 Aircraft as described in the Preamble to this Letter Agreement and will be further adjusted in the event of:

	i)		Any further configuration change which is the subject of a SCN;

	ii)		Variation in actual weights of items defined in Section 13-10 of the A318 Standard Specification;

The adjustment mechanism will be reviewed between the Buyer and the Seller and (i) reflect the weight and payload repercussions (if any) set forth in each individual SCN signed between the parties pursuant to the adjustment contemplated in this Paragraph 7 and (ii) use the same methodology and tolerances as used to compute the numbers set forth herein.

8		EXCLUSIVE GUARANTEES

		The Guarantees are exclusive and are provided in lieu of any and all other performance and weight guarantees of any nature which may be stated, referenced or incorporated in the A318 Standard Specification or any other document.

10		NEGOTIATED AGREEMENT

		The Buyer and the Seller agree that this Letter Agreement has been the subject of discussion and negotiation by the parties and that other mutual agreements of the parties set forth in the Agreement and this Letter Agreement were arrived at in consideration of, inter alia, the provisions of this Letter Agreement specifically including Paragraphs 8 and 9 of this Letter Agreement.

ASSIGNMENT


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8A-1 — 9 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

Notwithstanding the provisions of Clause 20 or any other provision of the Agreement, the Buyer’s rights under this Guarantee are not transferable and shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise. Any assignment, sale, transfer or other alienation of the Buyer’s rights under this Guarantee with respect to any A318 Aircraft will, as to the A318 Aircraft involved, immediately void this Guarantee in its entirety.

12		COUNTERPARTS

		This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8A-1 — 10 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

IN WITNESS WHEREOF, the parties have caused this Letter Agreement to be signed by their respective officers thereunto duly authorized as of the day and year first above written.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir Name: Thomas T. Weir	By:	/s/ John J. Leahy Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8A-1
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX A TO LETTER AGREEMENT NO. 8A-1


**		Confidential Treatment Requested.


USA Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8A-1 — 12 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8A-2

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: A318-100 PERFORMANCE GUARANTEE (CFM/66 METRIC TONS)

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A320 Family Aircraft Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain A318 Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8A-2 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the A318 Aircraft.


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8A-2 — 1 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		PREAMBLE

		The guarantees defined below (the “ Guarantees ”) are applicable to the A318 Aircraft as described in the A318-100 Standard Specification ** for:

(i)		the fitting of CFM56-5B9/P Propulsion Systems,

		**

and without taking into account any further changes thereto as provided in the Agreement as amended by the Amendment. The Guarantees are contingent upon the signature by the Buyer and the Seller **.

1		GUARANTEED PERFORMANCE

1.1		Speed

		Level flight speed at an A318 Aircraft gross weight of at a pressure altitude of using a thrust not exceeding maximum cruise thrust will not be less than a guaranteed true Mach number of **.

1.2		Specific Range

1.2.1		The nautical miles per pound of fuel at an A318 Aircraft gross weight of at a pressure altitude of conditions at a true Mach number of will be not less than a guaranteed value of .

1.2.2		The nautical miles per pound of fuel at an A318 Aircraft gross weight of at a pressure altitude of conditions at a true Mach number of will be not less than a guaranteed value of .


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Purchase Agreement		LA 8A-2 — 2 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1.3		Take-off

1.3.1		FAR take-off field length at an A318 Aircraft gross weight of at the start of ground run at sea level pressure altitude in will be not more than a guaranteed value of **.

1.3.2		FAR take-off field length at an A318 Aircraft gross weight of at the start of ground run at sea level pressure altitude at an ambient temperature of will be not more than a guaranteed value of **.

1.3.3

When operated under the following conditions (**):


Pressure altitude:	*	*
Ambient temperature:	*	*
Take-off run available (“ TOR ”):	*	*
Take-off distance available:	*	*
Accelerate-stop distance available:	*	*
Slope:	*	*
Wind:	*	*
Obstacles (height and distance	*	*
from end of TOR)	*	*
	*	*

the maximum permissible weight at the start of ground run will **.

1.4		Second Segment Climb

		The A318 Aircraft will **.

1.5		Altitude Capability

At an A318 Aircraft gross weight of ** conditions, the A318 Aircraft will be capable of maintaining:

	—		a rate of climb of **

	—		a rate of climb of **

	—		a maneuver of **

at a guaranteed pressure altitude of not less than **

1.6

En-route One Engine Inoperative


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Purchase Agreement		LA 8A-2 — 3 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		The A318 Aircraft will **.

1.7		Approach Climb

		The A318 Aircraft will **.

1.8		Landing Climb

FAR minimum landing climb gradient requirements using the landing flap configuration required to show compliance with Paragraph 1.9.1 will **.

1.9		Landing Field Length

1.9.1		FAR certified dry landing field length at an A318 Aircraft gross weight of at sea level pressure altitude will not be more than a guaranteed value of

1.9.2		When operated according to FAR regulations and under the following conditions **:


Pressure altitude:	*	*
Ambient temperature:	*	*
Landing distance available:	*	*
Wind:	*	*

the maximum permissible landing weight will be **

2		MISSION GUARANTEES

2.1		The A318 Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.1.1		The departure airport conditions are as defined in Paragraph 1.3.3.

		**

2.1.2		An allowance of of fuel is included for take-off and climb to above the departure airport with acceleration to climb speed at an ambient temperature of **.

2.1.3		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at a pressure altitude of above the destination airport are conducted in conditions. Climb and descent profiles are respectively Mach number and .


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Purchase Agreement		LA 8A-2 — 4 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.1.4		An allowance of ** of fuel is included for approach and land at the destination airport.

2.1.5		Stage distance is defined as the distance covered during climb, cruise and descent as described in Paragraph 2.1.3 above.

		**

2.1.6		At the end of approach and land ** of fuel will remain in the tanks.

2.2		In carrying a fixed payload of over a still air stage distance of the guaranteed trip fuel will be not more than ** when operated under the conditions defined in Paragraph 2.1 above.

2.3		The A318 Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.3.1		The departure airport conditions are as follows:


	Pressure altitude:		**
	Ambient temperature:		**
	Take-off run available (“TOR”):		**
	Take-off distance available:		**
	Accelerate-stop distance available:		**
	Slope:		**
	Wind:		**
	Obstacles (height and distance		**
	from end of TOR):		**
			**
			**
			**
			**
			**
			**
			**

The destination airport conditions are such as to allow the required landing weight to be used without restriction. **

2.3.2

An allowance of ** of fuel is included for take-off and climb to ** above the departure airport with acceleration to climb speed at an ambient temperature of **.


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Purchase Agreement		LA 8A-2 — 5 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.3.3		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at a pressure altitude of above the destination airport are conducted in conditions. Climb and descent profiles are respectively Mach number and .

2.3.4		An allowance of ** of fuel is included for approach and land at the destination airport.

2.3.5		Stage distance is defined as the distance covered during climb, cruise and descent as described in Paragraph 2.3.3 above.

		**

2.3.6		At the end of approach and land ** of fuel will remain in the tanks.

2.4		In carrying a fixed payload of over a still air stage distance of the guaranteed trip fuel will be not more than ** when operated under the conditions defined in Paragraph 2.3 above.

2.5		The mission guarantees are based on a fixed Operating Weight Empty of ** (For information only a Weight Breakdown is provided in Appendix A hereto.)

3		MANUFACTURER’S WEIGHT EMPTY

		The Seller guarantees a Manufacturer’s Weight Empty of **

		This is the Manufacturer’s Weight Empty as defined in Section **, as amended as defined in the Preamble to this Letter Agreement and is subject to adjustment as defined in Paragraph 7.2.

4		NOISE

		The A318 Aircraft will be certified in accordance with the requirements of , which is equivalent to . This is applicable at maximum brake release gross weight of and at maximum landing gross weight of .

		**

5		GUARANTEE CONDITIONS


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Purchase Agreement		LA 8A-2 — 6 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

5.1		The performance certification requirements for the A318 Aircraft, except where otherwise noted, will be as stated in Section **

5.2		For the determination of FAR take-off performance a hard dry level runway surface with no runway strength limitations, no obstacles, zero wind, atmosphere according to , except as otherwise noted, and the use of speed brakes, flaps, landing gear and engines in the conditions liable to provide the best results .

5.2.1		When establishing take-off and second segment performance **

5.3		When establishing the approach and landing climb performance cabin **

5.4		The en-route one engine inoperative climb performance will be established with the amount of engine air bleed associated with the maximum cabin altitude as specified in and an average ventilation rate not less than the amount defined in , but no air will be bled from the engines for anti-icing. All performance data are based on normal air conditioning mode.

5.5		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with maximum cabin differential pressure as defined in Section . Cabin air conditioning management during performance demonstration as described in Paragraph 6.3 below may be such as to optimize the A318 Aircraft performance while meeting Unless otherwise stated **.

5.6		The engines will be operated using not more than **

5.7		Where applicable the Guarantees assume the use of an approved fuel having a density of **

6		GUARANTEE COMPLIANCE

6.1		Compliance with the Guarantees will be demonstrated using operating procedures and limitations in accordance with those defined by the certifying airworthiness authority and by the Seller unless otherwise stated.

6.2		Compliance with the take-off, second segment, approach climb, en-route one engine inoperative climb, landing and external noise elements of the Guarantees will be demonstrated with reference to the approved flight manual.


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Purchase Agreement		LA 8A-2 — 7 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

6.3		Compliance with those parts of the Guarantees defined in Paragraphs 1 and 2 above not covered by the requirements of the certifying airworthiness authority will be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) A318 aircraft of the same aerodynamic configuration as the A318 Aircraft and incorporated in the In-Flight Performance Program and data bases (the “ IFP ”) appropriate to the A318 Aircraft.

6.4		Compliance with the Manufacturer’s Weight Empty guarantee defined in Paragraph 3 will be demonstrated with reference to a weight compliance report.

6.5		Data derived from tests will be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices to show compliance with the Guarantees.

6.6		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.

6.7		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at the Delivery of each of the A318 Aircraft.

6.8		Notwithstanding the provisions of the Agreement, the warranties contained in this Letter Agreement will apply with respect to defects resulting from non-compliance with the Guarantees, and be limited to those defects which become apparent within one (1) year after Delivery of the affected A318 Aircraft excepting those defects which are caused by engine deterioration. In the event such defects are discovered within one (1) year after Delivery of an A318 Aircraft the Seller and the Buyer will agree on the procedure and location for new performance tests to be carried out with respect to such A318 Aircraft to determine whether such defects in fact exist.

7		ADJUSTMENT OF GUARANTEES

7.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“ Rule Change ”) by any governmental agency made subsequent to the date of the Amendment and such Rule Change affects the A318 Aircraft configuration or performance or both required to obtain certification the Guarantees will be appropriately modified to reflect the effect of any such change on the weight or performance of the A318 Aircraft.

7.2		The Guarantees apply to the A318 Aircraft as described in the Preamble to this Letter Agreement and will be further adjusted in the event of:


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Purchase Agreement		LA 8A-2 — 8 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	i)		Any further configuration change which is the subject of a SCN;

	ii)		Variation in actual weights of items defined in Section 13-10 of the A318 Standard Specification;

8		EXCLUSIVE GUARANTEES

		The Guarantees are exclusive and are provided in lieu of any and all other performance and weight guarantees of any nature which may be stated, referenced or incorporated in the A318 Standard Specification or any other document.

9		**

10		NEGOTIATED AGREEMENT


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Purchase Agreement		LA 8A-2 — 9 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

The Buyer and the Seller agree that this Letter Agreement has been the subject of discussion and negotiation by the parties and that other mutual agreements of the parties set forth in the Agreement and this Letter Agreement were arrived at in consideration of, inter alia, the provisions of this Letter Agreement specifically including Paragraphs 8 and 9 of this Letter Agreement.

11		ASSIGNMENT

		Notwithstanding the provisions of Clause 20 or any other provision of the Agreement, the Buyer’s rights under this Guarantee are not transferable and shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise. Any assignment, sale, transfer or other alienation of the Buyer’s rights under this Guarantee with respect to any A318 Aircraft will, as to the A318 Aircraft involved, immediately void this Guarantee in its entirety.

12		COUNTERPARTS

		This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Purchase Agreement		LA 8A-2 — 10 of 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir Name: Thomas T. Weir	By:	/s/ John J. Leahy Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Purchase Agreement		LA 8A-2
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX A TO LETTER AGREEMENT NO. 8A-2


**		Confidential Treatment Requested.


USA—Amended and Restated Airbus A320 Family Purchase Agreement		LA 8A-2 — 12 de 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8B-1

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: A319-100 PERFORMANCE GUARANTEE (IAE/75.5 METRIC TONS)

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated Airbus A320 Family Purchase Agreement dated as of even date herewith, (the “ Agreement ”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Original A319 Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8B-1 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Original A319 Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8B-1 — 1 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		PREAMBLE

		The guarantees defined below (the “Guarantees”) are applicable to the Original A319 Aircraft as described in the A319-100 Standard Specification **for:

	(i)		the fitting of International Aero Engines V2524-A5 Propulsion Systems,

	(ii)		**,

	(iii)		**

	(iv)		**

		and without taking into account any further changes thereto as provided in the Agreement. The Guarantees assume execution of the SCN’s relating to (i) and (ii) above and **

1		GUARANTEED PERFORMANCE

1.1		Speed

		Level flight speed at an Original A319 Aircraft gross weight of at a pressure altitude of using a thrust not exceeding maximum cruise thrust will not be less than a guaranteed true Mach number of **.

1.2		Specific Range

1.2.1		The nautical miles per pound of fuel at an Original A319 Aircraft gross weight of at a pressure altitude of at a true Mach number of will be not less than a guaranteed value of

1.2.2		The nautical miles per pound of fuel at an Original A319 Aircraft gross weight of at a pressure altitude of at a true Mach number of will be not less than a guaranteed value of

1.3		Take-off

1.3.1		FAR take-off field length at an Original A319 Aircraft gross weight of at the start of ground run at sea level pressure altitude in will be not more than a guaranteed value of **.

1.3.2		FAR take-off field length at an Original A319 Aircraft gross weight of at the start of ground run at sea level pressure altitude at an ambient temperature of will be not more than a guaranteed value of **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8B-1 — 2 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1.3.3

When operated under the following conditions (**):


Pressure altitude:		**
Ambient temperature:		**
Take-off run available (“TOR”):		**
Take-off distance available:		**
Accelerate-stop distance available:		**
Slope:		**
Wind:		**
Obstacle (height and distance		**
from end of runway):		**
		**

the maximum permissible weight at the start of ground run will **

1.4		Second Segment Climb

		The Original A319 Aircraft will **

1.5		Altitude Capability

At an Original A319 Aircraft gross weight of **the Original A319 Aircraft will be capable of maintaining:

- a rate of climb of **

- **

- a maneuver of **

at a guaranteed pressure altitude of not less than **

1.6		En-route One Engine Inoperative

		The Original A319 Aircraft will **

1.7		Approach Climb

		The Original A319 Aircraft will **

1.8		Landing Climb


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8B-1 — 3 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		FAR minimum landing climb gradient requirements using the landing flap configuration required to show compliance with Paragraph 1.9.1 will **

1.9		Landing Field Length

1.9.1		FAR certified dry landing field length at an Original A319 Aircraft gross weight of at sea level pressure altitude will not be more than a guaranteed value of .

1.9.2		When operated according to FAR regulations and under the following conditions **:


Pressure altitude:		**
Ambient temperature:		**
Landing distance available:		**
Wind:		**

		the maximum permissible landing weight will be **

2.		MISSION GUARANTEES

2.1		The Original A319 Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.1.1		The departure airport conditions are as follows:


Pressure altitude:		**
Ambient temperature:		**
Take-off run available:		**
Take-off distance available:		**
Accelerate-stop distance available:		**
Slope:		**
Wind:		**
Obstacles (height and distance		**
from start of roll):		**
		**

		The destination airport conditions are such as to allow the required landing weight to be used without restriction. **

2.1.2		An allowance of of fuel is included for take-off and climb to above the departure airport with acceleration to climb speed at an ambient temperature of **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8B-1 — 4 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.1.3		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitude of above the destination airport are conducted in conditions. Climb and descent profiles are respectively Mach number and .

2.1.4		An allowance of ** of fuel is included for approach and land at the destination airport.

2.1.5		Stage distance is defined as the distance covered during climb, cruise and descent as described in Paragraph 2.1.3 above.

		**

2.1.6		At the end of approach and land ** of fuel will remain in the tanks.

2.2		In carrying a fixed payload of over a still air stage distance of the guaranteed trip fuel will be not more than ** when operated under the conditions defined in Paragraph 2.1 above.

2.3		The Original A319 Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.3.1		The departure airport conditions are as described in Paragraph 1.3.3.

		**

2.3.2		An allowance of of fuel is included for take-off and climb to above the departure airport with acceleration to climb speed at an ambient temperature of **.

2.3.3		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in . Climb and descent profiles are respectively Mach number and .

2.3.4		An allowance of ** of fuel is included for approach and land at the destination airport.

2.3.5		Stage distance is defined as the distance covered during climb, cruise and descent as described in Paragraph 2.3.3 above.

		**

2.3.6		At the end of approach and land ** of fuel will remain in the tanks.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8B-1 — 5 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.4		In carrying a fixed payload of over a still air stage distance of the guaranteed trip fuel will be not more than ** when operated under the conditions defined in Paragraph 2.3 above.

2.5		The mission guarantees are based on a fixed Operating Weight Empty of **

3		MANUFACTURER’S WEIGHT EMPTY

		The Seller guarantees a Manufacturer’s Weight Empty of **

		This is the Manufacturer’s Weight Empty as defined in Section **, as amended as defined in the Preamble to this Letter Agreement and is subject to adjustment as defined in Paragraph 7.

4		NOISE

		The Original A319 Aircraft will be certified in accordance with the requirements of , which is equivalent to . This is applicable for approach at maximum brake release gross weight of and at maximum landing gross weight of

		**

5		GUARANTEE CONDITIONS

5.1		The performance certification requirements for the Original A319 Aircraft, except where otherwise noted, will be as stated in Section **.

5.2		For the determination of FAR take-off performance a hard dry level runway surface with no runway strength limitations, no obstacles, zero wind, atmosphere according to , except as otherwise noted, and the use of speed brakes, flaps, landing gear and engines in the conditions liable to provide the best results

5.2.1		When establishing take-off and second segment performance **

5.3		When establishing the approach and landing climb performance cabin **

5.4		The en-route one engine inoperative climb performance will be established with the amount of engine air bleed associated with the maximum cabin altitude as specified in ** and an average ventilation rate not less than the amount defined in the Specification, but no air will be bled from the engines for anti-icing. All performance data are based upon normal air conditioning mode.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8B-1 — 6 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

5.5		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with maximum cabin differential pressure as defined in Section . Cabin air conditioning management during performance demonstration as described in Paragraph 6.3 below may be such as to optimize the Original A319 Aircraft performance while meeting . Unless otherwise stated **.

5.6		The engines will be operated using not more than **

5.7		Where applicable the Guarantees assume the use of an approved fuel having a density of **

6		GUARANTEE COMPLIANCE

6.1		Compliance with the Guarantees will be demonstrated using operating procedures and limitations in accordance with those defined by the certifying airworthiness authority unless otherwise stated.

6.2		Compliance with the take-off, second segment, approach climb, en-route one engine inoperative climb, landing and external noise elements of the Guarantees will be demonstrated with reference to the approved flight manual.

6.3		Compliance with those parts of the Guarantees defined in Paragraphs 1 and 2 above not covered by the requirements of the certifying airworthiness authority will be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) A319 aircraft of the same aerodynamic configuration as the Original A319 Aircraft.

6.4		Compliance with the Manufacturer’s Weight Empty guarantee defined in Paragraph 3 will be demonstrated with reference to a weight compliance report.

6.5		Data derived from tests will be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices to show compliance with the Guarantees.

6.6		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.

6.7		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at the Delivery of each of the Original A319 Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8B-1 — 7 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

6.8		Notwithstanding the provisions of the Agreement, the warranties contained in this Letter Agreement will apply with respect to defects resulting from non-compliance with the Guarantee, and be limited to those defects which become apparent within one (1) year after Delivery of the affected Original A319 Aircraft excepting those defects which are caused by engine deterioration. In the event such defects are discovered within one (1) year after Delivery of an Original A319 Aircraft, the Seller and the Buyer will agree on the procedure and location for new performance tests to be carried out with respect to such Original A319 Aircraft to determine whether such defects in fact exist.

7		ADJUSTMENT OF GUARANTEES

7.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“Rule Change”) by any governmental agency made subsequent to the date of the Agreement and such Rule Change affects the Original A319 Aircraft configuration or performance or both required to obtain certification the Guarantees will be modified to reflect the effect of any such change on the weight or performance of the Original A319 Aircraft.

7.2		The Guarantees apply to the Original A319 Aircraft as described in the preamble to this Letter Agreement and will be further adjusted in the event of:

	i)		Any further configuration change that is the subject of a SCN;

	ii)		Variation in actual weights of items defined in Section 13-10 of the Standard Specification;

		The adjustment mechanism will be reviewed between the Buyer and the Seller and (i) reflect the weight and payload repercussions (if any) set forth in each individual SCN signed between the parties pursuant to the adjustment contemplated in this Paragraph 7, and (ii) use the same methodology and tolerances as used to compute the numbers set forth in this Guarantee.

8		EXCLUSIVE GUARANTEES

		The Guarantees are exclusive and are provided in lieu of any and all other performance and weight guarantees of any nature which may be stated, referenced or incorporated in the Standard Specification or any other document.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8B-1 — 8 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

9		**

10		NEGOTIATED AGREEMENT

		The Buyer and the Seller agree that this Letter Agreement has been the subject of discussion and negotiation by the parties and that other mutual agreements of the parties set forth in the Agreement and this Letter Agreement were arrived at in consideration of, inter alia, the provisions of this Letter Agreement specifically including Paragraphs 8 and 9 of this Letter Agreement.

11		ASSIGNMENT

		Notwithstanding the provisions of Clause 20 or any other provision of the Agreement, the Buyer’s rights under this Guarantee are not transferable and shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise. Any assignment, sale, transfer or other alienation of the Buyer’s rights under this Guarantee with respect to any Original A319 Aircraft will, as to the Original A319 Aircraft involved, immediately void this Guarantee in its entirety.

12		COUNTERPARTS


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8B-1 — 9 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered will be an original, but all such counterparts will together constitute one and the same instrument.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8B-1 — 10 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By: Name:	/s/ Thomas T. Weir Thomas T. Weir	By: Name:	/s/ John J. Leahy John J. Leahy
Title:	Vice President and Treasurer	Title:	Chief Operating Officer Customers


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8B-1
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8B-2

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281


Re:		A319-100 PERFORMANCE GUARANTEE (CFM/75.5 METRIC TONS)

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated Airbus A320 Family Purchase Agreement dated as of even date herewith, (the “ Agreement ”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Original A319 Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8B-2 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Original A319 Aircraft.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8B-2 — 1 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

PREAMBLE

		The guarantees defined below (the “ Guarantees ”) are applicable to the Original A319 Aircraft as described in the A319-100 Standard Specification ** for:

(i)		the fitting of CFM56-5B6/P Propulsion Systems,

(ii)

		and without taking into account any further changes thereto as provided in the Agreement. The Guarantees assume execution of the ** herein to reflect the A319 Aircraft Specification.

1		GUARANTEED PERFORMANCE

1.1		Speed

		Level flight speed at an Original A319 Aircraft gross weight of at a pressure altitude of using a thrust not exceeding maximum cruise thrust will not be less than a guaranteed true Mach number of **.

1.2		Specific Range

1.2.1		The nautical miles per pound of fuel at an Original A319 Aircraft gross weight of at a pressure altitude of at a true Mach number of will be not less than a guaranteed value of .

1.2.2		The nautical miles per pound of fuel at an Original A319 Aircraft gross weight of at a pressure altitude of at a true Mach number of will be not less than a guaranteed value of

1.3		Take-off

1.3.1		FAR take-off field length at an Original A319 Aircraft gross weight of at the start of ground run at sea level pressure altitude in will be not more than a guaranteed value of **

1.3.2		FAR take-off field length at an Original A319 Aircraft gross weight of at the start of ground run at sea level pressure altitude at an ambient temperature of will be not more than a guaranteed value of **

1.3.3		When operated under the following conditions **:


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8B-2 — 2 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL


Pressure altitude:	*	*
Ambient temperature:	*	*
Take-off run available (“TOR”):	*	*
Take-off distance available:	*	*
Accelerate-stop distance available:	*	*
Slope:	*	*
Wind:	*	*
Obstacle (height and distance	*	*
from end of runway):	*	*
	*	*

		the maximum permissible weight at the start of ground run will **

1.4		Second Segment Climb

		The Original A319 Aircraft will **

1.5		Altitude Capability

		At an Original A319 Aircraft gross weight of ** the Original A319 Aircraft will be capable of maintaining:

	-		a rate of climb of **,

	-		**

	-		a maneuver of **

		at a guaranteed pressure altitude of not less than **

1.6		En-route One Engine Inoperative

		The Original A319 Aircraft will **.

1.7		Approach Climb

		The Original A319 Aircraft will **.

1.8		Landing Climb

		FAR minimum landing climb gradient requirements using the landing flap configuration required to show compliance with Paragraph 1.9.1 will **.

1.9		Landing Field Length


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8B-2 — 3 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1.9.1

FAR certified dry landing field length at an Original A319 Aircraft gross weight of ** at sea level pressure altitude will not be more than a guaranteed value of **

1.9.2

When operated according to FAR regulations and under the following conditions **:


Pressure altitude:	*	*
Ambient temperature:	*	*
Landing distance available:	*	*
Wind:	*	*

		the maximum permissible landing weight will be not less than a guaranteed value of **.

2.		MISSION GUARANTEES

2.1		The Original A319 Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of ) when operated under the conditions defined below:

2.1.1		The departure airport conditions are as follows:


Pressure altitude:	*	*
Ambient temperature:	*	*
Take-off run available:	*	*
Take-off distance available:	*	*
Accelerate-stop distance available:	*	*
Slope:	*	*
Wind:	*	*
Obstacles (height and distance	*	*
from start of roll):	*	*
	*	*

		**

2.1.2		An allowance of of fuel is included for take-off and climb to above the departure airport with acceleration to climb speed at an ambient temperature of **.

2.1.3		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitude of above the destination airport are conducted in . Climb and descent profiles are respectively Mach number and .


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8B-2 — 4 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.1.4		An allowance of ** of fuel is included for approach and land at the destination airport.

2.1.5		Stage distance is defined as the distance covered during climb, cruise and descent as described in Paragraph 2.1.3 above.

		**

2.1.6		At the end of approach and land ** of fuel will remain in the tanks.

2.2		In carrying a fixed payload of over a still air stage distance of the guaranteed trip fuel will be not more than ** when operated under the conditions defined in Paragraph 2.1 above.

2.3		The Original A319 Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.3.1		The departure airport conditions are as described in Paragraph 1.3.3.

		The destination airport conditions are such as to allow the required landing weight to be used without restriction. **

2.3.2		An allowance of of fuel is included for take-off and climb to above the departure airport with acceleration to climb speed at an ambient temperature of **.

2.3.3		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of above the destination airport are conducted in . Climb and descent profiles are respectively Mach number and **.

2.3.4		An allowance of ** of fuel is included for approach and land at the destination airport.

2.3.5		Stage distance is defined as the distance covered during climb, cruise and descent as described in Paragraph 2.3.3 above.

		**

2.3.6		At the end of approach and land ** of fuel will remain in the tanks.

2.4		In carrying a fixed payload of over a still air stage distance of the guaranteed trip fuel will be not more than ** when operated under the conditions defined in Paragraph 2.3 above.


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8B-2 — 5 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.5		The mission guarantees are based on a fixed Operating Weight Empty of **

3		MANUFACTURER’S WEIGHT EMPTY

		The Seller guarantees a Manufacturer’s Weight Empty of **

		This is the Manufacturer’s Weight Empty as defined in Section **, as amended as defined in the Preamble to this Letter Agreement and is subject to adjustment as defined in Paragraph 7.

4		NOISE

		The Original A319 Aircraft will be certified in accordance with the requirements of . This is applicable at maximum brake release gross weight of and at maximum landing gross weight of **

		**

5		GUARANTEE CONDITIONS

5.1		The performance certification requirements for the Original A319 Aircraft, except where otherwise noted, will be as stated in Section **.

5.2		For the determination of FAR take-off performance a hard dry level runway surface with no runway strength limitations, no obstacles, zero wind, atmosphere according to , except as otherwise noted, and the use of speed brakes, flaps, landing gear and engines in the conditions liable to provide the best results

5.2.1		When establishing take-off and second segment performance **.

5.3		When establishing the approach and landing climb performance cabin **.

5.4		The en-route one engine inoperative climb performance will be established with the amount of engine air bleed associated with the maximum cabin altitude as specified in and an average ventilation rate not less than the amount defined in , but no air will be bled from the engines for anti-icing. All performance data are based upon normal air conditioning mode.

5.5		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with maximum cabin differential pressure as defined in Section **. Cabin air conditioning management during performance demonstration as described in


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8B-2 — 6 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		Paragraph 6.3 below may be such as to optimize the Original A319 Aircraft performance while meeting the . Unless otherwise stated .

5.6		The engines will be operated using not more than **.

5.7		Where applicable the Guarantees assume the use of an approved fuel having a density of **

6		GUARANTEE COMPLIANCE

6.1		Compliance with the Guarantees will be demonstrated using operating procedures and limitations in accordance with those defined by the certifying airworthiness authority unless otherwise stated.

6.2		Compliance with the take-off, second segment, approach climb, en-route one engine inoperative climb, landing and external noise elements of the Guarantees will be demonstrated with reference to the approved flight manual.

6.3		Compliance with those parts of the Guarantees defined in Paragraphs 1 and 2 above not covered by the requirements of the certifying airworthiness authority will be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) A319 aircraft of the same aerodynamic configuration as the Original A319 Aircraft.

6.4		Compliance with the Manufacturer’s Weight Empty guarantee defined in Paragraph 3 will be demonstrated with reference to a weight compliance report.


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8B-2 — 7 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

6.5		Data derived from tests will be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices to show compliance with the Guarantees.

6.6		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.

6.7		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at the Delivery of each of the Original A319 Aircraft.

6.8		Notwithstanding the provisions of the Agreement, the warranties contained in this Letter Agreement will apply with respect to defects resulting from non-compliance with the Guarantee, and be limited to those defects which become apparent within one (1) year after Delivery of the affected Original A319 Aircraft excepting those defects which are caused by engine deterioration. In the event such defects are discovered within one (1) year after Delivery of an Original A319 Aircraft, the Seller and the Buyer will agree on the procedure and location for new performance tests to be carried out with respect to such Original A319 Aircraft to determine whether such defects in fact exist.

7		ADJUSTMENT OF GUARANTEES

7.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“ Rule Change ”) by any governmental agency made subsequent to the date of the Agreement and such Rule Change affects the Original A319 Aircraft configuration or performance or both required to obtain certification the Guarantees will be modified to reflect the effect of any such change on the weight or performance of the Original A319 Aircraft.

7.2		The Guarantees apply to the Original A319 Aircraft as described in the preamble to this Letter Agreement and will be further adjusted in the event of:

	i)		Any further configuration change that is the subject of a SCN;

	ii)		Variation in actual weights of items defined in Section 13-10 of the Standard Specification;

The adjustment mechanism will be reviewed between the Buyer and the Seller and (i) reflect the weight and payload repercussions (if any) set forth in each individual SCN signed between the parties pursuant to the adjustment contemplated in this Paragraph 7, and (ii) use the same methodology and tolerances as used to compute the numbers set forth in this Guarantee.


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8B-2 — 8 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

8		EXCLUSIVE GUARANTEES

		The Guarantees are exclusive and are provided in lieu of any and all other performance and weight guarantees of any nature which may be stated, referenced or incorporated in the Standard Specification or any other document.

9		**

10		NEGOTIATED AGREEMENT

		The Buyer and the Seller agree that this Letter Agreement has been the subject of discussion and negotiation by the parties and that other mutual agreements of the parties set forth in the Agreement and this Letter Agreement were arrived at in consideration of, inter alia, the provisions of this Letter Agreement specifically including Paragraphs 8 and 9 of this Letter Agreement.

11		ASSIGNMENT

		Notwithstanding the provisions of Clause 20 or any other provision of the Agreement, the Buyer’s rights under this Guarantee are not transferable and shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise. Any assignment, sale, transfer or other alienation of the Buyer’s rights under this Guarantee with respect to any Original A319 Aircraft will, as to the Original A319 Aircraft involved, immediately void this Guarantee in its entirety.

12		COUNTERPARTS

		This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered will be an original, but all such counterparts will together constitute one and the same instrument.


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8B-2 — 9 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

Name: Thomas T. Weir		Name: John J. Leahy
Title: Vice President and Treasurer		Title: Chief Operating Officer Customers



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8B-2
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8C-1

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281


Re:		A320-200 PERFORMANCE GUARANTEE FOR ORIGINAL A320 AIRCRAFT (IAE/77 METRIC TONS)

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated Airbus A320 Family Purchase Agreement dated as of even date herewith, (the “ Agreement ”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Original A320 Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8C-1 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Original A320 Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8C-1 — 1 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

PREAMBLE

The guarantees defined below (the “Guarantees”) are applicable to the A320-200 aircraft as described in the A320 Standard Specification **for:

(i)		the fitting of International Aero Engines V2527-A5 Propulsion Systems, and

(ii)		**

and without taking into account any further changes thereto as provided in the Agreement. The Guarantees assume execution of **

1.		GUARANTEED PERFORMANCE

1.1		Speed

		Level flight speed at an Original A320 Aircraft gross weight of at a pressure altitude of using a thrust not exceeding maximum cruise thrust will not be less than a guaranteed true Mach number of **.

1.2		Specific Range

1.2.1		The nautical miles per pound of fuel at an Original A320 Aircraft gross weight of at a pressure altitude of at a true Mach number of will be not less than a guaranteed value of

1.2.2		The nautical miles per pound of fuel at an Aircraft gross weight of at a pressure altitude of at a true Mach number of will be not less than a guaranteed value of .

1.3		Take-off

1.3.1		FAR take-off field length at an Original A320 Aircraft gross weight of at the start of ground run at sea level pressure altitude in will be not more than a guaranteed value of **.

1.3.2		FAR take-off field length at an Original A320 Aircraft gross weight of at the start of ground run at sea level pressure altitude at an ambient temperature of will be not more than a guaranteed value of **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8C-1 — 2 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1.3.3

When operated under the following conditions **:


Pressure altitude:	*	*
Ambient temperature:	*	*
Take-off run available:	*	*
Take-off distance available:	*	*
Accelerate-stop distance available:	*	*
Slope:	*	*
Wind:	*	*
Obstacle (height and distance	*	*
from end of runway):	*	*
	*	*

		the maximum permissible weight at the start of ground run will **

1.4		Second Segment Climb

		The Original A320 Aircraft will **

1.5		Altitude Capability

		At an Original A320 Aircraft gross weight of ** the Original A320 Aircraft will be capable of maintaining:

	-		a rate of climb of **

	-		**

	-		a maneuver of **

		at a guaranteed pressure altitude of not less than **

1.6		En-route One Engine Inoperative

		The Original A320 Aircraft will **

1.7		Approach Climb

		The Original A320 Aircraft will **

1.8		Landing Climb

		FAR minimum landing climb gradient requirements using the landing flap configuration required to show compliance with Paragraph 1.9.1 will **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8C-1 — 3 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1.9		Landing Field Length

1.9.1		FAR certified dry landing field length at an Original A320 Aircraft gross weight of at sea level pressure altitude will not be more than a guaranteed value of

1.9.2		When operated according to FAR regulations and under the following conditions **


Pressure altitude:	*	*
Ambient temperature:	*	*
Landing distance available:	*	*
Wind:	*	*

the maximum permissible landing weight will be **

2.		MISSION GUARANTEES

2.1		The Original A320 Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.1.1		The departure airport conditions are as follows:


Pressure altitude:	*	*
Ambient temperature:	*	*
Take-off run available:	*	*
Take-off distance available:	*	*
Accelerate-stop distance available:	*	*
Slope:	*	*
Wind:	*	*
Obstacles (height and distance	*	*
from start of roll):	*	*
	*	*
**

2.1.2		An allowance of of fuel is included for take-off and climb to above the departure airport with acceleration to climb speed at an ambient temperature of **

2.1.3		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at a pressure altitude of above the destination airport are conducted in . Climb and descent profiles are respectively Mach number and .

2.1.4		An allowance of ** of fuel is included for approach and land at the destination airport.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8C-1 — 4 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.1.5		Stage distance is defined as the distance covered during climb, cruise and descent as described in Paragraph 2.1.3 above.

		**

2.1.6		At the end of approach and land ** of fuel will remain in the tanks.

2.2		In carrying a fixed payload of over a still air stage distance of the guaranteed trip fuel will be not more than when operated under the conditions defined in Paragraph 2.1 above.

2.3		The Original A320 Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.3.1		The departure airport conditions are as described in Paragraph 1.3.3.

		The destination airport conditions are such as to allow the required landing weight to be used without restriction. **

2.3.2		An allowance of of fuel is included for take-off and climb to above the departure airport with acceleration to climb speed at an ambient temperature of **

2.3.3		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in . Climb and descent profiles are respectively Mach number and

2.3.4		An allowance of **of fuel is included for approach and land at the destination airport.

2.3.5		Stage distance is defined as the distance covered during climb, cruise and descent as described in Paragraph 2.3.3 above.

		**

2.3.6		At the end of approach and land **of fuel will remain in the tanks.

2.4		In carrying a fixed payload of over a still air stage distance of the guaranteed trip fuel will be not more than ** when operated under the conditions defined in Paragraph 2.3 above.

2.5		The mission guarantees are based on a fixed Operating Weight Empty of **

3.		MANUFACTURER’S WEIGHT EMPTY


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8C-1 — 5 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		The Seller guarantees a Manufacturer’s Weight Empty of **.

		This is the Manufacturer’s Weight Empty as defined in Section **, as amended as defined in the Preamble to this Letter Agreement and is subject to adjustment as defined in Paragraph 7.

4.		NOISE

		The Original A320 Aircraft shall be certified in accordance with the requirements of , which is equivalent to . This is applicable for approach at maximum brake release gross weight of and at maximum landing gross weight of

		**

5.		GUARANTEE CONDITIONS

5.1		The performance certification requirements for the Original A320 Aircraft, except where otherwise noted, will be as stated in Section **

5.2		For the determination of FAR take-off performance a hard dry level runway surface with no runway strength limitations, no obstacles, zero wind, atmosphere according to , except as otherwise noted, and the use of speed brakes, flaps, landing gear and engines in the conditions liable to provide the best results

5.2.1		When establishing take-off and second segment performance **

5.3		When establishing the approach and landing climb performance cabin **

5.4		The en-route one engine inoperative climb performance will be established with the amount of engine air bleed associated with the maximum cabin altitude as specified in and an average ventilation rate not less than the amount defined in , but no air will be bled from the engines for anti-icing. All performance data are based upon normal air conditioning mode.

5.5		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with maximum cabin differential pressure as defined in Section . Cabin air conditioning management during performance demonstration as described in Paragraph 6.3 below may be such as to optimize the Original A320 Aircraft performance while meeting

5.6		The engines will be operated using not more than **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8C-1 — 6 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

5.7		Where applicable the Guarantees assume the use of an approved fuel having a density of **

6.		GUARANTEE COMPLIANCE

6.1		Compliance with the Guarantees will be demonstrated using operating procedures and limitations in accordance with those defined by the certifying airworthiness authority unless otherwise stated.

6.2		Compliance with the take-off, second segment, approach climb, en-route one engine inoperative climb, landing and external noise elements of the Guarantees will be demonstrated with reference to the approved flight manual.

6.3		Compliance with those parts of the Guarantees defined in Paragraphs 1 and 2 above not covered by the requirements of the certifying airworthiness authority will be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) A320 aircraft of the same aerodynamic configuration as the Original A320 Aircraft.

6.4		Compliance with the Manufacturer’s Weight Empty guarantee defined in Paragraph 3 will be demonstrated with reference to a weight compliance report.

6.5		Data derived from tests will be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices to show compliance with the Guarantees.

6.6		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.

6.7		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at the Delivery of each of the Original A320 Aircraft.

6.8		Notwithstanding the provisions of the Agreement, the warranties contained in this Letter Agreement will apply with respect to defects resulting from non-compliance with the Guarantee, and be limited to those defects which become apparent within one (1) year after Delivery of the affected Aircraft excepting those defects which are caused by engine deterioration. In the event such defects are discovered within one (1) year after Delivery of an Original A320 Aircraft the Seller and the Buyer will agree on the procedure and location for new performance tests to be carried out with respect to such Aircraft to determine whether such defects in fact exist.

7.		ADJUSTMENT OF GUARANTEES

7.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“Rule Change”) by any governmental agency made subsequent to


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8C-1 — 7 of 36
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		the date of the Agreement and such Rule Change affects the Original A320 Aircraft configuration or performance or both required to obtain certification the Guarantees will be modified to reflect the effect of any such change on the weight or performance of the Original A320 Aircraft.

7.2		The Guarantees apply to the Original A320 Aircraft as described in the preamble to this Letter Agreement and will be further adjusted in the event of:

	i)		Any further configuration change that is the subject of a SCN;

	ii)		Variation in actual weights of items defined in Section 13-10 of the Standard Specification;

		The adjustment mechanism will be reviewed between the Buyer and the Seller and (i) reflect the weight and payload repercussions (if any) set forth in each individual SCN signed between the parties pursuant to the adjustment contemplated in this Paragraph 7, and (ii) use the same methodology and tolerances as used to compute the numbers set forth in this Guarantee.

8.		EXCLUSIVE GUARANTEES

		The Guarantees are exclusive and are provided in lieu of any and all other performance and weight guarantees of any nature which may be stated, referenced or incorporated in the A320 Standard Specification or any other document.

9.		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8C-1 — 8 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

10.		NEGOTIATED AGREEMENT

		The Buyer and the Seller agree that this Letter Agreement has been the subject of discussion and negotiation by the parties and that other mutual agreements of the parties set forth in the Agreement and this Letter Agreement were arrived at in consideration of, inter alia, the provisions of this Letter Agreement specifically including Paragraphs 8 and 9 of this Letter Agreement.

11.		ASSIGNMENT

		Notwithstanding the provisions of Clause 20 or any other provision of the Agreement, the Buyer’s rights under this Guarantee are not transferable and shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise. Any assignment, sale, transfer or other alienation of the Buyer’s rights under this Guarantee with respect to any Original A320 Aircraft will, as to the Original A320 Aircraft involved, immediately void this Guarantee in its entirety.

12.		COUNTERPARTS

		This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered will be an original, but all such counterparts will together constitute one and the same instrument.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8C-1 — 9 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By: /s/ Thomas T. Weir		By: /s/ John J. Leahy
Name: Thomas T. Weir		Name: John J. Leahy
Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8C-1
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8C-2

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281


Re:		A320-200 PERFORMANCE GUARANTEE (CFM/77 METRIC TONS)

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A320 Family Aircraft Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Original A320 Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8C-2 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Original A320 Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8C-2 — 1 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

PREAMBLE

The guarantees defined below (the “ Guarantees ”) are applicable to the A320-200 aircraft as described in the A320 Standard Specification ** for:

(i)		the fitting of CFM56-5B4/P Propulsion Systems, and

(ii)		**,

and without taking into account any further changes thereto as provided in the Agreement. The Guarantees assume execution **.

1.		GUARANTEED PERFORMANCE

1.1		Speed

		Level flight speed at an Original A320 Aircraft gross weight of at a pressure altitude of using a thrust not exceeding maximum cruise thrust will not be less than a guaranteed true Mach number of **.

1.2		Specific Range

1.2.1		The nautical miles per pound of fuel at an Original A320 Aircraft gross weight of at a pressure altitude of conditions at a true Mach number of will be not less than a guaranteed value of

1.2.2		The nautical miles per pound of fuel at an Aircraft gross weight of at a pressure altitude of conditions at a true Mach number of will be not less than a guaranteed value of

1.3		Take-off

1.3.1		FAR take-off field length at an Original A320 Aircraft gross weight of at the start of ground run at sea level pressure altitude in conditions will be not more than a guaranteed value of **

1.3.2		FAR take-off field length at an Original A320 Aircraft gross weight of at the start of ground run at sea level pressure altitude at an ambient temperature of will be not more than a guaranteed value of **

1.3.3		When operated under the following conditions **:


Pressure altitude:	*	*
Ambient temperature:	*	*
Take-off run available:	*	*
Take-off distance available:	*	*
Accelerate-stop distance available:	*	*


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8C-2 — 2 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL


Slope:	*	*
Wind:	*	*
Obstacle (height and distance from end of runway):	*	*
	*	*
	*	*

		the maximum permissible weight at the start of ground run will **

1.4		Second Segment Climb

		The Original A320 Aircraft will **.

1.5		Altitude Capability

		At an Original A320 Aircraft gross weight of ** conditions the Original A320 Aircraft will be capable of maintaining:

-		a rate of climb of **,

-		**,

-		a maneuver of **

		at a guaranteed pressure altitude of not less than **

1.6		En-route One Engine Inoperative

		The Original A320 Aircraft will **.

1.7		Approach Climb

		The Original A320 Aircraft will **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8C-2 — 3 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1.8		Landing Climb

		FAR minimum landing climb gradient requirements using the landing flap configuration required to show compliance with Paragraph 1.9.1 will **.

1.9		Landing Field Length

1.9.1		FAR certified dry landing field length at an Original A320 Aircraft gross weight of at sea level pressure altitude will not be more than a guaranteed value of .

1.9.2		When operated according to FAR regulations and under the following conditions **:


Pressure altitude:	*	*
Ambient temperature:	*	*
Landing distance available:	*	*
Wind:	*	*

		the maximum permissible landing weight will be **

2.		MISSION GUARANTEES

2.1		The Original A320 Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.1.1		The departure airport conditions are as follows:


Pressure altitude:	*	*
Ambient temperature:	*	*
Take-off run available:	*	*
Take-off distance available:	*	*
Accelerate-stop distance available:	*	*
Slope:	*	*
Wind:	*	*
Obstacles (height and distance	*	*
from start of roll):	*	*
	*	*
**


**		Confidential Treatment Requested.




USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8C-2 — 4 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.1.2		An allowance of of fuel is included for take-off and climb to above the departure airport with acceleration to climb speed at an ambient temperature of **.

2.1.3		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at a pressure altitude of above the destination airport are conducted in . Climb and descent profiles are respectively Mach number and .

2.1.4		An allowance of ** of fuel is included for approach and land at the destination airport.

2.1.5		Stage distance is defined as the distance covered during climb, cruise and descent as described in Paragraph 2.1.3 above.

		**

2.1.6		At the end of approach and land ** of fuel will remain in the tanks.

2.2		In carrying a fixed payload of over a still air stage distance of the guaranteed trip fuel will be not more than ** when operated under the conditions defined in Paragraph 2.1 above.

2.3		The Original A320 Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.3.1		The departure airport conditions are as described in Paragraph 1.3.3.

		The destination airport conditions are such as to allow the required landing weight to be used without restriction. **

2.3.2		An allowance of of fuel is included for take-off and climb to above the departure airport with acceleration to climb speed at an ambient temperature of **.

2.3.3		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in conditions. Climb and descent profiles are respectively Mach number and .

2.3.4		An allowance of ** of fuel is included for approach and land at the destination airport.

2.3.5		Stage distance is defined as the distance covered during climb, cruise and descent as described in Paragraph 2.3.3 above.

		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8C-2 — 5 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.3.6		At the end of approach and land ** of fuel will remain in the tanks.

2.4		In carrying a fixed payload of over a still air stage distance of the guaranteed trip fuel will be not more than ** when operated under the conditions defined in Paragraph 2.3 above.

2.5		The mission guarantees are based on a fixed Operating Weight Empty of **

3.		MANUFACTURER’S WEIGHT EMPTY

		The Seller guarantees a Manufacturer’s Weight Empty of **

		This is the Manufacturer’s Weight Empty as defined in Section **, as amended as defined in the Preamble to this Letter Agreement and is subject to adjustment as defined in Paragraph 7.

4.		NOISE

		The Original A320 Aircraft shall be certified in accordance with the requirements of which is equivalent to . This is applicable at maximum brake release gross weight of and at maximum landing gross weight of .

		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8C-2 — 6 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

5.		GUARANTEE CONDITIONS

5.1		The performance certification requirements for the Original A320 Aircraft, except where otherwise noted, will be as stated in Section **.

5.2		For the determination of FAR take-off performance a hard dry level runway surface with no runway strength limitations, no obstacles, zero wind, atmosphere according to , except as otherwise noted, and the use of speed brakes, flaps, landing gear and engines in the conditions liable to provide the best results .

5.2.1		When establishing take-off and second segment performance **.

5.3		When establishing the approach and landing climb performance cabin **.

5.4		The en-route one engine inoperative climb performance will be established with the amount of engine air bleed associated with the maximum cabin altitude as specified in and an average ventilation rate not less than the amount defined in the , but no air will be bled from the engines for anti-icing. All performance data are based upon normal air conditioning mode.

5.5		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with maximum cabin differential pressure as defined in Section . Cabin air conditioning management during performance demonstration as described in Paragraph 6.3 below may be such as to optimize the Original A320 Aircraft performance while meeting . Unless otherwise stated **.

5.6		The engines will be operated using not more than **.

5.7		Where applicable the Guarantees assume the use of an approved fuel having a density of **

6.		GUARANTEE COMPLIANCE

6.1		Compliance with the Guarantees will be demonstrated using operating procedures and limitations in accordance with those defined by the certifying airworthiness authority unless otherwise stated.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8C-2 — 7 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

6.2		Compliance with the take-off, second segment, approach climb, en-route one engine inoperative climb, landing and external noise elements of the Guarantees will be demonstrated with reference to the approved flight manual.

6.3		Compliance with those parts of the Guarantees defined in Paragraphs 1 and 2 above not covered by the requirements of the certifying airworthiness authority will be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) A320 aircraft of the same aerodynamic configuration as the Original A320 Aircraft.

6.4		Compliance with the Manufacturer’s Weight Empty guarantee defined in Paragraph 3 will be demonstrated with reference to a weight compliance report.

6.5		Data derived from tests will be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices to show compliance with the Guarantees.

6.6		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.

6.7		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at the Delivery of each of the Original A320 Aircraft.

6.8		Notwithstanding the provisions of the Agreement, the warranties contained in this Letter Agreement will apply with respect to defects resulting from non-compliance with the Guarantee, and be limited to those defects which become apparent within one (1) year after Delivery of the affected Aircraft excepting those defects which are caused by engine deterioration. In the event such defects are discovered within one (1) year after Delivery of an Original A320 Aircraft the Seller and the Buyer will agree on the procedure and location for new performance tests to be carried out with respect to such Aircraft to determine whether such defects in fact exist.

7.		ADJUSTMENT OF GUARANTEES

7.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“ Rule Change ”) by any governmental agency made subsequent to the date of the Agreement and such Rule Change affects the Original A320 Aircraft configuration or performance or both required to obtain certification the Guarantees will be modified to reflect the effect of any such change on the weight or performance of the Original A320 Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8C-2 — 8 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

7.2

The Guarantees apply to the Original A320 Aircraft as described in the preamble to this Letter Agreement and will be further adjusted in the event of:

	i)		Any further configuration change that is the subject of a SCN;

	ii)		Variation in actual weights of items defined in Section 13-10 of the Standard Specification;

		The adjustment mechanism will be reviewed between the Buyer and the Seller and (i) reflect the weight and payload repercussions (if any) set forth in each individual SCN signed between the parties pursuant to the adjustment contemplated in this Paragraph 7, and (ii) use the same methodology and tolerances as used to compute the numbers set forth in this Guarantee.

8.		EXCLUSIVE GUARANTEES

		The Guarantees are exclusive and are provided in lieu of any and all other performance and weight guarantees of any nature which may be stated, referenced or incorporated in the A320 Standard Specification or any other document.

9.		**

10.		NEGOTIATED AGREEMENT

		The Buyer and the Seller agree that this Letter Agreement has been the subject of discussion and negotiation by the parties and that other mutual agreements of the parties set forth in the Agreement and this Letter Agreement were arrived at in consideration of, inter alia, the provisions of this Letter Agreement specifically including Paragraphs 8 and 9 of this Letter Agreement.

11.		ASSIGNMENT

		Notwithstanding the provisions of Clause 20 or any other provision of the Agreement, the Buyer’s rights under this Guarantee are not transferable and shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise. Any assignment, sale, transfer or other alienation of the Buyer’s rights under this Guarantee with respect to any Original A320 Aircraft will, as to the Original A320 Aircraft involved, immediately void this Guarantee in its entirety.


**		Confidential treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8C-2 — 9 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

12.		COUNTERPARTS

		This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered will be an original, but all such counterparts will together constitute one and the same instrument.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8C-2 — 10 of 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By: /s/ Thomas T. Weir Name: Thomas T. Weir		By: /s/ John J. Leahy Name: John J. Leahy
Title: Vice President and Treasurer		Title: Chief Operating Officer Customers



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8C-2
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8D-1

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: A321-231 PERFORMANCE GUARANTEES (IAE/ 93 METRIC TONS)

Ladies and Gentlemen,

US Airways, Inc. (the “Buyer”) and Airbus S.A.S. (the “Seller”) have entered into an Amended and Restated Airbus A320 Family Aircraft Purchase Agreement (the “Agreement”) dated as of the date hereof, which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Original A321 Aircraft, under the terms and conditions set forth in said Agreement, the Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8D-1 (the “Letter Agreement”) certain additional terms and conditions regarding the sale of the Original A321 Aircraft.

Both parties agree that this Letter Agreement will constitute an integral, nonseverable part of the Agreement, except that if the Agreement and this Letter Agreement have specific provisions that are inconsistent, the specific provisions contained in this Letter Agreement will govern.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8D-1 — 1 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

PREAMBLE

The guarantees defined below (the “Guarantees”) are applicable to the Original A321 Aircraft as described in the Technical Specification ** for:

	(i)		the fitting of International Aero Engines V2533-A5 Propulsion Systems

	(ii)		**

	(iii)		**

and without taking into account any further changes thereto as provided in the Agreement. The Guarantees are contingent upon signature by the Buyer and the Seller **

1		GUARANTEED PERFORMANCE

1.1		Speed

		Level flight speed at an Aircraft gross weight of at a pressure altitude of using a thrust not exceeding maximum cruise thrust shall not be less than a guaranteed true Mach number of **.

1.2		Specific Range

1.2.1		The nautical miles per pound of fuel at an Aircraft gross weight of at a pressure altitude of conditions at a true Mach number of shall be not less than a guaranteed value of

1.2.2		The nautical miles per pound of fuel at an Aircraft gross weight of at a pressure altitude of conditions at a true Mach number of shall be not less than a guaranteed value of

1.3		Take-off

1.3.1		FAR take-off field length at an Aircraft gross weight of at the start of ground run at sea level pressure altitude in conditions shall be not more than a guaranteed value of **

1.3.2		FAR take-off field length at an Aircraft gross weight of at the start of ground run at sea level pressure altitude at an ambient temperature of shall be not more than a guaranteed value of **.

1.3.3		When operated under the following conditions ** using the Take-Off Thrust Bump specified in the preamble hereof:


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8D-1 — 2 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL


		Pressure altitude:		**
		Ambient temperature:		**
		Take-off run available (“TOR”):		**
		Take-off distance available:		**
		Accelerate-stop distance available:		**
		Slope:		**
		Wind:		**
		Obstacles :		**
		Height/distance from end of TOR:		**

the maximum permissible weight at the start of ground run shall **

1.3.4

When operated under the following conditions ** using the Take-Off Thrust Bump specified in the preamble hereof:


		Pressure altitude:		**
		Ambient temperature:		**
		Take-off run available (“TOR”):		**
		Take-off distance available:		**
		Accelerate-stop distance available: Slope:
		Wind:		**
		Obstacles:		**
		Height/distance from end of TOR:		**
				**
				**

the maximum permissible weight at the start of ground run shall **.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8D-1 — 3 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1.4		Second Segment Climb

		The Aircraft shall meet **

1.5		Altitude Capability

		At an Aircraft gross weight of ** conditions the Aircraft will be capable of maintaining:

	–		a rate of climb of **

	–		level flight at **

	–		a maneuver of **

at a guaranteed pressure altitude of not less than **

1.6		En-route One Engine Inoperative

		The Aircraft shall **

1.7		Approach Climb

		The Aircraft shall **

1.8		Landing Climb

		FAR minimum landing climb gradient requirements using the landing flap configuration required to show compliance with Subparagraph 1.9.1 shall **

1.9		Landing Field Length

1.9.1		FAR certified dry landing field length at an Aircraft gross weight of at sea level pressure altitude shall not be more than a guaranteed value of

1.9.2		When operated according to FAR regulations and under the following conditions **


		Pressure altitude:		**
		Ambient temperature:		**
		Landing distance available:		**
		Wind:		**

the maximum permissible landing weight shall be **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8D-1 — 4 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

MISSION GUARANTEES

2.1		The Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.1.1		The departure airport conditions are as follows:


		Pressure altitude:		**
		Ambient temperature:		**
		Take-off run available:		**
		Take-off distance available:		**
		Accelerate-stop distance available:		**
		Slope:		**
		Wind:		**
		Obstacles (height and distance		**
		from start of roll):		**
				**

		The destination airport conditions are such as to allow the required landing weight to be used without restriction. **

2.1.2		An allowance of of fuel is included for take-off and climb to above the departure airport with acceleration to climb speed at an ambient temperature of **.

2.1.3		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in . Climb and descent profiles are respectively number

2.1.4		An allowance of ** of fuel is included for approach and land at the destination airport.

2.1.5		Stage distance is defined as the distance covered during climb, cruise and descent as described in Subparagraph 2.1.3 above.

		**

2.1.6		At the end of approach and land ** of fuel will remain in the tanks.

2.2		In carrying a fixed payload of over a still air stage distance of the guaranteed trip fuel shall be not more than ** when operated under the conditions defined in Subparagraph 2.1 above.

2.3		The Aircraft will be capable of carrying a guaranteed payload of not less than ** over a still


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8D-1 — 5 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		air stage distance of ** when operated under the conditions defined below:

2.3.1		The departure airport conditions are as defined in Subparagraph 1.3.3 above.

		The destination airport conditions are such as to allow the required landing weight to be used without restriction. **

2.3.2		An allowance of of fuel is included for take-off and climb to above the departure airport with acceleration to climb speed at an ambient temperature of **

2.3.3		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at a pressure altitude of above the destination airport are conducted in . Climb and descent profiles are respectively Mach number .

2.3.4		An allowance of **of fuel is included for approach and land at the destination airport.

2.3.5		Stage distance is defined as the distance covered during climb, cruise and descent as described in Subparagraph 2.3.3 above.

		**

2.3.6		At the end of approach and land ** of fuel will remain in the tanks.

2.4		In carrying a fixed payload of over a still air stage distance of the guaranteed trip fuel shall be not more than **when operated under the conditions defined in Subparagraph 2.3 above.

2.5		The Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.5.1		The departure airport conditions are as defined in Subparagraph 1.3.4 above.

		The destination airport conditions are such as to allow the required landing weight to be used without restriction. Pressure altitude is **

2.5.2		An allowance of of fuel is included for take-off and climb to above the departure airport with acceleration to climb speed at an ambient temperature of **

2.5.3		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at a pressure altitude of above the destination airport are conducted in . Climb and descent profiles are respectively **

2.5.4		An allowance of ** of fuel is included for approach and land at the destination airport.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8D-1 — 6 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.5.5		Stage distance is defined as the distance covered during climb, cruise and descent as described in Subparagraph 2.5.3 above.

		**

2.5.6		At the end of approach and land ** of fuel will remain in the tanks.

2.6		In carrying a fixed payload of over a still air stage distance of the guaranteed trip fuel shall be not more than ** when operated under the conditions defined in Subparagraph 2.5 above.

2.7		The mission guarantees are based on ** (For information only a Weight Breakdown is provided in Appendix A hereto).

3		MANUFACTURER’S WEIGHT EMPTY

		The Seller guarantees a Manufacturer’s Weight Empty of **

		This is the Manufacturer’s Weight Empty as defined in Section **, as amended as defined in the Preamble to this Letter Agreement and is subject to adjustment as defined in Subparagraph 7.2.

		For clarification it is reminded that the Manufacturer’s Weight Empty includes the weights of the provisions for the installation of the Additional Center Tanks but does not include the weights of the Additional Center Tanks.

4		NOISE

		The Aircraft shall be certified in accordance with the requirements of , which is equivalent to . This is applicable for approach at maximum take off weight of and at maximum landing weight of

		**

5		GUARANTEE CONDITIONS

5.1		The performance certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section **

5.2		For the determination of FAR take-off performance a hard dry level runway surface with no runway strength limitations, no obstacles, zero wind, atmosphere according to **, except as otherwise noted, and the use of speed brakes, flaps, landing gear and engines in the


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8D-1 — 7 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		conditions liable to provide the best results **

5.2.1		When establishing take-off and second segment performance **

5.3		When establishing the approach and landing climb performance cabin **

5.4		The en-route one engine inoperative climb performance will be established with the amount of engine air bleed associated with the maximum cabin altitude as specified in and an average ventilation rate not less than the amount defined in the , but no air will be bled from the engines for anti-icing. All performance data are based on Normal air conditioning mode.

5.5		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with maximum cabin differential pressure as defined in Section . Cabin air conditioning management during performance demonstration as described in Subparagraph 6.3 below may be such as to optimize the Aircraft performance while meeting Unless otherwise stated **

5.6		The engines will be operated using not more than **

5.7		Where applicable the Guarantees assume the use of an approved fuel having a density of **

6		GUARANTEE COMPLIANCE

6.1		Compliance with the Guarantees will be demonstrated using operating procedures and limitations in accordance with those defined by the certifying airworthiness authority and by the Seller unless otherwise stated.

6.2		Compliance with the take-off, second segment, approach climb, en-route one engine inoperative climb, landing and external noise elements of the Guarantees will be demonstrated with reference to the approved flight manual.

6.3		Compliance with those parts of the Guarantees defined in Paragraphs 1 and 2 above not covered by the requirements of the certifying airworthiness authority will be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) A321-200 aircraft of the same aerodynamic configuration as the Aircraft and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the Aircraft.

6.4		Compliance with the Manufacturer’s Weight Empty guarantee defined in Paragraph 3 will be demonstrated with reference to a weight compliance report.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8D-1 — 8 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

6.5		Data derived from tests will be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices to show compliance with the Guarantees.

6.6		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.

6.7		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at the delivery of each of the Aircraft.

6.8		Notwithstanding the provisions of the Agreement, the warranties contained in this Letter Agreement will apply with respect to defects resulting from non-compliance with the Guarantees, and be limited to those defects which become apparent within one (1) year after delivery of the affected Aircraft excepting those defects which are caused by engine deterioration. In the event such defects are discovered within one (1) year after delivery of an Aircraft the Seller and the Buyer will agree on the procedure and location for new performance tests to be carried out with respect to such Aircraft to determine whether such defects in fact exist.

7		ADJUSTMENT OF GUARANTEES

7.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“Rule Change”) by any governmental agency made subsequent to the date of the Amendment and such Rule Change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees will be appropriately modified to reflect the effect of any such change on the weight or performance of the Aircraft.

7.2		The Guarantees apply to the Aircraft as described in the Preamble to this Letter Agreement and will be further adjusted in the event of:

	i)		Any further configuration change which is the subject of a SCN;

	ii)		Variation in actual weights of items defined in Section 13-10 of the A321-200 Standard Specification.

8 EXCLUSIVE GUARANTEES

The Guarantees are exclusive and are provided in lieu of any and all other performance and weight guarantees of any nature which may be stated, referenced or incorporated in the A321-200 Standard Specification or any other document.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8D-1 — 9 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

9		**

10		NEGOTIATED AGREEMENT

		The Buyer and the Seller agree that this Letter Agreement has been the subject of discussion and negotiation by the parties and that other mutual agreements of the parties set forth in the Agreement and this Letter Agreement were arrived at in consideration of, inter alia, the provisions of this Letter Agreement specifically including Paragraphs 8 and 9 of this Letter Agreement.

11		ASSIGNMENT

		Notwithstanding the provisions of Clause 20 or any other provision of the Agreement, the Buyer’s rights under this Guarantee are not transferable and shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise. Any assignment, sale, transfer or other alienation of the Buyer’s rights under this Guarantee with respect to any Original A321 Aircraft will, as to the Original A321 Aircraft involved, immediately void this Guarantee in its entirety.

12.		COUNTERPARTS


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8D-1 — 10 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8D-1 — 11 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy
	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8D-1 — 12 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX A to LETTER AGREEMENT No. 8D-1


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A320 Family Aircraft Purchase Agreement		LA 8D-1 — 13 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8D-2

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: A321-211 PERFORMANCE GUARANTEES (CFM/ 93 METRIC TONS)

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A320 Family Aircraft Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Original A321 Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8D-2 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Original A321 Aircraft.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8D-2 — 1 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

PREAMBLE

The guarantees defined below (the “ Guarantees ”) are applicable to the Original A321 Aircraft as described in the Technical Specification ** for:

	(i)		the fitting of CFM56-5B3/P Propulsion Systems

	(ii)		**

	(iii)		the installation of and without taking into account any further changes thereto as provided in the Agreement. The Guarantees are contingent upon signature by the Buyer and the .

1		GUARANTEED PERFORMANCE

1.1		Speed

		Level flight speed at an Aircraft gross weight of at a pressure altitude of using a thrust not exceeding maximum cruise thrust shall not be less than a guaranteed true Mach number of **.

1.2		Specific Range

1.2.1		The nautical miles per pound of fuel at an Aircraft gross weight of at a pressure altitude of conditions at a true Mach number of shall be not less than a guaranteed value of .

1.2.2		The nautical miles per pound of fuel at an Aircraft gross weight of at a pressure altitude of conditions at a true Mach number of shall be not less than a guaranteed value of

1.3		Take-off

1.3.1		FAR take-off field length at an Aircraft gross weight of at the start of ground run at sea level pressure altitude in conditions shall be not more than a guaranteed value of **

1.3.2		FAR take-off field length at an Aircraft gross weight of at the start of ground run at sea level pressure altitude at an ambient temperature of shall be not more than a guaranteed value of **

1.3.3		When operated under the following conditions ** using the Take-Off Thrust Bump specified in the preamble hereof:


		Pressure altitude:		**
		Ambient temperature:		**
		Take-off run available (“ TOR ”):		**


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8D-2 — 2 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL


		Take-off distance available:		**
		Accelerate-stop distance available:		**
		Slope:		**
		Wind: Obstacles :
		Height/distance from end of TOR:		**

the maximum permissible weight at the start of ground run shall **

1.3.4

When operated under the following conditions **using the Take-Off Thrust Bump specified in the preamble hereof:


		Pressure altitude:		**
		Ambient temperature:		**
		Take-off run available (“TOR”):		**
		Take-off distance available:		**
		Accelerate-stop distance available:		**
		Slope:		**
		Wind:		**
		Obstacles:		**
		Height/distance from end of TOR:		**

the maximum permissible weight at the start of ground run shall **


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8D-2 — 3 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1.4		Second Segment Climb

		The Aircraft shall **.

1.5		Altitude Capability

		At an Aircraft gross weight of ** conditions the Aircraft will be capable of maintaining:

	-		a rate of climb of **,

	-		level flight at **,

	-		a maneuver of **

at a guaranteed pressure altitude of not less than **

1.6		En-route One Engine Inoperative

		The Aircraft shall **

1.7		Approach Climb

		The Aircraft shall **

1.8		Landing Climb

		FAR minimum landing climb gradient requirements using the landing flap configuration required to show compliance with Subparagraph 1.9.1 shall **


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8D-2 — 4 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1.9		Landing Field Length

1.9.1		FAR certified dry landing field length at an Aircraft gross weight of at sea level pressure altitude shall not be more than a guaranteed value of

1.9.2		When operated according to FAR regulations and under the following conditions **:


		Pressure altitude:		**
		Ambient temperature:		**
		Landing distance available:		**
		Wind:		**

		the maximum permissible landing weight shall be **

2		MISSION GUARANTEES

2.1		The Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.1.1		The departure airport conditions are as follows:


		Pressure altitude:		**
		Ambient temperature:		**
		Take-off run available:		**
		Take-off distance available:		**
		Accelerate-stop distance available:		**
		Slope:		**
		Wind:		**
		Obstacles (height and distance		**
		from start of roll):		**
				**

		The destination airport conditions are such as to allow the required landing weight to be used without restriction. **

2.1.2		An allowance of of fuel is included for take-off and climb to above the departure airport with acceleration to climb speed at an ambient temperature of **


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8D-2 — 5 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.1.3		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in . Climb and descent profiles are respectively **.

2.1.4		An allowance of **of fuel is included for approach and land at the destination airport.

2.1.5		Stage distance is defined as the distance covered during climb, cruise and descent as described in Subparagraph 2.1.3 above.

		**

2.1.6		At the end of approach and land ** of fuel will remain in the tanks.

2.2		In carrying a fixed payload of over a still air stage distance of the guaranteed trip fuel shall be not more than ** when operated under the conditions defined in Subparagraph 2.1 above.

2.3		The Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.3.1		The departure airport conditions are as defined in Subparagraph 1.3.3 above.

		**

2.3.2		An allowance of of fuel is included for take-off and climb to above the departure airport with acceleration to climb speed at an ambient temperature of **.

2.3.3		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at a pressure altitude of above the destination airport are conducted in . Climb and descent profiles are respectively **.

2.3.4		An allowance of ** of fuel is included for approach and land at the destination airport.


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8D-2 — 6 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.3.5		Stage distance is defined as the distance covered during climb, cruise and descent as described in Subparagraph 2.3.3 above.

		**

2.3.6		At the end of approach and land ** of fuel will remain in the tanks.

2.4		In carrying a fixed payload of over a still air stage distance of the guaranteed trip fuel shall be not more than ** when operated under the conditions defined in Subparagraph 2.3 above.

2.5		The Aircraft will be capable of carrying a guaranteed payload of over a still air stage distance of when operated under the conditions defined below:

2.5.1		The departure airport conditions are as defined in Subparagraph 1.3.4 above.

		**

2.5.2		An allowance of of fuel is included for take-off and climb to above the departure airport with acceleration to climb speed at an ambient temperature of **.

2.5.3		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at a pressure altitude of the destination airport are conducted in . Climb and descent profiles are respectively **.

2.5.4		An allowance of **of fuel is included for approach and land at the destination airport.

2.5.5		Stage distance is defined as the distance covered during climb, cruise and descent as described in Subparagraph 2.5.3 above.

		**

2.5.6		At the end of approach and land ** of fuel will remain in the tanks.

2.6		In carrying a fixed payload of over a still air stage distance of the guaranteed trip fuel shall be not more than ** when operated under the conditions defined in Subparagraph 2.5 above.

2.7		The mission guarantees are based on a fixed Operating Weight Empty of ** (For information only a Weight Breakdown is provided in Appendix A hereto).

3		MANUFACTURER’S WEIGHT EMPTY


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8D-2 — 7 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		The Seller guarantees a Manufacturer’s Weight Empty of **

		This is the Manufacturer’s Weight Empty as defined in Section **, as amended as defined in the Preamble to this Letter Agreement and is subject to adjustment as defined in Subparagraph 7.2.

		For clarification it is reminded that the Manufacturer’s Weight Empty includes the weights of the provisions for **.

4		NOISE

		The Aircraft shall be certified in accordance with the requirements of , which is equivalent to .This is applicable for approach at maximum take off weight of 205,030 lb and at maximum landing weight of **

		**

5		GUARANTEE CONDITIONS

5.1		The performance certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section **.

5.2		For the determination of FAR take-off performance a hard dry level runway surface with no runway strength limitations, no obstacles, zero wind, atmosphere according to , except as otherwise noted, and the use of speed brakes, flaps, landing gear and engines in the conditions liable to provide the best results .

5.2.1		When establishing take-off and second segment performance **.

5.3		When establishing the approach and landing climb performance cabin **.

5.4		The en-route one engine inoperative climb performance will be established with the amount of engine air bleed associated with the maximum cabin altitude as specified in and an average ventilation rate not less than the amount defined in the , but no air will be bled from the engines for anti-icing. All performance data are based on Normal air conditioning mode.

5.5		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with maximum cabin differential pressure as defined in Section **. Cabin air conditioning management during performance demonstration as described in Subparagraph


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8D-2 — 8 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

6.3 below may be such as to optimize the Aircraft performance while meeting **. Unless otherwise stated **.

5.6		The engines will be operated using not more than **.

5.7		Where applicable the Guarantees assume the use of an approved fuel having a density of **.

6		GUARANTEE COMPLIANCE

6.1		Compliance with the Guarantees will be demonstrated using operating procedures and limitations in accordance with those defined by the certifying airworthiness authority and by the Seller unless otherwise stated.

6.2		Compliance with the take-off, second segment, approach climb, en-route one engine inoperative climb, landing and external noise elements of the Guarantees will be demonstrated with reference to the approved flight manual.

6.3		Compliance with those parts of the Guarantees defined in Paragraphs 1 and 2 above not covered by the requirements of the certifying airworthiness authority will be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) A321-200 aircraft of the same aerodynamic configuration as the Aircraft and incorporated in the In-Flight Performance Program and data bases (the “ IFP ”) appropriate to the Aircraft.


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8D-2 — 9 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

6.4		Compliance with the Manufacturer’s Weight Empty guarantee defined in Paragraph 3 will be demonstrated with reference to a weight compliance report.

6.5		Data derived from tests will be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices to show compliance with the Guarantees.

6.6		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.

6.7		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at the delivery of each of the Aircraft.

6.8		Notwithstanding the provisions of the Agreement, the warranties contained in this Letter Agreement will apply with respect to defects resulting from non-compliance with the Guarantees, and be limited to those defects which become apparent within one (1) year after delivery of the affected Aircraft excepting those defects which are caused by engine deterioration. In the event such defects are discovered within one (1) year after delivery of an Aircraft the Seller and the Buyer will agree on the procedure and location for new performance tests to be carried out with respect to such Aircraft to determine whether such defects in fact exist.

7		ADJUSTMENT OF GUARANTEES

7.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“ Rule Change ”) by any governmental agency made subsequent to the date of the Amendment and such Rule Change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees will be appropriately modified to reflect the effect of any such change on the weight or performance of the Aircraft.

7.2		The Guarantees apply to the Aircraft as described in the Preamble to this Letter Agreement and will be further adjusted in the event of:

	i)		Any further configuration change which is the subject of a SCN;

	ii)		Variation in actual weights of items defined in Section 13-10 of the A321-200 Standard Specification.


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8D-2 — 10 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

8		EXCLUSIVE GUARANTEES

		The Guarantees are exclusive and are provided in lieu of any and all other performance and weight guarantees of any nature which may be stated, referenced or incorporated in the A321-200 Standard Specification or any other document.

9		**

10		NEGOTIATED AGREEMENT

		The Buyer and the Seller agree that this Letter Agreement has been the subject of discussion and negotiation by the parties and that other mutual agreements of the parties set forth in the Agreement and this Letter Agreement were arrived at in consideration of, inter alia, the provisions of this Letter Agreement specifically including Paragraphs 8 and 9 of this Letter Agreement.

11		ASSIGNMENT

		Notwithstanding the provisions of Clause 20 or any other provision of the Agreement, the Buyer’s rights under this Guarantee are not transferable and shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise. Any assignment, sale, transfer or other alienation of the Buyer’s rights under this Guarantee with respect to any Original A321 Aircraft will, as to the Original A321 Aircraft involved, immediately void this Guarantee in its entirety.


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8D-2 — 11 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8D-2
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX A to LETTER AGREEMENT No. 8D-2


**		CONFIDENTIAL TREATMENT REQUESTED.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8D-2 — 13 of 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8E-1

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281


Re:		A320-232 (IAE Powered) PERFORMANCE GUARANTEES
		(78 METRIC TONS)

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated Airbus A320 Family Purchase Agreement dated as of even date herewith, (the “ Agreement ”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain New A320 (IAE Powered) Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8E-1 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the New A320 (IAE Powered) Aircraft.


**		Confidential Treatment Requested.



USA — Amended & Restated Airbus A320 Family Purchase Agreement		LA 8E-1 — 1 of 14
EXECUTION		PRIVILEGED AND CONFIDENTIAL

PREAMBLE

The guarantees defined below (“the Guarantees”) are applicable to the New A320 (IAE Powered) Aircraft as described in the Technical Specification ** for:

The fitting of International Aero Engines V2527-A5 propulsion system

and without taking into account any further changes thereto as provided in the Agreement.

		All Guarantees specified in this document are **

1		GUARANTEED PERFORMANCE

1.1		Take-off

1.1.1		FAR take-off field length at an New A320 (IAE Powered) Aircraft gross weight of at the start of TORA at sea level pressure altitude in conditions shall be not more than a guaranteed value of **.

1.1.2		When operated under the following conditions **:


Pressure altitude		: **
Ambient temperature		: **
Take-off run available (TORA)		: **
Take-off distance available		: **
Accelerate-stop distance available		: **
Slope		: **
Wind		: **
Line-up allowance TOD		: **
Line-up allowance ASD		: **
Obstacles (height and distance		: **
from end of TORA)		: **
		: **
		: **
		: **
		: **
		: **

		the maximum permissible weight at the start of TORA shall **

1.1.3		When operated under the following conditions **:


**		Confidential Treatment Requested.



USA — Amended & Restated Airbus A320 Family Purchase Agreement		LA 8E-1 — 2 of 14
EXECUTION		PRIVILEGED AND CONFIDENTIAL


Pressure altitude		: **
Ambient temperature		: **
Take-off run available (TORA)		: **
Take-off distance available		: **
Accelerate-stop distance available		: **
Slope		: **
Wind		: **
Line-up allowance TOD		: **
Line-up allowance ASD		: **
Obstacles (height and distance		: **
from end of TORA)		: **
		: **
		: **
		: **
		: **
		: **
		: **
		: **

the maximum permissible weight at the start of TORA shall **

1.2

Second Segment

The New A320 (IAE Powered) Aircraft shall **

1.3

Landing Field Length

FAR certified dry landing field length at an New A320 (IAE Powered) Aircraft gross weight of **at sea level pressure altitude shall be not more than **.

1.4		Specific Range

1.4.1		The nautical miles per pound of fuel at an New A320 (IAE Powered) Aircraft gross weight of at a pressure altitude of conditions at a true Mach number of shall be not less than a guaranteed value of .

1.4.2		The nautical miles per pound of fuel at an New A320 (IAE Powered) Aircraft gross weight of at a pressure altitude of conditions at a true Mach number of shall be not less than a guaranteed value of .

2		MISSION GUARANTEES


**		Confidential Treatment Requested.



USA — Amended & Restated Airbus A320 Family Purchase Agreement		LA 8E-1 — 3 of 14
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.1		The New A320 (IAE Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.1.1		The departure airport conditions **are as follows:


Pressure altitude Ambient temperature Take-off run available (TORA) Take-off distance available Accelerate-stop distance available Slope Wind Line-up allowance TOD Line-up allowance ASD		: : : : : : : : : **
Obstacles (height and distance from end of TORA)		: : : : : **

The destination airport conditions are such as to allow the required landing weight to be used without restriction. **

2.1.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.1.3		An allowance of of fuel is included for take-off and climb to above the departure airport at **

2.1.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in conditions. Climb and descent speeds **

2.1.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.1.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.1.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.1.4 above.

		**


**		Confidential Treatment Requested.



USA — Amended & Restated Airbus A320 Family Purchase Agreement		LA 8E-1 — 4 of 14
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.1.8

At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:

	1)		**

	2)		**

	3)		**

2.2		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.1 the Block Fuel shall be not more than a guaranteed value of **.

2.3		The New A320 (IAE Powered) Aircraft will be capable of carrying a over a still air stage distance of when operated under the conditions defined below:

2.3.1		The departure airport conditions are as described in paragraph 2.1.1.

		**

2.3.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.3.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.3.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in conditions. Climb and descent speeds **

2.3.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.3.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.3.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.3.4 above.

		**

2.3.8		At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:

	1)		**

	2)		**

	3)		**


**		Confidential Treatment Requested.



USA — Amended & Restated Airbus A320 Family Purchase Agreement		LA 8E-1 — 5 of 14
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.4		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.3 the Block Fuel shall be not more than a guaranteed value of **.

2.5		The New A320 (IAE Powered) Aircraft will be capable of carrying a guaranteed payload of ** when operated under the conditions defined below:

2.5.1		The departure airport conditions are as described in paragraph 2.1.1.

		**

2.5.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.5.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.5.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in conditions. Climb and descent speeds below **

2.5.5		**

2.5.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.5.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.5.4 above.

		**

2.5.8		At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:

	1)		**

	2)		**

	3)		**

2.6		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.5 the Block Fuel shall be not more than a guaranteed value of **

2.7		**

3		MANUFACTURER’S WEIGHT EMPTY


**		Confidential Treatment Requested.



USA — Amended & Restated Airbus A320 Family Purchase Agreement		LA 8E-1 — 6 of 14
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.1		The Seller guarantees a Manufacturer’s Weight Empty of **

3.2		For the purpose of this paragraph 3 the Manufacturer’s Weight Empty is the Manufacturer’s Weight Empty defined in Section **as defined in the Preamble to this Letter Agreement and is subject to adjustment as defined in paragraph 7.2.

		**

4		NOISE

4.1		Exterior Noise

		For the purpose of the exterior noise guarantees of paragraphs 4.1.1, 4.1.2 and 4.1.3 no thrust BUMP for take-off is assumed.

4.1.1		Noise Certification

		The A320-232 powered by V2527-A5 engines at a and a shall be certified in accordance with the requirements of **

4.1.2		**

4.1.3		**

4.2		Interior Noise

4.2.1		Interior Noise on Ground

4.2.1.2		Cockpit

		During ground operation, with the APU and the air conditioning in normal operation and passenger doors closed, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) in the cockpit shall be as follows:


	Guarantee
SPL [dB(A)]		*	*
SIL [dB]		*	*

		Noise level shall be measured at the Captain’s and First Officer’s seat position at head level with normal cockpit air conditioning and ventilation in operation.

4.2.1.2		Cabin


**		Confidential Treatment Requested.



USA — Amended & Restated Airbus A320 Family Purchase Agreement		LA 8E-1 — 7 of 14
EXECUTION		PRIVILEGED AND CONFIDENTIAL

During ground operation, with the APU and the air conditioning in normal operation and passenger doors open or closed, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) in the passenger seated area shall be as follows:


**		Confidential Treatment Requested.



USA — Amended & Restated Airbus A320 Family Purchase Agreement		LA 8E-1 — 8 of 14
EXECUTION		PRIVILEGED AND CONFIDENTIAL


		Guarantee
Passenger seated area	SPL[dB(A)]		*	*
	SIL [dB]		*	*

4.2.2		Interior Noise in Flight

4.2.2.1		Cockpit

		At a pressure altitude of and a true Mach number of in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) shall be as follows:


	Guarantee
SPL [dB(A)]		*	*
SIL [dB]		*	*

		Noise levels shall be measured at the Captain’s and First Officer’s seat position at head level with normal cockpit air conditioning and ventilation in operation.

4.2.2.2		Cabin

		At a pressure altitude of and a true Mach number of in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) shall be as follows:


		Guarantee
Front 40% of passenger seated area	SPL [dB(A)]		*	*
	SIL [dB]		*	*
Remaining 60 % of passenger seated area	SPL [dB(A)]		*	*
	SIL [dB]		*	*

Noise levels shall be measured at a height of ** above the passenger compartment floor on the aisle center lines in the passenger seated area.


**		Confidential Treatment Requested.



USA — Amended & Restated Airbus A320 Family Purchase Agreement		LA 8E-1 — 9 of 14
EXECUTION		PRIVILEGED AND CONFIDENTIAL

5		GUARANTEE CONDITIONS

5.1		The performance and noise certification requirements for the A320 (IAE Powered) aircraft, except where otherwise noted, will be as stated in **

5.2		For the determination of FAR take-off and landing performance a hard level dry runway surface with no runway strength limitations, no obstacles, no line-up allowances, zero wind, atmosphere according to , except as otherwise noted and the use of speedbrakes, flaps, landing gear and engines in the conditions liable to provide the best results

5.2.1		When establishing take-off and second segment performance **

5.3		The en-route one engine inoperative climb performance will be established with the amount of engine air bleed associated with the maximum cabin altitude as specified in and an average ventilation rate not less than the amount defined in the but no air will be bled from the engines for anti-icing.

5.4		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with maximum cabin differential pressure as defined in Section Cabin air conditioning management during performance demonstration as described in paragraph 6.3 below may be such as to optimize the New A320 (IAE Powered) Aircraft performance while meeting Unless otherwise stated **

5.5		The engines will be operated using not more than **

5.6		Where applicable the Guarantees assume the use of an approved fuel having a density of **

5.7		Loading restrictions may **

5.8		Speech interference level (SIL) is defined **

5.9		All guaranteed interior noise levels refer to an aircraft with standard acoustic insulation, an interior completely furnished and equipped with standard cloth seats. The effect of Buyer furnished equipment other than standard passenger cloth seats (standard seats or acoustically equivalent) shall be the responsibility of the Buyer **

		Effects on noise of Buyer furnished equipment and installations by or on behalf of the Buyer are not covered by this guarantee.

6		GUARANTEE COMPLIANCE


**		Confidential Treatment Requested.



USA — Amended & Restated Airbus A320 Family Purchase Agreement		LA 8E-1 — 10 of 14
EXECUTION		PRIVILEGED AND CONFIDENTIAL

6.1		Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.

6.2		Compliance with the take-off, second segment and landing elements of the Guarantees will be demonstrated with reference to the approved Flight Manual.

6.3		Compliance with those parts of the Guarantees defined in paragraphs 1 and 2 above not covered by the requirements of the certifying Airworthiness Authority shall be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) A320 (IAE Powered) aircraft of the same aerodynamic configuration as those New A320 (IAE Powered) Aircraft purchased by the Buyer and incorporated in the In-Flight Performance Program and data bases (the “IFP”) appropriate to the New A320 (IAE Powered) Aircraft.

6.4		Compliance with the Manufacturer’s Weight Empty guarantee defined in paragraph 3 shall be demonstrated with reference to a weight compliance report.

6.5		The approved aircraft flight manual shall be used to demonstrate compliance with the certification noise levels guarantees (paragraph 4.1.1).

6.6		FAA Advisory Circular 36-3H dated 25 April 2002 shall be used to demonstrate compliance with the guarantee in paragraph 4.1.2.

6.7		The Airbus Noise Level Computation program will be used to demonstrate compliance with the guarantee in paragraph 4.1.3.

6.8		Compliance with the interior noise guarantees shall be demonstrated with reference to noise surveys conducted on one (or more) aircraft at the Seller’s discretion of an acoustically equivalent standard to those A320-232 aircraft purchased by the Buyer. Data derived from flight tests and noise surveys shall be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices.

6.9		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.

6.10		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at, or as soon as possible after, the delivery of each of the Buyer’s New A320 (IAE Powered) Aircraft.

7		ADJUSTMENT OF GUARANTEES


**		Confidential Treatment Requested.



USA — Amended & Restated Airbus A320 Family Purchase Agreement		LA 8E-1 — 11 of 14
EXECUTION		PRIVILEGED AND CONFIDENTIAL

7.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“rule change”) by any governmental agency made subsequent to the date of the Agreement and such rule change affects the New A320 (IAE Powered) Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.

7.2		The Guarantees apply to the New A320 (IAE Powered) Aircraft as described in the Preamble to this Letter Agreement and may be adjusted in the event of:

	a)		Any further configuration change which is the subject of a SCN

	b)		Variation in actual weights of items defined in Section 13-10 of the Specification

	c)		Changes required to obtain certification which cause changes to the performance or weight of the New A320 (IAE Powered) Aircraft

8		EXCLUSIVE GUARANTEES

		The Guarantees are exclusive and are provided in lieu of any and all other performance and weight guarantees of any nature which may be stated, referenced or incorporated in the Specification or any other document.

9		**

10.		TRANSFERABILITY

		Notwithstanding the provisions of Clause 20 or any other provision of the Agreement, the Buyer’s rights under this Guarantee are not transferable and shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise. Any assignment, sale, transfer or other alienation of the Buyer’s rights under this Guarantee with respect to any New A320 (IAE Powered) Aircraft will, as to the New A320 (IAE Powered) Aircraft involved, immediately void this Guarantee in its entirety.

11.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one same instrument.


**		Confidential Treatment Requested.



USA — Amended & Restated Airbus A320 Family Purchase Agreement		LA 8E-1 — 12 of 14
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.



US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy
	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer
			Customers



USA — Amended & Restated Airbus A320 Family Purchase Agreement		LA 8E-1
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX A


**		Confidential Treatment Requested.



USA — Amended & Restated Airbus A320 Family Purchase Agreement A320 (IAE/78T)		LA 8E-1 — 14 of 14
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8E-2

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281


Re:		A320-214 (CFM Powered) PERFORMANCE GUARANTEES
		(78 METRIC TONS)

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated Airbus A320 Family Purchase Agreement dated as of even date herewith, (the “ Agreement ”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain New A320 (CFM Powered) Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8E-2 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the New A320 (CFM Powered) Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8E-2 — 1 of 16 PRIVILEGED AND CONFIDENTIAL

PREAMBLE

The guarantees defined below (“the Guarantees”) are applicable to the New A320 (CFM Powered) as described in the Technical Specification ** for:

a) Increased Design Weights to:


Maximum Take-Off Weight		**
Maximum Landing Weight		**
Maximum Zero Fuel Weight		**

b) The fitting of CFM International CFM56-5B4/P propulsion system

and without taking into account any further changes thereto as provided in the Agreement.

All Guarantees specified in this document are applicable to aircraft to be delivered from 2009 onwards.

1		GUARANTEED PERFORMANCE

1.1		Take-off

1.1.1		FAR take-off field length at an New A320 (CFM Powered) Aircraft gross weight of at the start of TORA at sea level pressure altitude in shall be not more than a guaranteed value of **.

1.1.2		When operated under the following conditions (representative of PHX 25R):


Pressure altitude		: **
Ambient temperature		: **
Take-off run available (TORA)		: **
Take-off distance available		: **
Accelerate-stop distance available		: **
Slope		: **
Wind		: **
Line-up allowance TOD		: **
Line-up allowance ASD		: **
Obstacles (height and distance		: **
from end of TORA)		: : : : : :


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8E-2 — 2 of 16 PRIVILEGED AND CONFIDENTIAL

the maximum permissible weight at the start of TORA shall be not less than a guaranteed value of **.

1.1.3

When operated under the following conditions **:


Pressure altitude		: **
Ambient temperature		: **
Take-off run available (TORA)		: **
Take-off distance available		: **
Accelerate-stop distance available		: **
Slope		: **
Wind		: **
Line-up allowance TOD		: **
Line-up allowance ASD		: **
Obstacles (height and distance		: **
from end of TORA)		: **
		: **
		: **
		: **
		: **
		: **
		: **
		: **

the maximum permissible weight at the start of TORA shall be **.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8E-2 — 3 of 16 PRIVILEGED AND CONFIDENTIAL

1.2		Second Segment

		The New A320 (CFM Powered) shall **

1.3		Landing Field Length

FAR certified dry landing field length at an New A320 (CFM Powered) Aircraft gross weight of **at sea level pressure altitude shall be not more than **.

1.4		Specific Range

1.4.1		The nautical miles per pound of fuel at an New A320 (CFM Powered) Aircraft gross weight of at a pressure altitude of at a true Mach number of shall be not less than a guaranteed value of .

1.4.2		The nautical miles per pound of fuel at an New A320 (CFM Powered) Aircraft gross weight of at a pressure altitude of at a true Mach number of shall be not less than a guaranteed value of .

2		MISSION GUARANTEES

2.1		The New A320 (CFM Powered) will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.1.1		The departure airport conditions ** are as follows:


Pressure altitude		: **
Ambient temperature		: **
Take-off run available (TORA)		: **
Take-off distance available		: **
Accelerate-stop distance available		: **
Slope		: **
Wind		: **
Line-up allowance TOD		: **
Line-up allowance ASD		: **
Obstacles (height and distance		: **
from end of TORA)		: **
		: **


		: **
		: **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8E-2 — 4 of 16 PRIVILEGED AND CONFIDENTIAL

The destination airport conditions are such as to allow the required landing weight to be used without restriction. **

2.1.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.1.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.1.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitude above the destination airport are conducted in . Climb and descent speeds below ** will be 250 knots CAS.

2.1.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.1.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.1.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.1.4 above.

		**

2.1.8		At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:

	1)		**

	2)		**

	3)		**

2.2		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.1 the Block Fuel shall be not more than a guaranteed value of **.

2.3		The New A320 (CFM Powered) will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.3.1		The departure airport conditions are as described in paragraph 2.1.1.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8E-2 — 5 of 16 PRIVILEGED AND CONFIDENTIAL

The destination airport conditions are such as to allow the required landing weight to be used without restriction. **

2.3.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.3.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.3.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitude of above the destination airport are conducted in . Climb and descent speeds below ** will be 250 knots CAS.

2.3.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.3.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.3.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.3.4 above.

		**

2.3.8		At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8E-2 — 6 of 16 PRIVILEGED AND CONFIDENTIAL

	1)		**

	2)		**

	3)		**

2.4		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.3 the Block Fuel shall be not more than a guaranteed value of **.

2.5		The New A320 (CFM Powered) will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.5.1		The departure airport conditions are as described in paragraph 2.1.1.

		**

2.5.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.5.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.5.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in ISA conditions. Climb and descent speeds below will be **.

2.5.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.5.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.5.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.5.4 above.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8E-2 — 7 of 16 PRIVILEGED AND CONFIDENTIAL

		**

2.5.8		At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:

	1)		**

	2)		**

	3)		**

2.6		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.5 the Block Fuel shall be not more than a guaranteed value of **.

2.7		**.

3		MANUFACTURER’S WEIGHT EMPTY

3.1		The Seller guarantees a Manufacturer’s Weight Empty of **.

3.2		For the purpose of this paragraph 3 the Manufacturer’s Weight Empty is the Manufacturer’s Weight Empty defined in Section **

		For information only an analysis of the Manufacturer’s Weight Empty, Customer Changes, Operators Items and Operating Weight Empty is shown in Appendix A to this Letter Agreement.

4		NOISE

4.1		Exterior Noise

		For the purpose of the exterior noise guarantees of paragraphs 4.1.1, 4.1.2 and 4.1.3 no thrust BUMP for take-off is assumed.

4.1.1		Noise Certification

		The A320-214 powered by CFM56-5B4/P engines at a and a shall be certified in accordance with the requirements of **

4.1.2


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8E-2 — 8 of 16 PRIVILEGED AND CONFIDENTIAL

•

4.1.3 **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8E-2 — 9 of 16 PRIVILEGED AND CONFIDENTIAL

4.2		Interior Noise

4.2.1		Interior Noise on Ground

4.2.1.2		Cockpit

		During ground operation, with the APU and the air conditioning in normal operation and passenger doors closed, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) in the cockpit shall be as follows:


		Guarantee
SPL [dB(A)]		**
SIL [dB]		**

Noise level shall be measured at the Captain’s and First Officer’s seat position at head level with normal cockpit air conditioning and ventilation in operation.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8E-2 — 10 of 16 PRIVILEGED AND CONFIDENTIAL

4.2.1.2

Cabin

4.2.2		Interior Noise in Flight

4.2.2.1		Cockpit

At a pressure altitude of ** and a true Mach number of **in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) shall be as follows:


		Guarantee
SPL [dB(A)]		**
SIL [dB]		**

Noise levels shall be measured at the Captain’s and First Officer’s seat position at head level with normal cockpit air conditioning and ventilation in operation.

4.2.2.2

Cabin

At a pressure altitude of ** and a true Mach number of ** in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) shall be as follows:


		Guarantee
Front 40% of passenger seated area	SPL[dB(A)]	**
	SIL [dB]	**
Remaining 60 % of passenger seated area	SPL[dB(A)]	**
	SIL [dB]	**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8E-2 — 11 of 16 PRIVILEGED AND CONFIDENTIAL

Noise levels shall be measured at a height of ** above the passenger compartment floor on the aisle center lines in the passenger seated area.

5		GUARANTEE CONDITIONS

5.1		The performance and noise certification requirements for the New A320 (CFM Powered), except where otherwise noted, will be as stated in **.

5.2		For the determination of FAR take-off and landing performance a hard level dry runway surface with no runway strength limitations, no obstacles, no line-up allowances, zero wind, atmosphere according to , except as otherwise noted and the use of speedbrakes, flaps, landing gear and engines in the conditions liable to provide the best results .

5.2.1		When establishing take-off and second segment performance **

5.3		The en-route one engine inoperative climb performance will be established with the amount of engine air bleed associated with the maximum cabin altitude as specified in and an average ventilation rate not less than the amount defined in but no air will be bled from the engines for anti-icing.

5.4		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with maximum cabin differential pressure as defined in Section . Cabin air conditioning management during performance demonstration as described in paragraph 6.3 below may be such as to optimize the New A320 (CFM Powered) performance while meeting the

5.5		The engines will be operated using not more than **

5.6		Where applicable the Guarantees assume the use of an approved fuel having a density of **

5.7		Loading restrictions may apply for operations with **

5.8		Speech interference level (SIL) is defined as the arithmetic average of the sound pressure levels . A-weighted sound pressure level (dB(A)) is as defined in the

5.9		All guaranteed interior noise levels refer to an aircraft with standard acoustic insulation, an interior completely furnished and equipped with standard cloth seats. The effect of Buyer furnished equipment other than standard passenger cloth seats (standard seats or acoustically equivalent) shall be the responsibility of the Buyer ** Effects on noise of Buyer furnished equipment and installations by or on behalf of the Buyer


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8E-2 — 12 of 16 PRIVILEGED AND CONFIDENTIAL

are not covered by this guarantee.

6		GUARANTEE COMPLIANCE

6.1		Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.

6.2		Compliance with the take-off, second segment and landing elements of the Guarantees will be demonstrated with reference to the approved Flight Manual.

6.3		Compliance with those parts of the Guarantees defined in paragraphs 1 and 2 above not covered by the requirements of the certifying Airworthiness Authority shall be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) A320 (CFM Powered) aircraft of the same aerodynamic configuration as those New A320 (CFM Powered) Aircraft purchased by the Buyer and incorporated in the In-Flight Performance Program and data bases (the “IFP”) appropriate to the New A320 (CFM Powered) Aircraft.

6.4		Compliance with the Manufacturer’s Weight Empty guarantee defined in paragraph 3 shall be demonstrated with reference to a weight compliance report.

6.5		The approved aircraft flight manual shall be used to demonstrate compliance with the certification noise levels guarantees (paragraph 4.1.1).

6.6		FAA Advisory Circular 36-3H dated 25 April 2002 shall be used to demonstrate compliance with the guarantee in paragraph 4.1.2.

6.7		The Airbus Noise Level Computation program will be used to demonstrate compliance with the guarantee in paragraph 4.1.3.

6.8		Compliance with the interior noise guarantees shall be demonstrated with reference to noise surveys conducted on one (or more) aircraft at the Seller’s discretion of an acoustically equivalent standard to those A320-214 aircraft purchased by the Buyer. Data derived from flight tests and noise surveys shall be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices.

6.9		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8E-2 — 13 of 16 PRIVILEGED AND CONFIDENTIAL

6.10		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at, or as soon as possible after, the delivery of each of the Buyer’s New A320 (CFM Powered).

7		ADJUSTMENT OF GUARANTEES

7.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“rule change”) by any governmental agency made subsequent to the date of the Agreement and such rule change affects the New A320 (CFM Powered) configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.

7.2		The Guarantees apply to the New A320 (CFM Powered) as described in the Preamble to this Letter Agreement and may be adjusted in the event of:

	a)		Any further configuration change which is the subject of a SCN

	b)		Variation in actual weights of items defined in Section 13-10 of the Specification

	c)		Changes required to obtain certification which cause changes to the performance or weight of the New A320 (CFM Powered)

EXCLUSIVE GUARANTEES

The Guarantees are exclusive and are provided in lieu of any and all other performance and weight guarantees of any nature which may be stated, referenced or incorporated in the Specification or any other document.

9		**

10.		**

11.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one same instrument.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8E-2 — 14 of 16 PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.



US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy
	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8E-2 — 15 of 16 PRIVILEGED AND CONFIDENTIAL

APPENDIX A


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8E-2 — 16 of 16 PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8F-1

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: A321-211 (CFM Powered) PERFORMANCE GUARANTEES

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated Airbus A320 Family Purchase Agreement dated as of even date herewith, (the “ Agreement ”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain New A321 (CFM Powered) Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8F-1 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the New A321 (CFM Powered) Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-1 — 1 of 22
EXECUTION		PRIVILEGED AND CONFIDENTIAL

PREAMBLE

The guarantees defined below (“the Guarantees”) are applicable to the New A321 (CFM Powered) Aircraft as described in the Technical Specification ** for:

Increased Design Weights to:


		Maximum Take-Off Weight		**
		Maximum Landing Weight		**
		Maximum Zero Fuel Weight		**

	b)		**

	c)		**

	d)		**

and without taking into account any further changes thereto as provided in the Agreement.

All Guarantees specified in this document are applicable to aircraft to be **.

1		GUARANTEED PERFORMANCE

1.1		Take-off

1.1.1		FAR take-off field length at an New A321 (CFM Powered) Aircraft gross weight of at the start of TORA at sea level pressure altitude in shall be not more than a guaranteed value of **.

1.1.2		When operated under the following conditions **:


		Pressure altitude		: **
		Ambient temperature		: **
		Take-off run available (TORA)		: **
		Take-off distance available		: **
		Accelerate-stop distance available		: **
		Slope		: **
		Wind		: **
		Line-up allowance TOD		: **
		Line-up allowance ASD		: **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-1 — 2 of 22
EXECUTION		PRIVILEGED AND CONFIDENTIAL


		Obstacles (height and distance		: **
		from end of TORA)		: **
				: **
				: **
				: **
				: **
				: **

the maximum permissible weight at the start of TORA shall be not less than a guaranteed value of **

1.1.3

When operated under the following conditions **:


		Pressure altitude		: **
		Ambient temperature		: **
		Take-off run available (TORA)		: **
		Take-off distance available		: **
		Accelerate-stop distance available		: **
		Slope		: **
		Wind		: **
		Line-up allowance TOD		: **
		Line-up allowance ASD		: **
		Obstacles (height and distance		: **
		from end of TORA)		: **
				: **
				: **
				: **
				: **
				: **
				: **
				: **

the maximum permissible weight at the start of TORA shall be not less than a guaranteed value of **.

1.2		Second Segment

		The New A321 (CFM Powered) Aircraft shall **

1.3		Landing Field Length


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8F-1 — 3 of 22 PRIVILEGED AND CONFIDENTIAL

FAR certified dry landing field length at an New A321 (CFM Powered) Aircraft gross weight of **at sea level pressure altitude shall be not more than **

1.4		Specific Range

1.4.1		The nautical miles per pound of fuel at an New A321 (CFM Powered) Aircraft gross weight of at a pressure altitude of in at a true Mach number of shall be not less than a guaranteed value of **.

1.4.2		The nautical miles per pound of fuel at an New A321 (CFM Powered) Aircraft gross weight of at a pressure altitude of in at a true Mach number of shall be not less than a guaranteed value of **.

2		MISSION GUARANTEES

2.1		The New A321 (CFM Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.1.1		The departure airport conditions are as described in paragraph 1.1.2.

		The destination airport conditions are such as to allow the required landing weight to be used without restriction. **

2.1.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.1.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.1.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in . Climb and descent speeds below will be .

2.1.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.1.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.1.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.1.4 above.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8F-1 — 4 of 22 PRIVILEGED AND CONFIDENTIAL

		**

2.1.8		At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:

2.2		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.1 the Block Fuel shall be not more than a guaranteed value of **.

2.3		The New A321 (CFM Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.3.1		The departure airport conditions are as described in paragraph 1.1.2.

		The destination airport conditions are such as to allow the required landing weight to be used without restriction. **

2.3.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.3.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.3.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of and descent to above the destination airport are conducted in Climb and descent speeds below will be **

2.3.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.3.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.3.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.3.4 above.

		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-1 — 5 of 22
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.3.8

At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:

2.4		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.3 the Block Fuel shall be not more than a guaranteed value of **.

2.5		The New A321 (CFM Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.5.1		The departure airport conditions are as described in paragraph 1.1.2.

		**

2.5.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.5.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.5.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in . Climb and descent speeds below will be

2.5.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.5.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.5.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.5.4 above.

		**

2.5.8		At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-1 — 6 of 22
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.6		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.5 the Block Fuel shall be not more than a guaranteed value of **.

2.7		The New A321 (CFM Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.7.1		The departure airport conditions are as described in paragraph 1.1.3.

		**

2.7.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.7.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.7.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in conditions. Climb and descent speeds below will be .

2.7.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.7.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.7.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.7.4 above.

		**

2.7.8		At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:


1	)	**
2	)	**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-1 — 7 of 22
EXECUTION		PRIVILEGED AND CONFIDENTIAL


			3	)		**

2.8		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.7 the Block Fuel shall be not more than a guaranteed value of **.

2.9		The New A321 (CFM Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-1 — 8 of 22
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.9.1		The departure airport conditions are as described in paragraph 1.1.3.

		**

2.9.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.9.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.9.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in conditions. Climb and descent speeds below will be

2.9.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.9.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.9.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.9.4 above.

		**

2.9.8		At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:

2.10		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.9 the Block Fuel shall be not more than a guaranteed value of **.

2.11		The New A321 (CFM Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:


**		Confidential Treatment Requested.




USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-1 — 9 of 22
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.11.1		The departure airport conditions are as described in paragraph 1.1.3.

		**

2.11.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.11.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.11.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in . Climb and descent speeds below will be

2.11.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.11.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.11.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.11.4 above.

		**

2.11.8		At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:

2.12		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.11 the Block Fuel shall be not more than a guaranteed value of **.

2.13		The New A321 (CFM Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.13.1		The departure airport conditions **are as follows:


		Pressure altitude		: **


**		Confidential Treatment Requested.




USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-1 — 10 of 22
EXECUTION		PRIVILEGED AND CONFIDENTIAL


		Ambient temperature		: **
		Take-off run available (TORA)		: **
		Take-off distance available		: **
		Accelerate-stop distance available		: **
		Slope		: **
		Wind		: **
		Line-up allowance TOD		: **
		Line-up allowance ASD		: **
		Obstacles (height and distance		: **
		from end of TORA)		: **
				: **
				: **
				: **

		The destination airport conditions are such as to allow the required landing weight to be used without restriction. Pressure altitude is **.

2.13.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.13.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.13.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in . Climb and descent speeds below will be .

2.13.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.13.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.13.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.13.4 above.

		**

2.13.8		At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:


1	)	**
2	)	**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-1 — 11 of 22
EXECUTION		PRIVILEGED AND CONFIDENTIAL


			3	)		**

2.14		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.13 the Block Fuel shall be not more than a guaranteed value of **.

2.15		The New A321 (CFM Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.15.1		The departure airport conditions are as described in paragraph 2.13.1.

		**

2.15.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.15.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.15.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in Climb and descent speeds below will be

2.15.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.15.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.15.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.15.4 above.

		**

2.15.8		At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-1 — 12 of 22
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.16		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.15 the Block Fuel shall be not more than a guaranteed value of **.

2.17		The New A321 (CFM Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.17.1		The departure airport conditions are as described in paragraph 2.13.1.

		**

2.17.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.17.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.17.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in Climb and descent speeds below will be .

2.17.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.17.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.17.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.17.4 above.

		**

2.17.8		At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:

2.18

In carrying a fixed payload of ** over a still air stage distance of **when operated under the conditions defined in paragraph 2.17 the Block Fuel shall be not more than a guaranteed value of **.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-1 — 13 of 22
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.19		**

3		MANUFACTURER’S WEIGHT EMPTY

3.1		The Seller guarantees a Buyer’s Manufacturer’s Weight Empty of **.

3.2		For the purposes of this paragraph 3 the Buyer’s Manufacturer’s Weight Empty is the Manufacturer’s Weight Empty defined in Section **

		For information only an analysis of the Buyer’s Manufacturer’s Weight Empty, Customer Changes, Operators Items and Operating Weight Empty is shown in Appendix A to this Letter Agreement.

4		NOISE

4.1		Exterior Noise

		For the purpose of the exterior noise guarantees of paragraphs 4.1.1, 4.1.2 and 4.1.3 no thrust BUMP for take-off is assumed.

4.1.1		Noise Certification

		The A321-211 powered by CFM56-5B3/P engines at a and a shall be certified in accordance with the requirements of **

4.1.2		**

4.1.3		**

4.2		Interior Noise

4.2.1		Interior Noise on Ground

4.2.1.2		Cockpit

		During ground operation, with the APU and the air conditioning in normal operation and passenger doors closed, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) in the cockpit shall be as follows:


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-1 — 14 of 22
EXECUTION		PRIVILEGED AND CONFIDENTIAL


		Guarantee
SPL [dB(A)]		**
SIL [dB]		**

		Noise level shall be measured at the Captain’s and First Officer’s seat position at head level with normal cockpit air conditioning and ventilation in operation.

4.2.1.2		Cabin

		During ground operation, with the APU and the air conditioning in normal operation and passenger doors open or closed, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) in the passenger seated area shall be as follows:


		Guarantee
Passenger seated area	SPL[dB(A)]	**
	SIL [dB]	**

4.2.2		Interior Noise in Flight

4.2.2.1		Cockpit

		At a pressure altitude of and a true Mach number of in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) shall be as follows:


		Guarantee
SPL [dB(A)]		**
SIL [dB]		**

		Noise levels shall be measured at the Captain’s and First Officer’s seat position at head level with normal cockpit air conditioning and ventilation in operation.

4.2.2.2		Cabin

		At a pressure altitude of and a true Mach number of in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) shall be as follows:


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-1 — 15 of 22
EXECUTION		PRIVILEGED AND CONFIDENTIAL


		Guarantee
Front 40% of passenger seated area	SPL[dB(A)]	**
	SIL [dB]	**
Remaining 60 % of passenger seated area	SPL[dB(A)]	**
	SIL [dB]	**

Noise levels shall be measured at a height of ** above the passenger compartment floor on the aisle center lines in the passenger seated area.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-1 — 16 of 22
EXECUTION		PRIVILEGED AND CONFIDENTIAL

5		GUARANTEE CONDITIONS

5.1		The performance and noise certification requirements for the New A321 (CFM Powered) Aircraft, except where otherwise noted, will be as stated in Section **

5.2		For the determination of FAR take-off and landing performance a hard level dry runway surface with no runway strength limitations, no obstacles, no line-up allowances, zero wind, atmosphere according to , except as otherwise noted and the use of speedbrakes, flaps, landing gear and engines in the conditions liable to provide the best results

5.2.1		When establishing take-off and second segment performance **

5.3		The en-route one engine inoperative climb performance will be established with the amount of engine air bleed associated with the maximum cabin altitude as specified in and an average ventilation rate not less than the amount defined in but no air will be bled from the engines for anti-icing.

5.4		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with maximum cabin differential pressure as defined in Cabin air conditioning management during performance demonstration as described in paragraph 6.3 below may be such as to optimize the New A321 (CFM Powered) Aircraft performance while meeting the

5.5		The engines will be operated using not more than **

5.6		Where applicable the Guarantees assume the use of an approved fuel having a density of **

5.7		Speech interference level (SIL) is defined as the arithmetic average of the sound pressure levels . A-weighted sound pressure level (dB(A)) is as defined in the

5.8		All guaranteed interior noise levels refer to an aircraft with standard acoustic insulation, an interior completely furnished and equipped with standard cloth seats. The effect of Buyer furnished equipment other than standard passenger cloth seats (standard seats or acoustically equivalent) shall be the responsibility of the Buyer **

		Effects on noise of Buyer furnished equipment and installations by or on behalf of the Buyer are not covered by this guarantee.

6		GUARANTEE COMPLIANCE


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-1 — 17 of 22
EXECUTION		PRIVILEGED AND CONFIDENTIAL

6.1		Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.

6.2		Compliance with the take-off, second segment and landing elements of the Guarantees will be demonstrated with reference to the approved Flight Manual.

6.3		Compliance with those parts of the Guarantees defined in paragraphs 1 and 2 above not covered by the requirements of the certifying Airworthiness Authority shall be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) A321 (CFM Powered) aircraft of the same aerodynamic configuration as those New A321 (CFM Powered) Aircraft purchased by the Buyer and incorporated in the In-Flight Performance Program and data bases (the “IFP”) appropriate to the New A321 (CFM Powered) Aircraft.

6.4		Compliance with the Manufacturer’s Weight Empty guarantee defined in paragraph 3 shall be demonstrated with reference to a weight compliance report.

6.5		The approved aircraft flight manual shall be used to demonstrate compliance with the certification noise levels guarantees (paragraph 4.1.1).

6.6		FAA Advisory Circular 36-3H dated 25 April 2002 shall be used to demonstrate compliance with the guarantee in paragraph 4.1.2.

6.7		The Airbus Noise Level Computation program will be used to demonstrate compliance with the guarantee in paragraph 4.1.3.

6.8		Compliance with the interior noise guarantees shall be demonstrated with reference to noise surveys conducted on one (or more) aircraft at the Seller’s discretion of an acoustically equivalent standard to those A321-211 aircraft purchased by the Buyer. Data derived from flight tests and noise surveys shall be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices.

6.9		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-1 — 18 of 22
EXECUTION		PRIVILEGED AND CONFIDENTIAL

6.10		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at, or as soon as possible after, the delivery of each of the Buyer’s New A321 (CFM Powered) Aircraft.

7		ADJUSTMENT OF GUARANTEES

7.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“rule change”) by any governmental agency made subsequent to the date of the Agreement and such rule change affects the New A321 (CFM Powered) Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.

7.2		The Guarantees apply to the New A321 (CFM Powered) Aircraft as described in the Preamble to this Letter Agreement and may be adjusted in the event of:

	a)		Any further configuration change which is the subject of a SCN

	b)		Variation in actual weights of items defined in Section 13-10 of the Specification

	c)		Changes required to obtain certification which cause changes to the performance or weight of the New A321 (CFM Powered) Aircraft

8		EXCLUSIVE GUARANTEES

		The Guarantees are exclusive and are provided in lieu of any and all other performance and weight guarantees of any nature which may be stated, referenced or incorporated in the Specification or any other document.

9		**

10.		TRANSFERABILITY

		Notwithstanding the provisions of Clause 20 or any other provision of the Agreement, the Buyer’s rights under this Guarantee are not transferable and shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise. Any assignment, sale, transfer or other alienation of the Buyer’s rights under this Guarantee with respect to any New A321 (CFM Powered) Aircraft will, as to the New A321 (CFM Powered) Aircraft involved, immediately void this Guarantee in its entirety.

11.		COUNTERPARTS


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-1 — 19 of 22
EXECUTION		PRIVILEGED AND CONFIDENTIAL

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one same instrument.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-1 — 20 of 22
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir Name: Thomas T. Weir	By:	/s/ John J. Leahy Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers



USA — Amended and Restated Airbus A320 Family Purchase Agreement EXECUTION		LA 8F-1 PRIVILEGED AND CONFIDENTIAL

APPENDIX A to Letter Agreement No. 8F-1


**		Confidential Treatment Requested.



USA — A320 Family – Amended & Restated PA EXECUTION		LA 8F-1 — 22 of 22 PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8F-2

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281


Re:		New A321-231 AIRCRAFT PERFORMANCE GUARANTEES(IAE Powered/93.5ton)

Ladies and Gentlemen,

US Airways, Inc., (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A320 Family Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain New A321 (IAE Powered) Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8F-2 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the New A321 (IAE Powered) Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 1 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL

PREAMBLE

The guarantees defined below (“the Guarantees”) are applicable to the New A321 (IAE Powered) Aircraft as described in the Technical Specification ** for:

Increased Design Weights to:


		Maximum Take-Off Weight Maximum Landing Weight Maximum Zero Fuel Weight		**

	b)		The fitting of provisions for two Additional Centre Tanks (“ACT”)

	c)		**

	d)		**

and without taking into account any further changes thereto as provided in the Agreement.

All Guarantees specified in this document are applicable to aircraft to be delivered from 2009 onwards.

1		GUARANTEED PERFORMANCE

1.1		Take-off

1.1.1		FAR take-off field length at an New A321 (IAE Powered) Aircraft gross weight of at the start of TORA at sea level pressure altitude in shall be not more than a guaranteed value of **.

1.1.2		When operated under the following conditions **:


		Pressure altitude		: **
		Ambient temperature		: **
		Take-off run available (TORA)		: **
		Take-off distance available		: **
		Accelerate-stop distance available		: **
		Slope		: **
		Wind		: **
		Line-up allowance TOD		: **
		Line-up allowance ASD		: **
		Obstacles (height and distance		: **
		from end of TORA)		: **
				: **
				: **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 2 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL


				: **
				: **
				: **

the maximum permissible weight at the start of TORA shall be not less than a guaranteed value of **.

1.1.3

When operated under the following conditions **:


		Pressure altitude		: **
		Ambient temperature		: **
		Take-off run available (TORA)		: **
		Take-off distance available		: **
		Accelerate-stop distance available		: **
		Slope		: **
		Wind		: **
		Line-up allowance TOD		: **
		Line-up allowance ASD		: **
		Obstacles (height and distance		: **
		from end of TORA)		: **
				: **
				: **
				: **
				: **
				: **

the maximum permissible weight at the start of TORA shall be not less than a guaranteed value of **.

1.2

Second Segment

The New A321 (IAE Powered) Aircraft shall **


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 3 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1.3

Landing Field Length

FAR certified dry landing field length at an New A321 (IAE Powered) Aircraft gross weight of **at sea level pressure altitude shall be not more than **.

1.4		Specific Range

1.4.1		The nautical miles per pound of fuel at a New A321 (IAE Powered) Aircraft gross weight of at a pressure altitude of at a true Mach number of shall be not less than a guaranteed value of .

1.4.2		The nautical miles per pound of fuel at a New A321 (IAE Powered) Aircraft gross weight of at a pressure altitude of at a true Mach number of shall be not less than a guaranteed value of .

2		MISSION GUARANTEES

2.1		The New A321 (IAE Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.1.1		The departure airport conditions are as described in paragraph 1.1.2.

The destination airport conditions are such as to allow the required landing weight to be used without restriction. **.

2.1.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.1.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.1.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitude of above the destination airport are conducted in conditions. Climb and descent speeds below will be

2.1.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.1.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.1.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.1.4 above.


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 4 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.1.8

At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:

	1)		**

	2)		**

	3)		**

2.2		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.1 the Block Fuel shall be not more than a guaranteed value of **.

2.3		The New A321 (IAE Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.3.1		The departure airport conditions are as described in paragraph 1.1.2.

The destination airport conditions are such as to allow the required landing weight to be used without restriction. **

2.3.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.3.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.3.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitude of above the destination airport are conducted in Climb and descent speeds below will be .

2.3.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.3.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.3.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.3.4 above.

2.3.8

At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 5 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	1)		**

	2)		**

	3)		**

2.4		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.3 the Block Fuel shall be not more than a guaranteed value of **.

2.5		The New A321 (IAE Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.5.1		The departure airport conditions are as described in paragraph 1.1.2.

The destination airport conditions are such as to allow the required landing weight to be used without restriction. Pressure altitude is **.

2.5.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.5.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.5.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitude of above the destination airport are conducted in . Climb and descent speeds below will be .

2.5.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.5.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.5.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.5.4 above.

2.5.8

At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:

	1)		**

	2)		**

	3)		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 6 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.6		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.5 the Block Fuel shall be not more than a guaranteed value of **.

2.7		The New A321 (IAE Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.7.1		The departure airport conditions are as described in paragraph 1.1.3.

The destination airport conditions are such as to allow the required landing weight to be used without restriction. **

2.7.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.7.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.7.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitude of above the destination airport are conducted in . Climb and descent speeds below will be .

2.7.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.7.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.7.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.7.4 above.

2.7.8

At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:

	1)		**

	2)		**

	3)		**

2.8

In carrying a fixed payload of ** over a still air stage distance of **when operated under the conditions defined in paragraph 2.7 the Block Fuel shall be not more than a guaranteed value of **.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 7 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.9		The New A321 (IAE Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.9.1		The departure airport conditions are as described in paragraph 1.1.3.

2.9.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.9.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.9.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitude of above the destination airport are conducted in . Climb and descent speeds below will be

2.9.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.9.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.9.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.9.4 above.

2.9.8

At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:


		1) 2) 3) **

2.10		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.9 the Block Fuel shall be not more than a guaranteed value of **.

2.11		The New A321 (IAE Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.11.1		The departure airport conditions are as described in paragraph 1.1.3.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 8 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.11.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.11.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.11.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitude of above the destination airport are conducted in . Climb and descent speeds below will be .

2.11.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.11.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.11.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.11.4 above.

2.11.8

At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:

	1)		**

	2)		**

	3)		**

2.12		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.11 the Block Fuel shall be not more than a guaranteed value of **.

2.13		The New A321 (IAE Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.13.1		The departure airport conditions **are as follows:


		Pressure altitude		: **
		Ambient temperature		: **
		Take-off run available (TORA)		: **
		Take-off distance available		: **
		Accelerate-stop distance available		: **
		Slope		: **
		Wind		: **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 9 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL


		Line-up allowance TOD		: **
		Line-up allowance ASD		: **
		Obstacles (height and distance		: **
		from end of TORA)		: **
				: **
				: **
				: **

The destination airport conditions are such as to allow the required landing weight to be used without restriction. Pressure altitude is **.

2.13.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.13.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.13.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in . Climb and descent speeds below will be .

2.13.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.13.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.13.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.13.4 above.

2.13.8

At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:

	1)		**

	2)		**

	3)		**

2.14

In carrying a fixed payload of ** over a still air stage distance of **when operated under the conditions defined in paragraph 2.13 the Block Fuel shall be not more than a guaranteed value of **.

** Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 10 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.15		The New A321 (IAE Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.15.1		The departure airport conditions are as described in paragraph 2.13.1.

The destination airport conditions are such as to allow the required landing weight to be used without restriction. **

2.15.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.15.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.15.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in . Climb and descent speeds below will be .

2.15.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.15.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.15.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.15.4 above.

2.15.8

At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:

	1)		**

	2)		**

	3)		**

2.16		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.15 the Block Fuel shall be not more than a guaranteed value of **.

2.17		The New A321 (IAE Powered) Aircraft will be capable of carrying a guaranteed payload of not less than over a still air stage distance of when operated under the conditions defined below:

2.17.1		The departure airport conditions are as described in paragraph 2.13.1.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 11 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL

The destination airport conditions are such as to allow the required landing weight to be used without restriction. **

2.17.2		An allowance of ** of fuel is included for taxi at the departure airport.

2.17.3		An allowance of of fuel is included for take-off and climb to above the departure airport at ** with acceleration to climb speed.

2.17.4		Climb from above the departure airport up to cruise altitude using maximum climb thrust and cruise at a fixed Mach number of at pressure altitudes of above the destination airport are conducted in . Climb and descent speeds below will be .

2.17.5		An allowance of ** of fuel is included for approach and land at the destination airport.

2.17.6		An allowance of ** of fuel is included for taxi at the destination airport.

2.17.7		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 2.17.4 above.

2.17.8

At the end of approach and land ** of fuel will remain in the tanks. This represents the estimated fuel required for:

	1)		**

	2)		**

	3)		**

2.18		In carrying a fixed payload of over a still air stage distance of when operated under the conditions defined in paragraph 2.17 the Block Fuel shall be not more than a guaranteed value of **.

2.19		**

3		MANUFACTURER’S WEIGHT EMPTY

3.1		The Seller guarantees a Buyer’s Manufacturer’s Weight Empty of **.

3.2		For the purposes of this paragraph 3 the Buyer’s Manufacturer’s Weight Empty is the Manufacturer’s Weight Empty defined in Section **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 12 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL

For information only an analysis of the Buyer’s Manufacturer’s Weight Empty, Customer Changes, Operators Items and Operating Weight Empty is shown in Appendix A to this Letter Agreement.

4		NOISE

4.1		Exterior Noise

For the purpose of the exterior noise guarantees of paragraphs 4.1.1, 4.1.2 and 4.1.3 no thrust BUMP for take-off is assumed.

4.1.1

Noise Certification

The A321-231 powered by V2533-A5 engines at a ** and a ** shall be certified in accordance with the requirements of **

4.1.2**
4.1.3**

4.2		Interior Noise

4.2.1		Interior Noise on Ground

4.2.1.2		Cockpit

		During ground operation, with the APU and the air conditioning in normal operation and passenger doors closed, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) in the cockpit shall be as follows:


	Guarantee
SPL [dB(A)]		*	*
SIL [dB]		*	*

Noise level shall be measured at the Captain’s and First Officer’s seat position at head level with normal cockpit air conditioning and ventilation in operation.

4.2.1.2		Cabin

		During ground operation, with the APU and the air conditioning in normal operation and passenger doors open or closed, the guaranteed A-weighted Sound Pressure Level


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 13 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL

(SPL) and the Speech Interference Level (SIL) in the passenger seated area shall be as follows:


		Guarantee
Passenger seated area	SPL[dB(A)]	**
	SIL [dB]	**

4.2.2		Interior Noise in Flight

4.2.2.1		Cockpit

		At a pressure altitude of and a true Mach number of in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) shall be as follows:


		Guarantee
SPL [dB(A)] SIL [dB]

Noise levels shall be measured at the Captain’s and First Officer’s seat position at head level with normal cockpit air conditioning and ventilation in operation.

4.2.2.2		Cabin

		At a pressure altitude of and a true Mach number of in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) shall be as follows:


		Guarantee
Front 40% of passenger seated area	SPL[dB(A)]	**
	SIL [dB]	**
Remaining 60 % of passenger seated area	SPL[dB(A)]	**
	SIL [dB]	**

Noise levels shall be measured at a height of ** above the passenger compartment floor on the aisle center lines in the passenger seated area.

5		GUARANTEE CONDITIONS

5.1		The performance and noise certification requirements for the New A321 (IAE Powered) Aircraft, except where otherwise noted, will be as stated in **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 14 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL

5.2		For the determination of FAR take-off and landing performance a hard level dry runway surface with no runway strength limitations, no obstacles, no line-up allowances, zero wind, atmosphere according to , except as otherwise noted and the use of speedbrakes, flaps, landing gear and engines in the conditions liable to provide the best results .

5.2.1		When establishing take-off and second segment performance **

5.3		The en-route one engine inoperative climb performance will be established with the amount of engine air bleed associated with the maximum cabin altitude as specified in and an average ventilation rate not less than the amount defined in but no air will be bled from the engines for anti-icing.

5.4		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with maximum cabin differential pressure as defined in Cabin air conditioning management during performance demonstration as described in paragraph 6.3 below may be such as to optimize the New A321 (IAE Powered) Aircraft performance while meeting the

5.5		The engines will be operated using not more than **

5.6		Where applicable the Guarantees assume the use of an approved fuel having a density of **

5.7		Speech interference level (SIL) is defined as the arithmetic average of the sound pressure levels . A-weighted sound pressure level (dB(A)) is as defined in the

5.8		All guaranteed interior noise levels refer to an aircraft with standard acoustic insulation, an interior completely furnished and equipped with standard cloth seats. The effect of Buyer furnished equipment other than standard passenger cloth seats (standard seats or acoustically equivalent) shall be the responsibility of the Buyer **

		Effects on noise of Buyer furnished equipment and installations by or on behalf of the Buyer are not covered by this guarantee.

6		GUARANTEE COMPLIANCE

6.1		Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 15 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL

6.2		Compliance with the take-off, second segment and landing elements of the Guarantees will be demonstrated with reference to the approved Flight Manual.

6.3		Compliance with those parts of the Guarantees defined in paragraphs 1 and 2 above not covered by the requirements of the certifying Airworthiness Authority shall be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) A321 aircraft of the same aerodynamic configuration as those New A321 (IAE Powered) Aircraft purchased by the Buyer and incorporated in the In-Flight Performance Program and data bases (the “IFP”) appropriate to the New A321 (IAE Powered) Aircraft.

6.4		Compliance with the Manufacturer’s Weight Empty guarantee defined in paragraph 3 shall be demonstrated with reference to a weight compliance report.

6.5		The approved aircraft flight manual shall be used to demonstrate compliance with the certification noise levels guarantees (paragraph 4.1.1).

6.6		FAA Advisory Circular 36-3H dated 25 April 2002 shall be used to demonstrate compliance with the guarantee in paragraph 4.1.2.

6.7		The Airbus Noise Level Computation program will be used to demonstrate compliance with the guarantee in paragraph 4.1.3.

6.8		Compliance with the interior noise guarantees shall be demonstrated with reference to noise surveys conducted on one (or more) aircraft at the Seller’s discretion of an acoustically equivalent standard to those A321-231 aircraft purchased by the Buyer. Data derived from flight tests and noise surveys shall be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices.

6.9		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.

6.10		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at, or as soon as possible after, the delivery of each of the Buyer’s New A321 (IAE Powered) Aircraft.

7		ADJUSTMENT OF GUARANTEES

7.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“rule change”) by any governmental agency made subsequent to the date of the Agreement and such rule change affects the New A321 (IAE Powered) Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 16 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL

7.2

The Guarantees apply to the New A321 (IAE Powered) Aircraft as described in the Preamble to this Letter Agreement and may be adjusted in the event of:

	a)		Any further configuration change which is the subject of a SCN

	b)		Variation in actual weights of items defined in Section 13-10 of the Specification

	c)		Changes required to obtain certification which cause changes to the performance or weight of the New A321 (IAE Powered) Aircraft

8		EXCLUSIVE GUARANTEES

		The Guarantees are exclusive and are provided in lieu of any and all other performance and weight guarantees of any nature which may be stated, referenced or incorporated in the Specification or any other document.

9		**

10.		TRANSFERABILITY

		Notwithstanding the provisions of Clause 20 or any other provision of the Agreement, the Buyer’s rights under this Guarantee are not transferable and shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise. Any assignment, sale, transfer or other alienation of the Buyer’s rights under this Guarantee with respect to any New A321 (IAE Powered) Aircraft will, as to the New A321 (IAE Powered) Aircraft involved, immediately void this Guarantee in its entirety.

11.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 17 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL

IN WITNESS WHEREOF, the parties have caused this Letter Agreement to be signed by their respective officers thereunto duly authorized as of the day and year first above written.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

Name: Thomas T. Weir		Name: John J. Leahy
Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 18 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX A to Letter Agreement 8F-2


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 8F-2 — 20 of 20
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 9

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: MISCELLANEOUS TERMS

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A320 Family Purchase Agreement dated as of the date hereof (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 9 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 9 — 1 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1.		INEXCUSABLE DELAY

		Clause 11.1 or the Agreement is deleted in its entirety and replaced by the following text between the “QUOTE” and “UNQUOTE”:

QUOTE:

11 — INEXCUSABLE DELAY

2.		TERMINATION

2.1		**

2.2		Paragraph 21.2(1)(i) of the Agreement is amended to read as follows between the “QUOTE” and “UNQUOTE”

QUOTE

(1) **

UNQUOTE

2.3		**

2.4		**

3.		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Paragraph 3 will be void and of no force or effect.

4.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one same instrument.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 9 — 2 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

Name: Thomas T. Weir		Name: John J. Leahy
Title: Vice President and Treasurer		Title: Chief Operating Officer Customers



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 9
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 10

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A320 Family Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 10 (the “Letter Agreement”) certain additional terms and conditions regarding the sale of the Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 10 — 1 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		**

4.		ASSIGNMENT

		Notwithstanding any other provision of this Letter Agreement or of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Paragraph 4 will be void and of no force or effect.

5.		COUNTERPARTS

		This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 10 — 2 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

Name: Thomas T. Weir		Name: John J. Leahy
Title: Vice President and Treasurer		Title: Chief Operating Officer Customers



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 11

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc., (the “Buyer”), and Airbus S.A.S. (the “Seller”), have entered into an Airbus Amended and Restated A320 Family Aircraft Purchase Agreement dated as of even date herewith (the “Agreement”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain New A320 Aircraft (the “Aircraft”), under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 11 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the New Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 11 — 1 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

11.		NEGOTIATED AGREEMENT

		THE BUYER AND THE SELLER AGREE THAT THIS LETTER AGREEMENT HAS BEEN THE SUBJECT OF DISCUSSIONS AND NEGOTIATION BY THE PARTIES AND THAT THE OTHER MUTUAL AGREEMENT OF THE PARTIES SET FORTH IN THE PURCHASE AGREEMENT WERE ARRIVED AT IN CONSIDERATION OF, INTER ALIA, THE PROVISIONS OF THIS LETTER AGREEMENT.

12.		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without prior written consent of the Seller and any attempted assignment or transfer in contravention of the provisions of this sentence will be void and of no force and effect.

13.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one same instrument.



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 11 — 2 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

Name: Thomas T. Weir		Name: John J. Leahy
Title: Vice President and Treasurer		Title:	Chief Operating Officer Customers



USA — Amended and Restated Airbus A320 Family Purchase Agreement		LA 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

Exhibit 10.4

AIRBUS A330 PURCHASE AGREEMENT

dated as of October 2, 2007

between

AIRBUS S.A.S.
Seller

and

US AIRWAYS, INC.
Buyer



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

TABLE OF CONTENTS


0 DEFINITIONS			2
1 SALE AND PURCHASE			9
2 SPECIFICATION			10
2.1 Specification Documents			10
2.2 Customization Milestones Chart			11
2.3 Propulsion Systems			11
3 PRICE			12
3.1 Base Price of the Aircraft			12
3.2 Base Price of the A330-200 Aircraft			12
3.3 [INTENTIONALLY LEFT BLANK]			14
3.4 Taxes, Duties and Imposts			14
4 PRICE REVISION			17
4.1 Seller Price Revision Formula			17
4.2 Propulsion Systems Price Revision			17
5 PAYMENT TERMS			18
5.1 Payments			18
5.2 Predelivery Payments			18
5.3 Initial Payment			20
5.4 Payment of Balance of the Final Contract Price			20
5.5 Application of Payments			20
5.6 Overdue Payments			21
5.7 Proprietary Interest			21
5.8 Payment in Full			21
6 INSPECTION			22
6.1 Manufacturing Procedures			22
6.2 Inspection Procedures			22
6.3 Representatives			22
7 CERTIFICATION			24
7.1 Type Certification			24
7.2 Export Certificate of Airworthiness			24
7.3 Additional FAA Requirements			24
7.4 Additional EASA Requirements			24
7.5 Specification Changes After Delivery			25
8 TECHNICAL ACCEPTANCE			26
8.1 Technical Acceptance Process			26
8.2 Buyer’s Attendance			26
8.3 Certificate of Acceptance			27
8.4 Finality of Acceptance			27
8.5 Aircraft Utilization			27
9 DELIVERY			28
9.1 Delivery Schedule			28



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		i PRIVILEGED AND CONFIDENTIAL


9.2 Delivery Process			28
9.3 Flyaway			29
10 EXCUSABLE DELAY AND TOTAL LOSS			30
10.1 Scope of Excusable Delay			30
10.2 Consequences of Excusable Delay			30
10.3 Termination on Excusable Delay			31
10.4 Total Loss, Destruction or Damage			31
10.5 Remedies			32
11 INEXCUSABLE DELAY			33
11.1 Liquidated Damages			33
11.2 Renegotiation			33
11.3 Termination			33
11.4 Setoff Payments			34
11.5 Remedies			34
12 WARRANTIES AND SERVICE LIFE POLICY			35
12.1 Warranty			35
12.2 Seller Service Life Policy			45
12.3 Supplier Warranties and Service Life Policy			49
12.4 Interface Commitment			49
12.5 Exclusivity of Warranties			51
12.6 Duplicate Remedies			53
12.7 Negotiated Agreement			53
12.8 Survivability			53
13. PATENT AND COPYRIGHT INDEMNITY			54
13.1 Indemnity			54
13.2 Administration of Patent and Copyright Indemnity Claims			55
14 TECHNICAL DATA AND SOFTWARE SERVICES			57
14.1 Supply			57
14.2 Aircraft Identification for Technical Data			57
14.3 Integration of Equipment Data			57
14.4 Delivery			58
14.5 Revision Service			59
14.6 Service Bulletins Incorporation			59
14.7 Future Developments			59
14.8 Technical Data Familiarization			60
14.9 Customer Originated Changes			60
14.10 Software Products			61
14.11 Warranties			63
14.12 Proprietary Rights			64
15 SELLER REPRESENTATIVES			65
15.2 Resident Customer Support Representatives			65
15.3 Customer Support Director			65
15.4 [Intentionally left blank]			65



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		ii PRIVILEGED AND CONFIDENTIAL


15.5 Buyer’s Service			65
15.6 Temporary Assignment and Withdrawal of Resident Customer Support Representative			66
15.7 Representatives’ Status			66
16 TRAINING AND TRAINING AIDS			67
16.1 General			67
16.2 Scope			67
16.3 Training Organization / Location			67
16.4 Training Courses			67
16.5 Prerequisites			69
16.6 Logistics			69
16.7 Maintenance Training			71
APPENDIX A TO CLAUSE 16			72
17 SUPPLIER PRODUCT SUPPORT			73
17.1 Equipment Supplier Product Support Agreements			73
17.2 Supplier Compliance			73
17.3 Supplier Part Repair Stations			74
18 BUYER FURNISHED EQUIPMENT			75
18.1 Administration			75
18.2 Requirements			76
18.3 Buyer’s Obligation and Seller’s Remedies			76
18.4 Title and Risk of Loss			77
18.5 Disposition of BFE Following Termination			77
19 INDEMNITIES AND INSURANCE			79
19.1 Seller’s Indemnities			79
19.2 Buyer’s Indemnities			79
19.3 Notice and Defense of Claims			80
19.4 Insurance			80
20 ASSIGNMENTS AND TRANSFERS			82
20.1 Assignments by Buyer			82
20.2 Assignments on Sale, Merger or Consolidation			82
20.3 Designations by Seller			82
20.4 Transfer Prior to Delivery			83
20.5 Post Delivery Resale or Lease			83
21. TERMINATION			84
21.1 Termination Events			84
21.2 Remedies in Event of Termination			85
21.3 Definitions			87
21.4 Notice of Termination Event			87
21.5 Adequate Assurance of Performance			87
21.6 Information Covenants			88
22 MISCELLANEOUS			90
22.1 Data Retrieval			90
22.2 Notices			90



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		iii PRIVILEGED AND CONFIDENTIAL


22.3 Waiver			91
22.4 Interpretation and Law			91
22.5 Waiver of Jury Trial			92
22.6 No Representations outside of this Agreement			92
22.7 Confidentiality			93
22.8 Severability			93
22.9 Alterations to Contract			93
22.10 Inconsistencies			94
22.11 Language			94
22.12 Headings			94
22.13 Counterparts			94
23 CERTAIN REPRESENTATIONS OF THE PARTIES			95
23.1. Buyer’s Representations			95
23.2 Seller’s Representations			95



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		iv PRIVILEGED AND CONFIDENTIAL


EXHIBITS

EXHIBIT A-1		A330-200 AIRCRAFT SPECIFICATION

EXHIBIT A-2		A330-300 AIRCRAFT SPECIFICATION

EXHIBIT A-3		A340-300 AIRCRAFT SPECIFICATION

EXHIBIT A-4		A340-500 AIRCRAFT SPECIFICATION

EXHIBIT B-1.A		SCN FORM

EXHIBIT B-1.B		SCNs FOR A330-200

EXHIBIT B-2		MSCN FORM

EXHIBIT C		SELLER SERVICE LIFE POLICY: ITEMS COVERED

EXHIBIT D		FORM OF CERTIFICATE OF ACCEPTANCE

EXHIBIT E		FORM OF BILL OF SALE

EXHIBIT F		TECHNICAL DATA INDEX

EXHIBIT G-1		SELLER PRICE REVISION FORMULA

EXHIBIT G-2		PRATT & WHITNEY PRICE REVISION FORMULA

EXHIBIT G-3		GENERAL ELECTRIC PRICE REVISION FORMULA

EXHIBIT G-4		ROLLS-ROYCE PRICE REVISION FORMULA

EXHIBIT H		TERMS AND CONDITIONS FOR LICENSE FOR USE OF SOFTWARE



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		v PRIVILEGED AND CONFIDENTIAL

A330 PURCHASE AGREEMENT

This Agreement is made this 2nd day of October, 2007


between
		AIRBUS S.A.S., organized and existing under the laws of the Republic of France, having its registered office located at

		1, rond-point Maurice Bellonte 31700 Blagnac, France

		(hereinafter referred to as the “ Seller ”)

and
		US Airways, Inc., a corporation organized and existing under the laws of the State of Delaware, United States of America, having its principal corporate offices located at 111 West Rio Salado Parkway, Tempe, Arizona 85281 (the “ Buyer ”).

WHEREAS the Buyer and the Seller have entered into an A330/A340 Purchase Agreement, dated as of November 24, 1998, as amended from time to time (the “ Original Agreement ”), relating to, inter alia , the sale by the Seller and the purchase by the Buyer of certain Airbus aircraft..

WHEREAS, the Buyer agrees to place an order with the Seller for certain Airbus A330 and A340 model aircraft, on the terms and conditions herein provided.

WHEREAS, the Buyer and the Seller shall enter into a new A330purchase agreement as set forth herein.

NOW THEREFORE IT IS AGREED AS FOLLOWS:



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PA — 1 of 95 PRIVILEGED AND CONFIDENTIAL

0		DEFINITIONS

		For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following terms will have the following meanings:

		A330-200 Aircraft —any or all of the Airbus A330-200 model aircraft to be sold to the Buyer by the Seller pursuant to this Agreement, together with all components, equipment, parts and accessories installed in or on such aircraft and the A330-200 Propulsion Systems installed thereon.

		A330-200 Propulsion System —the two (2) Pratt & Whitney PW 4168A, two (2) Pratt & Whitney PW 4170, two (2) General Electric CF6 80E1A4 or two (2) Rolls-Royce Trent 772B powerplants installed on an A330-200 Aircraft or to be installed on an A330-200 Aircraft at Delivery, each composed of the powerplant (as such term is defined in Chapters 70-80 of the applicable ATA Specification, but limited to the equipment, components, parts and accessories included in the powerplant, as so defined).

		A330-200 Specification —the A330-200 Standard Specification, as amended from time to time in accordance with this Agreement.

		A330-200 Standard Specification —the A330-200 standard specification document No. G.000.02000, Issue 4.3, dated July 13, 2006, to be published by the Seller, which includes a maximum take-off weight of 233 metric tons, maximum landing weight of 182 metric tons and maximum zero-fuel weight of 170 metric tons, a copy of which is annexed as Exhibit A-1.

		A330-300 Aircraft —any or all of the Airbus A330-300 model aircraft to be sold to the Buyer by the Seller pursuant to this Agreement, together with all components, equipment, parts and accessories installed in or on such aircraft and the A330-300 Propulsion Systems installed thereon.

		A330-300 Propulsion System —the two (2) Pratt & Whitney PW 4170, two (2) General Electric CF6 80E1A4 or two (2) Rolls-Royce Trent 772B powerplants installed on an A330-300 Aircraft or to be installed on an A330-300 Aircraft at Delivery, each composed of the powerplant (as such term is defined in Chapters 70-80 of the applicable ATA Specification, but limited to the equipment, components, parts and accessories included in the powerplant, as so defined).

		A330-300 Specification —the A330-300 Standard Specification, as amended from time to time in accordance with this Agreement.

		A330-300 Standard Specification —the A330-300 standard specification document No. G.000.03000, Issue 7.3, dated July 13, 2006, to be published by the Seller, which includes a maximum take-off weight of 233 metric tons, maximum landing weight of 187 metric tons and maximum zero-fuel weight of 185 metric tons, a copy of which is annexed as Exhibit A-2.



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PA — 2 of 95 PRIVILEGED AND CONFIDENTIAL

		A340-300 Aircraft —any or all of the Airbus A340-300 model aircraft to be sold to the Buyer by the Seller pursuant to this Agreement, together with all components, equipment, parts and accessories installed in or on such aircraft and the A340-300 Propulsion Systems installed thereon.

		A340-300 Propulsion System —the four (4) CFM International CFM 56-5C4/P powerplants installed on an A340-300 Aircraft or to be installed on an A340-300 Aircraft at Delivery, each composed of the powerplant (as such term is defined in Chapters 70-80 of the applicable ATA Specification, but limited to the equipment, components, parts and accessories included in the powerplant, as so defined).

		A340-300 Specification —the A340-300 Standard Specification, as amended from time to time in accordance with this Agreement.

		A340-300 Standard Specification —the A340-300 standard specification document No. F.000.03000, Issue 7.3, dated July 13, 2006, to be published by the Seller, which includes a maximum take-off weight of 276.5 metric tons, maximum landing weight of 192 metric tons and maximum zero-fuel weight of 181 metric tons, a copy of which is annexed as Exhibit A-3.

		A340-500 Aircraft —any or all of the Airbus A340-500 model aircraft to be sold to the Buyer by the Seller pursuant to this Agreement, together with all components, equipment, parts and accessories installed in or on such aircraft and the A340-500 Propulsion Systems installed thereon.

		A340-500 Propulsion System —the four (4) Rolls-Royce Trent 553A2.61 powerplants installed on an A340-500 Aircraft or to be installed on an A340-500 Aircraft at Delivery, each composed of the powerplant (as such term is defined in Chapters 70-80 of the applicable ATA Specification, but limited to the equipment, components, parts and accessories included in the powerplant, as so defined) .

		A340-500 Specification —the A340-500 Standard Specification, as amended from time to time in accordance with this Agreement.

		A340-500 Standard Specification —the A340-500 standard specification document No. F.000.05000, Issue 2.1, dated July 13, 2006, to be published by the Seller, which includes a maximum take-off weight of 372 metric tons, maximum landing weight of 243 metric tons and maximum zero-fuel weight of 230 metric tons, a copy of which is annexed as Exhibit A-4.

		Affiliate —with respect to any person or entity, any other person or entity directly or indirectly controlling, controlled by or under common control with such person or entity.



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PA — 3 of 95 PRIVILEGED AND CONFIDENTIAL

		Agreement —this Airbus A330/A340 purchase agreement, including exhibits and appendices attached hereto as the same may be amended or modified and in effect from time to time.

		Aircraft —any or all of the A330-200 Aircraft, A330-300 Aircraft, A340-300 Aircraft or A340-500 Aircraft.

		Airframe —any Aircraft, excluding the Propulsion Systems therefor.

		Amended and Restated A350 XWB Purchase Agreement —the Amended and Restated A350 XWB Purchase Agreement between the Seller and the Buyer dated as of the date hereof.

		ANACS —Airbus North America Customer Services, Inc., a corporation organized and existing under the laws of Delaware, having an office located at 198 Van Buren Street, Suite 300, Herndon, VA 20170, or any successor thereto.

		ATA Specification —recommended specifications developed by the Air Transport Association of America reflecting consensus in the commercial aviation industry on accepted means of communicating information, conducting business, performing operations and adhering to accepted practices.

		Aviation Authority —when used with respect to any jurisdiction, the government entity that, under the laws of such jurisdiction, has control over civil aviation or the registration, airworthiness or operation of civil aircraft in such jurisdiction.

		Balance of the Final Contract Price —means the amount payable by the Buyer to the Seller on the Delivery Date for an Aircraft after deducting from the Final Contract Price for such Aircraft the amount of all Predelivery Payments received by the Seller from the Buyer, in respect of such Aircraft on or before the Delivery Date.

		Base Price —as defined in Clause 3.1.

		BFE — see Buyer Furnished Equipment.

		Buyer Furnished Equipment or BFE —for any Aircraft, all the items of equipment that will be furnished by the Buyer and installed in the Aircraft by the Seller pursuant to Clause 18, as listed in the Specification.

		Certificate of Acceptance —as defined in Clause 8.3.

		Change in Law —as defined in Clause 7.4.1.

		COC — see Customer Originated Changes.



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PA — 4 of 95 PRIVILEGED AND CONFIDENTIAL

		Customer Originated Changes or COC —data originating from the Buyer that are introduced into Seller’s Technical Data and Documentation, as more completely set forth in Clause 14.9.

		Delivery —the transfer of title to the Aircraft from the Seller to the Buyer.

		Delivery Date —the date on which Delivery occurs.

		Delivery Location —the facilities of the Seller at the location of final assembly of the Aircraft, which is currently at the works of Airbus France S.A.S. in Toulouse, France, or any other mutually agreed upon location.

		Development Changes —as defined in Clause 2.1.4.

		DGAC —the Direction Générale de l’Aviation Civile of France or any successor agency thereto.

		EASA —European Aviation Safety Agency or any successor agency thereto.

		Excusable Delay —as defined in Clause 10.1.

		Export Certificate of Airworthiness —an export certificate of airworthiness issued by the Aviation Authority of the Delivery Location.

		FAA —the U.S. Federal Aviation Administration or any successor agency thereto.

		FCA — see Free Carrier.

		Final Contract Price —as defined in Clause 3 for the applicable Aircraft.

		Free Carrier or FCA —as defined in Incoterms 2000: ICC Official Rules for the Interpretation of Trade Terms , published by the International Chamber of Commerce.

		Goods and Services –means any goods, excluding Aircraft, and services that may be purchased by the Buyer from the Seller or its designee from the Airbus Customer Services Catalog.

		In-house Warranty Labor Rate —as defined in Clause 12.1.8(v)(b).

		In-house Warranty Repair —as defined in Clause 12.1.8(i).

		Initial Payment —as defined in Clause 5.3.

		Interface Problem —as defined in Clause 12.4.1.



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PA — 5 of 95 PRIVILEGED AND CONFIDENTIAL

		LIBOR —the London Interbank Offered Rate determined on the basis of the offered rates for deposits in US dollars for a stated interest period (or for six-month deposits in US dollars if no interest period is stated), which appears on the Reuters Screen LIBO Page as of 11:00 a.m., London time, on the second Working Day prior to the start of the relevant interest period. If at least two (2) such offered rates appear on the Reuters Screen LIBO Page, the rate for that interest period will be the arithmetic mean of such offered rates rounded to the nearest one-hundred thousandth of a basis point. If only one (1) offered rate appears, the rate for that interest period will be “LIBOR” as quoted by National Westminster Bank, plc, or any successor thereto. “Reuters Screen LIBO Page” means the display designated as page “LIBO” on the Reuters Monitor Money Rates Service (or any successor to such page or service).

		Manufacturer Specification Change Notice or MSCN —as defined in Clause 2.1.3.

		MSCN — see Manufacturer Specification Change Notice.

		Predelivery Payment —any of the payments made in accordance with Clause 5.2.

		Predelivery Payment Reference Price —as defined in Clause 5.2.2.

		Propulsion Systems —collectively or individually, the A330-200 Propulsion Systems, A330-300 Propulsion Systems, A340-300 Propulsion Systems and/or A340-500 Propulsion Systems.

		Ready for Delivery —with respect to any Aircraft, the term applicable to such Aircraft when (i) the Technical Acceptance Process has been successfully completed for such Aircraft, and (ii) the Export Certificate of Airworthiness has been issued therefor.

		Reference Price of the Propulsion Systems —any of the PW 4168A Reference Price, PW 4170 Reference Price, GE CF6-80E1A4 Reference Price and RR 772B Reference Price

		Resident Customer Support Representative —as set forth in Clause 15.2.1.

		Scheduled Delivery Month —as defined in Clause 9.1.1.

		SCN —s ee Specification Change Notice.

		Seller Price Revision Formula —as set forth in Exhibit G-1.

		Service Life Policy —as set forth to in Clause 12.2.

		SFE— see Seller Furnished Equipment .

		Seller Furnished Equipment —as set forth to in Clause 17.1.1.



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PA — 6 of 95 PRIVILEGED AND CONFIDENTIAL

		Software Products —software, whether bundled with data or not, specifically designed to provide the Buyer with certain maintenance and operation capabilities further detailed in the ANACS Customer Support Catalog.

		Specification —collectively or individually, as applicable, the A330-200 Specification, A330-300 Specification, A340-300 Specification and/or the A340-500 Specification.

		Specification Change Notice —as defined in Clause 2.1.2.

		Standard Specification —collectively or individually, the A330-200 Standard Specification, A330-300 Standard Specification, A340-300 Standard Specification and/or the A340-500 Standard Specification.

		Supplier —any supplier of Supplier Parts.

		Supplier Part —any component, equipment, accessory or part installed in an Aircraft at the time of Delivery thereof, not including the Propulsion Systems or Buyer Furnished Equipment, for which there exists a Supplier Product Support Agreement.

		Supplier Product Support Agreement —an agreement between the Seller and a Supplier containing enforceable and transferable warranties (and in the case of landing gear suppliers, service life policies for selected structural landing gear elements).

		Technical Data —as set forth in Exhibit F.

		Technical Acceptance Process —as defined in Clause 8.1.1.

		Termination Event —as defined in Clause 21.1.

		Training Conference —as defined in Clause 16.4.1.

		Training Course Catalog —as defined in Clause 16.4.1.

		Type Certificate —as defined in Clause 7.1.

		Warranted Part —as defined in Clause 12.1.1.

		Warranty Claim —as defined in Clause 12.1.7(v).

		Working Day —with respect to any action to be taken hereunder, a day other than a Saturday, Sunday or other day designated as a holiday in the jurisdiction in which such action is required to be taken.

		The terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement, and not a particular Clause thereof. The definition of a singular in this Clause will apply to plurals of the same words.



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PA — 7 of 95 PRIVILEGED AND CONFIDENTIAL

		Except for the purposes of and as provided in Clause 22.10, references in this Agreement to an exhibit, schedule, article, section, subsection or clause refer to the appropriate exhibit or schedule to, or article, section, subsection or clause in this Agreement.

		Except for the preceding sentence, each agreement defined in this Clause 0 will include all appendices, exhibits and schedules to such agreement. If the prior written consent of any person is required hereunder for an amendment, restatement, supplement or other modification to any such agreement and the consent of each such person is obtained, references in this Agreement to such agreement will be to such agreement as so amended, restated, supplemented or modified.

		References in this Agreement to any statute will be to such statute as amended or modified and in effect at the time any such reference is operative.

		Technical and trade terms used but not defined herein will be defined as generally accepted in the airline and/or aircraft manufacturing industries or as otherwise described.



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PA — 8 of 95 PRIVILEGED AND CONFIDENTIAL

1		SALE AND PURCHASE

		The Seller will manufacture, sell and deliver, and the Buyer will purchase and take delivery of the Aircraft from the Seller, subject to the terms and conditions in this Agreement.



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PA — 9 of 95 PRIVILEGED AND CONFIDENTIAL

2		SPECIFICATION

2.1		Specification Documents

2.1.1		The Aircraft will be manufactured in accordance with the applicable Specification.

2.1.2		Specification Change Notice

		The Specification may be amended in writing by the Buyer and the Seller by a Specification Change Notice in substantially the form set out in Exhibit B-1 (each, an " SCN " ). An SCN will set out the SCN’s effectivity and the particular change to be made to the Specification and the effect, if any, of such change on design, performance, weight, Scheduled Delivery Month of the Aircraft affected thereby, interchangeability or replaceability requirements of the Specification and text of the Specification. An SCN may result in an adjustment of the Base Price of the Aircraft, which adjustment, if any, will be specified in the SCN. SCNs will not be binding on either party until signed by persons duly authorized by the Buyer and the Seller, but upon being so signed, will constitute amendments to this Agreement.

2.1.3		Manufacturer Specification Change Notice

		The Specification may also be amended in writing by the Seller by a Manufacturer’s Specification Change Notice. Each MSCN will be substantially in the form set out in Exhibit B-2 and will set out the MSCN’s effectivity and the particular change to be made to the Specification and the effect, if any, of such change on design, performance, weight, Scheduled Delivery Month of the Aircraft affected thereby, interchangeability or replaceability requirements of the Specification and text of the Specification. MSCNs will be subject to the Buyer’s acceptance, except in the case of Development Changes (as defined below) or changes resulting from Airworthiness Directives, government-mandated regulations arising after the date of the Specification or equipment obsolescence.

2.1.4		Development Changes

		As stated in Clause 2.1.3, changes may be made by the Seller without the Buyer’s consent when changes to the Aircraft do not adversely affect price, Scheduled Delivery Month, weight of the Aircraft affected thereby, ** interchangeability requirements or replaceability requirements of the Specifications of the Aircraft affected thereby are deemed by the Seller to be necessary to improve the Aircraft affected thereby, prevent delay or ensure compliance with this Agreement ( " Development Changes " ). Development Changes will be made by either an MSCN or a manufacturer’s information document prior to Delivery of the relevant Aircraft.



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PA — 10 of 95 PRIVILEGED AND CONFIDENTIAL

2.2		Customization Milestones Chart

		Within a reasonable period after signature of this Agreement, the Seller will provide the Buyer with a chart called the “Customization Milestones Chart,” defining the lead times before Delivery needed for agreeing on items requested by the Buyer from the Standard Specifications and Configuration Guides CD-ROM.

2.3		Propulsion Systems

		Each Airframe will be equipped with a set of Propulsion Systems. Each Airframe will be equipped with nacelles and thrust reversers.

		The Buyer will notify the Seller of its choice of Propulsion Systems not later than **before delivery of the first A330-200 Aircraft.


USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PA — 11 of 95 PRIVILEGED AND CONFIDENTIAL

3		PRICE

3.1		Base Price of the Aircraft

		The Base Price of each A330-200 Aircraft is the sum of:

	(i)		the Base Price of the Airframe and

	(ii)		the Base Price of the Propulsion System

		as stated below in Clause 3.2.

3.2		Base Price of the A330-200 Aircraft

3.2.1		Base Price of the A330-200 Airframe

		The Base Price of each A330-200 Airframe is the sum of

	(i)		US $ (US dollars—), representing the price of an A330-200 model aircraft built to the A330-200 Standard Specification (excluding Buyer Furnished Equipment and SCNs), at delivery conditions prevailing in **;

	(ii)		US $ (US dollars—), at delivery conditions prevailing in **; and

	(iii)		the price of any SCNs that may be mutually agreed upon subsequent to signature of this Agreement.

3.2.2		[INTENTIONALLY LEFT BLANK]

3.2.3		Base Price of the Propulsion System

3.2.3.1		Base Price of the Pratt & Whitney PW 4168A A330-200 Propulsion System

		The Base Price of the Pratt & Whitney PW 4168A A330-200 Propulsion System, at delivery conditions prevailing in **, is:

			US $**

			(US dollars—**).

Said Base Price has been calculated from the reference price indicated by Pratt & Whitney, the manufacturer of the PW 4168A Propulsion System (the “ PW 4168A Reference Price ”) of US $ ** (US dollars—**) in accordance with economic conditions prevailing in **.

3.2.3.2

Base Price of the Pratt & Whitney PW 4170 A330-200 Propulsion System



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PA — 12 of 95 PRIVILEGED AND CONFIDENTIAL

The Base Price of the Pratt & Whitney PW 4170 A330-200 Propulsion System and A330-300 Propulsion System, at delivery conditions prevailing in **, is:

			US $**

			(US dollars—**).

Said Base Price has been calculated from the reference price indicated by Pratt & Whitney, the manufacturer of the PW 4170 Propulsion System (the “ PW 4170 Reference Price ”) of US $ ** (US dollars—**) in accordance with economic conditions prevailing in **.

3.2.3.3		Base Price of the General Electric CF6-80E1A4 A330-200 Propulsion Systems

		The Base Price of the General Electric CF6-80E1A4 A330-200 Propulsion System and A330-300 Propulsion System, at delivery conditions prevailing in **, is:

			US $**

			(US dollars—**).

Said Base Price has been calculated from the reference price indicated by General Electric, the manufacturer of the CF6-80E1A4 Propulsion System (the “ GE CF6-80E1A4 Reference Price ”) of US $ ** (US dollars—**) in accordance with delivery conditions prevailing in **.

3.2.3.4		Base Price of the Rolls-Royce Trent 772B A330-200 Propulsion System

		The Base Price of the Rolls-Royce Trent 772B A330-200 Propulsion System and A330-300 Propulsion System, at delivery conditions prevailing in **, is:

			US $**

			(US dollars—**).

Said Base Price has been calculated from the reference price indicated by Rolls-Royce, the manufacturer of the Trent 772B Propulsion System (the “ RR 772 Reference Price ”) of US $ ** (US dollars—**) in accordance with delivery conditions prevailing in **.

3.2.4

The Final Contract Price of an A330-200 Aircraft or A330-300 Aircraft, as applicable, will be the sum of:

(i)

the Base Price of the Airframe, adjusted to the Delivery Date of the A330-200 Aircraft or A330-300 Aircraft, as applicable, in accordance with the Seller Price Revision Formula;



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PA — 13 of 95 PRIVILEGED AND CONFIDENTIAL

	(ii)		the price of any SCNs for the A330-200 Aircraft or A330-300 Aircraft, as applicable, entered into after the date of signature of this Agreement, as adjusted to the Delivery Date in accordance with the applicable Seller Price Revision Formula;

	(iii)		the PW 4168A Reference Price, the PW 4170 Reference Price, the GE CF6-80E1A4 Reference Price or the RR 772B Reference Price, as applicable, adjusted to the Delivery Date in accordance with the price revision formula for the applicable Propulsion Systems; and

	(vii)		any other amount resulting from any other provisions of this Agreement and/or any other written agreement between the Buyer and the Seller relating to the A330-200 Aircraft or A330-300 Aircraft, as applicable.

3.3		[INTENTIONALLY LEFT BLANK]

3.4		Taxes, Duties and Imposts

3.4.1		The Seller will pay any and all taxes, duties, imposts or similar charges of any nature whatsoever, except for taxes based on or measured by the income of the Buyer, or any taxes of a similar nature or charges levied against the Buyer or its Affiliates for the privilege of doing business in any jurisdiction, that are (i) imposed upon the Buyer, (ii) imposed upon the Seller with an obligation on the Buyer to withhold or collect the amount thereof from the Seller or (iii) imposed upon the Buyer with an obligation on the Seller to withhold or collect such amount from the Buyer, and that are levied, assessed, charged or collected for or in connection with the fabrication, manufacture, modification, assembly, sale, delivery, use of, or payment by it under this Agreement for, any Aircraft, component, accessory, equipment or part delivered or furnished by it hereunder, provided such taxes, duties, imposts or similar charges have been promulgated and are enforceable under the laws of any country, province, municipality or other jurisdiction or government entity thereof and are asserted with respect to events or circumstances occurring on or before Delivery of such Aircraft.

		Notwithstanding anything to the contrary in this Clause 3.4.1, the Seller will not be required to bear or pay or to indemnify the Buyer for taxes, imposts, charges, or duties, (i) to the extent imposed as the result of the Buyer’s engaging in activities in the jurisdiction imposing such tax which activities are unrelated to the transactions contemplated by this Agreement or as the result of being incorporated or organized in such jurisdiction or maintaining an office or having a place of business or other presence therein, (ii) arising out of or caused by the willful misconduct or gross negligence of the Buyer, (iii) that are interest, penalties, fines or additions to tax that would not have been imposed but for any failure by the Buyer to file any tax return or information return in a timely and proper manner, (iv) that are being contested by the Seller in good faith by appropriate proceedings during the pendency of such contest, or (v) that are imposed on or payable by a transferee of all or any part of the interest of the Buyer in the Aircraft or



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PA — 14 of 95 PRIVILEGED AND CONFIDENTIAL

any of its rights or obligations under this Agreement to the extent in excess of the taxes that would have been imposed on or payable by the Buyer in the absence of any such transfer.

3.4.2		The Buyer will pay any and all taxes, duties, imposts or similar charges of any nature whatsoever, except for taxes based on or measured by the income of the Seller or any taxes of a similar nature or charges levied against the Seller or its Affiliates for the privilege of doing business in any jurisdiction, that are (i) imposed upon the Seller, (ii) imposed upon the Buyer with an obligation on the Seller to collect the amount thereof for the Buyer or (iii) imposed upon the Seller with an obligation on the Buyer to withhold such amount from the Seller, and that are levied, assessed, charged or collected for or in connection with the fabrication, manufacture, modification, assembly, sale, delivery or use of or payment under this Agreement for any Aircraft, component, accessory, equipment or part delivered or furnished by it hereunder, provided such taxes, duties, imposts or similar charges have been levied, assessed, charged or collected under laws promulgated and enforceable under the laws of any country, province, municipality or other jurisdiction or government entity thereof and are asserted with respect to events or circumstances occurring after Delivery of such Aircraft.

		Notwithstanding anything to the contrary in this Clause 3.4.2, the Buyer will not be required to bear or pay or to indemnify the Seller for taxes, imposts, charges, or duties, (i) to the extent imposed as the result of Seller’s engaging in activities in the jurisdiction imposing such tax which activities are unrelated to the transactions contemplated by this Agreement or as the result of being incorporated or organized in such jurisdiction or maintaining an office or having a place of business or other presence therein, (ii) arising out of or caused by the willful misconduct or gross negligence of the Seller, (iii) that are interest, penalties, fines or additions to tax that would not have been imposed but for any failure by the Seller to file any tax return or information return in a timely and proper manner, (iv) that are being contested by the Buyer in good faith by appropriate proceedings during the pendency of such contest, or (v) that are imposed on or payable by a transferee of all or any part of the interest of the Seller in the Aircraft or any of its rights or obligations under this Agreement to the extent in excess of the taxes that would have been imposed on or payable by the Seller in the absence of any such transfer.

3.4.3		The Seller will arrange for the exportation of the Aircraft from the country of the Delivery Location and will pay any customs duties, taxes and fees required to be paid with respect to such exportation of the Aircraft.

3.4.4		The Buyer will arrange for the importation of the Aircraft into any country or jurisdiction and will pay any customs duties, taxes and fees required to be paid with respect to such importation of the Aircraft.



USA — Airbus A330 Purchase Agreement		PA — 15 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

4		PRICE REVISION

4.1		Seller Price Revision Formula

		**, the Base Price of the Airframe of the A330-200 Aircraft and A330-300 Aircraft and the Base Price of the A340-300 Aircraft and A340-500 Aircraft and of SCNs are subject to revision up to and including the Delivery Date, in accordance with the Seller Price Revision Formula in Exhibit G-1.

4.2		Propulsion Systems Price Revision

4.2.1		The Reference Price of the Propulsion Systems for the A330-200 Aircraft and A330-300 Aircraft are subject to revision in accordance with the applicable Propulsion Systems Price Revision Formula up to and including the Delivery Date.

4.2.2		Modification of Propulsion Systems Reference Price and Propulsion System Price Revision Formula

		The Reference Price of the Propulsion System, the prices of the related equipment and the Propulsion System Price Revision Formula are based on information received from the Propulsion System manufacturer and are subject to amendment by the Propulsion Systems manufacturer at any time prior to Delivery. If the Propulsion System manufacturer makes any such amendment, the amendment will be deemed to be incorporated into this Agreement and the Reference Price of the Propulsion System, the prices of the related equipment and the Propulsion System Price Revision Formula will be adjusted accordingly. The Seller agrees to notify the Buyer as soon as the Seller receives notice of any such amendment from the Propulsion System manufacturer.



USA — Airbus A330 Purchase Agreement		PA — 16 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

5		PAYMENT TERMS

5.1		Payments

5.1.1		The Buyer will pay the Predelivery Payments, the Balance of the Final Contract Price and any other amount due hereunder in immediately available funds in United States dollars to the Seller’s account with **, or to such other account within the United States as may be designated by the Seller.

5.1.2		Payments with payment due dates that fall on Saturday, Sunday or a bank holiday will be due on the first Working Day following such payment due date.

5.2		Predelivery Payments

5.2.1		**

5.2.2		**



USA — Airbus A330 Purchase Agreement		PA — 17 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

5.2.3		Predelivery Payments will be paid according to the following schedule. **

5.2.4		**



USA — Airbus A330 Purchase Agreement		PA — 18 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

5.2.5		SCN Predelivery Payment

		In addition to Predelivery Payments payable under Clause 5.2.3, the Seller will be entitled to request Predelivery Payments for each SCN executed after signature of this Agreement to the extent that the aggregate price of all SCNs selected by the Buyer exceeds US$ (US dollars – ).

	(i)		For each such SCN executed **

	(ii)		For each such SCN executed **

5.3		Initial Payment

		The Seller acknowledges that it has received from the Buyer the sum of US $ (US dollars—), which represents a nonrefundable amount of $ (US dollars—) (the “Initial Payment ” ) for each A330-200 Aircraft. **

5.4		Payment of Balance of the Final Contract Price

		Concurrent with each Delivery, the Buyer will pay to the Seller the Balance of the Final Contract Price for the applicable Aircraft. The Seller’s receipt of the full amount of all Predelivery Payments and of the Balance of the Final Contract Price, including any amounts due under Clause 5.6, will be a condition precedent to the Seller’s obligation to deliver such Aircraft to the Buyer.

5.5		Application of Payments

		Notwithstanding any other rights the Seller may have at contract or at law, the Buyer and the Seller hereby agree that should any amount (whether under this Agreement or under any other agreement between the Buyer or any of its Affiliates and the Seller or any of its Affiliates and whether at the stated maturity of such amount, by acceleration or otherwise) become due and payable by the Buyer or its Affiliates, and not be paid in full in immediately available funds on the date due, then the Seller will have the right to debit and apply, in whole or in part, the Predelivery Payments paid to the Seller by the Buyer hereunder against such unpaid amount. The Seller will promptly notify the Buyer in writing after such debiting and application, and the Buyer will immediately pay to the Seller the amount owed to comply with Clause 5.2.3.

5.6		Overdue Payments If any payment due the Seller is not received by the Seller on the date or dates agreed on between the Buyer and the Seller, the Seller will have the right to claim from the Buyer and the Buyer will promptly pay to the Seller on receipt of such claim interest at the rate ** on the amount of such overdue payment, to be calculated from and including the due date of such payment to (but excluding) the date such payment is received by the Seller,



USA — Airbus A330 Purchase Agreement		PA — 19 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		**.The Seller’s right to receive such interest will be in addition to any other rights of the Seller hereunder or at law.

5.7		Proprietary Interest

		Notwithstanding any provision of law to the contrary, the Buyer will not, by virtue of anything contained in this Agreement (including, without limitation, the making of any Predelivery Payments hereunder, or any designation or identification by the Seller of a particular aircraft as an Aircraft to which any of the provisions of this Agreement refers) acquire any proprietary, insurable or other interest whatsoever in any Aircraft before Delivery of and payment for such Aircraft, as provided in this Agreement.

5.8		Payment in Full

		The Buyer’s obligation to make payments to the Seller hereunder will not be affected by and will be determined without regard to any setoff, counterclaim, recoupment, defense or other right that the Buyer may have against the Seller or any other person and all such payments will be made without deduction or withholding of any kind. The Buyer will ensure that the sums received by the Seller under this Agreement will be equal to the full amounts expressed to be due the Seller hereunder, without deduction or withholding on account of and free from any and all taxes, levies, imposts, duties or charges of whatever nature, except that if the Buyer is compelled by law to make any such deduction or withholding, the Buyer will pay such additional amounts to the Seller as may be necessary so that the net amount received by the Seller after such deduction or withholding will equal the amounts that would have been received in the absence of such deduction or withholding.



USA — Airbus A330 Purchase Agreement		PA — 20 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

6		INSPECTION

6.1		Manufacturing Procedures

		The Airframe will be manufactured in accordance with the requirements of the laws of the jurisdiction of incorporation of the Seller or of its relevant Affiliate as enforced by the Aviation Authority of such jurisdiction.

6.2		Inspection Procedures

6.2.1		All work to be carried out on the Aircraft and all materials and parts thereof will be at all reasonable times open to inspection during business hours by duly authorized representatives of the Buyer or its designee at the works of the relevant manufacture facility of the Seller or its Affiliates and, if possible, at the works of their respective subcontractors. These representatives will have access to such relevant technical data as are reasonably necessary for this purpose (except that, if access to any part of the respective works where construction is in progress or materials or parts are stored is restricted for security reasons, the Seller, its Affiliates and relevant subcontractors, as the case may be, will be allowed a reasonable time to make the items available for inspection elsewhere). The actual detailed inspection of the Aircraft, materials and parts thereof will take place only in the presence of the respective inspection department personnel of the Seller, its Affiliates or relevant subcontractors. The procedures for such inspections will be agreed on with the Buyer before any inspection. The Seller will ensure that such personnel will be available at all reasonable times during business hours as described above.

6.2.2		All inspections, examinations and discussions with the Seller’s or its subcontractors’ engineering or other personnel by the Buyer and its representatives will be performed in such a manner as not to delay or hinder either the work to be carried out on the Aircraft or the proper performance of this Agreement. In no event will the Buyer or its representatives be permitted to inspect any aircraft other than the Aircraft. **

6.3		Representatives

		For the purposes of Clause 6.2, starting at a mutually agreed date and continuing until Delivery of the last Aircraft, the Seller will furnish free-of-charge secretarial assistance and suitable space, office equipment and facilities in or conveniently located with respect to the Delivery Location for the use of not more than ** representatives of the Buyer during the aforementioned period. The Seller will provide internet access, electronic mail, facsimile and a telephone at the Seller’s cost.

6.4		The Seller and its Affiliates, as applicable, will correct or otherwise resolve any deviations from the applicable Specification discovered during any inspection or examination conducted under this Clause 6.



USA — Airbus A330 Purchase Agreement		PA — 21 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

7		CERTIFICATION

		Except as set forth in this Clause 7, the Seller will not be required to obtain any certificate or approval with respect to the Aircraft.

7.1		Type Certification

		A type certificate for the Aircraft will have been issued by each of EASA and the FAA in the transport category (each, a “ Type Certificate ”) prior to Delivery of the first Aircraft.

7.2		Export Certificate of Airworthiness Subject to the provisions of Clause 7.3, each Aircraft will be delivered to the Buyer with an Export Certificate of Airworthiness issued by the DGAC or EASA, as applicable, and in a condition enabling the Buyer (or an eligible person under then applicable law) to obtain a Standard Airworthiness Certificate issued pursuant to Part 21 ** of the US Federal Aviation Regulations and a Certificate of Sanitary Construction issued by the U.S. Public Health Service Food and Drug Administration. However, the Seller will have no obligation to make and will not be responsible for any costs of alterations or modifications to any Aircraft to enable such Aircraft to meet FAA or U.S. Department of Transportation requirements for specific operation on the Buyer’s routes, except as may be provided pursuant to Clause 7.3, whether before, at or after Delivery of any Aircraft.

7.3		Additional FAA Requirements

		If the FAA requires additional data before the issuance of a Standard Airworthiness Certificate for an Aircraft, the Seller will provide such data at the expense of the Buyer.

7.4		Additional EASA Requirements

7.4.1		If, is Ready for Delivery, any law, rule or regulation is enacted, promulgated, becomes effective and/or an interpretation of any law, rule or regulation is issued (a “ Change in Law ”) by the EASA , that requires any change to the Specification for the purposes of obtaining the Export Certificate of Airworthiness, the Seller will make the required modification and the parties will sign an SCN for such modification.

7.4.2		The Seller will as far as practicable, but at its sole discretion and without prejudice to the requirements of Clause 7.4.3, take into account the information available to it concerning any proposed law, rule or regulation or interpretation by the EASA that could become a Change in Law in order to minimize the costs of changes to the Specification if the same becomes such a Change in Law.


USA — Airbus A330 Purchase Agreement		PA — 22 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

7.4.3		The cost of implementing any modifications referred to in Clause 7.4.1 will be shared equally by the Seller and the Buyer if a Change in Law by the EASA becomes effective after issuance of a Type Certificate by the EASA but before the Aircraft is Ready for Delivery;

7.4.4		Notwithstanding the provisions of Clauses 7.4.3, if a Change in Law relates to an item of BFE or to the Propulsion Systems (including to engine accessories, quick engine change units or thrust reversers) the costs relating thereto will be borne in accordance with such arrangements as may be made separately between the Buyer and the manufacturer of the BFE or the Propulsion Systems, as applicable, and the Seller will have no obligation with respect thereto.

7.5		Specification Changes After Delivery

		Nothing in Clause 7.4 will require the Seller to make any changes or modifications to, or to make any payments or take any other action with respect to, any Aircraft that is Ready for Delivery before the compliance date of any law or regulation referred to in Clause 7.4. Any such changes or modifications made to an Aircraft after it is Ready for Delivery will be at the Buyer’s expense.


USA — Airbus A330 Purchase Agreement		PA — 23 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

8		TECHNICAL ACCEPTANCE

8.1		Technical Acceptance Process

8.1.1		Prior to Delivery, the Aircraft will undergo a technical acceptance process developed by the Seller, ** (the “ Technical Acceptance Process ”). Completion of the Technical Acceptance Process will demonstrate the satisfactory functioning of the Aircraft and will be deemed to demonstrate compliance with the applicable Specification. Should it be established that the Aircraft fails to complete the Technical Acceptance Process satisfactorily, the Seller will without hindrance from the Buyer be entitled to and will carry out any necessary changes to correct the reason for such failure and, as soon as practicable thereafter, resubmit the Aircraft in order to complete the Technical Acceptance Process.

8.1.2		The Technical Acceptance Process will

	(i)		start on a date notified by the Seller to the Buyer at least ** in advance,

	(ii)		take place at the Delivery Location,

	(iii)		be carried out by the personnel of the Seller,

	(iv)		include a technical acceptance flight that will not exceed **, and

	(v)		conclude in **.

8.2		Buyer’s Attendance

8.2.1		The Buyer is entitled to attend and observe the Technical Acceptance Process.

8.2.2		If the Buyer attends the Technical Acceptance Process, the Buyer

	(i)		will comply with the reasonable requirements of the Seller, with the intention of completing the Technical Acceptance Process within **, and

	(ii)		may have a maximum of representatives (no more than of whom will have access to the cockpit at any one time) accompany the Seller’s representatives on the technical acceptance flight, during which the Buyer’s representatives will comply with the instructions of the Seller’s representatives.


USA — Airbus A330 Purchase Agreement		PA — 24 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

8.2.3		If the Buyer does not attend or fails to cooperate in the Technical Acceptance Process, the Seller will be entitled to complete the Technical Acceptance Process in compliance with Clause 8.1.1, without the Buyer’s attendance, and the Buyer will be deemed to have accepted that the Aircraft is functioning satisfactorily and is in compliance with the Specification, in all respects.

8.3		Certificate of Acceptance

		Upon successful completion of the Technical Acceptance Process, the Buyer will, on or before the Delivery Date, sign and deliver to the Seller a certificate of acceptance in respect of the Aircraft in the form of Exhibit D (the “ Certificate of Acceptance ”). Any discrepancies in the condition of the Aircraft, and any agreements between the Buyer and the Seller with respect thereto, will be documented in a separate agreement, but the same will not, unless otherwise agreed, affect the Buyer’s rights under Clause 12 with respect to such discrepancy.

8.4		Finality of Acceptance

		The Buyer’s signature of the Certificate of Acceptance for the Aircraft will constitute waiver by the Buyer of any right it may have under the Uniform Commercial Code as adopted by the State of New York or otherwise to revoke acceptance of the Aircraft for any reason, whether known or unknown to the Buyer at the time of acceptance.

8.5		Aircraft Utilization

		The Seller will, without payment or other liability, be entitled to use the Aircraft before Delivery to obtain the certificates required under Clause 7. Such use will not limit the Buyer’s obligation to accept Delivery.


USA — Airbus A330 Purchase Agreement		PA — 25 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

9		DELIVERY

9.1		Delivery Schedule

9.1.1		Subject to any delay contemplated by Clauses 2, 7, 8, 10 and 18, the Seller will have the Aircraft Ready for Delivery at the Delivery Location within the following months (each a “ Scheduled Delivery Month ”).


Rank Number	Scheduled Delivery Month	Year
1	**********	2009
2		2009
3		2009
4		2009
5		2009
6	**********	2010
7		2010
8		2010
9		2010
10		2010

9.1.2		Delivery Notices

9.1.2.1**

**

9.2		Delivery Process

9.2.1		The Buyer will send its representatives to the Delivery Location to take Delivery within ** after the date on which the Aircraft is Ready for Delivery.

9.2.2		The Seller will transfer title to the Aircraft to the Buyer free and clear of all encumbrances other than those arising by or through the Buyer, provided that the Balance of the Final Contract Price has been paid by the Buyer, pursuant to Clause 5.4 and that the Certificate of Acceptance has been signed and delivered to the Seller pursuant to Clause 8.3. The Seller will provide the Buyer with a bill of sale in the form of Exhibit E and/or such other documentation confirming transfer of title and receipt of the Final Contract Price as may reasonably be requested by the Buyer. Property interest in and risk of loss of or damage to the Aircraft will pass to the Buyer contemporaneously with the delivery by the Seller to the Buyer of such bill of sale.

9.2.3		If (i) the Buyer fails to deliver the signed Certificate of Acceptance to the Seller on or before the Delivery Date, or (ii) the Buyer fails to pay the Balance of the Final Contract



USA — Airbus A330 Purchase Agreement		PA — 26 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

Price for the Aircraft to the Seller on the Delivery Date, then the Buyer will be deemed to have rejected Delivery wrongfully when the Aircraft was duly tendered pursuant to this Agreement. If such a deemed rejection arises, the Seller will retain title to the applicable Aircraft and the Buyer will indemnify and hold the Seller harmless against any and all costs (including but not limited to any parking, storage, and insurance costs) and consequences resulting from the Buyer’s rejection. These rights of the Seller will be in addition to the Seller’s other rights and remedies in this Agreement.

9.3		Flyaway

9.3.1		The Buyer and the Seller will cooperate to obtain any licenses that may be required by the relevant Aviation Authority for the purpose of exporting the Aircraft.

9.3.2		All expenses of, or connected with, flying the Aircraft from the Delivery Location after Delivery will be borne by the Buyer. The Buyer will make direct arrangements with the supplying companies for the fuel and oil required for all delivery flights.



USA — Airbus A330 Purchase Agreement		PA — 27 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

10		EXCUSABLE DELAY AND TOTAL LOSS

10.1		Scope of Excusable Delay

		Neither the Seller nor any Affiliate of the Seller, will be responsible for or be deemed to be in default on account of delays in delivery or failure to deliver or otherwise in the performance of this Agreement or any part hereof due to causes reasonably beyond the Seller’s control or not occasioned by the Seller’s fault or negligence (“Excusable Delay”), including, but not limited to: (i) acts of God or the public enemy, natural disasters, fires, floods, storms beyond ordinary strength, explosions or earthquakes; epidemics or quarantine restrictions; serious accidents; total or constructive total loss; any law, decision, regulation, directive or other act (whether or not having the force of law) of any government or of the Council of the European Union or the Commission of the European Union or of any national, Federal, State, municipal or other governmental department, commission, board, bureau, agency, court or instrumentality, domestic or foreign; governmental priorities, regulations or orders affecting allocation of materials, facilities or a completed Aircraft; war, civil war or warlike operations, terrorism, insurrection or riots; failure of transportation ; strikes or labor troubles causing cessation, slow down or interruption of work; inability after due and timely diligence to procure materials, accessories, equipment or parts or to cause a subcontractor or Supplier to furnish materials, components, accessories, equipment or parts; (ii) ; (iii) any delay caused directly or indirectly by the action or inaction of the Buyer, and (iv) delay in delivery or otherwise in the performance of this Agreement by the Seller due in whole or in part to any delay in or failure of the delivery of, or any other event or circumstance relating to **.

10.2		Consequences of Excusable Delay 10.2.1 If an Excusable Delay occurs,

(a)

the Seller will

	(i)		notify the Buyer of such Excusable Delay as soon as practicable after becoming aware of the same;

	(ii)		not be deemed to be in default in the performance of its obligations hereunder as a result of such Excusable Delay;

	(iii)		not be responsible for any damages arising from or in connection with such Excusable Delay suffered or incurred by the Buyer; and

	(iv)		subject to the provisions of Clause 10.3 below, as soon as practicable after the removal of the cause of such Excusable Delay, resume performance of its obligations under this Agreement and notify the Buyer of the revised Scheduled Delivery Month; **



USA — Airbus A330 Purchase Agreement		PA — 28 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

10.3		Termination on Excusable Delay

10.3.1		If any Delivery is delayed as a result of an Excusable Delay for a period of more than after the last day of the Scheduled Delivery Month, then either party may terminate this Agreement with respect to the affected Aircraft, by giving written notice to the other party within after the expiration of such **. However, the Buyer will not be entitled to terminate this Agreement pursuant to this Clause 10.3.1 if the Excusable Delay is caused directly or indirectly by the action or inaction of the Buyer.

10.3.2		If the Seller advises the Buyer of a revised Scheduled Delivery Month pursuant to Clause 10.2.1(iv) that there will be a delay in Delivery of an Aircraft of more than after the last day of the Scheduled Delivery Month, then the Buyer may terminate this Agreement with respect to the affected Aircraft. Termination will be made by giving written notice to the other party within after the Buyer’s receipt of the notice of a revised Scheduled Delivery Month. However, the Buyer will not be entitled to terminate this Agreement pursuant to this Clause 10.3.2 if the Excusable Delay is caused directly or indirectly by the action or inaction of the Buyer.

10.3.3		Any termination pursuant to Clause 10.3.1 or 10.3.2 with respect to an affected Aircraft will discharge the obligations and liabilities of the parties hereunder with respect to such Aircraft, **.

10.3.4		If this Agreement is not terminated under the terms of Clause 10.3.1 or 10.3.2, then the Seller and the Buyer will mutually agree upon a new Scheduled Delivery Month after the ** period referred to in Clause 10.3.1 or 10.3.2, and this new Scheduled Delivery Month will be deemed to be an amendment to the applicable Scheduled Delivery Month in Clause 9.1.1.

10.4		Total Loss, Destruction or Damage

		If prior to Delivery, any Aircraft is lost, destroyed or in the reasonable opinion of the Seller is damaged beyond economic repair (“ Total Loss ”), the Seller will notify the Buyer to this effect within of such occurrence. The Seller will include in said notification (or as soon after the issue of the notice as such information becomes available to the Seller) the earliest date consistent with the Seller’s other commitments and production capabilities that an aircraft to replace the Aircraft may be delivered to the Buyer and the Scheduled Delivery Month will be extended as specified in the Seller’s notice to accommodate the delivery of the replacement aircraft. However, if the Scheduled Delivery Month is extended to a month that is later than after the last day of the original Scheduled Delivery Month, then this Agreement will terminate with respect to said Aircraft unless:

(i)

the Buyer notifies the Seller within ** of the date of receipt of the Seller’s notice that it desires the Seller to provide a replacement aircraft during the month quoted in the Seller’s notice; and



USA — Airbus A330 Purchase Agreement		PA — 29 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

(ii)

the parties execute an amendment to this Agreement recording the variation in the Scheduled Delivery Month.

		Nothing herein will require the Seller to manufacture and deliver a replacement aircraft if such manufacture would require the reactivation of its production line for the model or series of aircraft that includes the Aircraft. Any termination pursuant to this Clause 10.4 as to a particular Aircraft will discharge the obligations and liabilities of the parties hereunder with respect to such Aircraft, **

10.5		Remedies

		THIS CLAUSE 10 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE BUYER FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER, OTHER THAN SUCH DELAYS AS ARE COVERED BY CLAUSE 11, AND THE BUYER HEREBY WAIVES ALL RIGHTS TO WHICH IT WOULD OTHERWISE BE ENTITLED IN RESPECT THEREOF, INCLUDING, WITHOUT LIMITATION, ANY RIGHTS TO INCIDENTAL AND CONSEQUENTIAL DAMAGES OR SPECIFIC PERFORMANCE. THE BUYER WILL NOT BE ENTITLED TO CLAIM THE REMEDIES AND RECEIVE THE BENEFITS PROVIDED IN THIS CLAUSE 10 WHERE THE DELAY REFERRED TO IN THIS CLAUSE 10 IS CAUSED DIRECTLY OR INDIRECTLY BY THE NEGLIGENCE OR FAULT OF THE BUYER OR ITS REPRESENTATIVES.



USA — Airbus A330 Purchase Agreement		PA — 30 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

11		INEXCUSABLE DELAY

11.1		Liquidated Damages

		Should an Aircraft not be Ready for Delivery within after the last day of the Scheduled Delivery Month (as such month may be changed pursuant to Clauses 2, 7 or 10) and such delay is not as a result of an Excusable Delay or Total Loss, then such delay will be termed an “ Inexcusable Delay .” In the event of an Inexcusable Delay, the Buyer will have the right to claim, and the Seller will pay the Buyer liquidated damages of US $ ).

		In no event will the amount of liquidated damages exceed the total of US $ (US dollars—) in respect of any one Aircraft.

		The Buyer’s right to liquidated damages in respect of an Aircraft is conditioned on the Buyer’s submitting a written claim for liquidated damages to the Seller not later than ** after the last day of the Scheduled Delivery Month.

11.2		Renegotiation

		If, as a result of an Inexcusable Delay, Delivery does not occur within after the last day of the Scheduled Delivery Month the Buyer will have the right, exercisable by written notice to the Seller given between , to require from the Seller a renegotiation of the Scheduled Delivery Month for the affected Aircraft. Unless otherwise agreed between the Seller and the Buyer during such renegotiation, the said renegotiation will not prejudice Buyer’s right to receive liquidated damages in accordance with Clause 11.1.

11.3		Termination

		If, as a result of an Inexcusable Delay, Delivery does not occur within after the last day of the Scheduled Delivery Month and the parties have not renegotiated the Delivery Date pursuant to Clause 11.2, then both parties will have the right exercisable by written notice to the other party, given between , to terminate this Agreement in respect of the affected Aircraft. In the event of termination, neither party will have any claim against the other, except that the Seller will pay to the Buyer any amounts due pursuant to Clause 11.1 and will pay the Buyer an amount equal to the Predelivery Payments received from the Buyer hereunder in respect of the Aircraft as to which this Agreement has been terminated.

11.4		Setoff Payments

		Notwithstanding anything to the contrary contained herein, before being required to make any payments under Clauses 11.1 or 11.3 above, the Seller will have the right to apply any and all sums previously paid by the Buyer to the Seller with respect to an Aircraft as


USA — Airbus A330 Purchase Agreement		PA — 31 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

to which this Agreement has been terminated to the payment of any other amounts that any Buyer or any Affiliate of the Buyer owes to the Seller or any Affiliate thereof under any agreement between them.

11.5		Remedies

		THIS CLAUSE 11 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE BUYER FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER, OTHER THAN SUCH DELAYS AS ARE COVERED BY CLAUSE 10, AND THE BUYER HEREBY WAIVES ALL RIGHTS TO WHICH IT WOULD OTHERWISE BE ENTITLED IN RESPECT THEREOF, INCLUDING WITHOUT LIMITATION ANY RIGHTS TO INCIDENTAL AND CONSEQUENTIAL DAMAGES OR SPECIFIC PERFORMANCE. THE BUYER WILL NOT BE ENTITLED TO CLAIM THE REMEDIES AND RECEIVE THE BENEFITS PROVIDED IN THIS CLAUSE 11 WHERE THE DELAY REFERRED TO IN THIS CLAUSE 11 IS CAUSED BY THE NEGLIGENCE OR FAULT OF THE BUYER OR ITS REPRESENTATIVES.


USA — Airbus A330 Purchase Agreement		PA — 32 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

12		WARRANTIES AND SERVICE LIFE POLICY

12.1		Warranty

12.1.1		Nature of Warranty Subject to the limitations and conditions hereinafter provided, and except as provided in Clause 12.1.2, the Seller warrants to the Buyer that each Aircraft and each Warranted Part will at the time of Delivery hereunder be free from defects:

	(i)		in material,

	(ii)		in workmanship, including, without limitation, processes of manufacture,

	(iii)		in design (including, without limitation, selection of materials parts and components) having regard to the state of the art at the date of such design, and

	(iv)		arising from failure to conform to the Specification, except as to immaterial deviations from those portions of the Specification that are expressly stated in the Specification to be estimates or approximations or design aims.

For the purposes of this Agreement, the term “ Warranted Part ” will mean any Seller proprietary component, equipment, accessory or part that (a) is installed on or incorporated into an Aircraft at Delivery, (b) is manufactured to the detail design of the Seller or a subcontractor of the Seller and (c) bears a part number of the Seller at the time of Delivery.

12.1.2		Exceptions

		The warranties set forth in Clause 12.1.1 will not apply to Buyer Furnished Equipment, Propulsion Systems, or to any component, accessory, equipment or part purchased by the Buyer or the Seller **that is not a Warranted Part, provided, however, that:

	(i)		any defect in the Seller’s workmanship in respect of the installation of such items in or on the Aircraft, including any failure by the Seller to conform to the installation instructions of the manufacturers of such items that invalidates any applicable warranty from such manufacturers, will constitute a defect in workmanship for the purpose of this Clause 12.1 and be covered by the warranty set forth in Clause 12.1.1(ii), and

	(ii)		any defect inherent in the Seller’s design of the installation, considering the state of the art at the date of such design, that impairs the use or function of such items will constitute a defect in design for the purposes of this Clause 12.1 and be covered by the warranty set forth in Clause 12.1.1(iii).


USA — Airbus A330 Purchase Agreement		PA — 33 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

12.1.3		Warranty Periods

		The warranties described in Clauses 12.1.1 and 12.1.2 will be limited to those defects that become apparent within ** after Delivery of the affected Aircraft (the “Warranty Period”).

12.1.4		Limitations of Warranty

	(i)		The Buyer’s remedy and the Seller’s obligation and liability under Clauses 12.1.1 and 12.1.2 are limited to, at the Seller’s expense and option, the repair, replacement or correction of, or the supply of modification kits rectifying the defect to any defective Warranted Part, as mutually agreed between and satisfactory to the Buyer and the Seller, **. However, the Seller may furnish a credit to the Buyer for the future purchase of Goods and Services (not including Aircraft) equal to the price at which the Buyer is then entitled to acquire a replacement for the defective Warranted Part.

	(ii)		If the Seller corrects a defect covered by Clause 12.1.1(iii) that becomes apparent within the Warranty Period, on the written request of the Buyer the Seller will correct any such defect in any Aircraft that has not already been delivered to the Buyer. The Seller will not be responsible for, nor deemed to be in default on account of, any delay in Delivery of any Aircraft or otherwise, in respect of performance of this Agreement, due to the Seller’s undertaking to make such correction. In the alternative, the Buyer and the Seller may agree to deliver such Aircraft with subsequent correction of the defect by the Buyer at the Seller’s expense, or the Buyer may elect to accept Delivery and thereafter file a Warranty Claim as though the defect had become apparent immediately after Delivery of such Aircraft.

	(iii)		**


USA — Airbus A330 Purchase Agreement		PA — 34 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

12.1.5

Cost of Inspection

(i)

	(a)		to determine whether a defect exists in any Warranted Part within the Warranty Period; or

	(b)		pending the Seller’s provision of a corrective technical solution.

(ii)

The Seller’s liability under Clause 12.1.5(i) is subject to the following conditions:

	(a)		such inspections are recommended by a Seller Service Bulletin to be performed within the Warranty Period;

	(b)		the labor rate for the reimbursements will be the In-house Warranty Labor Rate, and

	(c)		the hours used to determine such reimbursement will not exceed the Seller’s estimate of the labor hours required for such inspections. **

12.1.6

Warranty Claim Requirements

The Buyer’s remedy and the Seller’s obligation and liability under this Clause 12.1, with respect to each claimed defect, are subject to the following conditions precedent:

	(i)		the existence of a defect covered by the provisions of this Clause 12.1,

	(ii)		the defect becomes apparent within the Warranty Period, **

	(iii)		the Buyer submits to the Seller evidence reasonably satisfactory to the Seller that the claimed defect is due to a matter covered under the provisions of this Clause 12. ** the Buyer will submit additional information as deemed necessary by the Seller to make a determination that such defect did not result from any act or omission of the Buyer, including but not limited to, any failure to operate and maintain the affected Aircraft or part thereof in accordance with the standards set forth in Clause 12.1.11 or from any act or omission of any third party,

	(iv)		the Buyer returns as soon as practicable the Warranted Part claimed to be defective to the repair facilities designated by the Seller, unless the Buyer


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 35 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

			elect to repair a defective Warranted Part in accordance with the provisions of Clause 12.1.8,

	(v)		the Seller receives a Warranty Claim complying with the provisions of Clause 12.1.7(v).

12.1.7		Warranty Administration

		The warranties set forth in Clause 12.1 will be administered as hereinafter provided:

	(i)		Claim Determination . Determination as to whether any claimed defect in any Warranted Part entitles the Buyer to a remedy under this Clause 12.1 will be made by the Seller, in consultation with the Buyer, and will be based on claim details, reports from the Seller’s regional representative, historical data logs, inspections, tests, findings during repair, defect analysis and other relevant documents and information.

	(ii)		Transportation Costs . Transportation costs associated with (a) the sending of a defective Warranted Part as to which a remedy is available under this Clause 12 to the facilities designated by the Seller **.

	(iii)		On-Aircraft Work by the Seller . If either (a) the Seller determines that a defect subject to this Clause 12.1 requires the dispatch by the Seller of a working team to the facilities of the Buyer to repair or correct such defect, ** or (b) the Seller accepts the return of an Aircraft to perform or have performed a repair or correction, then, the labor costs for such on-Aircraft work will be borne by the Seller.

			On-Aircraft work by the Seller will be undertaken only if, in the Seller’s opinion, the work requires the Seller’s technical expertise. In such case, the Seller and the Buyer will agree on a schedule and place for the work to be performed.

	(iv)		Return of an Aircraft . If the Buyer desires to return an Aircraft to the Seller for consideration of a Warranty Claim, the Buyer will notify the Seller of its intention to do so, and the Seller will, prior to such return, have the right to inspect such Aircraft, and without prejudice to the Seller’s rights hereunder, to repair such Aircraft either at the Buyer’s facilities or at another mutually acceptable location at the Seller’s expense. If the Seller agrees that the return or movement of the Aircraft to another facility is necessary to effect the repair or correction, the Aircraft will be transported to and from such facility at the Seller’s expense.

			If the Seller does not agree that the return of an Aircraft is necessary for the handling of a Warranty Claim, then the return of such Aircraft by the


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 36 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

			Buyer to the Seller and return of such Aircraft to the Buyer’s facilities will be at the Buyer’s expense.

	(v)		Warranty Claim Substantiation . For each claim under this Clause 12.1, the Buyer will give written notice to the Seller that contains at least the data listed below, , with respect to an Aircraft or Warranted Part, as applicable (“ Warranty Claim ”). The Buyer will to provide to the Seller a Warranty Claim within but in no event later than of discovering each defect giving rise to a warranty claim under Clause 12.1.

	(a)		Description of the defect and any action taken

	(b)		Date of incident and/or removal

	(c)		Description of the Warranted Part claimed to be defective

	(d)		Part number

	(e)		Serial number (if applicable)

	(f)		Position on Aircraft, according to Catalog Sequence Number of the Illustrated Parts Catalog, **, Component Maintenance Manual or Structural Repair Manual, as applicable

	(g)		Total flying hours or calendar times, as applicable, at the date of appearance of a defect **

	(h)		Time since last shop visit at the date of appearance of defect **

	(i)		Manufacturer’s serial number (MSN) of the Aircraft and/or its registration number

	(j)		Aircraft total flying hours and/or number of landings at the date of appearance of defect

	(k)		Claim number

	(l)		Date of claim

	(m)		Date of delivery of an Aircraft or Warranted Part to the Buyer

			Warranty Claims are to be addressed as follows:

			Airbus S.A.S. Customer Services Directorate Warranty Administration Rond-Point Maurice Bellonte B.P. 33 F-31707 Blagnac Cedex, France

(vi)

Replacements . ** Replaced components, equipment, accessories or parts will become the Seller’s property.


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 37 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

			Title to and risk of loss of any Aircraft, component, accessory, equipment or part returned by the Buyer to the Seller will at all times remain with the Buyer, except that (i) when the Seller has possession of a returned Aircraft, component, accessory, equipment or part to which the Buyer has title, the Seller will have such responsibility therefor as is chargeable by law to a bailee for hire, but the Seller will not be liable for loss of use, and (ii) title to and risk of loss of a returned component, accessory, equipment or part will pass to the Seller on shipment by the Seller to the Buyer of any item furnished by the Seller to the Buyer as a replacement therefor or on the Seller’s issuance of a credit with respect thereto. Upon the Seller’s shipment to the Buyer of any replacement component, accessory, equipment or part provided by the Seller pursuant to this Clause 12.1, title to and risk of loss of such component, accessory, equipment or part will pass to the Buyer.

	(vii)		Seller’s Acceptance and Rejection . The Seller will provide reasonable written substantiation in case of rejection of a Warranty Claim. The Buyer will pay the Seller (a) reasonable inspection and test charges incurred by the Seller in connection with the investigation and processing of a rejected Warranty Claim, .

	(viii)		Inspection . The Seller will have the right to inspect the affected Aircraft and documents and other records relating thereto in the event of any claim under this Clause 12.1 on reasonable prior written notice to the Buyer and such inspection will not unreasonably interfere with the Buyer’s operation and personnel.

12.1.8

In-house Warranty Repair

	(i)		Authorization . The Buyer is hereby authorized to repair Warranted Parts, subject to the terms of this Clause 12.1.8 (“ In-house Warranty Repair ”). When the estimated labor cost of an In-house Warranty Repair exceeds US$ (US dollars—), the Buyer will notify the Resident Customer Support Representative if available of its decision to perform any In-house Warranty Repairs before such repairs are commenced. Such Buyer’s notice will include sufficient detail regarding the defect, estimated or actual labor hours and material, as applicable, to allow the Seller to ascertain the reasonableness of the estimate. The Seller will use reasonable efforts to ensure a prompt response and will not unreasonably withhold authorization.

	(ii)		Conditions of Authorization . The Buyer will be entitled to the benefits under this Clause 12.1.8 for repair of Warranted Parts:

(a)


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 38 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

	(b)		if adequate facilities and qualified personnel are available to the Buyer;

	(c)		if repairs are to be performed in accordance with the Seller’s written instructions set forth in applicable Technical Data, **

	(d)		only to the extent reasonably necessary to correct the defect, in accordance with the standards set forth in Clause 12.1.11.

	(iii)		Seller’s Rights . The Seller will have the right to require the delivery to it of any Warranted Part, or any part removed therefrom that is claimed to be defective, if, in the Seller’s judgment, the nature of the claimed defect requires technical investigation. Such delivery will be subject to the provisions of Clause 12.1.7(ii).

			Subject to applicable safety rules, the Seller will have the right to have a representative present as an observer during the disassembly, inspection and testing of any Warranted Part claimed to be defective. Such representatives will not unreasonably interfere with the Buyer’s operation and personnel.

	(iv)		In-house Warranty Claim Substantiation . Claims for In-house Warranty Repair credit will comply with the requirements in Warranty Claims under Clause 12.1.7(v) and in addition, to the extent ascertainable, will include:

	(a)		A report of technical findings with respect to the defect, if applicable.

	(b)		For parts required to remedy the defect

	§		part numbers,

	§		serial numbers (if applicable),

	§		description of the parts,

	§		quantity of parts,

	§		unit price of parts,

	§		related Seller’s or third party’s invoices (if applicable),

	§		total price of parts

	(c)		Detailed number of labor hours

	(d)		In-house Warranty Labor Rate

	(e)		Total claim amount


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 39 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

(v)

	(a)		To determine direct labor costs, only the labor hours spent on, disassembly, inspection, repair, reassembly, and final inspection and test of the Warranted Part alone will be counted. The hours required for maintenance work concurrently being carried out on the Aircraft or Warranted Part will not be included.

	(b)		The labor hours counted as set forth above will be multiplied by the In-house Warranty Labor Rate. Such rate is deemed to represent the Buyer’s composite average hourly labor rate paid to the Buyer’s employees or to a third party that the Buyer has authorized to perform the repair, whose jobs, in both cases, are directly related to the performance of the repair. This labor rate is US$ (US dollars (the “ In-house Warranty Labor Rate ”).

			The In-house Warranty Labor Rate is subject to adjustment annually by multiplying the same by the ratio ECIn/ECIb. For the purposes of this Clause 12.1.8(v) only, ECIn is equal to the Labor Index defined in the Seller Price Revision Formula for January of the year in which the hours are spent and ECIb is equal to such Labor Index for **.

	(c)		Direct material costs are determined by the prices at which the Buyer acquired such replacement material, excluding any parts and materials used for overhaul or repair furnished free of charge by the Seller.

	(vi)		Limitation on Credit . The Buyer will in no event be credited for repair costs (including labor and material) for any Warranted Part to the extent that such repair costs exceed, the lower of (x) ) of the Seller’s then current catalog price for a replacement of such Warranted Part .

			The Seller will substantiate the costs referred to in Clause 12.1.8(vi)(y) in writing on reasonable request by the Buyer.

	(vii)		Scrapped Material . The Buyer may, with the agreement of the Resident Customer Support Representative, scrap any defective Warranted Parts that are beyond economic repair and not required for technical evaluation. If the Buyer does not obtain the written agreement of the Resident Customer Support Representative to scrap a Warranted Part, then the


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 40 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

			Buyer will retain such Warranted Part and any defective part removed from a Warranted Part during repair for a period of either after the date of completion of repair or after submission of a claim for In-house Warranty Repair credit relating thereto, whichever is longer. Such parts will be returned to the Seller within days of receipt of the Seller’s request therefor, at the Seller’s expense

	(viii)		DISCLAIMER OF SELLER LIABILITY FOR BUYER’S REPAIR

			THE SELLER WILL NOT BE LIABLE FOR, AND THE BUYER WILL INDEMNIFY THE SELLER AGAINST, CLAIMS OF ANY THIRD PARTIES FOR LOSSES DUE TO ANY DEFECT, NONCONFORMANCE OR PROBLEM OF ANY KIND, ARISING OUT OF OR IN CONNECTION WITH ANY REPAIR OF WARRANTED PARTS UNDERTAKEN BY THE BUYER UNDER THIS CLAUSE 12.1.8 OR ANY OTHER ACTIONS UNDERTAKEN BY THE BUYER UNDER THIS CLAUSE 12.1.8, WHETHER SUCH CLAIM IS ASSERTED IN CONTRACT OR IN TORT, OR IS PREMISED ON ALLEGED, ACTUAL, IMPUTED, ORDINARY OR INTENTIONAL ACTS OR OMISSIONS OF THE BUYER OR THE SELLER.

12.1.9		Warranty Transferability

		The warranties provided for in this Clause 12.1 for any Warranted Part will accrue to the benefit of any operator other than the Buyer if the Warranted Part enters into the possession of such operator as a result of a pooling agreement between such operator and the Buyer, in accordance with the terms and subject to the limitations and exclusions of the foregoing warranties and to applicable laws or regulations.

12.1.10		Warranty for Corrected, Replacement or Repaired Warranted Parts

		Whenever any Warranted Part that contains a defect for which the Seller is liable under this Clause 12.1 has been corrected, repaired or replaced pursuant to the terms of this Clause 12, the period of the Seller’s warranty with respect to such corrected, repaired or replacement Warranted Part, will be the remaining portion of the original Warranty Period in respect of such corrected, repaired or replaced Warranted Part. If a defect is attributable to a defective repair or replacement by the Buyer, a Warranty Claim with respect to such defect will be rejected, notwithstanding any subsequent correction or repair, and will immediately terminate the remaining warranties under this Clause 12.1 in respect of the affected Warranted Part.

12.1.11		Standard Airline Operation — Normal Wear and Tear


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 41 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		The Buyer’s rights under this Clause 12.1 are subject to the Aircraft and each component, equipment, accessory and part thereof being maintained, overhauled, repaired and operated in accordance with FAA regulations **.

		The Seller’s liability under this Clause 12.1 will not extend to normal wear and tear nor, to the extent caused by any of the following:

	(i)		any Aircraft or component, equipment, accessory or part thereof that has been repaired, altered or modified after Delivery in a manner inconsistent with the requirements of the applicable Aviation Authority or the aircraft repair manuals, as applicable;

	(ii)		any component, equipment or accessory or part thereof that has been operated in a damaged state **

	(iii)		any component, equipment, accessory or part from which the trademark, trade name, part or serial number or other identification marks have been removed.

12.2		Seller Service Life Policy

12.2.1		Scope and Definitions

		In addition to the warranties set forth in Clause 12.1, the Seller agrees that, should a Failure occur in any Item (as such terms are defined below), then, subject to the general conditions and limitations set forth in Clauses 12.2.3 and 12.2.4, the provisions of this Clause 12.2 will apply.

		For the purposes of this Clause 12.2,

(i)

“ Item ” means any of the Seller components, equipment, accessories or parts listed in Exhibit C that are installed on an Aircraft at any time during the period of effectiveness of the Service Life Policy as defined below in Clause 12.2.2;


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 42 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

(ii)

“ Failure ” means any breakage of, or defect in, an Item that

	(a)		materially impairs the utility or safety of the Item,

	(b)		did not result from any breakage or defect in any other Aircraft part or component or from any other extrinsic force, and

	(c)		has occurred or can reasonably be expected to occur, but does not necessarily occur, on a repetitive or fleetwide basis.

The Seller’s obligations under this Clause 12.2 are referred to as the “ Service Life Policy .”

12.2.2		Periods and Seller’s Undertaking

		Subject to the general conditions and limitations set forth in Clause 12.2.4, the Seller agrees that if a Failure occurs in an Item within ** after the Delivery of the Aircraft on which such Item is installed, the Seller will, at its discretion, as promptly as practicable and for a price that reflects the Seller’s financial participation as hereinafter provided:

	(i)		design and furnish to the Buyer a ** correction for such Item and provide any parts required for such correction (including Seller designed standard parts but excluding industry standard parts), or

	(ii)		replace such Item.

12.2.3		Seller’s Participation in the Cost

		Any part or Item that the Seller is required to furnish to the Buyer under this Service Life Policy will be furnished at the Seller’s current sales price therefor, less the Seller’s financial participation, which will be determined in accordance with the following formula:

		P = C ( N – T ) / N

		where

	P:		financial participation of the Seller,

	C:		the Seller’s then current sales price for the required Item or required Seller designed parts,


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 43 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

total time in months since Delivery of the Aircraft in which the Item subject to a Failure was originally installed, and

** months.

12.2.4		General Conditions and Limitations

12.2.4.1		Notwithstanding any provision of this Clause 12.2, during the Warranty Period, all Items will be covered by the provisions of Clause 12.1 and not by the provisions of this Clause 12.2.

12.2.4.2		The Buyer’s remedies and the Seller’s obligations and liabilities under this Service Life Policy are subject to compliance by the Buyer with the following conditions:

	(i)		The Buyer will generate and maintain log books and other historical records as required by the FAA, and will retain the same for the duration of this Service Life Policy, with respect to each Item adequate to enable the determination as to whether the alleged Failure is covered by this Service Life Policy and, if so, to allocate the portion of the cost to be borne by the Seller in accordance with Clause 12.2.3.

	(ii)		The Buyer will keep the Seller informed, by making available any relevant records **, of any significant incidents relating to an Aircraft, howsoever occurring or recorded.

	(iii)		The conditions of Clause 12.1.11 will have been complied with.

	(iv)		The Buyer will implement specific structural inspection programs for monitoring purposes as may be established from time to time by the Seller and the Buyer. Such programs will be, to the extent possible, compatible with the Buyer’s operational requirements and will be carried out at the Buyer’s expense. Reports relating thereto will be regularly furnished to the Seller **.

	(v)		The Buyer will report in writing any breakage or defect that may be covered by the Service Life Policy to the Seller within **, after such breakage or defect becomes apparent, whether or not the same can reasonably be expected to occur in any other Aircraft, and the Buyer will inform the Seller in sufficient detail about such breakage or defect to enable the Seller to determine whether the same is subject to this Service Life Policy.

12.2.4.3

Except as otherwise provided in this Clause 12.2, any claim under this Service Life Policy will be administered as provided in, and will be subject to the terms and conditions of, Clause 12.1.6.


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 44 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

12.2.4.4		If the Seller has issued a service bulletin modification applicable to an Aircraft, the purpose of which is to avoid a Failure, the Seller will offer the necessary modification kit free of charge or under a pro rata formula established by the Seller. If such a kit is so offered to the Buyer, then, in respect of such Failure and any Failures that could ensue therefrom, the Seller’s commitment under this Clause 12.2 will be subject to the Buyer’s incorporating such modification in the relevant Aircraft, within a reasonable time, as promulgated by the Seller and in accordance with the Seller’s instructions.

12.2.4.5		THIS SERVICE LIFE POLICY IS NEITHER A WARRANTY, PERFORMANCE GUARANTEE, NOR AN AGREEMENT TO MODIFY ANY AIRCRAFT OR AIRFRAME COMPONENTS TO CONFORM TO NEW DEVELOPMENTS OCCURRING IN THE STATE OF AIRFRAME DESIGN AND MANUFACTURING ART. THE SELLER’S OBLIGATION UNDER THIS CLAUSE 12.2 IS TO MAKE ONLY THOSE CORRECTIONS TO THE ITEMS OR FURNISH REPLACEMENTS THEREFOR AS PROVIDED IN THIS CLAUSE 12.2. THE BUYER’S SOLE REMEDY AND RELIEF FOR THE NONPERFORMANCE OF ANY OBLIGATION OR LIABILITY OF THE SELLER ARISING UNDER OR BY VIRTUE OF THIS SERVICE LIFE POLICY WILL BE **, LIMITED TO THE AMOUNT THE BUYER REASONABLY EXPENDS IN PROCURING A CORRECTION OR REPLACEMENT FOR ANY ITEM THAT IS THE SUBJECT OF A FAILURE COVERED BY THIS SERVICE LIFE POLICY AND TO WHICH SUCH NONPERFORMANCE IS RELATED, LESS THE AMOUNT THAT THE BUYER OTHERWISE WOULD HAVE BEEN REQUIRED TO PAY UNDER THIS CLAUSE 12.2 IN RESPECT OF SUCH CORRECTED OR REPLACEMENT ITEM. WITHOUT LIMITING THE EXCLUSIVITY OF WARRANTIES AND GENERAL LIMITATIONS OF LIABILITY PROVISIONS SET FORTH IN CLAUSE 12.5, THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL CLAIMS TO ANY FURTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF PROFITS AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES, ARISING UNDER OR BY VIRTUE OF THIS SERVICE LIFE POLICY.

12.2.5		Transferability

		The Buyer’s rights under this Clause 12.2 will not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise, without the Seller’s prior written consent.

		Any unauthorized assignment, sale, transfer or other alienation of the Buyer’s rights under this Service Life Policy will, as to the Aircraft involved, immediately void this Service Life Policy in its entirety.


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 45 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

12.3		Supplier Warranties and Service Life Policy

12.3.1		Seller’s Support

		Before Delivery of the first Aircraft, the Seller will provide the Buyer with the warranties and service life policies that the Seller has obtained pursuant to the Supplier Product Support Agreements.

12.3.2		Supplier’s Default

12.3.2.1		If any Supplier under any warranty referred to in Clause 12.3.1 defaults in the performance of any material obligation under such warranty with respect to a Supplier Part, the Buyer has used its best efforts to enforce its rights under such warranty, and the Buyer submits reasonable evidence, within a reasonable time, that such default has occurred, then Clause 12.1 of this Agreement will apply to the extent it would have applied had such Supplier Part been a Warranted Part, to the extent the Seller can reasonably perform said Supplier’s obligations, except that the Supplier’s warranty period indicated in the applicable Supplier Product Support Agreement will apply.

12.3.2.2		If any Supplier under any service life policy referred to in Clause 12.3.1 defaults in the performance of any material obligation under such service life policy with respect to a Supplier Part, the Buyer has used best efforts to enforce its rights under such service life policy, and the Buyer submits within a reasonable time to the Seller reasonable evidence that such default has occurred, then Clause 12.2 will apply to the extent the same would have applied had such Supplier Part been listed in Exhibit C, to the extent that the Seller can reasonably perform said Supplier’s service life policy.

12.3.2.3		At the Seller’s request, the Buyer will assign to the Seller, and the Seller will be subrogated to, all of the Buyer’s rights against the relevant Supplier with respect to, and arising by reason of, such default and the Buyer will provide reasonable assistance to enable the Seller to enforce the rights so assigned.

12.4		Interface Commitment

12.4.1		Interface Problem

		If the Buyer experiences any technical problem in the operation of an Aircraft or its systems, the cause of which, after due and reasonable investigation, is not readily identifiable by the Buyer, but which the Buyer reasonably believes to be attributable to the design characteristics of one or more components of the Aircraft and/or its systems (an “ Interface Problem ”), the Seller will, if requested by the Buyer, and without additional charge to the Buyer, promptly conduct or have conducted an investigation and analysis of such problem to determine, if possible, the cause or causes of the problem and to recommend such corrective


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 46 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		action as may be feasible, provided, however, that if the Seller determines, after such investigation, that the Interface Problem was due to or caused by any act or omission of the Buyer in its performance of its obligations hereunder, the Buyer will pay to the Seller all reasonable costs and expenses incurred by the Seller during such investigation. The Buyer will furnish to the Seller all data and information relevant to the Interface Problem in its possession and will reasonably cooperate with the Seller in the conduct of the Seller’s investigations and such tests as may be required. At the conclusion of such investigation the Seller will promptly advise the Buyer in writing of the Seller’s opinion as to the cause or causes of the Interface Problem and the Seller’s recommendations as to corrective action.

12.4.2		Seller’s Responsibility

		If the Seller determines that the Interface Problem is primarily attributable to the design of a Warranted Part, the Seller will, if requested by the Buyer, take prompt action to correct the design of such Warranted Part, pursuant to the terms and conditions of Clause 12.1.

12.4.3		Supplier’s Responsibility

		If the Seller determines that the Interface Problem is primarily attributable to the design of any Supplier Part, the Seller will at the Buyer’s request, assist the Buyer in processing any warranty claim the Buyer may have against the manufacturer of such Supplier Part. **

12.4.4		Joint Responsibility

		If the Seller determines that the Interface Problem is attributable partially to the design of a Warranted Part and partially to the design of any Supplier Part, the Seller will, if requested by the Buyer, seek a solution to the Interface Problem through cooperative efforts of the Seller and any Supplier(s) involved. The Seller will promptly advise the Buyer of any corrective action proposed by the Seller and any such Supplier(s). Such proposal will be consistent with any then existing obligations of the Seller hereunder and of any such Supplier to the Buyer. Such corrective action, unless reasonably rejected by the Buyer, will constitute full satisfaction of any claim the Buyer may have against either the Seller or any such Supplier(s) with respect to such Interface Problem, unless such corrective action does not resolve the Interface Problem.

12.4.5		General

12.4.5.1		All requests under this Clause 12.4 will be directed both to the Seller and the affected Suppliers.


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 47 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

12.4.5.2		Except as specifically set forth in this Clause 12.4, this Clause 12.4 will not be deemed to impose on the Seller any obligations not expressly set forth elsewhere in this Agreement.

12.4.5.3		All reports, recommendations, data and other documents furnished by the Seller to the Buyer pursuant to this Clause 12.4 will be deemed to be delivered under this Agreement and will be subject to the terms, covenants and conditions set forth in this Clause 12 and in Clause 22.7.

12.5		Exclusivity of Warranties

		THIS CLAUSE 12 (INCLUDING ITS SUBPROVISIONS) SETS FORTH THE EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE OBLIGATIONS OF THE SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO THE BUYER, WHETHER UNDER THIS AGREEMENT OR OTHERWISE, ARISING FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE DELIVERED BY THE SELLER UNDER THIS AGREEMENT.

		THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN THIS CLAUSE 12 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYER FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN THE GOODS AND SERVICES SUPPLIED UNDER THIS AGREEMENT. THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS, GUARANTEES AND LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, WHETHER EXPRESS OR IMPLIED BY CONTRACT, TORT, STATUTORY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT OR PROBLEM OF ANY KIND IN ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE DELIVERED BY THE SELLER UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO:

	(1)		ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE;

	(2)		ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

	(3)		ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

	(4)		ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO, ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 48 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

			NEGLIGENCE, INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;

	(5)		ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;

	(6)		ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL STATUTE OR AGENCY;

	(7)		ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

	(a)		LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;

	(b)		LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;

	(c)		LOSS OF PROFITS AND/OR REVENUES;

	(d)		ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.

		THE WARRANTIES AND SERVICE LIFE POLICY PROVIDED BY THIS AGREEMENT WILL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE SELLER AND THE BUYER. IF ANY PROVISION OF THIS CLAUSE 12 SHOULD FOR ANY REASON BE HELD UNLAWFUL, OR OTHERWISE UNENFORCEABLE, THE REMAINDER OF THIS CLAUSE 12 WILL REMAIN IN FULL FORCE AND EFFECT.

		FOR THE PURPOSE OF THIS CLAUSE 12.5, “SELLER” WILL BE UNDERSTOOD TO INCLUDE THE SELLER, ITS AFFILIATES AND SUPPLIERS.

		**

12.6		Duplicate Remedies


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 49 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		The remedies provided to the Buyer under this Clause 12 as to any defect in respect of the Aircraft or any part thereof are mutually exclusive and not cumulative. The Buyer will be entitled to the remedy that provides the maximum benefit to it, as the Buyer may elect, pursuant to the terms and conditions of this Clause 12 for any defect for which remedies are provided under this Clause 12 provided, however, that the Buyer will not be entitled to elect a remedy under more than one part of this Clause 12 for the same defect. The Buyer’s rights and remedies herein for the nonperformance of any obligations or liabilities of the Seller arising under these warranties will be in monetary damages limited to the amount the Buyer expends in procuring a correction or replacement for any covered part subject to a defect or nonperformance covered by this Clause 12, and the Buyer will not have any right to require specific performance by the Seller.

12.7		Negotiated Agreement

		The Buyer specifically recognizes that:

	(i)		the Specification has been agreed upon after careful consideration by the Buyer using its judgment as professional operators of, and maintenance providers with respect to, aircraft used in public transportation and as such is are professionals within the same industry as the Seller;

	(ii)		this Agreement, and in particular this Clause 12, has been the subject of discussion and negotiation and is fully understood by the Buyer;

	(iii)		the price of the Aircraft and the other mutual agreements of the Buyer set forth in this Agreement were arrived at in consideration of, inter alia, the provisions of this Clause 12, specifically including the Exclusivity of Warranties set forth in Clause 12.5.

12.8		Survivability

		In respect of all delivered Aircraft, the provisions of this Clause 12 will survive any termination of this Agreement, except any termination following a Termination Event referred to in Clause 21(1), (2), (3) or (4).


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 50 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

13.		PATENT AND COPYRIGHT INDEMNITY

13.1		Indemnity

13.1.1		Subject to the provisions of Clause 13.2.3, the Seller will indemnify the Buyer from and against any damages, costs and expenses including legal costs (excluding damages, costs, expenses, loss of profits and other liabilities in respect of or resulting from loss of use of the Aircraft) resulting from any infringement or claim of infringement by the Airframe or any part or software installed therein at Delivery of

	(i)		any British, French, German, Spanish or U.S. patent;

	(ii)		any patent issued under the laws of any other country in which the Buyer may lawfully operate the Aircraft, provided that from the time of design of such Airframe or any part or software installed therein at Delivery and until infringement claims are resolved, the country of the patent and the flag country of the Aircraft are both parties to:

	(a)		the Chicago Convention on International Civil Aviation of December 7, 1944, and are each fully entitled to all benefits of Article 27 thereof, or,

	(b)		the International Convention for the Protection of Industrial Property of March 20, 1883; and

(iii)

in respect of computer software installed on the Aircraft, any copyright, provided that the Seller’s obligation to indemnify will be limited to infringements in countries which, at the time of design, are members of The Berne Union and recognize computer software as a “work” under the Berne Convention.

13.1.2

Clause 13.1.1 will not apply to

	(i)		Buyer Furnished Equipment;

	(ii)		the Propulsion Systems;

	(iii)		Supplier Parts; or

	(iv)		software not developed by the Seller.

13.1.3


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 51 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

	(i)		procure for the Buyer the right to use the affected Airframe, part or software free of charge; or

	(ii)		replace the infringing part or software as soon as possible with a non-infringing substitute.

13.2		Administration of Patent and Copyright Indemnity Claims

13.2.1		If the Buyer receives a written claim or a suit is threatened or begun against the Buyer for infringement of a patent or copyright referred to in Clause 13.1, the Buyer will

	(i)		forthwith notify the Seller, giving particulars thereof;

	(ii)		furnish to the Seller all data, papers and records within the Buyer’s control or possession relating to such patent or claim;

	(iii)		refrain from admitting any liability or making any payment, or assuming any expenses, damages, costs or royalties, or otherwise acting in a manner prejudicial to the defense or denial of the suit or claim, it being agreed that nothing in this Clause 13.2.1(iii) will prevent the Buyer from paying the sums that may be required to obtain the release of the Aircraft, provided that payment is accompanied by a denial of liability and is made without prejudice;

	(iv)		fully cooperate with, and render all assistance to, the Seller as may be pertinent to the defense or denial of the suit or claim; and

	(v)		act to mitigate damages and/or to reduce the amount of royalties that may be payable, and act to minimize costs and expenses.

13.2.2.1		The Seller will be entitled either in its own name or on behalf of the Buyer to conduct negotiations with the party or parties alleging infringement and may assume and conduct the defense or settlement of any suit or claim in the manner that, in the Seller’s opinion, it deems proper.

13.2.3		The Seller’s liability hereunder will be conditional on the strict and timely compliance by the Buyer with the terms of this Clause and is in lieu of any other liability to the Buyer, whether express or implied, that the Seller might incur at law as a result of any infringement or claim of infringement of any patent or copyright.


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 52 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 53 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

14		TECHNICAL DATA AND SOFTWARE SERVICES

		The Seller will make available or will cause the Seller’s designee ANACS to make available to the Buyer the Technical Data and certain additional services under the terms and conditions set forth in this Clause 14.

14.1		Supply

		The Technical Data will be supplied in the English language using the aeronautical terminology in common use.

		Range, form, type, format, Air Transport Association (“ ATA ” ) compliance or non-compliance, quantity and delivery schedule of the Technical Data to be provided under this Agreement are covered in Exhibit F. **

		The Buyer will not receive compensation or credits of any kind for return of unused or partially used Technical Data.

14.2		Aircraft Identification for Technical Data

14.2.1		For Technical Data customized to the Aircraft, the Buyer agrees to the allocation of fleet serial numbers (“ FSN(s) ” ) in the form of block of numbers selected in the range from 001 to 999.

14.2.2		The sequence will not be interrupted except if two (2) different Propulsion Systems or two (2) different Aircraft models are selected.

14.2.3		The Buyer will indicate to the Seller the FSNs allocated to each Aircraft corresponding to the Aircraft rank in the delivery schedule set forth in Clause 9.1.1 not later than ** prior to the Scheduled Delivery Month for the first Aircraft to be delivered hereunder. The allocation of such FSNs to such Aircraft will not constitute any proprietary, insurable or other interest of the Buyer in any Aircraft prior to its Delivery.

14.3		Integration of Equipment Data

14.3.1		Supplier Equipment

		If necessary for the understanding of the affected systems, information relating to Supplier Equipment that is installed on the Aircraft by the Seller, will be introduced ** into the first issue, subsequent to the installation of the Supplier equipment of the customized Technical Data supplied to the Buyer, provided Clause 14.3.2.2 is complied with (the “ First Issue ” ).

14.3.2		Buyer Furnished Equipment


USA — Airbus A330 Purchase Agreement EXECUTION		PA — 54 of 95 PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

14.3.2.1		The Seller will introduce BFE data, for equipment installed on the Aircraft by the Seller, into the customized Technical Data at no additional charge to the Buyer for the First Issue, provided such data are provided in accordance with the conditions set forth in Clauses 14.3.2.2 through 14.3.2.5.

14.3.2.2		The Buyer will to supply the BFE data to the Seller at least before the scheduled delivery of the customized Technical Data and the full set of BFE data will be provided to the Seller at the latest ** before the scheduled delivery of the customized Technical Data. The BFE data supplied to the Buyer by the Seller will be in English.

14.3.2.3		The Buyer will use reasonable efforts to supply BFE Data to the Seller in English and in a format compliant with the applicable ATA specification and all applicable revisions.

14.3.2.4		The Buyer and the Seller will agree on the requirements for the provision to the Seller of BFE data for “on-aircraft maintenance.” These requirements include but are not limited to time frame, media and format, to facilitate the efficient, expedited and economic integration of BFE data into Technical Data.

14.3.2.5		The BFE data will be delivered in digital format and/or in Portable Document Format, as agreed between the Buyer and the Seller.

14.3.2.6		All costs related to the delivery to the Seller of BFE data will be borne by the Buyer.

14.3.2.7		Clause 14.3.2 will apply to the BFE data provided by the Seller under the terms of Clause 18.1.3.

14.4		Delivery

14.4.1		The Technical Data are delivered on-line and/or off-line, as set forth in Exhibit F.

14.4.2		For Technical Data delivered off-line, the Technical Data and corresponding revisions will be sent to one address only. The Buyer will specify such address.

14.4.3		Packing and shipment of the Technical Data and their revisions will be carried out by the quickest transportation methods. Shipment will be FCA Toulouse, France, FCA Hamburg, Germany, and/or FCA Ashburn, VA, USA.

14.4.4		The delivery schedule of the First Issue will be phased as mutually agreed to correspond with Aircraft deliveries. The Buyer agrees to provide ** notice when requesting a change to the delivery schedule.


		PA — 55 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

14.4.5		The Buyer will be responsible for coordinating with and satisfying the requirements of the FAA for Technical Data. ** FCA Toulouse, France, FCA Hamburg, Germany, and/or FCA Ashburn, VA, USA.

14.4.6		**

14.5		Revision Service

		**

14.6		Service Bulletins Incorporation

		During the period of revision service and upon the Buyer’s request for incorporation, which will be made within ** after issuance of a Service Bulletin, Seller’s Service Bulletin information will be incorporated into the Technical Data for the Aircraft after formal notification by the Buyer of its intention to accomplish a Service Bulletin. The split effectivity for a Service Bulletin will remain in the Technical Data until notification from the Buyer that accomplishment has been completed on all the applicable Aircraft, except that for the Flight Manual, Configuration Deviation List, Weight and Balance Manual and the MMEL only the pre- or post-Service Bulletin status will be shown.

14.7		Future Developments

		The Seller will continuously monitor technological developments and apply them to data and document production and methods of transmission where beneficial and economical. The Buyer agrees to give reasonable consideration to any new development proposed by the Seller for implementation.


		PA — 56 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

14.8		Technical Data Familiarization

		Upon request by the Buyer, the Seller will provide a Technical Data familiarization training at the Seller’s or at the facilities of one of the Buyer. .

14.9		Customer Originated Changes

14.9.1		Data on Customer Originated Changes may be incorporated into the following Technical Data when customized to the Buyer’s

	–		Aircraft Maintenance Manual

	–		Illustrated Parts Catalog

	–		Trouble Shooting Manual

	–		Aircraft Wiring Manual

	–		Aircraft Schematics Manual

	–		Aircraft Wiring Lists

	–		Flight Crew Operating Manual

	–		Quick Reference Handbook

14.9.2		COC data will be developed by the Buyer according to the “Customer Guide for Customer Originated Changes” issued by the Seller. The Buyer will ensure that any such COC data is in compliance with the requirements of the FAA.

		COC data will be incorporated by the Seller into all affected customized Technical Data unless the Buyer specifies in writing the documents into which the Buyer desires the COC to be incorporated. Following incorporation of the COC into the customized Technical Data, the relevant Technical Data will show only the aircraft configuration that reflects the COC data and not the configuration before such COC data are incorporated.

14.9.3	(i)	The Buyer hereby acknowledges and accepts that the incorporation of any COC data into the Technical Data issued by the Seller will be at the Buyer’s sole risk, that the Seller will have no obligation to check the COC data for accuracy or validity, and that the Seller will have no liability whatsoever with respect to (a) the contents of any COC data (including omissions or inaccuracies therein) (b) any effect that the incorporation of such COC data may have on the Technical Data or (c) any costs of any nature that the COC data may add to subsequent Service Bulletins or modifications.

	(ii)	THE SELLER HEREBY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OR LIABILITIES, EXPRESSED OR IMPLIED, ORAL OR WRITTEN, ARISING BY LAW, COURSE OF DEALING OR OTHERWISE, AND WITHOUT LIMITATION ALL WARRANTIES AS TO QUALITY, OPERATION, MERCHANTABILITY, FITNESS FOR ANY INTENDED PURPOSE, AND ALL OTHER


		PA — 57 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

			CHARACTERISTICS WHATSOEVER, INCLUDING ANY OMISSIONS OR INACCURACIES THEREIN, OF ANY COC DATA INCORPORATED INTO THE TECHNICAL DATA ISSUED BY THE SELLER.

	(iii)		The Buyer will indemnify and hold the Seller harmless from and against any losses (including reasonable attorneys’ fees) arising from claims by any third party for injury, loss or damage incurred directly or indirectly as a result of the incorporation of any COC data into the Technical Data issued by the Seller.

	(iv)		If the Buyer sells, leases or otherwise transfers any Aircraft to which the COC data apply:

	(a)		the Buyer will remain fully liable for the COC data and any and all effects of their incorporation, as set forth in this Clause 14.9;

	(b)		the Seller may disclose the COC data to the subsequent owner(s) or operator(s) of the transferred Aircraft;

	(c)		it will be the sole responsibility of the Buyer to notify, or cause notification to be made to, the subsequent owner(s) or operator(s) of the existence of the such COC data in the Technical Data applicable to the corresponding Aircraft.

		The Seller hereby disclaims any and all liabilities whatsoever for the COC data in the event of transfer, sale or lease of any Aircraft to which COC data apply.

14.9.4		The incorporation of any COC will be performed under the conditions specified in the Seller’s then current Customer Services Catalog.

14.10		Software Products

		Software Products are available to the Buyer exclusively from ANACS and may be licensed under the General Terms and Conditions of Licensing set forth in Exhibit H.

14.10.1		Performance Engineer’s Programs

(i)

In addition to the standard operational manuals, the Seller will provide to the Buyer software components and databases composing the Performance Engineer’s Programs (“ PEP ”) for the Aircraft.


		PA — 58 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

(ii)

The license to use the PEP will be granted ** for as long as the revisions of the PEP are ** in accordance with Clause 14.5. At the end of such period, license fees may be charged and yearly revision service for the PEP will be provided to the Buyer at the standard commercial conditions set forth in the then current ANACS Customer Services Catalog.

14.10.2		AirN@v and/or ADOC N@vigator Based Consultation

		The affected Technical Data covered under an Advanced Consultation Tool based on ADOC N@vigator browser are:

	–		Engineering Documentation Combined Index

	–		Engineering Drawings Parts Usage

	–		Engineering Drawings Parts List

	–

The Technical Data listed below will be provided on DVD and include integrated software (the “ AirN@v Services ”):


		AirN@v Planning AirN@v Repair AirN@v Workshop AirN@v Associated Data AirN@v Engineering:

		The applicable Technical Data pursuant to each of the above AirN@v Services is listed in Exhibit F.

		The licensing conditions for the use of AirN@v Services will be as set forth in Exhibit H. The license to use AirN@v and/or ADOC N@vigator based products for the Aircraft will be granted free of charge for as long as the revisions of such Technical Data are free of charge in accordance with Clause 14.5. At the end of such period, license fees may be charged and the yearly revision service for AirN@v and/or ADOC N@vigator will be provided to the Buyer at the standard commercial conditions set forth in the then current ANACS Customer Services Catalog.

14.10.3		AirbusWorld Customer Portal

14.10.3.1		The Buyer will be entitled to obtain access to a wide range of information and services, including Technical Data, available in the secure zone of the Seller’s


		PA — 59 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		Customer Portal AirbusWorld (“ AirbusWorld ”). Access will be free of charge for as long as the Buyer operates the Aircraft.

		Access to the secure zone of AirbusWorld (the “ Secure Zone ”) is reserved to Airbus owners and operators and is subject to the prior signature by the Buyer of the “ General Terms and Conditions of Access to and Use of Airbus Secure Area of Customer Portal. ”

		A description of the basic services available to the Buyer in the Secure Zone is set forth in the ANACS Customer Services Catalog.

14.10.3.2

On-Line Technical Data

	(i)		The Technical Data specified in Exhibit F as being provided on-line will be made available to the Buyer through the Secure Zone at no cost as long as revision service for such Technical Data is free of charge in accordance with Clause 14.5.

	(ii)		The list of the Technical Data available on-line may be amended from time to time.

			For any Technical Data that are or become available on-line, the Seller will notify the Buyer thereof and the Seller reserves the right to discontinue other formats for such Technical Data. On-line and old formats of such Technical Data are to be available in parallel for a period of twelve (12) months or two (2) revision cycles, whichever is shorter.

14.10.3.3		Access to the Secure Zone will be granted free of charge for a reasonable number, to be agreed by the parties, of the Buyer’s users (including one Buyer administrator) for the Technical Data related to the Aircraft that will be operated by the Buyer.

14.11		Warranties

14.11.1		The Seller warrants that the Technical Data (exclusive of COC) are prepared in accordance with the state of art at the date of their conception. Should any Technical Data prepared by the Seller contain any nonconformity or defect, the sole and exclusive liability of the Seller will be to take all reasonable and proper steps, at its option, to correct or replace such Technical Data.

14.11.2		THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND/OR ITS SUPPLIERS AND REMEDIES OF THE BUYER SET FORTH IN THIS CLAUSE 14 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND/OR ITS SUPPLIERS AND RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, ITS SUPPLIERS AND/OR THEIR


		PA — 60 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

INSURERS, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT IN ANY TECHNICAL DATA DELIVERED UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO:

	(A)		ANY WARRANTY AGAINST HIDDEN DEFECTS

	(B)		ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;

	(C)		ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

	(D)		ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY, WHETHER CONTRACTUAL OR DELICTUAL AND WHETHER OR NOT ARISING FROM THE SELLER’S AND/OR ITS SUPPLIERS’ NEGLIGENCE, ACTUAL OR IMPUTED; AND

	(E)		ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OR DAMAGE TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART THEREOF OR ANY TECHNICAL DATA DELIVERED HEREUNDER.

		THE SELLER AND/OR ITS SUPPLIERS WILL HAVE NO OBLIGATION OR LIABILITY, HOWSOEVER ARISING, FOR LOSS OF USE, REVENUE OR PROFIT OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT IN ANY TECHNICAL DATA DELIVERED UNDER THIS AGREEMENT.

		FOR THE PURPOSES OF THIS CLAUSE 14.11.2, “THE SELLER” WILL INCLUDE THE SELLER, ITS AFFILIATES AND ANY OF THEIR RESPECTIVE INSURERS.

14.12		Proprietary Rights

		All proprietary rights, including but not limited to patent, design and copyrights, relating to Technical Data will remain with the Seller and/or its Affiliates as the case may be. All Technical Data are supplied for the sole use by the Buyer in maintaining and operating the Aircraft and the Buyer undertakes not to modify, copy the contents of, or use the Technical Data to manufacture any parts or components of the Aircraft, save as explicitly permitted herein or in the Technical Data, or as otherwise expressly authorized by the Seller. These proprietary rights will also apply to any translation of Technical Data into a language or languages or medium or media that may have been performed or caused to be performed by the Buyer.


		PA — 61 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

15		SELLER REPRESENTATIVES

15.1		Seller Representatives

		The Seller will provide or cause to be provided ** to the Buyer the services described in this Clause 15, at the main base of the Buyer or at other locations to be mutually agreed.

15.2		Resident Customer Support Representatives

15.2.1

(i)

The Seller will provide one or more dedicated resident customer support representatives to act in an advisory capacity for pre-entry-into-service support of the Aircraft (“Resident Customer Support Representative”), commencing at **.

(ii)

The actual number of Resident Customer Support Representatives assigned to the Buyer at any one time pursuant to this Agreement or any other agreement with the Seller or its Affiliates, will not exceed **.

15.2.2		The Seller will provide to the Buyer an annual written account of the consumed months and any remaining balance of months.

15.3		Customer Support Director

		The Seller will assign the services of Customer Support Director based in Herndon, Virginia, to liaise between the Seller and the Buyer on product support matters after signature of this Agreement .

15.4		[Intentionally left blank]

15.5		Buyer’s Service

15.5.1		From the date of arrival of the first Resident Customer Support Representative and until the duration of the assignment, the Buyer will provide , suitable office space, office equipment and facilities for the sole use of the Resident Customer Support Representative(s) in or conveniently near the maintenance facilities of the Buyer.

15.5.2		** and


		PA — 62 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

(ii)

when said Resident Customer Support Representative(s) are assigned away from the locations mentioned above in Clause 15.2.1 at the Buyer’s request, transportation on similar basis between the said locations and the place of assignment.

15.5.3		The parties will give each other all necessary reasonable assistance with general administrative functions specific to their respective countries and procurement of the documents necessary to live and work there.

15.6		Temporary Assignment and Withdrawal of Resident Customer Support Representative

		The Seller will have the right, upon written notice to and communication with the Buyer, to transfer or recall any Resident Customer Support Representative(s) on a temporary or permanent basis if, in the Seller’s opinion, conditions are dangerous to the Resident Customer Support Representative’s safety or health or prevent the fulfillment of such Resident Customer Support Representative’s contractual tasks. The Buyer will ** for the man-days during which any Resident Customer Support Representative is absent from the Buyer’s facility pursuant to this Clause 15.6

15.7		Representatives’ Status

		In providing the above technical service, the Seller’s employees, including the Resident Customer Support Representative(s) and the Customer Support Director, are deemed to be acting in an advisory capacity only and at no time will they be deemed to be acting, either directly or indirectly, as the employees or agents of the Buyer.


		PA — 63 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

16		TRAINING AND TRAINING AIDS

16.1.		General

		This Clause 16 covers the terms and conditions for the supply of training and training aids for the Buyer’s personnel to support the Aircraft operation.

16.2.		Scope

16.2.1		The range and quantity of training and training aids to be provided free of charge under this Agreement are covered in Appendix A to this Clause 16. The Seller will arrange availability of such training and training aids in relation to the delivery schedule for the Aircraft set forth in Clause 9.1.1.

16.2.2		The Maintenance Training and Flight Training courses described in Appendix A to this Clause 16 will be provided **

16.2.3		**, no compensation or credit of any sort will be provided for unused or partially used training or training aids offered pursuant to this Clause 16.

16.3.		Training Organization / Location

16.3.1		The Seller will provide the training at the Airbus Training Center in Miami, Florida (the " Seller’s Training Center " ), and/or at its affiliated training center in Blagnac, France (the " Affiliated Training Center " ).

16.3.2		If unavailability of facilities or scheduling difficulties make training by the Seller impractical at the training centers listed in Clause 16.3.1, the Seller will ensure that the Buyer is provided such training at locations other than those named in Clause 16.3.1.

16.3.3		Upon the Buyer’s request, the Seller may also provide certain training at one of the Buyer’s bases, if and when practicable for the Seller, under terms and conditions to be mutually agreed upon. In this event, all additional charges listed in Clause 16.6.2 will be borne by the Buyer.

16.4		Training Courses

16.4.1		Training courses, as well as the minimum and maximum numbers of trainees per course provided for the Buyer’s personnel, are defined in the applicable training course catalog (the “ Training Course Catalog ”) and will be scheduled as mutually agreed upon during a training conference (the “ Training Conference ”) that will be held as soon as practicable after signature of this Agreement and no later than ** prior to delivery of the first Aircraft.

16.4.2		The following terms will apply when training is performed by the Seller:


		PA — 64 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

	(i)		Training courses will be the Seller’s standard courses as described in the Seller’s applicable Training Course Catalog valid at the time of execution of the course. The Seller will be responsible for all training course syllabi, training aids and training equipment necessary for the organization of the training courses.

	(ii)		The training curricula and the training equipment may not be fully customized. However, they may be modified to include the most significant aspects of the Specification as known, at the latest, ** prior to the date of the first training course planned for the Buyer and will be configured in order to obtain the relevant Aviation Authority’s approval and to support the Seller’s training programs.

	(iii)		Training data and documentation necessary for training detailed in Appendix A to this Clause 16 will **. Training data and documentation will be marked “FOR TRAINING ONLY” and as such will be supplied for the sole and express purpose of training.

	(iv)		Upon the request of the Buyer **, the Seller will collect and pack for consolidated shipment to the facility of the Buyer, all training data and documentation of the Buyer’s trainees attending training at the Airbus Training Center in Miami, Florida or Blagnac, France, as applicable. This training data and documentation will be delivered FCA Miami International Airport. The Buyer will designate in writing one Buyer to receive title to such training data and documentation and title to and risk of loss of the training data and documentation will pass to the Buyer upon delivery.

16.4.3		If the Buyer decides to cancel or reschedule a training course, a minimum advance notice of ** will be required. Any later cancellation or change from the Buyer, when courses cannot be allocated to other customers, will be deducted from the training allowances defined herein or will be charged to the Buyer, as applicable.

16.4.4		The Seller will deliver, or will cause any third party training provider to deliver, to the trainees a certificate of completion at the end of any such training course. No such certificate will represent authority or qualification by any Aviation Authority but may be presented to such officials in order to obtain relevant formal qualification.

16.4.5		**

16.5		Prerequisites


		PA — 65 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

16.5.1		Training will be conducted in English and all training aids are written in English using common aeronautical terminology. Trainees must have the prerequisite experience set forth in Appendix B to this Clause 16.

		The Seller’s training courses are “Transition Training Courses” and not “Ab Initio Training Courses.”

		The Buyer will be responsible for the selection of the trainees and for any liability with respect to the entry knowledge level of the trainees.

16.5.2		The Buyer will provide the Seller with an attendance list of the trainees for each course with the validated qualification of each trainee. The Seller reserves the right to verify the trainees’ proficiency and previous professional experience. The Seller will in no case warrant or otherwise be held liable for any trainee’s performance as a result of any training services provided.

16.5.3		The Seller will provide to the Buyer an Airbus Pre-Training Survey, and/or the “Maintenance Training Survey,” as applicable, to obtain the trainee’s associated background. The Buyer will complete such survey(s) and return them to the Seller at least ** prior to the start of the training course.

16.5.4		If the Buyer makes a change to any trainee attendance list within the ** period stated in Clause 16.5.3, the Buyer will immediately inform the Seller thereof and send the Seller an updated Airbus Pre-Training Survey and/or Maintenance Training Survey reflecting requested information for the replacement trainee(s).

16.6.		Logistics

16.6.1		Trainees

	(i)		When training is done at the Airbus Training Center in Miami, Florida, the Seller will provide for the duration of the training course on the basis of .

	(ii)		When training is done at the Airbus Training Center in Blagnac, France, the Seller will **

	(iii)		**

16.6.2

Training at External Location

(i)

Seller’s Instructors


		PA — 66 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

			If at the Buyer’s request, training is provided by the Seller’s instructors at any location other than the Seller’s training centers, **.

	(ii)		Living Expenses for the Seller’s Instructors

			Such expenses, covering the entire period from day of secondment to day of return to the Seller’s base, will include but will not be limited to lodging, food and local transportation to and from the place of lodging and the training course location. **.

	(iii)		Air Travel

			**

	(iv)		Training Material

			The Buyer will reimburse the Seller for the reasonable cost of shipping the training material needed to conduct such courses.

	(v)		Buyer’s Indemnity

			The Buyer will be solely liable for any and all cancellation or delay in the performance of the training outside of the Seller’s training centers that is associated with the transportation provided under Clause 16.6.2(iii) **.

	(vi)		Training Equipment Availability

			Training equipment necessary for course performance at any course location other than the Seller’s training centers or the facilities of the training provider selected by the Seller will be provided by the Buyer in accordance with the Seller’s specifications.

16.7		Maintenance Training

16.7.1		The Seller will provide maintenance training for the Buyer’s ground personnel as described in Appendix A to this Clause 16. The available courses are listed in the Seller’s applicable Training Course Catalog. The practical training provided in the frame of maintenance training is performed exclusively on the training devices in use in the Seller’s Training Center or the Affiliated Training Center. If additional practical training is required, such additional practical training can be organized with the assistance of the Seller, in accordance with**.


		PA — 67 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

APPENDIX A TO CLAUSE 16

TRAINING ALLOWANCES

1.		MAINTENANCE TRAINING

1.1		The Seller will provide to the Buyer of maintenance training for the Buyer’s personnel, if the Buyer chooses to have the A330-200 Aircraft and/or A330-300 Aircraft powered by General Electric or Rolls-Royce propulsion systems. These trainee days will be used solely for the maintenance training courses as defined in the Seller’s applicable Training Course Catalog.

1.2		The number of Engine Run-up courses within the trainee day allowance in Paragraph 2.1 will not exceed per firmly ordered Aircraft and to a .

2.		TRAINEE DAYS ACCOUNTING

		Trainee days are counted as follows:

(i) For instruction at the Seller’s Training Center or Affiliated Training Center, ** and the number of trainees as confirmed by the Buyer ** days before the beginning of the course will be counted as the number of trainees considered to have taken the course.

(ii) For instruction outside of the Seller’s Training Center or Affiliated Training Center, not including practical training, **equals the actual number of trainees attending the course or a minimum of ** trainee days.

(iii) For instruction outside of the Seller’s Training Center or Affiliated Training Center that is practical training, ** equals the actual number of trainees attending the course or a minimum of ** trainee days.

If training is to be provided outside of the Seller’s Training Center or Affiliated Training Center specifically at the Seller’s request, Paragraph 2(i) will be applicable to the trainee days accounting for such training facility.


		PA — 68 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

17		SUPPLIER PRODUCT SUPPORT

17.1		Equipment Supplier Product Support Agreements

17.1.1		The Seller will, **transfer to the Buyer the Supplier Product Support Agreements transferable to the Buyer from Suppliers of equipment listed as “Seller Furnished Equipment” in the Specification on Delivery. These agreements are based on the “World Airlines and Suppliers Guide” and include Supplier commitments contained in the Supplier Product Support Agreements, which include the following:

	(i)		Technical data and manuals required to operate, maintain, service and overhaul the Supplier items will (a) be prepared in accordance with the provisions of the applicable ATA Specification in accordance with Clause 14, (b) include revision service, and (c) be published in the English language. The Seller will make reasonable efforts to ensure that software data, supplied in the form of an appendix to the Component Maintenance Manual, be provided in compliance with the applicable ATA Specification to protect Suppliers’ proprietary interests,

	(ii)		Warranties and guarantees, including Suppliers’ standard warranties, and in the case of Suppliers of landing gear, service life policies for selected landing gear structures,

	(iii)		Training to ensure efficient operation, maintenance and overhaul of the Suppliers’ items for the Buyer’s instructors, shop and line service personnel.

	(iv)		Spares data in compliance with the applicable ATA Specification, initial provisioning recommendations, spares and logistics service, including routine and emergency deliveries, and

	(v)		Technical service to assist the Buyer with maintenance, overhaul, repair, operation and inspection of Supplier items as well as required tooling and spares provisioning.

17.2		Supplier Compliance

		The Seller will monitor Supplier compliance with support commitments defined in the Supplier Product Support Agreements and will take action together with the Buyer, if necessary.

		**

17.3		Supplier Part Repair Stations


		PA — 69 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

The Seller has developed with the Suppliers a comprehensive network of repair stations in the United States of America and Canada for those Supplier Parts originating from outside these countries. **


		PA — 70 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

18		BUYER FURNISHED EQUIPMENT

18.1		Administration

18.1.1		Without additional charge and in accordance with the Specification, the Seller will provide for the installation of the Buyer Furnished Equipment, provided that the BFE is referred to in the Airbus BFE Catalog of Approved Suppliers by Products valid at the time the BFE is ordered.

		The Seller will advise the Buyer of the dates by and location to which, in the planned release of engineering for the Aircraft, the Seller requires a written detailed engineering description. This description will include the dimensions and weight of BFE, the information related to its certification and information necessary for the installation and operation thereof. The Buyer will furnish such detailed description and information by the dates specified. Thereafter, no information, dimensions or weights will be revised unless authorized by an SCN.

		The Seller will also provide the Buyer in due time with a schedule of dates and shipping addresses for delivery of BFE and (when requested by the Seller) additional spare BFE in order permit installation of the BFE in the Aircraft and delivery of the Aircraft in accordance with the delivery schedule. The Buyer will provide the BFE by such dates in a serviceable condition, to allow performance of any assembly, test, or acceptance process in accordance with the Seller’s industrial schedule.

		The Buyer will also provide, when requested by the Seller, at Airbus France S.A.S. works and/or at Airbus Deutschland GmbH works, as applicable and needed, adequate field service, including support from BFE suppliers to act in a technical advisory capacity to the Seller in the installation, calibration and possible repair of any BFE.

18.1.2		The BFE will be imported into France or into Germany by the Buyer under a suspensive customs system (“ Régime de l’entrepôt industrial pour fabrication coordonnée ” or “ Zollverschluss ”) without application of any French or German tax or customs duty, and will be Delivered Duty Unpaid (DDU) (as defined in Incoterms 2000:ICC Official Rules for the Interpretation of Trade Terms, published by the International Chamber of Commerce), to

Airbus France S.A.S.
316 Route de Bayonne
31300 Toulouse, France

Airbus Deutchland GmbH
Division Hamburger Flugzeugbau
Kreetslag 10


		PA — 71 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

21129 Hamburg
Federal Republic of Germany

as provided in Clause 18.1.1.

18.1.3		If the Buyer requests the Seller to supply directly certain items that are considered BFE according to the Specification, and if such request is notified to the Seller in due time in order not to affect the Delivery Date of the Aircraft, the Seller may agree to order such items subject to the execution of an SCN reflecting the effect on price, escalation adjustment, and any other customary conditions of the Agreement. In such a case the Seller will be entitled to the payment of a handling charge **and will bear no liability in respect of delay and product support commitments for such items.

18.2		Requirements

		The Buyer is responsible for assuring and warranting, at its expense, that BFE will (i) be manufactured by a qualified supplier in accordance with the provisions of Clause 18.1.1, (ii) meet the requirements of the applicable Specification, (iii) comply with applicable requirements incorporated by reference to the Type Certificate and listed in the Type Certificate Data Sheet, and (iv) be approved by the applicable Aviation Authority delivering the Export Certificate of Airworthiness and by the FAA for installation and use on the Aircraft at the time of Delivery of such Aircraft. The Seller will be entitled to refuse any item of BFE that it considers incompatible with the Specification, the engineering description mentioned above in Clause 18.1.1 or the certification requirements.

18.3		Buyer’s Obligation and Seller’s Remedies

18.3.1		Any delay or failure in

	(i)		furnishing the BFE in serviceable condition at the requested delivery date,

	(ii)		complying with the warranty in Clause 18.2 or in providing the descriptive information or service representatives mentioned in Clause 18.1.1, or

	(iii)		in obtaining any required approval for such equipment under the regulations of the above mentioned Aviation Authorities

may delay the performance of any act to be performed by the Seller, and cause the Final Contract Price of the Aircraft to be adjusted in accordance with the updated delivery schedule, including, in particular, the costs the Seller incurs that are attributable to the delay or failure described above, such as storage, taxes, insurance and costs of out-of sequence installation.


		PA — 72 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

18.3.2

In addition to the consequences outlined in Clause 18.3.1, in the event of a delay or failure described in Clause 18.3.1,

	(i)		the Seller may select, purchase and install equipment similar to the BFE at issue, in which event the Final Contract Price of the affected Aircraft will also be increased by the purchase price of such equipment, plus reasonable costs and expenses incurred by the Seller for handling charges, transportation, insurance, packaging and, if required and not already provided for in the price of the Aircraft, for adjustment and calibration; or

	(ii)		if the BFE is delayed more than beyond, or unapproved within of the date specified in Clause 18.1.1, then the Seller may deliver or the Buyer may elect to have the Aircraft delivered without the installation of such equipment, notwithstanding the terms of Clause 7.2 insofar as it may otherwise have applied, whereupon the Seller will be relieved of all obligations to install such equipment.

18.4		Title and Risk of Loss

		Title to (subject to Clause 18.5(iv)) and risk of loss of BFE will at all times remain with the Buyer that is the owner thereof, except that risk of loss (limited to cost of replacement of said BFE and excluding in particular loss of use) will be with the Seller for as long as the BFE is in the care, custody and control of the Seller.

18.5		Disposition of BFE Following Termination

		If a termination of this Agreement pursuant to the provisions of Clause 21 occurs with respect to an Aircraft in which all or any part of the BFE has been installed prior to the date of such termination, the Seller will be entitled, but not required, to remove all items of BFE that can be removed without causing damage to the Aircraft or rendering any system in the Aircraft unusable and to undertake commercially reasonable efforts to facilitate the sale of such items of BFE to other customers, retaining and applying the proceeds of such sales to reduce Seller’s damages resulting from the termination. In addition, the following terms will apply in the case of such a termination:

	(i)		The Buyer will cooperate with the Seller in facilitating the sale of BFE pursuant to the first paragraph of this Clause 18.5 and will be responsible for all costs incurred by the Seller in removing and facilitating the sale of such BFE. The Buyer will reimburse the Seller for all such costs within of receiving documentation of such costs from the Seller.

	(ii)		The Seller will notify the Buyer as to those items of BFE not sold by the Seller pursuant to the first paragraph of this Clause 18.5, and, at the Seller’s request, the Buyer will remove such items from the Seller’s facility within thirty (30) days of the date of such notice. The Buyer will have no claim against the Seller for damage or destruction of any item of BFE removed from the Aircraft and not removed from Seller’s facility within such period.


		PA — 73 of 95
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

	(iii)		The Buyer will have no claim against the Seller for damage to or destruction of any item of BFE damaged or destroyed in the process of being deinstalled from the Aircraft, provided that the Seller will use reasonable care in such deinstallation.

	(iv)		The Buyer will grant title to the Seller for any BFE items that cannot be removed from the Aircraft


USA — Airbus A330 Purchase Agreement		PA — 74 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

19		INDEMNITIES AND INSURANCE

19.1		Seller’s Indemnities

		The Seller will, except in the case of gross negligence or willful misconduct of the Buyer, its directors, officers, agents and employees, be solely liable for and will indemnify and will hold the Buyer and its respective directors, officers, agents and employees, Affiliates, the Buyer’s representatives, and the respective assignees, directors, officers, agents and employees of each of the foregoing harmless against all losses, liabilities, claims, damages, costs and expenses, including court costs and reasonable attorneys’ fees (“ Losses ”), arising from claims for

	(i)		injuries to, or deaths of, the Seller’s directors, officers, agents or employees, or loss or damage to property of the Seller, or its employees or agents when such losses occur during or are incidental to (a) the exercise by the Buyer of its inspection rights under Clause 6, (b) the Technical Acceptance Process described in Clause 8, (c) the provision of Resident Customer Support Representative support pursuant to Clause 15 or (iv) the provision of training pursuant to Clause 16; and

	(ii)		injuries to or deaths of third parties, or loss of property of third parties, occurring during, or incidental to (a) the exercise by the Buyer of its inspection rights pursuant to Clause 6 or (b) the Technical Acceptance Process described in Clause 8.

19.2		Buyer’s Indemnities

		The Buyer will, except in the case of gross negligence or willful misconduct of the Seller, its directors, officers, agents and employees, be solely liable for and will indemnify and will hold the Seller and its subcontractors and Affiliates, the Seller’s representatives, and the respective assignees, directors, officers, agents and employees of each of the foregoing, harmless against all Losses arising from:

	(i)		injuries to or deaths of the Buyer’s directors, officers, agents or employees, or loss or damage to property of the Buyer or to its employees or agents, when such losses occur during or are incidental to (a) the exercise by the Buyer of its inspection rights under Clause 6; (b) the Technical Acceptance Process described in Clause 8, (c) the provision of Resident Customer Support Representative support pursuant to Clause 15, or (d) the provision of training pursuant to Clause 16; and

	(ii)		claims for injuries to or deaths of third parties, or loss of property of third parties occurring during or incidental to (a) the provision of Resident Customer Support Representative support under Clause 15 or (b) arise out of the provision of


USA — Airbus A330 Purchase Agreement		PA — 75 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

training pursuant to Clause 16 and are not caused by a defect of the type specified in Clause 12.1.1 that is not excluded under Clause 12.1.2.

19.3

Notice and Defense of Claims

	(i)		If any claim is made or suit is brought against a party or entity entitled to indemnification under this Clause 19 (the “ Indemnitee ”) for damages for which liability has been assumed by the other party under this Clause 19, (the “ Indemnitor ”), the Indemnitee will promptly give notice to the Indemnitor and the Indemnitor (unless otherwise requested by the Indemnitee) will assume and conduct the defense, or settlement, of such suit, as the Indemnitor will deem prudent. Notice of the claim or suit will be accompanied by all information pertinent to the matter as is reasonably available to the Indemnitee and will be followed by such cooperation by the Indemnitee as the Indemnitor or its counsel may reasonably request at the expense of the Indemnitor.

	(ii)		If the Indemnitor fails or refuses to assume the defense of any claim or lawsuit notified to it under this Clause 19, the Indemnitee will have the right to proceed with the defense or settlement of the claim or lawsuit as it deems prudent and will have a claim over against the Indemnitor for any judgments, reasonable settlements, costs or expenses, including reasonable attorneys’ fees. Further, in such event, the Indemnitor will be deemed to have waived any objection or defense to the Indemnitee’s claim based on the reasonableness of any settlement.

19.4		Insurance

		For all training periods on aircraft, the Buyer will cause the Seller and its Affiliates, as defined in this Clause 19.4 to be named as additional insured under its aviation legal liability insurance policies, including passenger legal liability, bodily injury liability, products liability (exclusive of manufacturer’s product liability insurance), property damage liability, contractual liability and war risks and allied perils liability, to the extent of the Buyer’s undertaking set forth in Clause 19.2. With respect to the Buyer’s hull all risks and hull war risks insurances and allied perils, the Buyer will cause its hull insurance underwriters to waive all rights of subrogation against the Seller, as defined in this Clause 19.4 to the extent of the Buyer’s undertaking set forth in Clause 19.2.

		Any applicable deductible will be borne by the Buyer. With respect to the above policies, the Buyer will furnish to the Seller, not less than seven (7) Working Days prior to the start of any such training period, certificates of insurance, in English, evidencing the limit of liability cover and period of insurance in a form acceptable to the Seller from its respective insurance broker(s) certifying that such policies have been endorsed as follows:

(i)

under the aviation legal liability insurances referred to above, the Buyer’s policies are primary and non-contributory to any insurance maintained by the Seller.


USA — Airbus A330 Purchase Agreement		PA — 76 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

	(ii)		such insurance can only be cancelled or materially altered by the giving of not less than thirty (30) days (but seven (7) days or such lesser period as may be customarily available in respect of war risks and allied perils) and ten (10) days in respect of cancellation for non-payment of premium) prior written notice thereof to the Seller; and

	(iii)		under any such cover, all rights of subrogation against the Seller and its Affiliates have been waived to the extent of the Buyer’s undertaking and specially referring to Clause 19.2 and to this Clause 19.4.


USA — Airbus A330 Purchase Agreement		PA — 77 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

20		ASSIGNMENTS AND TRANSFERS

20.1		Assignments by Buyer

		Except as hereinafter provided, the Buyer may not sell, assign or transfer its rights or obligations under this Agreement to any person without the prior written consent of the Seller.

20.2		Assignments on Sale, Merger or Consolidation

		The Buyer will be entitled to assign its rights under this Agreement at any time due to a merger or consolidation involving the Buyer, provided the Buyer first obtains the written consent of the Seller. The Seller will provide its consent if:

	(i)		the surviving or acquiring entity is organized and existing under the laws of the United States;

	(ii)		the surviving or acquiring entity has executed an assumption agreement, in form and substance reasonably acceptable to the Seller, agreeing to assume all of the Buyer’s obligations under this Agreement;

	(iii)		at the time, and immediately following the consummation, of the merger, consolidation or sale, no event of default exists or will have occurred and be continuing;

	(iv)		there exists with respect to the surviving or acquiring entity no basis for a Termination Event within the meaning of Clause 21; and

	(v)		the surviving or acquiring entity holds an air carrier operating certificate issued by the FAA at the time, and immediately following the consummation, of such sale, merger or consolidation.

20.3		Designations by Seller

		The Seller may at any time by notice to the Buyer designate facilities or personnel of ANACS or any Affiliate of the Seller at which or by whom the services to be performed under this Agreement will be performed. The Seller may also designate any of its Affiliates as the party responsible on behalf of the Seller for providing to the Buyer all or any of the services to be performed under this Agreement. Notwithstanding such designation, the Seller will remain ultimately responsible for fulfillment of all obligations undertaken by the Seller in this Agreement.

20.4


USA Airbus A330 Purchase Agreement		PA — 78 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

20.5**


USA — Airbus A330 Purchase Agreement		PA 79 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

21.		TERMINATION

21.1		Termination Events

		Each of the following will constitute a “ Termination Event”

	(1)		The Buyer commences in any jurisdiction any case, proceeding or other action with respect to the Buyer or its properties relating to bankruptcy, insolvency, reorganization, winding-up, liquidation, dissolution or other relief from, or with respect to, or readjustment of, its debts or obligations.

	(2)		An action is commenced in any jurisdiction seeking the appointment of a receiver, trustee, custodian or other similar official for the Buyer or for all or any substantial part of its assets, and such action remains unstayed, undismissed or undischarged for **, or the Buyer makes a general assignment for the benefit of its creditors.

	(3)		An action is commenced in any jurisdiction against the Buyer seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets, and such action remains unstayed, undismissed or undischarged for ** .

	(4)		The Buyer becomes the object, in any jurisdiction, of a case, proceeding or action similar or analogous to any of the events mentioned in Clause 21.1(1), (2) or (3).

	(5)		The Buyer is generally not, or is unable to, or admits in writing its inability to, pay its debts as they become due.

	(6)		The Buyer commences negotiations with significant creditors, existing or potential, with the intention of restructuring all or substantially all of its outstanding obligations or in preparation for a bankruptcy filing under the U.S. Bankruptcy Code.

	(7)		The Buyer or any of its respective Affiliates fails to make (i) payment of all or part of the Final Contract Price of any Aircraft required to be made under this Agreement on the due date therefore; when such payment is due, (ii) any Predelivery Payment required to be made under this Agreement within after the date on which such amount is due (iii) any other payment required to be made under this Agreement or any other material agreement between the Buyer or any of its Affiliates and the Seller or any of its Affiliates of such failure to pay which such payment is due.


USA Airbus A330 Purchase Agreement		PA — 80 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

	(8)		The Buyer repudiates, cancels or terminates this Agreement in whole or in part.

	(9)		The Buyer defaults in its obligation to take delivery of an Aircraft as provided in Clause 9.

	(10)		The Buyer or any of its Affiliates defaults in the observance or performance of any other covenant, undertaking or obligation contained in this Agreement or any other material agreement between the Buyer or its Affiliates, on the one hand, and the Seller or its Affiliates on the other hand, provided that, if such breach or default is capable of being cured, such breach or default is not cured within any specified cure period, **.

	(11)		Any other event that the parties will have agreed in writing constitutes a Termination Event hereunder.

	21.2		**

21.3		**

21.4		Notice of Termination Event

		Promptly upon obtaining knowledge of the occurrence of a Termination Event by the Buyer, the Buyer will notify the Seller of such occurrence in writing, provided, that any failure by the Buyer to notify the Seller will not prejudice the Seller’s rights or remedies hereunder.

21.5		**

21.6		Information Covenants

		The Buyer hereby covenants and agrees that, from the date of this Agreement until no further Aircraft are to be delivered hereunder, the Buyer will furnish or cause to be furnished to the Seller the following, it being understood that this covenant with respect to Clauses 21.6 (a), (b) and (c) will be deemed satisfied if the information requested in those clauses is filed, un-redacted, with the U.S. Securities and Exchange Commission and is publicly available on EDGAR (or any successor online resource):


USA Airbus A330 Purchase Agreement		PA — 81 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

	(a)		Annual Financial Statements. As soon as available and in any event no later than the date that the Buyer furnish such annual statements to the Securities and Exchange Commission or successor thereto (the “ SEC ” ) (i) a copy of the SEC Form 10-K filed by the Buyer with the SEC for such fiscal year, or, if no such Form 10-K was filed by the Buyer for such fiscal year, ** following the close of such fiscal year of the Buyer, the consolidated balance sheet of the Buyer and its Subsidiaries, as at the end of such fiscal year and the related consolidated statements of operations, of common stockholders’ equity (deficit) (in the case of the Buyer and its Subsidiaries) and of cash flows for such fiscal year, setting forth comparative consolidated figures as of the end of and for the preceding fiscal year, and examined by any firm of independent public accountants of recognized standing selected by the Buyer and reasonably acceptable to the Seller, whose opinion will not be qualified as to the scope of audit or as to the status of the Buyer as a going concern, and (ii) a certificate of such accounting firm stating that its audit of the business of the Buyer was conducted in accordance with generally accepted auditing standards.

	(b)		Quarterly Financial Statements . As soon as available and in any event no later than the date that the Buyer furnish such quarterly statements to the SEC, a copy of the SEC Form 10-Q filed by the Buyer, as a group, with the SEC for such quarterly period, or, if no such Form 10-Q was filed by the Buyer with respect to any such quarterly period, no later than the ** following the close of such quarterly period, the consolidated balance sheet of the Buyer and its Subsidiaries, as at the end of such quarterly period and the related consolidated statements of operations for such quarterly period and for the elapsed portion of the fiscal year ended with the last day of such quarterly period and in each case setting forth comparative consolidated figures as of the end of and for the related periods in the prior fiscal year, all of which will be certified by an Authorized Officer of the Buyer, subject to changes resulting from audit and normal year-end audit adjustments.

	(c)		Other Information . Promptly upon transmission thereof, copies of any filings and registrations with, and reports to, the SEC by the Buyer or any of its Affiliates, and, with reasonable promptness, such other information or documents (financial or otherwise) as the Seller may reasonably request from time to time.

For the purposes of this Clause 21.6, (x) an “ Authorized Officer ” of the Buyer will mean the Chief Executive Officer, the Chief Financial Officer or any Vice President and above thereof who reports directly or indirectly to the Chief Financial Officer and (y) “ Subsidiaries ” will mean, as of any date of determination, those companies owned by the Buyer whose financial results the Buyer is required to include in its statements of consolidated operations and consolidated balance sheets.


USA Airbus A330 Purchase Agreement		PA — 82 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

21.7		Information Undertakings

		The Buyer undertakes, from the date of this Agreement until no further Aircraft are to be delivered hereunder, to use best reasonable efforts to furnish or cause to be furnished to the Seller the following information:

	(a)		Debt Rescheduling. (i) Promptly upon the commencement by the Buyer of negotiations with one or more of its significant creditors with a view to general readjustment or rescheduling of all or any material part of its indebtedness under circumstances in which a reasonable business person, in the exercise of prudent business judgment, would conclude that the Buyer would otherwise not be able to pay such indebtedness as it falls due, notice of commencement of such negotiations, and (ii) thereafter timely advice of the progress of such negotiations until such negotiations are terminated or completed.

	(b)		Acceleration of other indebtedness . Immediately upon knowledge by the Buyer that the holder of any bond, debenture, promissory note or any similar evidence of indebtedness of the Buyer or any Affiliate thereof ( “ Other Indebtedness ” ) has demanded payment, given notice or exercised its right to a remedy having the effect of acceleration with respect to a claimed event of default under any Other Indebtedness, where the impact of the acceleration is likely to have a material adverse effect on the Buyer’s ability to perform its obligations under or in connection with the transactions contemplated by this Agreement, notice of the demand made, notice given or action taken by such holder and the nature and status of the claimed event of default and what the action the Buyer is taking with respect thereto.


USA Airbus A330 Purchase Agreement		PA — 83 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

22		MISCELLANEOUS

22.1		Data Retrieval

		On the Seller’s reasonable request, the Buyer will provide the Seller with all the necessary data, as customarily compiled by it and pertaining to the operation of the Aircraft, to assist the Seller in making an efficient and coordinated survey of all reliability, maintenance, operational and cost data with a view to improving the safety, availability and operational costs of the Aircraft.

22.2		Notices

		All notices and requests required or authorized hereunder will be given in writing either by personal delivery to a responsible officer of the party to whom the same is given or by commercial courier, certified air mail (return receipt requested) or facsimile at the addresses and numbers set forth below. The date on which any such notice or request is so personally delivered, or if such notice or request is given by commercial courier, certified air mail or facsimile the date on which it is given, will be deemed to be the effective date of such notice or request.

		The Seller will be addressed at:

1, rond-point Maurice Bellonte
31700 Blagnac France
Attention: Director – Contracts

Telephone: 33 05 61 30 40 12
Telecopy: 33 05 61 30 40 11

cc: General Counsel
Fax: (480) 693-5932

The Buyer will be addressed, in the case of any item to be delivered other than via commercial courier or personal service or delivery, at:

4000 East Sky Harbor Boulevard
Phoenix, Arizona 85034
Attention: Senior Vice President and Chief Financial Officer
cc: General Counsel
Telephone: (480) 693-5710
Fax: (480) 693-2899


USA Airbus A330 Purchase Agreement		PA — 84 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

And, in the case of any item to be delivered via courier or personal service or delivery,

111 West Rio Salado Parkway
Tempe, Arizona 85281
Attention: Senior Vice President and Chief Financial Officer

		From time to time, the party receiving the notice or request may designate another address or another person.

22.3		Waiver

		The failure of either party to enforce at any time any of the provisions of this Agreement, to exercise any right herein provided or to require at any time performance by the other party of any of the provisions hereof will in no way be construed to be a present or future waiver of such provisions nor in any way to affect the validity of this Agreement or any part hereof or the right of the other party thereafter to enforce each and every such provision. The express waiver by either party of any provision, condition or requirement of this Agreement will not constitute a waiver of any future obligation to comply with such provision, condition or requirement.

22.4		Interpretation and Law

		THIS AGREEMENT WILL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE THEREOF WILL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

		THE PARTIES HEREBY ALSO AGREE THAT THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS WILL NOT APPLY TO THIS TRANSACTION.

		REGARDING THE CAPE TOWN CONVENTION ON INTERNATIONAL INTERESTS IN MOBILE EQUIPMENT, THE BUYER AGREES THAT IT WILL NOT, AND IT WILL NOT PERMIT ANY LENDER OR FINANCIER FINANCING EITHER AIRCRAFT OR PREDELIVERY PAYMENTS TO, REGISTER ANY INTEREST IN AN UNDELIVERED AIRCRAFT OR IN ANY PROPULSION SYSTEM INSTALLED THEREON AT THE INTERNATIONAL REGISTRY IN CONNECTION WITH SUCH FINANCING.

		Each party (i) hereby irrevocably submits itself to the nonexclusive jurisdiction of the courts of the state of New York in New York County and, to the extent permitted by applicable law, of the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement or


USA Airbus A330 Purchase Agreement		PA — 85 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		any of the transactions contemplated hereby brought by any party or parties hereto, and (ii) hereby waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any such suit, action or proceeding, to the extent permitted by applicable law, the defense of sovereign immunity, any claim that it is not personally subject to the jurisdiction of the above-named courts by reason of sovereign immunity or otherwise or that it or its property is exempt or immune from jurisdiction of such court or from legal process (whether through service of notice, attachment prior to judgment, attachment in aid of execution or judgment, execution of judgment or otherwise) and to the extent permitted by applicable law, that the suit, action or proceeding which is referred to in clause (i) above is brought in an inconvenient forum, that the venue of such suit, action or proceeding is improper, or that this Agreement or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by these courts.

22.4.1		Service of process in any suit, action or proceeding in respect of any matter as to which the Buyer has submitted to jurisdiction under Clause 22.4 may be made on the Buyer by delivery of the same personally or by dispatching the same via Federal Express, UPS, or similar international air courier, service prepaid to, CT Corporation, 111 Hudson St., New York, NY (or such other office in the City of New York as such agent will then be occupying), as agent for the Buyer, it being agreed that service upon CT Corporation will constitute valid service upon the Buyer or by any other method authorized by the laws of the State of New York.

22.4.2		Service of process in any suit, action or proceeding in respect of any matter as to which the Seller has submitted to jurisdiction under Clause 22.4 may be made on the Seller by delivery of the same personally or by dispatching the same via Federal Express, UPS, or similar international air courier, service prepaid to, CT Corporation, 111 Hudson St., New York, NY (or such other office in the City of New York as such agent will then be occupying), as agent for the Seller, it being agreed that service upon CT Corporation will constitute valid service upon the Seller or by any other method authorized by the laws of the State of New York.

22.5		Waiver of Jury Trial

		EACH OF THE PARTIES HERETO WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM OR CROSS-CLAIM THEREIN.

22.6		No Representations outside of this Agreement

		The parties declare that, prior to the execution of this Agreement, they, with the advice of their respective counsel, apprised themselves of sufficient relevant data in order that they might intelligently exercise their own judgments in deciding whether to execute this Agreement and in deciding on the contents of this Agreement. Each party further declares that its decision to execute this Agreement is not predicated on or influenced by any declarations or representations by any other person, party, or any predecessors in interest, successors, assigns, officers, directors, employees, agents or attorneys of any


USA Airbus A330 Purchase Agreement		PA — 86 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		said person or party, except as set forth in this Agreement. This Agreement resulted from negotiation involving counsel for all of the parties hereto and no term herein will be construed or interpreted against any party under the contra proferentum or any related doctrine.

22.7		Confidentiality

		Subject to any legal or governmental requirements of disclosure, or a request in a judicial proceeding (in which case, the party subject to the request will duly inform the other parties to the Agreement of such request so that such parties may seek appropriate protective order) the parties (which for this purpose will include their employees, agents and advisors) will maintain the terms and conditions of this Agreement and any reports or other data furnished hereunder (including, but not limited to, Clauses 14 and 16) strictly confidential. Without limiting the generality of the foregoing, the Buyer and the Seller will each use its best efforts to limit the disclosure of the contents of this Agreement to the extent legally permissible in any filing required to be made by the Buyer with any governmental agency and will make such applications as will be necessary to implement the foregoing.

		With respect to any public disclosure or filing, the Buyer agrees to submit to the Seller a copy of the proposed document to be filed or disclosed and will give the Seller a reasonable period of time in which to review said document. The Buyer and the Seller will consult with each other prior to the making of any public disclosure or filing, permitted hereunder, of this Agreement or the terms and conditions thereof.

		The provisions of this Clause 22.7 will survive any termination of this Agreement.

22.8		Severability

		If any provision of this Agreement should for any reason be held to be without effect, the remainder of this Agreement will remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law, which renders any provision of this Agreement prohibited or unenforceable in any respect.

22.9		Alterations to Contract

		This Agreement, including its Exhibits and Appendices, together with other agreements between the parties executed as of the date hereof, contains the entire agreement between the parties with respect to the subject matter hereof and thereof and supersedes any previous understanding, commitments or representations whatsoever, whether oral or written including that certain term sheet between the Seller and the Buyer, dated June 14, 2007]. This Agreement will not be amended or modified except by an instrument in writing of even date herewith or subsequent hereto executed by both parties or by their fully authorized representatives.


USA Airbus A330 Purchase Agreement		PA — 87 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

22.10		Inconsistencies

		In the event of any inconsistency between the terms of this Agreement and the terms contained in either (i) the Specification, or (ii) any other Exhibit attached to this Agreement, in each such case the terms of such Specification, Exhibit will prevail over this Agreement. For the purpose of this Clause 22.10, the term Agreement will not include either Specification or any Exhibit **.

22.11		Language

		All correspondence, documents and any other written matters in connection with this Agreement will be in English.

22.12		Headings

		All headings in this Agreement are for convenience of reference only and do not constitute a part of this Agreement.

22.13		Counterparts

		This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered will be an original, but all such counterparts will together constitute one and the same instrument.


USA Airbus A330 Purchase Agreement		PA — 88 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

23		CERTAIN REPRESENTATIONS OF THE PARTIES

23.1.		Buyer’s Representations

		The Buyer represents and warrants to the Seller:

	(i)		it is a corporation organized and existing in good standing under the laws of the State of Delaware and has the corporate power and authority to enter into and perform its obligations under this Agreement;

	(ii)		neither the execution and delivery by it of this Agreement, nor the consummation of any of the transactions by it contemplated hereby, nor the performance by it of the obligations hereunder, constitutes a breach of any agreement to which it is a party or by which its assets are bound; and

	(iii)		this Agreement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

23.2		Seller’s Representations

		The Seller represents and warrants to the Buyer:

	(i)		the Seller is a société à responsabilité limitée organized and existing in good standing under the laws of the Republic of France and has the corporate power and authority to enter into and perform its obligations under this Agreement;

	(ii)		neither the execution and delivery by the Seller of this Agreement, nor the consummation of any of the transactions by the Seller contemplated hereby, nor the performance by the Seller of the obligations hereunder, constitutes a breach of any agreement to which the Seller is a party or by which its assets are bound;

	(iii)		this Agreement has been duly authorized, executed and delivered by the Seller and constitutes the legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms.


USA Airbus A330 Purchase Agreement		PA — 89 of 95
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

IN WITNESS WHEREOF, these presents were entered into as of the day and year first above written.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir Name: Thomas T. Weir	By:	/s/ John J. Leahy Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


USA — Airbus A330 Purchase Agreement		PA
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

EXHIBIT A-1

The A330-200 Standard Specification is contained in a separate folder.

Exh. A-1 — 1 of 1



USA — Airbus A330 Purchase Agreement EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT A-2

The A330-300 Standard Specification is contained in a separate folder.

Exh. A-2 — 1 of 1



USA — Airbus A330 Purchase Agreement EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT A-3

The A340-300 Standard Specification is contained in a separate folder.

Exh. A-3 — 1 of 1



USA — Airbus A330 Purchase Agreement EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT A-4

The A340-500 Standard Specification is contained in a separate folder.

Exh. A-4 — 1 of 1



USA — Airbus A330 Purchase Agreement EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-1.A


AIRBUS			SCN No.
SPECIFICATION CHANGE NOTICE			Issue
(SCN)			Dated
			Page No.

TITLE

DESCRIPTION

EFFECT ON WEIGHT
Manufacturer’s Weight Empty Change:

Operational Weight Empty Change:

Allowable Payload Change:

REMARKS/REFERENCES
Response to RFC

SPECIFICATION CHANGED BY THIS SCN

THIS SCN REQUIRES PRIOR OR CONCURRENT ACCEPTANCE OF THE FOLLOWING SCN(s)

PRICE PER AIRCRAFT

US DOLLARS:

AT DELIVERY CONDITIONS:

This change will be effective on Aircraft No. and subsequent provided approval is received by .


BUYER APPROVAL		SELLER APPROVAL

By:		By:

Title: (Authorized Finance Department Officer)		Date:

By:

Title: (Authorized maintenance or flight operations officer)

Date:

Exh. B-1.A — 1 of 2



USA — Airbus A330 Purchase Agreement EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-1.A


AIRBUS			SCN No.
SPECIFICATION CHANGE NOTICE			Issue
(SCN)			Dated
			Page No.

SCOPE OF CHANGE (FOR INFORMATION ONLY)

Exh. B-1.A — 2 of 2



USA — Airbus A330 Purchase Agreement EXECUTION		PRIVILEGED AND CONFIDENTIAL

Exhibit B.1.B

A330-200 definition Technical SCN List


	A330-200
RFC (from -	Jan 07
300 for ref)	DC	TITLE (based on previous A330-300 definition)	REMARKS
**	**	**	**


**		Confidential Treatment Requested


			EXHIBIT B-2
AIRBUS	Airline

MANUFACTURER’S SPECIFICATION	MSCN Number
CHANGE NOTICE	Issue
	Dated
(MSCN)	Page	1 of 3

Title:

Description

Effect on weight

Manufacturer’s Weight Empty Change :

Operational Weight Empty Change :

Allowable Payload Change :

Remarks/References

Specification changed by this MSCN

Price per aircraft

US DOLLARS :

AT DELIVERY CONDITIONS :

This change will be effective on

AIRCRAFT N°

and subsequent.

Provided MSCN is not rejected by

Buyer Approval

Seller Approval

By :

Date :


		Exh B-2 — 1 of 3
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL


			EXHIBIT B-2
AIRBUS	Airline

MANUFACTURER’S SPECIFICATION	MSCN Number
CHANGE NOTICE	Issue
	Dated
(MSCN)	Page	2 of 3

Specification repercussion:

After contractual agreement with respect to weight, performance, delivery, etc, the indicated part of the specification wording will read as follows:

Price per aircraft

US DOLLARS :

AT DELIVERY CONDITIONS :

This change will be effective on

AIRCRAFT N°

and subsequent.

Provided MSCN is not rejected by

Buyer Approval

Seller Approval

By :

Date :


		Exh B-2 — 2 of 3
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL


AIRBUS	Airline		EXHIBIT B-2

MANUFACTURER’S SPECIFICATION	MSCN Number
CHANGE NOTICE	Issue
	Dated
(MSCN)	Page	3 of 3

Scope of change (FOR INFORMATION ONLY)

Price per aircraft

US DOLLARS :

AT DELIVERY CONDITIONS :

This change will be effective on

AIRCRAFT N°

and subsequent.

Provided MSCN is not rejected by

Buyer Approval

Seller Approval

By :

Date :


		Exh B-2 — 3 of 3
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT C

SELLER SERVICE LIFE POLICY
ITEMS COVERED


1		The Items covered by the Service Life Policy pursuant to Clause 12.2 are those Seller Items of primary and auxiliary structure described hereunder.

2		WINGS — CENTER AND OUTER WING BOX (LEFT AND RIGHT)

2.1		Wing Structure

2.1.1		**

2.1.2		**

2.1.3		**

2.2		Fittings

2.2.1		**

2.2.2		**

2.2.3		**

2.2.4		**

2.3		Auxiliary Support Structure

2.3.1		**

2.3.1.1		**

2.3.1.2		**

2.3.2		**

2.3.2.1		**

2.3.2.2		**

2.3.3		**

2.3.3.1		**

2.3.3.2		**



		Exh. C-1 — 1 of 3
USA — Airbus A330 Purchase Agreement EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT C


2.4		Pylon

2.4.1		**

2.4.1.1		**

2.4.1.2		**

2.4.1.3		**

2.4.1.4		**

3		FUSELAGE

3.1		Fuselage structure

3.1.1		**

3.1.2		**

3.1.3		**

3.1.4		**

3.1.5		**

3.1.6		**

3.1.7		**

3.1.8		**

3.2		Fittings

3.2.1		**

3.2.2		**

3.2.3		**



		Exh. C-1 — 2 of 3
USA — Airbus A330 Purchase Agreement EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT C


4		STABILIZERS

4.1		Horizontal Stabilizer Main Structural Box

4.1.1		**

4.1.2		**

4.1.3		**

4.1.4		**

4.1.5		**

4.1.5.1		**

4.1.5.2		**

4.2		Vertical Stabilizer Main Structural Box

4.2.1		**

4.2.2		**

4.2.3		**

4.2.4		**

4.2.5		**

4.2.5.1		**

4.2.5.2		**

5		EXCLUSIONS

		**



		Exh. C-1 — 3 of 3
USA — Airbus A330 Purchase Agreement EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT D

Form of

CERTIFICATE OF ACCEPTANCE
for A330 Aircraft

In accordance with the terms of that certain A330 Purchase Agreement dated as of , between US Airways, Inc., (“Buyer”) and Airbus S.A.S. (“Airbus”) (the “Purchase Agreement”), the acceptance inspections relating to the Airbus A330 aircraft, Manufacturer’s Serial Number: ___, U.S. Registration Number: ___with two (2) Rolls-Royce Trent series propulsion systems installed thereon, serial nos. ___(position #1) and ___(position #2) (the “A330 Aircraft”), have taken place at Toulouse, France, on the ___day of , ___.

In view of said inspections having been carried out with satisfactory results, and with any remaining discrepancies note separately, Buyer hereby approves the A330 Aircraft as being in conformity with the provisions of the Purchase Agreement.

This acceptance does not impair the rights of the Buyer that may be derived from the warranties relating to the A330 Aircraft set forth in the Purchase Agreement.


		RECEIPT AND ACCEPTANCE OF THE ABOVE- DESCRIBED A330 AIRCRAFT ACKNOWLEDGED

		US AIRWAYS, INC.

		By:


		Its:



USA Airbus A330 Purchase Agreement EXECUTION		Exh. D — 1 of 1 PRIVILEGED AND CONFIDENTIAL

EXHIBIT E

BILL OF SALE for [A330/A340] Aircraft

Know all persons by these presents that Airbus S.A.S. (“ Airbus ”), organized and existing under the laws of the Republic of France, whose address is 1 rond-point Maurice Bellonte, 31700 Blagnac, France, is the owner of the full legal and beneficial title to the following airframe (the “ Airframe ”), the attached propulsion systems as specified (the “Propulsion Systems”) and all appliances, components, parts, instruments, accessories, furnishings, modules and other equipment of any nature, excluding buyer furnished equipment, incorporated therein, installed thereon or attached thereto on the date hereof (the “ Parts ”):


MANUFACTURER OF AIRFRAME:		MANUFACTURER OF PROPULSION
		SYSTEMS:

AIRBUS		[PRATT & WHITNEY/GENERAL ELECTRIC/CFM
		INTERNATIONAL/ROLLS ROYCE]

MODEL: [A330-[ ]/A340-[ ]]		MODEL: [PW 4168A/PW 4170/CF6
		8031A4/TRENT 772B/TRENT 553A2.61]

MANUFACTURER’S		SERIAL NUMBERS:
SERIAL NUMBER: [ ]		LH : [ ]
		RH : [ ]

REGISTRATION NO: [ ]

The Airframe, Engines and Parts are hereafter together referred to as the aircraft (the “ [A330/A340] Aircraft ”).

AIRBUS does this ___day of sell, transfer and deliver all of its above described rights, title and interest to the [A330/A340] Aircraft to the following company forever, said [A330/A340] Aircraft to be the property thereof:

US AIRWAYS, INC., (THE “ BUYER ”).

Airbus hereby warrants to the Buyer, its successors and assigns that it has on the date hereof good and lawful right to sell, deliver and transfer title to the [A330/A340 Aircraft to the Buyer and that there is hereby conveyed to the Buyer on the date hereof good, legal and valid title to the [A330/A340] Aircraft, free and clear of all liens, claims, charges, encumbrances and rights of others, other than those arising by or through the Buyer and that the Seller will warrant and defend such title forever against all claims and demands whatsoever.

Exh. E — 1 of 2

USA Airbus A330 Purchase Agreement


EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT E

IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed by its duly authorized representative this day of [ ].

AIRBUS S.A.S.
By:
Title:
Signature:
Location:

Exh. E — 2 of 2

USA Airbus A330 Purchase Agreement


EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT F

EXHIBIT F

TECHNICAL DATA INDEX


USA Airbus A330 Purchase Agreement		Exhibit F — 1 of 17
EXECUTION
**Confidential Treatment Requested.		CONFIDENTIAL AND PRIVILEGED

EXHIBIT F

TECHNICAL DATA INDEX


USA Airbus A330 Purchase Agreement		Exhibit F — 2 of 17
EXECUTION
**Confidential Treatment Requested.		CONFIDENTIAL AND PRIVILEGED

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments


USA Airbus A330 Purchase Agreement		Exhibit F — 4 of 17
EXECUTION
**Confidential Treatment Requested.		CONFIDENTIAL AND PRIVILEGED

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments


USA Airbus A330 Purchase Agreement		Exhibit F — 5 of 17
EXECUTION
**Confidential Treatment Requested.		CONFIDENTIAL AND PRIVILEGED

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments


USA Airbus A330 Purchase Agreement		Exhibit F — 6 of 17
EXECUTION
**Confidential Treatment Requested.		CONFIDENTIAL AND PRIVILEGED

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments


USA Airbus A330 Purchase Agreement		Exhibit F — 7 of 17
EXECUTION
**Confidential Treatment Requested.		CONFIDENTIAL AND PRIVILEGED

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments


USA Airbus A330 Purchase Agreement		Exhibit F — 8 of 17
EXECUTION
**Confidential Treatment Requested.		CONFIDENTIAL AND PRIVILEGED

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments


USA Airbus A330 Purchase Agreement		Exhibit F — 9 of 17
EXECUTION
**Confidential Treatment Requested.		CONFIDENTIAL AND PRIVILEGED

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments


USA Airbus A330 Purchase Agreement		Exhibit F — 10 of 17
EXECUTION
**Confidential Treatment Requested.		CONFIDENTIAL AND PRIVILEGED

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments


USA Airbus A330 Purchase Agreement		Exhibit F — 11 of 17
EXECUTION
**Confidential Treatment Requested.		CONFIDENTIAL AND PRIVILEGED

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments


USA Airbus A330 Purchase Agreement		Exhibit F — 12 of 17
EXECUTION
**Confidential Treatment Requested.		CONFIDENTIAL AND PRIVILEGED

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments


USA Airbus A330 Purchase Agreement EXECUTION		Exhibit F — 13 of 17
**Confidential Treatment Requested.		CONFIDENTIAL AND PRIVILEGED

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments


USA Airbus A330 Purchase Agreement EXECUTION		Exhibit F — 14 of 17
**Confidential Treatment Requested.		CONFIDENTIAL AND PRIVILEGED

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments


USA Airbus A330 Purchase Agreement EXECUTION		Exhibit F — 15 of 17
**Confidential Treatment Requested.		CONFIDENTIAL AND PRIVILEGED

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments


USA Airbus A330 Purchase Agreement EXECUTION		Exhibit F — 16 of 17
**Confidential Treatment Requested.		CONFIDENTIAL AND PRIVILEGED

EXHIBIT F

NOMENCLATURE

Abbr

Avail

Form

Type

Qty

Deliv

Comments


USA Airbus A330 Purchase Agreement EXECUTION		Exhibit F — 17 of 17
**Confidential Treatment Requested.		CONFIDENTIAL AND PRIVILEGED

EXHIBIT G-1

SELLER PRICE REVISION FORMULA


1		BASE PRICE

		The Base Price A330-200 Airframe; the Base Price of the A330-300 Airframe; the Base Price of the A340-300 Aircraft; and the Base Price of the A340-500 Aircraft are as quoted in Clause 3 of the Agreement.

2		BASE PERIOD

		The Base Prices enumerated above in Paragraph 1 of this Exhibit G-1 have been established in accordance with the average economic conditions prevailing in and corresponding to a theoretical delivery in as defined by “ECIb” and “ICb” index values indicated in Paragraph 4 of this Exhibit G-1.

		These Base Prices are subject to adjustment for changes in economic conditions as measured by data obtained from ** and in accordance with the provisions of Paragraphs 4 and 5 of this Exhibit G-1.

		**

3		INDEXES

		Labor Index: **

		Material Index: **

4		**

5		**

5.1		**

5.2		**

5.3		**


		Exh. G-1 — 1 of 1
USA — Airbus A330 Purchase Agreement EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

EXHIBIT G-2

PRATT & WHITNEY PROPULSION SYSTEMS PRICE REVISION FORMULA


1.		REFERENCE PRICE

		The Reference Price of the PW 4168A and PW 4170 Propulsion Systems are as quoted in Clauses 3.2.3.1 and 3.2.3.2 of the Agreement.

		This Reference Prices is subject to adjustment for changes in economic conditions as measured by data obtained from the **, and in accordance with the provisions of Paragraphs 4 and 5 of this Exhibit G-2.

2.		REFERENCE PERIOD

		The above Reference Price has been established in accordance with the economic conditions prevailing in as defined, according to PRATT & WHITNEY by the values indicated in Paragraph 4 hereof.

3.		INDEXES

		Labor Index : **

		Material Index : **

4.		**



5.		**

5.1		**

5.2		**

5.3		**

5.4		**

5.5		**


		Exh. G-2 — 1 of 1
USA — Airbus A330 Purchase Agreement EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

EXHIBIT G-3

GENERAL ELECTRIC PROPULSION SYSTEMS PRICE REVISION FORMULA


1		REFERENCE PRICE

		The Reference Price of the GE CF6-80E1A4 propulsion systems is as quoted in Clause 3.2.2.3 of the Agreement. This Reference Price is subject to adjustment for changes in economic conditions as measured by data obtained from ** and in accordance with the provisions of Paragraphs 4 and 5 of this Exhibit G-3.

2		REFERENCE PERIOD

		The above Reference Price has been established in accordance with the economic conditions prevailing for a theoretical delivery in as defined by General Electric by the .

3		INDEXES

		Labor Index: **

		Material Index: **

4		**

		**

5.		**

5.1		**

5.2		**

5.3		**

5.4		**


		Exh. G-3 — 1 of 1
USA — Airbus A330 Purchase Agreement EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

EXHIBIT G-4

ROLLS ROYCE PROPULSION SYSTEMS PRICE REVISION FORMULA


1		REFERENCE PRICE

		The Reference Price of the Rolls-Royce Trent 772B Propulsions Systems is as quoted in Clause 3.2.2.4 to the Agreement.

		This Reference Price is subject to adjustment for changes in economic conditions as measured by data obtained from the **, and in accordance with the provisions of Paragraphs 4 and 5 of this Exhibit G-4.

2		REFERENCE PERIOD

		The above Reference Price has been established in accordance with the average economic conditions prevailing in as defined, according to ROLLS ROYCE, by the values indicated in Paragraph 4 of this Exhibit G-4.

3		INDEXES

		Labor Index: **

		Material Index: **

		**

4		**



5		**

5.1		**

5.2		**

5.3		**

5.4		**


		Exh. G-4 — 1 of 1
USA — Airbus A330 Purchase Agreement EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

EXHIBIT H

General Conditions of Licensing of Software

These General Conditions of Licensing of Software (the “ General Conditions ”) will provide the conditions for the supply of software developed by and proprietary to Airbus S.A.S (“ Airbus ”) and licensed to Airbus North America Customer Services, Inc. (“ ANACS ”) for supply and license to any user (such user, whether provided with the software ** is referred to hereinafter as the “ Buyer ”). These General Conditions will be incorporated into any product-specific license agreement entered into between the Buyer and ANACS and will apply to any software license granted to the Buyer to the extent not in conflict with any such product-specific agreement that post-dates execution of these General Conditions.

10.		MISCELLANEOUS

10.1		Severability

		If a court holds any provision of these General Conditions or any part thereof to be illegal, invalid or unenforceable, the remaining provisions and remainder of the relevant provision will remain in full force and effect and the parties will amend these General Conditions to give effect to the remainder of the clause to the maximum extent possible.

10.2		Injunctive relief

		The Buyer agrees that money damages would not be a sufficient remedy for any breach of these General Conditions by the Buyer or its representatives and that ANACS will be entitled to injunctive relief, specific performance and any other appropriate equitable remedies for any such breach, in addition to all other remedies available at law or equity.

10.3		No Waiver

		The failure of either party to enforce at any time any obligations hereunder or to require performance of the same by the other party shall in no way be construed to be a present or future waiver of such obligation.

10.4		Notices

		All notices and requests required or authorized hereunder shall be given in writing either by registered mail (return receipt requested) or by telefax. In the case of any such notice or request being given by registered mail, the date upon which the answerback is recorded by the addressee or, in case of a telefax, the date upon which it is sent a correct confirmation printout, shall be deemed to be the effective date of such notice or request.

10.5		Applicable Law


		Exh. H — 1 of 2
USA — Airbus A330 Purchase Agreement EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

EXHIBIT H

These General Conditions shall be governed by and construed in accordance with the laws of the State of New York, without application of conflict of laws principles, which could result in the application of the law of any other jurisdiction. The United Nations Convention on the International Sale of Goods, 1988, shall not apply hereto.


		Exh. H — 2 of 2
USA — Airbus A330 Purchase Agreement EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

LETTER AGREEMENT NO. 1

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281


Re:		SPARE PARTS PROCUREMENT

Ladies and Gentlemen,

US Airways, Inc., (the “ Buyer ”), and AIRBUS S.A.S. (the “ Seller ”), have entered into an Airbus A330 Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 1 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.


		LA1 — 1 of 23
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

CONTENTS

PARAGRAPHS


1	-	GENERAL

2	-	INITIAL PROVISIONING

3	-	STORES

4	-	DELIVERY

5	-	PRICE

6	-	PAYMENT PROCEDURES AND CONDITIONS

7	-	TITLE

8	-	PACKAGING

9	-	DATA RETRIEVAL

10	-	BUY-BACK

11	-	WARRANTIES

12	-	**

13	-	TERMINATION

14	-	ASSIGNMENT

15	-	COUNTERPARTS


		LA1 — 2 of 23
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

1.		GENERAL

1.1		Material

		This Letter Agreement covers the terms and conditions for the services offered by the Seller to the Buyer in respect of the Aircraft spare parts and other equipment (“ Material Support ”) listed below in Paragraphs 1.1(a) through 1.1(f) (“ Material ”) and is intended by the parties to be and will constitute an agreement of sale of all Material furnished to the Buyer by the Seller pursuant hereto.

		The Material will comprise:

	(a)		Seller Parts (defined as industrial proprietary components, equipment, accessories or parts of the Seller manufactured to the detailed design of the Seller or a subcontractor of it and bearing official part numbers of the Seller or material for which the Seller has exclusive sales rights in the United States).

	(b)		Supplier Parts classified as Repairable Line Maintenance Parts in accordance with the applicable ATA Specification.

	(c)		Supplier Parts classified as Expendable Line Maintenance Parts in accordance with the applicable ATA Specification.

	(d)		Ground Support Equipment (GSE) and Specific (To-Type) tools.

	(e)		Hardware and standard material.

	(f)		Consumables and raw material as a package.

			It is expressly understood that Seller Parts will not include parts manufactured pursuant to a parts manufacturing authority.

			Material covered under Paragraphs 1.1(e) and 1.1(f) is available only as a package when supplied as part of the Initial Provisioning defined in Paragraph 1.2.1.

1.2		Scope of Material Support

1.2.1		The Material Support to be provided by the Seller hereunder covers all Material purchased by the Buyer from the Seller during the Initial Provisioning Period (defined below in Paragraph 2) (the “ Initial Provisioning ”) and all items in Paragraphs 1.1(a) through 1.1(d) for purchases additional to the Initial Provisioning.


		LA1 — 3 of 23
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

1.2.2		Propulsion Systems, including associated parts and spare parts therefor, are not covered under this Letter Agreement and will be subject to direct negotiations between the Buyer and the Propulsion Systems manufacturer(s). **

1.2.3		During a period commencing on the date hereof and continuing as long as at least aircraft of the type of the Aircraft are operated in commercial air transport service of which, at least is operated by the Buyer (the “ Term ”), the Seller will maintain or cause to be maintained such stock of Seller Parts as the Seller deems reasonable and will furnish at reasonable prices Seller Parts adequate to meet the Buyer’s needs for maintenance of the Aircraft. Such Seller Parts will be sold and delivered in accordance with Paragraphs 4 and 5 of this Letter Agreement, upon receipt of the Buyer’s orders.

		The Seller will use its reasonable efforts to obtain a similar service from all Suppliers of parts that are originally installed on the Aircraft and not manufactured by the Seller.

1.3		Purchase Source of Material

		The Buyer agrees to purchase from the Seller, or another source in compliance with FAA requirements, the Seller Parts required for the Buyer’s own needs during the Term, and in addition, the Buyer may purchase Seller Parts of other airlines operating aircraft of the type of the Aircraft, or may purchase items equivalent to Seller Parts from airlines or from distributors or dealers, on the condition that the Seller Parts have been designed and manufactured by, or obtained from, the Seller, and the Buyer may also exercise its rights under Paragraph 1.4.

1.4		Manufacture of Material by the Buyer

1.4.1		The provisions of Paragraph 1.3 of this Letter Agreement notwithstanding, the Buyer may manufacture or have manufactured Seller Parts for its own use or may purchase for its own use Seller Parts from any source other than those listed in Paragraph 1.3 in the following cases:

	(a)		after expiration of the Term, provided that at such time the Seller is out of stock of a required Seller Part;

	(b)		at any time, to the extent Seller Parts are needed to effect AOG repairs on any Aircraft and are not available from the Seller within a lead time shorter than or equal to the time in which the Buyer can procure said Seller Parts from another source, provided the Buyer will sell or lease such Seller Parts only if they are assembled in an Aircraft that is sold or leased;


		LA1 — 4 of 23
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

	(c)		at any time, if the Seller fails to fulfill its obligations with respect to any Seller Parts pursuant to Paragraph 1.2 above within a reasonable period after written notice thereof from the Buyer;

	(d)		at any time, if with respect to certain Seller Parts, the Seller has granted, under the Illustrated Parts Catalog supplied in accordance with this Letter Agreement, the right of local manufacture of Seller Parts; and

	(e)		after written approval by the Seller, such approval not to be unreasonably withheld.

1.4.2		The Buyer may manufacture the Seller’s proprietary tooling from drawings and other data supplied by the Seller or the manufacturer.

1.4.3		The rights granted to the Buyer in Paragraph 1.4.1 will not in any way be construed as a license, nor will they in any way obligate the Buyer to pay any license fee, royalty or obligation whatsoever, nor will they in any way be construed to affect the rights of third parties.

1.4.4		The Seller will provide the Buyer with all technical data reasonably necessary to manufacture Seller Parts and the Seller’s proprietary tooling, in the event the Buyer is entitled to do so pursuant to Paragraphs 1.4.1 and 1.4.2. The proprietary rights to such technical data will be subject to the terms of Clause14.12 of the Agreement.

2.		INITIAL PROVISIONING

		The period up to and including the ** after delivery of the last Aircraft will hereinafter be referred to as the Initial Provisioning Period.

2.1		Seller-Supplied Data

		The Seller will prepare and supply to the Buyer the following data:

2.1.1		Initial Provisioning Data — Seller

		The Seller will provide to the Buyer initial provisioning data provided for in the applicable ATA Specification (“ Initial Provisioning Data ”) in a form, format and within a time period to be mutually agreed upon.

		A revision service will be effected every , up to the end of the Initial Provisioning Period.

		The Seller will ensure that Initial Provisioning Data is released to the Buyer in time


		LA1 — 5 of 23
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		to allow the necessary evaluation time by the Buyer and the on-time delivery of ordered Material.

2.1.2		Supplementary Data

		The Seller will provide the Buyer with Local Manufacture Tables (X-File), as part of the Illustrated Parts Catalog (Additional Cross-Reference Tables), which will be a part of the Initial Provisioning Data package.

2.1.3		Data for Standard Hardware

		The Initial Provisioning Data provided to the Buyer will include data for hardware and standard material.

2.2		Supplier-Supplied Data

2.2.1		General

		Suppliers will prepare and issue CMM parts and IPL parts (T-files) in the English language for those Supplier components for which the Buyer has elected to receive data and the Seller will make reasonable efforts to ensure that the Suppliers take such actions.

		Said data (initial issue and revisions) will be transmitted to the Buyer through the Suppliers and/or the Seller. The Seller will **

		The Seller will ensure the supply of Initial Provisioning Data to the Buyer in time to allow the necessary evaluations by the Buyer and on-time deliveries.

2.2.2		Initial Provisioning Data — Supplier

		Initial Provisioning Data for Supplier products provided for in the applicable ATA Specification will be furnished as mutually agreed upon during a Preprovisioning Meeting (defined below), with free of charge revision service assured up to the end of the Initial Provisioning Period, or until it reflects the configuration of the delivered Aircraft.

2.3		Preprovisioning Meeting

2.3.1		The Seller will organize a meeting (i) at the Manufacturer’s spares center in Hamburg, Germany (“ MSC ”), (ii) at ANACS or (iii) at a place to be mutually agreed, in order to formulate an acceptable schedule and working procedure to accomplish the Initial Provisioning of Material (the “ Preprovisioning Meeting ”).


		LA1 — 6 of 23
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

2.3.2		The date of the Preprovisioning Meeting will be mutually agreed upon, but it will take place no earlier than after the Agreement will have taken effect and no later than before delivery of the first Aircraft.

2.4		Initial Provisioning Training

		The Seller will furnish, at the Buyer’s request and at no charge to the Buyer, training courses related to the Seller’s provisioning documents, purchase order administration and handling at MSC or at a mutually agreed location. The areas covered in these training courses are (i) familiarization of the Buyer with the provisioning; (ii) explanation of the technical function as well as the necessary technical and commercial Initial Provisioning Data; and (iii) familiarization with the Seller’s purchase order administration system.

2.5		Initial Provisioning Conference

		The Seller will organize an Initial Provisioning conference at MSC, ANACS or a location to be mutually agreed upon that will include participation of major Suppliers, as agreed upon during the Pre-provisioning Meeting (the “ Initial Provisioning Conference ”).

		Such Initial Provisioning Conference will take place no earlier than ** after Buyer Furnished Equipment (BFE) selection or Customer Definition Freeze (CDF), whichever last occurs.

2.6		Initial Provisioning Data Compliance

2.6.1		Initial Provisioning Data generated by the Seller and supplied to the Buyer will comply with the latest configuration of the Aircraft to which such data relate, as known ** before the data are issued. Said data will enable the Buyer to order Material conforming to its Aircraft as required for maintenance and overhaul.

		This provision will not cover Buyer modifications unknown to the Seller, or modifications not agreed to or designed by the Seller.

2.7		Delivery of Initial Provisioning Material

2.7.1		During the Initial Provisioning Period, Material will conform with the latest configuration standard of the affected Aircraft and with the Initial Provisioning Data transmitted by the Seller. The Seller, in addition, will use its reasonable efforts to cause Suppliers to provide a similar service for their items. Should the Seller default in this obligation, it will immediately replace such Seller parts and/or authorize return


		LA1 — 7 of 23
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		shipment at no transportation cost to the Buyer. The Buyer will make reasonable efforts to minimize such cost.

2.7.2		The Seller will use its reasonable efforts to deliver Initial Provisioning Material in Paragraph 1.1(a) of this Letter Agreement against the Buyer’s orders from the Seller and according to the following schedule, provided the orders are received by the Seller in accordance with published leadtime.

		Initial Provisioning Material will be delivered as provided below:

	(a)		At least of the ordered quantity of each Line Replacement or Line Maintenance item: (for items identified as line station items, **) before delivery of the first Aircraft of each block of Aircraft for which the Buyer has placed Initial Provisioning orders for Material defined above in Paragraph 1.1(a).

	(b)		**

	(c)		of the ordered quantity of each item, including line station items: months after delivery of the first Aircraft of each block of Aircraft for which the Buyer has placed Initial Provisioning orders for Material, as defined above in Paragraph 1.1(a). If said percent cannot be accomplished, the Seller will endeavor to have such items available at its facilities for immediate supply, in case of an AOG.

			The size of each block of Aircraft referred to in the schedule above will be defined at the Pre-Provisioning Conference and the Material will be delivered in sequence.

2.7.3		**

2.7.4		The Buyer may cancel or modify Initial Provisioning orders placed with the Seller with no cancellation charge as follows:

	(a)		“ Long Lead-Time Material ” (lead time exceeding ), not later than before scheduled delivery of said Material.

	(b)		Normal lead time Material, not later than before scheduled delivery of said Material, provided however, that for Material that has a lead time of , the published lead time for the Buyer’s right to cancel or modify orders will be equal to the published lead time for such Material plus **.

	(c)		Buyer-specific Material and Material described in Paragraphs 1.1(b) through 1.1(f), not later than the quoted lead time before scheduled delivery of said Material.


		LA1 — 8 of 23
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

2.7.5		Should the Buyer cancel or modify any orders for Material outside the time limits defined above in Paragraph 2.7.4, the Seller will have no liability for the cancellation or modification, and the Buyer will reimburse the Seller for any direct cost incurred in connection therewith.

2.7.6		Except as otherwise set forth herein, all transportation costs for the return of Material under this Paragraph 2, including any insurance and customs duties applicable or other related expenditures, will be borne by the Buyer.

3.		STORES

3.1		ANACS Spares Center

		The Seller has established and will maintain or cause to be maintained, as long as at least aircraft of the type of the Aircraft are in commercial air transport service of which at least is operated by the (the “ US Term ”), a US store in North America known as the ANACS Spares Center (“ ANACS Spares Center ”). The ANACS Spares Center will be operated for the handling of AOG and critical orders for Seller Parts.

3.2		Material Support Center, Germany

		The Manufacturer has established and will maintain or cause to be maintained during the Term a store of Seller Parts at MSC. MSC will be operated **.

3.3		Other Points of Shipment

		The Seller reserves the right to effect deliveries from distribution centers other than the ANACS Spares Center or MSC and from any of the production facilities of the Associated Contractors.

4.		DELIVERY

4.1		General

		The Buyer’s purchase orders will be administered in accordance with **.

		The provisions of Paragraph 4.2 of this Letter Agreement do not apply to Initial Provisioning Data or Material as described in Paragraph 2 of this Letter Agreement.

4.2		Lead Times


		LA1 — 9 of 23
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

4.2.1		In general, the lead times are (and, unless otherwise agreed, will at all times be) in accordance with the definition in the “World Airline and Suppliers Guide” (latest edition).

4.2.2		Material will be dispatched within the lead times quoted in the published Seller’s price catalog for Material described in Paragraph 1.1(a), and within the Supplier’s or supplier’s lead time augmented by the Seller’s own order and delivery processing time (such in-house processing time not to exceed **) for Material described in Paragraphs 1.1(b) through 1.1(d). The Seller will endeavor to improve its lead times and neither the Seller, the Manufacturer nor any of their Affiliates will discriminate against the Buyer in delivery processing time.


		LA1 — 10 of 23
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

4.2.3		Expedite Service

		The Seller operates a ** expedite service to supply the relevant Seller Parts available in the Seller’s stock, workshops and assembly line, including high-cost/long-lead-time items, to the international airport nearest the location of such items (the “ Expedite Service ”).

		The Expedite Service is operated in accordance with the “World Airlines and Suppliers Guide.” Accordingly, the Seller will notify the Buyer of the action taken to effect the Expedite Service as follows:

	(a)		** after receipt of an AOG order,

	(b)		** after receipt of a critical order (imminent AOG or work stoppage),

	(c)		** after receipt of an expedite order from the Buyer (nil stock at the Buyer’s for no-go items).

		The Seller and its subcontractors will deliver Seller Parts requested on expedite basis against normal orders previously placed by the Buyer or upon requests by telephone or facsimile by the Buyer’s representatives, such requests to be confirmed by the Buyer’s subsequent order for such Seller Parts within a reasonable time.

4.3		Delivery Status

		The Seller agrees to report to the Buyer the status of supplies against orders on a monthly basis or on a mutually agreed timeframe.

4.4		Excusable Delay

		Clause 10.1 of the Agreement will apply to the Material support as defined in Paragraph 1 of this Letter Agreement.

4.5		Shortages, Overshipments, Nonconformance in Orders

4.5.1		Within ** after receipt of Material delivered pursuant to a purchase order, the Buyer will advise the Seller of any alleged shortages or overshipments with respect to such purchase order and of all claimed nonconformance to specification of parts in such order.

		In the event that the Buyer has not reported such alleged shortages, overshipments or nonconformance within such period, the Buyer will be deemed to have accepted the deliveries unless, in the case of shortages, the Buyer can prove within a reasonable period of time that it did not receive the Material.

LA1 — 11 of 23


USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

4.5.2		In the event that the Buyer reports over-shipments or nonconformance to the specifications within the period specified in Paragraph 4.5.1, the Seller will, if such report is accepted, either replace the Material concerned or credit the Buyer for Material paid for but returned to the Seller. In such case, transportation charges will be borne by the Seller.

		The Buyer will endeavor to minimize such costs.

4.6		**

4.7		**

4.8		Cessation of Deliveries

		The Seller reserves the right to stop or otherwise suspend deliveries if the Buyer fails to meet its obligations under Paragraph 6.

5.		PRICE

5.1		The Material prices will be:

5.1.1		**

5.1.2		**

5.2		Validity of Prices

5.2.1		The Material prices are the Seller’s published prices in effect on the date of receipt of the purchase order (subject to reasonable quantities and delivery time) and will be expressed in US dollars. Payment will be made by the Buyer to the Seller in US dollars as set forth below in Paragraph 6.1.

5.2.2		Prices of Seller Parts will be in accordance with the then current “Airbus Spare Parts Price Catalog and Repair Guide”. Prices will be firm for each calendar year, except that the Seller reserves the right to revise the prices of Seller Parts during the course of the calendar year in the following cases:

	•		significant revision in manufacturing costs,

	•		significant revision in Manufacturer’s purchase price of materials (including significant variation of exchange rates),

LA1 — 12 of 23


USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

	•		significant error in estimation of expression of any price.

	**		.

5.2.3		**

5.2.4		The Seller warrants that, should the Buyer purchase from the Seller of the recommended Initial Provisioning of Material identified in Paragraphs 1.1(b) through 1.1(d) above, the average handling charge on the total package will not exceed . This average handling charge will be increased to on any orders placed less than prior to delivery of the first Aircraft, provided, however, that the handling charge on any individual item will not exceed **.

6.		PAYMENT PROCEDURES AND CONDITIONS

6.1		Currency

		Payment will be made in US dollars.

6.2		Time and Means of Payment

6.2.1		Payment will be made by transfer of immediately available funds from the Buyer to the Seller within from the date of invoice.

6.2.2		All invoices from Seller to Buyer pursuant to this Letter Agreement, (the “ Invoices ”) will be paid within the terms hereof except in the case of any disputed charges. The Buyer will provide notice of any such disputed charges to the Seller promptly following identification thereof, and in all cases prior to the initial due date of the Invoice. Each such notice of dispute shall be in writing and set forth the disputed amount(s), the invoice number(s) a reasonably detailed description of such disputed amount(s), and in reasonable detail, the basis of the dispute. The Buyer will pay all undisputed amount(s) on or prior to the due date therefor in accordance with the terms of the Invoice. The Buyer and Seller agree to negotiate in good faith any disputed charges, and any balance due either party at conclusion of those negotiations will be netted against other amounts, if any, due from such party hereunder or, if there are no such other amounts, within ** of resolution, or the original due date, whichever is later.

6.3		Bank Accounts

		The Buyer will make all payments hereunder in full without setoff, counterclaim, deduction or withholding of any kind to the accounts listed below, unless otherwise directed by the Seller:

LA1 — 13 of 23


USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

	(a)		For wire transfer, in favor of Airbus North America Customer Services, Inc.:

			**

	(b)		For direct deposit (lockbox), in favor of Airbus North America Customer Services, Inc.:

			**

6.4		Taxes

		All payments due the Seller hereunder will be made in full without setoff or counterclaim and without deduction or withholding of any kind. Consequently, the Buyer will assure that the sums received by the Seller under this Letter Agreement are equal to the full amounts expressed to be due the Seller hereunder, without deduction or withholding on account of and free from any and all taxes, levies, imposts, dues or charges of whatever nature except that if the Buyer is compelled by law to make any such deduction or withholding the Buyer will pay such additional amounts as may be necessary in order that the net amount received by the Seller after such deduction or withholding will equal the amounts that would have been received in the absence of such deduction or withholding.

6.5		If any payment due the Seller is not received in accordance with the time period provided in Paragraph 6.2, the Seller will have the right to claim from the Buyer and the Buyer will promptly pay to the Seller interest on the unpaid amount at an annual rate equal to LIBOR for month deposits of a similar amount plus per year to be calculated from (and including) the due date to (but excluding) the date payment is received by the Seller, on the basis of a ** year and actual number of days elapsed. The Seller’s claim to such interest will not prejudice any other rights the Seller may have under this Letter Agreement or applicable law.

7.		TITLE

		Title to any Material purchased under this Letter Agreement will remain with the Seller until full payment of the invoices therefore and any interest thereon has been received by the Seller.

		The Buyer will undertake that Material to which title has not passed to the Buyer will

LA1 — 14 of 23


USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		be kept free from any lien, security interest mortgage or other charge or claim in favor of any third party.

8.		PACKAGING

		All Material will be packaged in accordance with the applicable ATA Specification, Category III for consumable/expendable Material and Category II for rotables. Category I containers will be used if requested by the Buyer and the difference between Category I and Category II packaging costs will be paid by the Buyer together with payment for the respective Material.

LA1 — 15 of 23


USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

9.		DATA RETRIEVAL

		The Buyer undertakes to provide periodically to the Seller, as the Seller may reasonably request, during the Term, a quantitative list of the parts used for maintenance and overhaul of the Aircraft. The range and contents of this list will be established by mutual agreement between the Seller and the Buyer.

10.		BUY-BACK

10.1		Buy-Back of Obsolete Material

		The Seller agrees to buy back unused Seller Parts that may become obsolete for the Buyer’s fleet ** as a result of mandatory modifications required by the Buyer’s or Seller’s Aviation Authorities, subject to the following:

	(a)		the Seller Parts involved will be those which the Seller directs the Buyer, or the Aviation Authority determines are unusable, to scrap or dispose of and which cannot be reworked or repaired to satisfy the revised standard;

	(b)		the Seller will grant the Buyer a credit equal to the purchase price paid by the Buyer for any such obsolete parts, such credit will not exceed the value of the provisioning quantities recommended by the Seller in the Initial Provisioning recommendation as mutually agreed upon at the Initial Provisioning Conference;

	(c)		the Seller will use its reasonable efforts to obtain for the Buyer the same protection from Suppliers and will promptly assist the Buyer if so requested by the Buyer.

10.2		Buy-Back of Surplus Material

10.2.1		The Seller agrees that at any time after year and within years after delivery of the first Aircraft to the Buyer, the Buyer will have the right to return to the Seller, , unused and undamaged Material described in Paragraphs 1.1(a) and 1.1(b) originally purchased from the Seller under the terms hereof, provided (i) that the selected protection level does not exceed with a turnaround time of , (ii) that said Material does not exceed the provisioning quantities recommended by the Seller in the Initial Provisioning recommendations, does not have a limited shelf life nor contain any shelf-life limited components with less than of their shelf life remaining when returned to the Seller, and (iii) that the Material is returned with the Seller’s original documentation and any such documentation (including tags, certificates) required to identify, substantiate the condition of and enable the resale of such Material.

10.2.2		The Seller’s agreement in writing is necessary before any Material in excess of the

LA1 — 16 of 23


USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		Seller’s recommendation may be considered for buy-back.

10.2.3		It is expressly understood and agreed that the rights granted to the Buyer under this Paragraph 10.2 will not apply to Material that may become obsolete at any time or for any reason other than as set forth in Paragraph 10.1.

10.2.4		**

10.3		Except as otherwise set forth herein, all transportation costs for the return of surplus Material under this Paragraph 10, including any applicable insurance and customs duties or other related expenditures, will be borne by the Seller.

10.4		The Seller’s obligation to repurchase surplus and obsolete Material depends upon the Buyer’s demonstration, by the Buyer’s compliance with the requirements set forth in Paragraph 9 of this Letter Agreement, that such Material exceeds the Initial Provisioning requirements.

11		WARRANTIES

11.1		WARRANTIES ON SELLER PARTS

11.1.1		Nature of Warranty

		Subject to the limitations and conditions hereinafter provided, and except as provided in Paragraph 11.1.2, the Seller warrants to the Buyer that each Seller Part will at the time of Delivery to the Buyer be free from defects:

	(i)		in material,

	(ii)		in workmanship, including, without limitation, processes of manufacture,

	(iii)		in design (including, without limitation, selection of materials) having regard to the state of the art at the date of such design, and

	(iv)		arising from failure to conform to the Specification, except as to those portions of the Specification that are expressly stated in the Specification to be estimates or approximations or design aims.

11.1.2		**

11.1.3		Exceptions

		The warranties set forth in Paragraph 11.1.1 will not apply to Buyer Furnished Equipment, Propulsion Systems, or to any component, accessory, equipment or part

LA1 — 17 of 23


USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		purchased by the Buyer that is not a Seller Part, provided, however, that any defect inherent in the Seller’s design of the installation, considering the state of the art at the date of such design, that impairs the use of such items will constitute a defect in design for the purposes of this Paragraph 11.1 and be covered by the warranty set forth in Paragraph 11.1.1(iii).

11.1.4		Warranty Period

		The warranties described in Paragraphs 11.1.1 will be limited to those defects that become apparent within ** after delivery of the Seller Part (the “ Seller Part Warranty Period ”).

11.1.5		Buyer’s Remedy and Seller’s Obligation

		The Buyer’s remedy and the Seller’s obligation and liability under Paragraph 11.1 are limited to, at the Seller’s expense, the repair, replacement or correction of, or the supply of modification kits rectifying the defect to any defective Seller Part, **.

		The provisions of Clauses 12.1.6, 12.1.7, 12.1.8 and 12.1.9 of the Agreement will, as applicable, also apply to this Paragraph 11.

11.2		EXCLUSIVITY OF WARRANTIES

		THIS PARAGRAPH 11 (INCLUDING ITS SUBPARTS) SETS FORTH THE EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE OBLIGATIONS OF THE SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO THE BUYER, WHETHER UNDER THIS LETTER AGREEMENT OR OTHERWISE, ARISING FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY SELLER PART DELIVERED BY THE SELLER UNDER THIS AGREEMENT.

		THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN THIS PARAGRAPH 11 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYER FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN THE SELLER PARTS SUPPLIED UNDER THIS LETTER AGREEMENT. THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS, GUARANTEES AND LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, WHETHER EXPRESS OR IMPLIED BY CONTRACT, TORT, STATUTORY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT OR PROBLEM OF ANY KIND IN ANY SELLER PART DELIVERED BY THE SELLER UNDER THIS LETTER AGREEMENT, INCLUDING BUT NOT LIMITED TO:

(1)

ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR

LA1 — 18 of 23


USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

			FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE;

	(2)		ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

	(3)		ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

	(4)		ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO, ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE, INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;

	(5)		ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;

	(6)		ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL STATUTE OR AGENCY;

	(7)		ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

	(a)		LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, OR PART PROVIDED UNDER THE AGREEMENT DUE TO A DEFECT, NONCONFORMITY OR OTHER PROBLEM IN ANY SELLER PART;

	(b)		LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART DUE TO A DEFECT, NONCONFORMITY OR OTHER PROBLEM IN ANY SELLER PART;

	(c)		LOSS OF PROFITS AND/OR REVENUES;

	(d)		ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.

THE WARRANTIES PROVIDED BY THIS LETTER AGREEMENT WILL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE SELLER AND THE BUYER. IN THE EVENT

LA1 — 19 of 23


USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		THAT ANY PROVISION OF THIS PARAGRAPH 11 SHOULD FOR ANY REASON BE HELD UNLAWFUL, OR OTHERWISE UNENFORCEABLE, THE REMAINDER OF THIS PARAGRAPH 11 WILL REMAIN IN FULL FORCE AND EFFECT.

		FOR THE PURPOSE OF THIS PARAGRAPH 11.2, “SELLER” WILL BE UNDERSTOOD TO INCLUDE THE SELLER, ITS AFFILIATES, SUPPLIERS AND ASSOCIATED CONTRACTORS.

		THE FOREGOING DOES NOT APPLY TO CLAIMS BY THE BUYER AGAINST THE SELLER FOR CONTRIBUTION TOWARD THIRD PARTY CLAIMS FOR BODILY INJURY OR PROPERTY DAMAGE TO THE EXTENT SUCH CLAIMS RESULT IN AN ORDER OF A COURT OF COMPETENT JURISDICTION NOT SUBJECT TO APPEAL FINDING LIABILITY ON THE PART OF THE SELLER WITH RESPECT TO SUCH CLAIM.

11.3		DUPLICATE REMEDIES

		The remedies provided to the Buyer under Paragraph 11 are mutually exclusive and not cumulative. The Buyer will be entitled to the remedy that provides the maximum benefit to it, as the Buyer may elect, pursuant to the terms and conditions of this Paragraph 11 for any such particular defect for which remedies are provided under this Paragraph 11, provided, however, that the Buyer will not be entitled to elect a remedy under more than one part of this Paragraph 11 for the same defect. **

11.4		NEGOTIATED AGREEMENT

		The Buyer and Seller agree that this Paragraph 11 has been the subject of discussion and negotiation and is fully understood by the parties, and that the price of the Aircraft and the other mutual agreements of the parties set forth in the Agreement were arrived at in consideration of, inter alia, the Exclusivity of Warranties and General Limitations of Liability provisions and Duplicate Remedies provisions set forth in this Paragraph 11.

12.		**

13.		TERMINATION

		Any termination under Paragraph 10, 11 or 21 of the Agreement or under the Letter Agreements thereto will discharge all obligations and liabilities of the parties hereunder with respect to undelivered Material, services, data or other items to be purchased hereunder that are applicable to those Aircraft as to which the Agreement has been terminated, provided that the Seller will nevertheless repurchase new and unused Material in excess of the Buyer’s requirements due to an Aircraft cancellation

LA1 — 20 of 23


USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		pursuant to Paragraph 10 or 11 of the Agreement, as provided in Paragraph 10.2. In the case of any termination of this Letter Agreement in connection with a termination under Clause 21 of the Agreement, the Seller will not have any obligation to repurchase Material delivered in respect of any undelivered Aircraft and the Seller’s rights to payment for services or spare parts actually delivered to the Buyer or, in the case of spare parts, the return thereof in new and unused condition, in their original packaging with all applicable documentation will not be limited by the liquidated damages provision included in Clause 21 of the Agreement.

14.		MISCELLANEOUS

		**

15.		NEGOTIATED AGREEMENT

		THE BUYER AND THE SELLER AGREE THAT THIS LETTER AGREEMENT HAS BEEN THE SUBJECT OF DISCUSSIONS AND NEGOTIATION BY THE PARTIES AND THAT THE AGREEMENTS OF THE PARTIES SET FORTH IN THE AGREEMENT WERE ARRIVED AT IN CONSIDERATION OF, INTER ALIA, THE PROVISIONS OF THIS LETTER AGREEMENT.

16.		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this paragraph will be void and of no force or effect.

17.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument.

LA1 — 21 of 23


USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir Name: Thomas T. Weir	By:	/s/ John J. Leahy Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


USA — Airbus A330 Purchase Agreement		LA1
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX “A” TO LETTER AGREEMENT NO. 1

AILERONS

AUXILIARY POWER UNIT (APU) DOORS

CARGO DOORS

PASSENGER DOORS

ELEVATORS

FLAPS

LANDING GEAR DOORS

RUDDER

TAIL CONE

WING SLATS

SPOILERS

AIRBRAKES

WING TIPS

RADOMES (If such part is a Seller Part in respect of the Aircraft)



USA — Airbus A330 Purchase Agreement EXECUTION		LA1 — 23 of 23 PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 2

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: PREDELIVERY PAYMENTS

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Airbus A330 Purchase Agreement dated as of the date hereof, (the “ Agreement ”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 2 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

The parties agree that this Letter Agreement will constitute an integral, non-severable part of said Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions that are inconsistent, the specific provisions contained in this Letter Agreement will govern.



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		LA2 — 1 of 3 PRIVILEGED AND CONFIDENTIAL


1.		PREDELIVERY PAYMENTS

1.1		Predelivery Payment Schedule

1.1.1		**

**

2.		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Paragraph 2 will be void and of no force or effect.

3.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one same instrument.



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		LA2 — 2 of 3 PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy
	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers



USA — Airbus A330 Purchase Agreement EXECUTION		LA2 PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 3

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Airbus A330 Purchase Agreement dated as of even date herewith, (the “ Agreement ”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 3 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions that are inconsistent, the specific provisions contained in this Letter Agreement will govern.


7.		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Letter Agreement will be void and of no force or effect.



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		LA3 — 1 of 3 PRIVILEGED AND CONFIDENTIAL


8.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one same instrument.



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		LA3 — 2 of 3 PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer
			Customers



USA Airbus A330 Purchase Agreement EXECUTION		LA3 PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 4

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”), and Airbus S.A.S. (the “ Seller ”), have entered into an Airbus A330 Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 4 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions that are inconsistent, the specific provisions contained in this Letter Agreement will govern.


2.		COUNTERPARTS

		This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		LA 4 — 1 of 2 PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy
	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers



USA Airbus A330 Purchase Agreement EXECUTION		LA 4 PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 5

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Pkwy
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Airbus A330 Purchase Agreement dated as of even date herewith, (the “ Agreement ”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 5 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions that are inconsistent, the specific provisions contained in this Letter Agreement will govern.



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		LA 5 — 1 of 3 PRIVILEGED AND CONFIDENTIAL


3.		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Letter Agreement will be void and of no force or effect.

4.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one same instrument.



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		LA 5 — 2 of 3 PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy
	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer
			Customers



USA Airbus A330 Purchase Agreement EXECUTION		LA 5 PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 6

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: SPECIFICATION MATTERS

Ladies and Gentlemen,

US Airways, Inc., (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Airbus A330 Purchase Agreement dated as of the even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 6 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions that are inconsistent, the specific provisions contained in this Letter Agreement will govern.



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		LA 6 — 1 of 3 PRIVILEGED AND CONFIDENTIAL


**

3.		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Paragraph 3 will be void and of no force or effect.

4.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one same instrument.



USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		LA 6 — 2 of 3 PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy
	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer
			Customers



USA Airbus A330 Purchase Agreement EXECUTION		LA 6 PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 7

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: PRODUCT SUPPORT

Ladies and Gentlemen,

US Airways, Inc., (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Airbus A330 Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 7 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.


USA — Airbus A330 Purchase Agreement		LA7 — 1 of 8
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

1.		**

2.		TECHNICAL DATA AND SOFTWARE SERVICES

		The first sentence of Clause 14.5 of the Agreement is superseded and replaced by the following:

		QUOTE

		Unless otherwise specifically stated, revision service for Technical Data for the Aircraft will be provided **

		UNQUOTE

3.		OPERATION SUPPORT

3.1		The Seller will provide to the Buyer the following software tools (collectively, the “ Software Tools ”) during the ** preceding the first day of the Scheduled Delivery Month:

	(i)		**

	(ii)		**

		The Buyer will be granted a license for the use of the Software Tools, or any successor product thereto. Such license will be subject to the provisions of Exhibit H to the Agreement, except that if any provision of this Letter Agreement conflicts with any provision of such Exhibit H, this Letter Agreement will govern to the extent of such inconsistency.

		**

		The license to use Software Tools will be granted following Delivery of the last New Aircraft and will be subject to termination by the Seller during such period (a) immediately, in the event of a breach by the Buyer of Paragraph 2.2 of Exhibit H to the Agreement and (b) in the event of any other material breach by the Buyer of the terms of such license, following notice to the Buyer and the Buyer’s failure to cure such other material breach from the date of such Seller’s notice. **


		LA7 — 2 of 8
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

		Notwithstanding the provisions of Paragraph 2.3 of Exhibit H to the Agreement, the Buyer may install Software Tools on its computer network, provided that the Buyer takes adequate measures satisfactory to the Seller to preclude any unauthorized access to Software Tools, which measures include but are not limited to (i) control of access to Software (with respect to Software Tools) strictly by the head of information systems and his/her designee (ii) control of access to the Product (with respect to Software Tools) only by Authorized Users of the Buyer, the aggregate of which Authorized Users shall not exceed the number agreed by the Seller and (iii) any other reasonable measures deemed appropriate by the Seller.

		Provided that the Seller gives the Buyer ** prior notice, the Buyer will permit the Seller to review the network installation to assure it meets the Seller’s security requirements. In the event that the Seller deems the Buyer’s network installation to be inadequate, at the Seller’s request the Buyer will remove Software Tools from the Buyer’s network. Failure to do shall be a cause for termination of the Buyer’s license for Software Tools.

3.2		The Seller will provide to the Buyer the Performance Engineering Program for the Aircraft under the same terms and conditions as set forth in Paragraph 2.1 above, from the Delivery of the first New Aircraft for


		LA7 — 3 of 8
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

4.		WARRANTY AND SERVICE LIFE POLICY

4.1		Clause 12.1.3 and 12.1.4 of the Agreement is deleted in its entirety and replaced with the following quoted text:

		QUOTE

	12.1.3		Warranty Period

			**

	12.1.4		Limitations of Warranty

			(i) ** .

			(ii) If the Seller corrects a defect covered by Clause 12.1.1(iii) that becomes apparent within the Warranty Period, on the written request of the Buyer the Seller will correct any such defect in any Aircraft that has not already been delivered to the Buyer. Subject to the provisions of Clause 8 to the Agreement, the Seller will not be responsible for, nor deemed to be in default on account of, any delay in Delivery of any Aircraft or otherwise, in respect of performance of this Agreement, due to the Seller’s undertaking to make such correction. In the alternative, the Buyer and the Seller may agree to deliver such Aircraft with subsequent correction of the defect by the Buyer at the Seller’s expense, or the Buyer may elect to accept Delivery and thereafter file a Warranty Claim as though the defect had become apparent immediately after Delivery of such Aircraft. **

			(iii) If a defect that would otherwise be covered under this Clause 12 becomes apparent and the Buyer has complied with the requirements of Clause 12, and the Seller has no then available correction for the defect and the Seller believes the defect can reasonably be expected to affect all or a substantial portion of the Aircraft, then the Buyer will be deemed to have given notice of such defect for all Aircraft that thereafter experience such defect.

UNQUOTE


		LA7 — 4 of 8
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

4.2		Clause 12.2.2 of the Agreement is deleted in its entirety and replaced by the following:

		QUOTE

	12.2.2		Periods and Seller’s Undertaking

			Subject to the general conditions and limitations set forth in Clause 12.2.4 the Seller agrees that if a Failure occurs in an Item within ** after the Delivery of the Aircraft on which such item is installed, the Seller will, at its discretion, as promptly as practicable and for a price that reflects the Seller’s financial participation as hereinafter provided:

	(i)		design and furnish to the Buyer a terminating correction for such Item and provide any parts required for such correction (including Seller designed standard parts but excluding industry standard parts), or

	(ii)		replace such Item.

		UNQUOTE

4.3		The definition of “N” in Clause 12.2.3 of the Agreement is deleted in its entirety and replaced by the following:

		QUOTE

		N: **

		UNQUOTE

5.		CUSTOMER ORIGINATED CHANGE (COC)

		The following sentence between QUOTE and UNQUOTE is added to the end of Clause 14.9.3(i):

		QUOTE

		Without prejudice to any other provisions in Clause 14.9.3, if it is determined that the Seller made any error in incorporating the Buyer’s data into Technical Data, then the Buyer’s sole remedy, upon the Buyer’s notification to the Seller of such


		LA7 — 5 of 8
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

		error, shall be to request the Seller to correct such COC on a mutually agreed schedule.

		UNQUOTE

6.		**

7.		**

7.1		**

7.2		**

7.3		**

8.		**

9.		Dispatch Reliability Guarantee

		The Seller will provide the Buyer with a “dispatch reliability guarantee” with respect to the Aircraft within ** of the date hereof. Such dispatch reliability guarantee will be prepared similar in substance and form to the “Dispatch Reliability Guarantee” provided pursuant to Letter Agreement No. 11 of the Amended and Restated Airbus A350 XWB Purchase Agreement dated as of the date hereof as adapted to reflect the Buyer’s in-service experience with A330 model aircraft.

10.		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Letter Agreement will be void and of no force or effect.

11.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument.


		LA7 — 6 of 8
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

**Confidential Treatment Requested.

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

Name: Thomas T. Weir		Name: John J. Leahy
Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


		LA7
USA Airbus A330 Purchase Agreement
EXECUTED		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8A

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: A330-200 PERFORMANCE GUARANTEES

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Airbus A330 Purchase Agreement dated as of even date herewith, (the “ Agreement ”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8A (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.



		LA 8A — 1 of 8
USA- Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

1		AIRCRAFT CONFIGURATION

		The Guarantees defined below are applicable to the A330-200 Aircraft powered as described in the Standard Specification ** as amended by Specification Change Notices (SCN) for:

Design Weights to:


Maximum Design Take-Off Weight		**
Maximum Design Landing Weight		**
Maximum Design Zero Fuel Weight		**

Fitting of Pratt and Whitney 4168A-1D or 4170 engines

for deliveries from ** onwards without taking into account any further changes thereto as provided in the Agreement, herein after referred as “the Specification”.

2		MISSION GUARANTEE

2.1		The A330-200 Aircraft shall be capable of carrying a fixed zero fuel weight of over a guaranteed still air stage distance of when operated under the conditions defined below:

2.2		The departure airport conditions are such to allow the required Takeoff Weight to be used without any restriction.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction.

2.3		An allowance of is included for take-off and climb to altitude with acceleration to climb speed at a temperature of **.

2.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes of and descent to pressure altitude are conducted in conditions. Climb and descent speeds below shall be ** CAS.

2.5		An allowance of ** of fuel is considered for approach and landing at the destination airport.

2.6		Stage distance is defined as the distance covered during climb, cruise and descent as defined in paragraphs 2.4 above.

2.7		At the end of approach and landing ** of usable fuel shall remain in the tanks. This represents the estimated fuel required for:

	1)		En-route reserves: **

	2)		**

	3)		**



		LA 8A — 2 of 8
USA- Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

3		MANUFACTURERS WEIGHT EMPTY

		The Seller guarantees that the Manufacturer’s Weight Empty as defined in the Specification amended by the SCN for associated changes as defined in paragraph 1, and which shall be derived from the weighing of the A330-200 Aircraft, shall not be more than a guaranteed value of **.

		The Manufacturer’s Weight Empty is subject to adjustment as defined in paragraph 7.2 below.

4		Noise

4.1		Exterior Noise

4.1.1		Noise Certification

		The A330-200 powered by PW4168A-1D or PW4170 engines at a MTOW of and a MLW of shall be certified in accordance with the requirements of Chapter 4 of ICAO Annex 16, Volume I, Amendment 7, effective March 21, 2002 (equivalent to FAR Part 36 Stage 4).

		Noise data shall be obtained and evaluated in accordance with the requirements of Appendix 2 of Third Edition of ICAO Annex 16, Volume I.

4.2		Interior Noise

4.2.1		Interior Noise On Ground

4.2.1.1		Cabin

		During ground operation, with the APU and the air conditioning in normal operation and passenger doors open or closed, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) in the passenger seated area shall be as follows:


		Guarantee

SPL [dB(A)]		**

SIL [dB]		**

Noise levels shall be measured at a height of ** above the passenger compartment floor on the aisle center lines in the passenger seated area.



		LA 8A — 3 of 8
USA- Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

4.2.2		Interior Noise in Flight

4.2.2.1		Cockpit

		At a pressure altitude of and a true Mach number of in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) shall be as follows:


		Guarantee

SPL dB(A)]		**

SIL [dB]		**

		Noise levels shall be measured at the Captain’s and First Officer’s seat position at head level with normal cockpit air conditioning and ventilation in operation.

4.2.2.2		Cabin

		At a pressure altitude of and a true Mach number of straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) shall be as follows:


		Guarantee

SPL [dB(A)]		**

SIL [dB]		**

		Noise levels shall be measured at a height of ** above the passenger compartment floor on the aisle center lines in the passenger seated area.

5		GUARANTEE CONDITIONS

5.1		The performance and noise certification requirements for the A330-200 Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.

5.2		For the determination of FAR take-off and landing performance a hard dry level runway surface with no runway strength limitations, no line-up allowances, no obstacles, zero wind, atmosphere according to ISA, except as otherwise noted, and the use of centre of gravity positions, speed brakes, flaps, landing gear and engines in the conditions liable to provide the best results will be assumed.

5.2.1		When establishing take-off and second segment performance no air will be bled from the engines for cabin air conditioning or anti-icing.

5.3		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with cabin differential pressure as defined in Section 21-30.31 of the



		LA 8A — 4 of 8
USA- Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		Specification. Cabin air conditioning management during performance demonstration as described in Subparagraph 6.3 below may be such as to optimise the A330-200 Aircraft performance while meeting the minimum air conditioning requirements defined above. Unless otherwise stated no air will be bled from the engines for anti-icing.

		Cruise performance at and above is based on a centre of gravity position of .

5.4		The engines will be operated using not more than the engine manufacturer’s maximum recommended outputs for take-off, maximum go-round, maximum continuous, maximum climb and cruise for normal operation unless otherwise stated.

5.5		Where applicable the Guarantees assume the use of an approved fuel having a density of per US gallon and a lower heating value of .

5.6		Speech Interference Level (SIL) is defined as the arithmetic average of the sound pressure levels in the **. A-Weighted sound pressure level (dB(A)) is as defined in the American National Standard Specification ANSI.4-1971.

5.7		All guaranteed interior noise levels refer to an aircraft with standard acoustic insulation, an interior completely furnished and equipped with standard cloth seats. The effect of Buyer furnished equipment other than standard passenger cloth seats (standard seats or acoustically equivalent) shall be the responsibility of the Buyer. (Remark: Leather seats tend to increase interior noise levels by 1-2 dB)

		Effects on noise of Buyer furnished equipment and installations by or on behalf of the Buyer are not covered by this guarantee.

6		GUARANTEE COMPLIANCE

6.1		Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.

6.2		Compliance with the take-off, second segment, en-route one engine inoperative, approach climb and landing elements of the Guarantees will be demonstrated with reference to the approved Flight Manual.

6.3		Compliance with those parts of the Guarantees defined in paragraph 2 above not covered by the requirements of the certifying Airworthiness Authority shall be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) aircraft of the same aerodynamic configuration as the A330-200 Aircraft and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the A330-200 Aircraft.

6.4		Compliance with the Manufacturer’s Weight Empty guarantee defined in Paragraph 3 shall be demonstrated with reference to a weight compliance report.

6.5		The approved A330-200 Aircraft flight manual shall be used to demonstrate compliance with the guarantees of certification noise levels.



		LA 8A — 5 of 8
USA- Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

6.6		Compliance with the interior noise guarantees shall be demonstrated with reference to noise surveys conducted on one (or more) aircraft at the seller’s discretion of an acoustically equivalent standard to those A330-200 Aircraft purchased by the Buyer.

6.7		Data derived from flight tests and noise surveys shall be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices.

6.8		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.

6.9		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at, or as soon as possible after, the delivery of each of the A330-200 Aircraft.

7		ADJUSTMENT OF GUARANTEES

7.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“rule change”) by any governmental agency made subsequent to the date of the Agreement and such rule change affects the A330-200 Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.

7.2		The Guarantees apply to the A330-200 Aircraft as described in paragraph 1 of this Letter Agreement and may be adjusted in the event of:

	i)		Any further configuration change which is the subject of a SCN

	ii)		Variation in actual weights of items defined in Section 13-10 of the Specification

	iii)		Changes required to obtain certification that cause modifications to the performance or weight of the A330-200 Aircraft

8		EXCLUSIVE GUARANTEES

		The Guarantees are exclusive and are provided in lieu of any and all other performance and weight guarantees of any nature which may be stated, referenced or incorporated in the Specification or any other document.

9		**

9.1		**

9.2		**

9.3		**



		LA 8A — 6 of 8
USA- Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

10		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Letter Agreement will be void and of no force or effect.

11		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one same instrument.



		LA 8A — 7 of 8
USA- Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

Name: Thomas T. Weir		Name: John J. Leahy
Title: Vice President and Treasurer		Title: Chief Operating Officer Customers



		LA 8A — 8 of 8
USA- Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

LETTER AGREEMENT NO. 8B

As October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

[INTENTIONALLY LEFT BLANK]



		LA 8B — 1 of 1
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8C

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281


Re:		A330-200 PERFORMANCE GUARANTEES (GE CF6-80E1A4)

Ladies and Gentlemen,

US Airways, Inc., (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Airbus A330 Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8C (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions that are inconsistent, the specific provisions contained in this Letter Agreement will govern.



		LA 8C — 1 of 9
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

1		AIRCRAFT CONFIGURATION

		The Guarantees defined below are applicable to the A330-200 Aircraft powered as described in the Standard Specification ** as amended by Specification Change Notices (SCN) for:

		a) Design Weights to:


Maximum Design Take-Off Weight		**
Maximum Design Landing Weight		**
Maximum Design Zero Fuel Weight		**

		b) Fitting of General Electric CF6-80E1A4 engines

		without taking into account any further changes thereto as provided in the Agreement, herein after referred as “the Specification”.

2		MISSION GUARANTEE

2.1		The A330-200 Aircraft will be capable of carrying a fixed zero fuel weight of over a guaranteed still air stage distance of when operated under the conditions defined below:

2.2		The departure airport conditions are such to allow the required Takeoff Weight to be used without any restriction.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction.

2.3		An allowance of of fuel is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of **.

2.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes of and descent to pressure altitude are conducted in conditions. Climb and descent speeds below will be ** knots CAS.

2.5		An allowance of ** of fuel is considered for approach and landing at the destination airport.

2.6		Stage distance is defined as the distance covered during climb, cruise and descent as defined in paragraphs 2.4 above.

2.7		At the end of approach and landing ** of usable fuel will remain in the tanks. This represents the estimated fuel required for:



		LA 8C — 2 of 9
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		1) 2) 3) 4)

3		MANUFACTURERS WEIGHT EMPTY

		The Seller guarantees that the Manufacturer’s Weight Empty as defined in the Specification amended by the SCN for associated changes as defined in paragraph 1, and which will be derived from the weighing of the Aircraft, will not be more than a guaranteed value of **.

		The Manufacturer’s Weight Empty is subject to adjustment as defined in paragraph 7.2 below.

4		Noise

4.1		Exterior Noise

4.1.1		Noise Certification

		The A330-200 powered by GE CF6-80E1A4 engines at a MTOW of and a MLW of will be certified in accordance with the requirements of Chapter 4 of ICAO Annex 16, Volume I, Amendment 7, effective March 21, 2002 (equivalent to FAR Part 36 Stage 4).

		Noise data will be obtained and evaluated in accordance with the requirements of Appendix 2 of Third Edition of ICAO Annex 16, Volume I.

4.2		Interior Noise

4.2.1		Interior Noise On Ground



		LA 8C — 3 of 9
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

4.2.1.1		Cabin

		During ground operation, with the APU and the air conditioning in normal operation and passenger doors open or closed, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) in the passenger seated area will be as follows:


		Guarantee
SPL [dB(A)]		**
SIL [dB]		**

		Noise levels will be measured at a height of ** above the passenger compartment floor on the aisle center lines in the passenger seated area.

4.2.2		Interior Noise in Flight

4.2.2.1		Cockpit

		At a pressure altitude of and a true in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) will be as follows:


		Guarantee
SPL dB(A)]		**
SIL [dB]		**

		Noise levels will be measured at the Captain’s and First Officer’s seat position at head level with normal cockpit air conditioning and ventilation in operation.

4.2.2.2		Cabin

		At a pressure altitude of 35000 ft and a true Mach number of ** in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) will be as follows:


		Guarantee
SPL [dB(A)]		**
SIL [dB]		**



		LA 8C — 4 of 9
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		Noise levels will be measured at a height of ** above the passenger compartment floor on the aisle center lines in the passenger seated area.

5		GUARANTEE CONDITIONS

5.1		The performance and noise certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.

5.2		For the determination of FAR take-off and landing performance a hard dry level runway surface with no runway strength limitations, no line-up allowances, no obstacles, zero wind, atmosphere according to ISA, except as otherwise noted, and the use of centre of gravity positions, speed brakes, flaps, landing gear and engines in the conditions liable to provide the best results will be assumed.

5.2.1		When establishing take-off and second segment performance no air will be bled from the engines for cabin air conditioning or anti-icing.

5.3		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with cabin differential pressure as defined in Section 21-30.31 of the Specification. Cabin air conditioning management during performance demonstration as described in Subparagraph 6.3 below may be such as to optimise the Aircraft performance while meeting the minimum air conditioning requirements defined above. Unless otherwise stated no air will be bled from the engines for anti-icing.

		Cruise performance at and above is based on a centre of gravity position of .

5.4		The engines will be operated using not more than the engine manufacturer’s maximum recommended outputs for take-off, maximum go-round, maximum continuous, maximum climb and cruise for normal operation unless otherwise stated.

5.5		Where applicable the Guarantees assume the use of an approved fuel having a density of per US gallon and a lower heating value of .

5.6		Speech Interference Level (SIL) is defined as the arithmetic average of the sound pressure levels in the **. A-Weighted sound pressure level (dB(A)) is as defined in the American National Standard Specification ANSI.4-1971.

5.7		All guaranteed interior noise levels refer to an aircraft with standard acoustic insulation, an interior completely furnished and equipped with standard cloth seats. The effect of Buyer furnished equipment other than standard passenger cloth seats (standard seats or acoustically



		LA 8C — 5 of 9
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		equivalent) will be the responsibility of the Buyer. (Remark: Leather seats tend to increase interior noise levels by 1-2 dB)

		Effects on noise of Buyer furnished equipment and installations by or on behalf of the Buyer are not covered by this guarantee.

6		GUARANTEE COMPLIANCE

6.1		Compliance with the Guarantees will be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.

6.2		Compliance with the take-off, second segment, en-route one engine inoperative, approach climb and landing elements of the Guarantees will be demonstrated with reference to the approved Flight Manual.

6.3		Compliance with those parts of the Guarantees defined in paragraph 2 above not covered by the requirements of the certifying Airworthiness Authority will be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) aircraft of the same aerodynamic configuration as the Aircraft and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the Aircraft.

6.4		Compliance with the Manufacturer’s Weight Empty guarantee defined in Paragraph 3 will be demonstrated with reference to a weight compliance report.

6.5		The approved A330-200 Aircraft flight manual will be used to demonstrate compliance with the guarantees of certification noise levels.

6.6		Compliance with the interior noise guarantees will be demonstrated with reference to noise surveys conducted on one (or more) aircraft at the seller’s discretion of an acoustically equivalent standard to those A330-200 Aircraft purchased by the Buyer.

6.7		Data derived from flight tests and noise surveys will be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices.

6.8		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.

6.9		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at, or as soon as possible after, the delivery of each of the A330-200 Aircraft.



		LA 8C — 6 of 9
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

7		ADJUSTMENT OF GUARANTEES

7.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“rule change”) by any governmental agency made subsequent to the date of the Agreement and such rule change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees will be appropriately modified to reflect the effect of any such change.

7.2		The Guarantees apply to the Aircraft as described in paragraph 1 of this Letter Agreement and may be adjusted in the event of:

	i)		Any further configuration change which is the subject of a SCN

	ii)		Variation in actual weights of items defined in Section 13-10 of the Specification

	iii)		Changes required to obtain certification that cause modifications to the performance or weight of the A330-200 Aircraft

8		EXCLUSIVE GUARANTEES

		Without prejudice to the rights of the Buyer under Letter Agreement No. 12 to the Agreement, the Guarantees are exclusive and are provided in lieu of any and all other performance and weight guarantees of any nature which may be stated, referenced or incorporated in the Specification or any other document with respect to the subject matter of this Letter Agreement.

9		**

9.1		**

9.2		**

9.3		**

10		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without prior written consent of the Seller and any attempted assignment or transfer in contravention of the provisions of this sentence will be void and of no force and effect.



		LA 8C — 7 of 9
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

11		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one same instrument.



		LA 8C — 8 of 9
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy
	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers



		LA 8C
USA Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8D

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: A330-200 PERFORMANCE GUARANTEES (RR Trent 772B)

Ladies and Gentlemen,

US Airways, Inc., (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Airbus A330 Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8D (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions that are inconsistent, the specific provisions contained in this Letter Agreement will govern.



		LA 8D -1 of 9
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

1		AIRCRAFT CONFIGURATION

		The Guarantees defined below are applicable to the A330-200 Aircraft powered as described in the Standard Specification Ref. ** as amended by Specification Change Notices (SCN) for:

a) Design Weights to:


Maximum Design Take-Off Weight		**
Maximum Design Landing Weight		**
Maximum Design Zero Fuel Weight		**

b) Fitting of Rolls-Royce Trent 772B EP engines

for deliveries from ** onwards without taking into account any further changes thereto as provided in the Agreement, herein after referred as “the Specification”.

2		MISSION GUARANTEE

2.1		The A330-200 Aircraft will be capable of carrying a fixed zero fuel weight of over a guaranteed still air stage distance of when operated under the conditions defined below:

2.2		The departure airport conditions are such to allow the required Takeoff Weight to be used without any restriction.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction.

2.3		An allowance of is included for take-off and climb to altitude with acceleration to climb speed at a temperature of **.

2.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes of and descent to 1,500 ft pressure altitude are conducted in ISA+10°C conditions. Climb and descent speeds below will be ** CAS.

2.5		An allowance of ** of fuel is considered for approach and landing at the destination airport.

2.6		Stage distance is defined as the distance covered during climb, cruise and descent as defined in paragraphs 2.4 above.

2.7		At the end of approach and landing ** of usable fuel will remain in the tanks. This represents the estimated fuel required for:



		LA 8D — 2 of 9
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

1) **
2) **
3) **
4) **

3		MANUFACTURERS WEIGHT EMPTY

		The Seller guarantees that the Manufacturer’s Weight Empty as defined in the Specification amended by the SCN for associated changes as defined in paragraph 1, and which will be derived from the weighing of the Aircraft, will not be more than a guaranteed value of **.

		The Manufacturer’s Weight Empty is subject to adjustment as defined in paragraph 7.2 below.

4		Noise

4.1		Exterior Noise

4.1.1		Noise Certification

The A330-200 powered by RR Trent 772B EP engines at a MTOW of ** and a MLW of ** will be certified in accordance with the requirements of Chapter 4 of ICAO Annex 16, Volume I, Amendment 7, effective March 21, 2002 (equivalent to FAR Part 36 Stage 4).

Noise data will be obtained and evaluated in accordance with the requirements of Appendix 2 of Third Edition of ICAO Annex 16, Volume I.

4.2		Interior Noise

4.2.1		Interior Noise On Ground



		LA 8D — 3 of 9
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

4.2.1.1

Cabin


		Guarantee
SPL [dB(A)]		**
SIL [dB]		**

Noise levels will be measured at a height of ** above the passenger compartment floor on the aisle center lines in the passenger seated area.

4.2.2		Interior Noise in Flight

4.2.2.1		Cockpit

		At a pressure altitude of and a true Mach number of in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) will be as follows:


		Guarantee
SPL dB(A)]		**
SIL [dB]		**

Noise levels will be measured at the Captain’s and First Officer’s seat position at head level with normal cockpit air conditioning and ventilation in operation.

4.2.2.2		Cabin

		At a pressure altitude of and a true Mach number of in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) will be as follows:


		Guarantee
SPL [dB(A)]		**
SIL [dB]		**



		LA 8D — 4 of 9
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

Noise levels will be measured at a height of ** above the passenger compartment floor on the aisle center lines in the passenger seated area.

5		GUARANTEE CONDITIONS

5.1		The performance and noise certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.

5.2		For the determination of FAR take-off and landing performance a hard dry level runway surface with no runway strength limitations, no line-up allowances, no obstacles, zero wind, atmosphere according to ISA, except as otherwise noted, and the use of centre of gravity positions, speed brakes, flaps, landing gear and engines in the conditions liable to provide the best results will be assumed.

5.2.1		When establishing take-off and second segment performance no air will be bled from the engines for cabin air conditioning or anti-icing.

5.3		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with cabin differential pressure as defined in Section 21-30.31 of the Specification. Cabin air conditioning management during performance demonstration as described in Subparagraph 6.3 below may be such as to optimise the Aircraft performance while meeting the minimum air conditioning requirements defined above. Unless otherwise stated no air will be bled from the engines for anti-icing.

		Cruise performance at and above is based on a centre of gravity position of .

5.4		The engines will be operated using not more than the engine manufacturer’s maximum recommended outputs for take-off, maximum go-round, maximum continuous, maximum climb and cruise for normal operation unless otherwise stated.

5.5		Where applicable the Guarantees assume the use of an approved fuel having a density of per US gallon and a lower heating value of .

5.6		Speech Interference Level (SIL) is defined as the arithmetic average of the sound pressure levels in the **. A-Weighted sound pressure level (dB(A)) is as defined in the American National Standard Specification ANSI.4-1971.

5.7		All guaranteed interior noise levels refer to an aircraft with standard acoustic insulation, an interior completely furnished and equipped with standard cloth seats. The effect of Buyer furnished equipment other than standard passenger cloth seats (standard seats or acoustically



		LA 8D — 5 of 9
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

equivalent) will be the responsibility of the Buyer. (Remark: Leather seats tend to increase interior noise levels by 1-2 dB)

Effects on noise of Buyer furnished equipment and installations by or on behalf of the Buyer are not covered by this guarantee.

6		GUARANTEE COMPLIANCE

6.1		Compliance with the Guarantees will be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.

6.2		Compliance with the take-off, second segment, en-route one engine inoperative, approach climb and landing elements of the Guarantees will be demonstrated with reference to the approved Flight Manual.

6.3		Compliance with those parts of the Guarantees defined in paragraph 2 above not covered by the requirements of the certifying Airworthiness Authority will be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) aircraft of the same aerodynamic configuration as the Aircraft and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the Aircraft.

6.4		Compliance with the Manufacturer’s Weight Empty guarantee defined in Paragraph 3 will be demonstrated with reference to a weight compliance report.

6.5		The approved A330-200 Aircraft flight manual will be used to demonstrate compliance with the guarantees of certification noise levels.

6.6		Compliance with the interior noise guarantees will be demonstrated with reference to noise surveys conducted on one (or more) aircraft at the seller’s discretion of an acoustically equivalent standard to those A330-200 Aircraft purchased by the Buyer.

6.7		Data derived from flight tests and noise surveys will be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices.

6.8		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.

6.9		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at, or as soon as possible after, the delivery of each of the A330-200 Aircraft.



		LA 8D — 6 of 9
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

7		ADJUSTMENT OF GUARANTEES

7.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“rule change”) by any governmental agency made subsequent to the date of the Agreement and such rule change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees will be appropriately modified to reflect the effect of any such change.

7.2		The Guarantees apply to the Aircraft as described in paragraph 1 of this Letter Agreement and may be adjusted in the event of:

	i)		Any further configuration change which is the subject of a SCN

	ii)		Variation in actual weights of items defined in Section 13-10 of the Specification

	iii)		Changes required to obtain certification that cause modifications to the performance or weight of the A330-200 Aircraft

EXCLUSIVE GUARANTEES

Without prejudice to the rights of the Buyer under Letter Agreement No. 12 to the Agreement, the Guarantees are exclusive and are provided in lieu of any and all other performance and weight guarantees of any nature which may be stated, referenced or incorporated in the Specification or any other document with respect to the subject matter of this Letter Agreement.

9		**

9.1		**

9.2		**

9.3		**

ASSIGNMENT

Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without prior written consent of the Seller and any attempted assignment or transfer in contravention of the provisions of this sentence will be void and of no force and effect.

COUNTERPARTS



		LA 8D — 7 of 9
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.



		LA 8D — 8 of 9
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

	Name: Thomas T. Weir Title: Vice President and Treasurer		Name: John J. Leahy Title: Chief Operating Officer Customers



		LA 8D
USA Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8E

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: A340-300 PERFORMANCE GUARANTEES

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”), and Airbus S.A.S. (the “ Seller ”), have entered into an Airbus A330 Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8E (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.



		LA 8E — 1 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

1		AIRCRAFT CONFIGURATION

1.1		The Guarantees defined below are applicable to the A340-300 Aircraft as described in the Standard Specification ** as amended by the Specification Change Notices (SCN’s) for:

(i)

Change in Design Weights to:


Maximum Design Take-Off Weight		**
Maximum Design Landing Weight		**
Maximum Design Zero Fuel Weight		**

(ii)

fitting of CFM International CFM56-5C4/P Bump Engines

		herein after referred as “the Specification” without taking into account any further changes thereto as provided in the Agreement.

2		GUARANTEED PERFORMANCE

2.1		Take-off Field Length

		FAR take-off field length (“TOFL”) at an Aircraft gross weight of at the start of Take-Off Distance Available (TODA) at Sea Level pressure altitude in ISA+15°C conditions shall be not more than a guaranteed value of .

2.2		Second Segment Climb

		The Aircraft shall meet FAR 25 regulations for one engine inoperative climb after take-off, undercarriage retracted, at a weight corresponding to the stated weight at the start of ground run, at the altitude and temperature, and in the configuration of flap angle and safety speed required to comply with the performance guaranteed in paragraph 2.1 and 2.3.

2.3		Take-off Weight

2.3.1		When operated under the following conditions **


Pressure altitude		: **
Ambient temperature		: **
Take-off run available		: **
Take-off distance available		: **
Accelerate-stop distance available		: **



		LA 8E — 2 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.


Slope		: **
Wind		: **
Line-up allowance TODA/TORA		: **
Line-up allowance ASDA		: **
Obstacles (Height/Distance above/from start of TODA):		**

		the maximum permissible take-off weight at the start of Take-off Distance Available shall be not less than a guaranteed value of **(Max Structural)

2.3.2		When operated under the following conditions **


Pressure altitude		: **
Ambient temperature		: **
Take-off run available		: **
Take-off distance available		: **
Accelerate-stop distance available		: **
Slope		: **
Wind		: **
Line-up allowance TODA/TORA		: **
Line-up allowance ASDA		: **
Obstacles (Height/Distance above/from end of TODA):		**
		**
		**
		**
		**
		**

		the maximum permissible take-off weight at the start of Take-off Distance Available shall be not less than a guaranteed value of **.

2.3.3		When operated under the following conditions **


Pressure altitude		: **
Ambient temperature		: **
Take-off run available		: **
Take-off distance available		: **
Accelerate-stop distance available		: **
Slope		: **
Wind		: **
Line-up allowance TODA/TORA		: **
Line-up allowance ASDA		: **
Obstacles		: **

the maximum permissible take-off weight at the start of Take-off Distance Available shall



		LA 8E — 3 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		be not less than a guaranteed value of **.

2.3.4		When operated under the following conditions **


Pressure altitude		: **
Ambient temperature		: **
Take-off run available		: **
Take-off distance available		: **
Accelerate-stop distance available		: **
Slope		: **
Wind		: **
Line-up allowance TODA/TORA		: **
Line-up allowance ASDA		: **
Obstacles (Height/Distance above/from start of TODA):		**
		**
		**
		**
		**
		**
		**
		**
		**
		**
		**

		the maximum permissible take-off weight at the start of Take-off Distance Available shall be not less than a guaranteed value of **

2.3.5		When operated under the following conditions **


Pressure altitude		: **
Ambient temperature		: **
Take-off run available		: **
Take-off distance available		: **
Accelerate-stop distance available		: **
Slope		: **
Wind		: **
Line-up allowance TODA/TORA		: **
Line-up allowance ASDA		: **
Obstacles (Height/Distance above/from start of TODA):		**

the maximum permissible take-off weight at the start of Take-off Distance Available shall be not less than a guaranteed value of **



		LA 8E — 4 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

2.3.6

When operated under the following conditions **


Pressure altitude		: **
Ambient temperature		: **
Take-off run available		: **
Take-off distance available		: **
Accelerate-stop distance available		: **
Slope		: **
Wind		: **
Line-up allowance TODA/TORA		: **
Line-up allowance ASDA		: **
Obstacles		: **

		the maximum permissible take-off weight at the start of Take-off Distance Available shall be not less than a guaranteed value of **.

2.4		Landing Field Length

		FAR certified dry landing field length (“LFL”) at an Aircraft gross weight of at Sea Level pressure altitude shall not be more than a guaranteed value of .

2.5		Speed

		Level flight speed at an Aircraft gross weight of at a pressure altitude of conditions using a thrust not exceeding maximum cruise thrust will be not less than a guaranteed true Mach number of **.

3		MISSION GUARANTEES

3.1		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of when operated under the conditions defined below:

3.1.1		The departure airport conditions ** are as defined in paragraph 2.3.3 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. **

3.1.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.1.3		An allowance of of fuel and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance



		LA 8E — 5 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		covered in these segments.

3.1.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes of between and descent to pressure altitude are conducted in ISA+10°C conditions.

		Climb and descent speeds below shall be . A wind component of ** of cruise wind has been considered during climb and descent.

3.1.5		An allowance of of fuel and is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.1.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.1.2 to 3.1.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.1.4 above.

3.1.7		At the end of approach and landing ** of usable fuel shall remain in the tanks.

		This represents the estimated fuel required for a continued cruise at and at an initial weight equal to the landing weight at the destination airport.

3.2		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.1.1 to 3.1.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.1.2 to 3.1.5 above.

3.3		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of when operated under the conditions defined below:



		LA 8E — 6 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

3.3.1		The departure airport conditions ** are as defined in paragraph 2.3.2 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. **

3.3.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.3.3		An allowance of of fuel and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance covered in these segments.

3.3.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes between and descent to pressure altitude are conducted in ISA+10°C conditions.

		Climb and descent speeds below shall be . A wind component of ** of cruise wind has been considered during climb and descent.

3.3.5		An allowance of of fuel and is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.3.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.3.2 to 3.3.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.3.4 above.

3.3.7		At the end of approach and landing ** of usable fuel shall remain in the tanks.

		This represents the estimated fuel required for a continued cruise at and at an initial weight equal to the landing weight at the destination airport.

3.4		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.3.1 to 3.3.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.3.2 to 3.3.5 above.



		LA 8E — 7 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

3.5		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of nautical miles ** when operated under the conditions defined below:

3.5.1		The departure airport conditions ** are as defined in paragraph 2.3.2 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. Pressure altitude is **.

3.5.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.5.3		An allowance of of fuel and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance covered in these segments.

3.5.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes of between and descent to pressure altitude are conducted in ** conditions.

		Climb and descent speeds below shall be . A wind component of ** of cruise wind has been considered during climb and descent.

3.5.5		An allowance of of fuel and is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.5.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing and manoeuvre as defined in paragraphs 3.5.2 to 3.5.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.5.4 above.

3.5.7		At the end of approach and landing ** of usable fuel shall remain in the tanks.

		This represents the estimated fuel required for a continued cruise at and at an initial weight equal to the landing weight at the destination airport.

3.6		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.5.1 to 3.5.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .



		LA 8E — 8 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.5.2 to 3.5.5 above.

3.7		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of when operated under the conditions defined below:

3.7.1		The departure airport conditions ** are as defined in paragraph 2.3.1 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. Pressure altitude is **.

3.7.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.7.3		An allowance of and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance covered in these segments.

3.7.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes between and descent to pressure altitude are conducted in ISA+10°C conditions.

		Climb and descent speeds below shall be . A wind component of ** of cruise wind has been considered during climb and descent.

3.7.5		An allowance of of fuel and is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.7.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing and manoeuvre as defined in paragraphs 3.7.2 to 3.7.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.7.4 above.

3.7.7		At the end of approach and landing ** of usable fuel shall remain in the tanks.

		This represents the estimated fuel required for a continued cruise at and at an initial weight equal to the landing weight at the destination airport.

3.8		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.7.1 to 3.7.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .



		LA 8E — 9 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.7.2 to 3.7.5 above.

3.9		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of when operated under the conditions defined below:

3.9.1		The departure airport conditions ** are as defined in paragraph 2.3.2 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. Pressure altitude is **.

3.9.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.9.3		An allowance of of fuel and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance covered in these segments.

3.9.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes beween and descent to pressure altitude are conducted in ** conditions.

		Climb and descent speeds below shall be . A wind component of ** of cruise wind has been considered during climb and descent.

3.9.5		An allowance of of fuel and is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.9.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing and manoeuvre as defined in paragraphs 3.9.2 to 3.9.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.9.4 above.

3.9.7		At the end of approach and landing ** of usable fuel shall remain in the tanks.

		This represents the estimated fuel required for a continued cruise at and at an initial weight equal to the landing weight at the destination airport.

3.10		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.9.1 to 3.9.7 inclusive above shall be not more than a guaranteed value of ** and the block time will not be more than a



		LA 8E — 10 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		guaranteed value of **.

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.9.2 to 3.9.5 above.

3.11		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of when operated under the conditions defined below:

3.11.1		The departure airport conditions ** are as defined in paragraph 2.3.4 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. Pressure altitude is **.

3.11.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.11.3		An allowance of of fuel and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance covered in these segments.

3.11.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes between and descent to pressure altitude are conducted in ISA+10°C conditions.

		Climb and descent speeds below shall be . A wind component of **of cruise wind has been considered during climb and descent.


		LA 8E — 11 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

3.11.5		An allowance of of fuel and is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.11.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing and manoeuvre as defined in paragraphs 3.11.2 to 3.11.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.11.4 above.

3.11.7		At the end of approach and landing ** of usable fuel shall remain in the tanks.

		This represents the estimated fuel required for a continued cruise at and at an initial weight equal to the landing weight at the destination airport.

3.12		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.11.1 to 3.11.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.11.2 to 3.11.5 above.

3.13		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of nautical miles ** when operated under the conditions defined below:

3.13.1		The departure airport conditions ** are as defined in paragraph 2.3.2 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. Pressure altitude is **.

3.13.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.13.3		An allowance of of fuel and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance covered in these segments.

3.13.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes between and descent to pressure altitude are conducted in ISA+10°C conditions.

		Climb and descent speeds below shall be . A wind component of ** of cruise wind has been considered during climb and descent.


		LA 8E — 12 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

3.13.5		An allowance of of fuel and is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.13.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing and manoeuvre as defined in paragraphs 3.13.2 to 3.13.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.13.4 above.

3.13.7		At the end of approach and landing ** of usable fuel shall remain in the tanks.

		This represents the estimated fuel required for a continued cruise at and at an initial weight equal to the landing weight at the destination airport.

3.14		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.13.1 to 3.13.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.13.2 to 3.13.5 above.

3.15		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of when operated under the conditions defined below:

3.15.1		The departure airport conditions ** are as defined in paragraph 2.3.6 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. Pressure altitude is **.


		LA 8E — 13 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

3.15.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.15.3		An allowance of and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance covered in these segments.

3.15.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes between and descent to pressure altitude are conducted in ISA+10°C conditions.

		Climb and descent speeds below shall be . A wind component of ** of cruise wind has been considered during climb and descent.

3.15.5		An allowance of of fuel and is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.15.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing and manoeuvre as defined in paragraphs 3.15.2 to 3.15.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.15.4 above.

3.15.7		At the end of approach and landing ** of usable fuel shall remain in the tanks.

		This represents the estimated fuel required for a continued cruise at and at an initial weight equal to the landing weight at the destination airport.

3.16		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.15.1 to 3.15.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.15.2 to 3.15.5 above.


		LA 8E — 14 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

3.17		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of when operated under the conditions defined below:

3.17.1		The departure airport conditions ** are as defined in paragraph 2.3.5 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. Pressure altitude is **.

3.17.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.17.3		An allowance of of fuel and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance covered in these segments.

3.17.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes between and descent to pressure altitude are conducted in ISA+10°C conditions.

		Climb and descent speeds below shall be . A wind component of ** of cruise wind has been considered during climb and descent.

3.17.5		An allowance of of fuel and is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.17.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing and manoeuvre as defined in paragraphs 3.17.2 to 3.17.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.17.4 above.

3.17.7		At the end of approach and landing ** of usable fuel shall remain in the tanks.

		This represents the estimated fuel required for a continued cruise at and at an initial weight equal to the landing weight at the destination airport.

3.18		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.17.1 to 3.17.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .


		LA 8E — 15 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.17.2 to 3.17.5 above.

3.19		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of when operated under the conditions defined below:

3.19.1		The departure airport conditions ** are as defined in paragraph 2.3.2 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. Pressure altitude is **.

3.19.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.19.3		An allowance of of fuel and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance covered in these segments.

3.19.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes between and descent to pressure altitude are conducted in ISA+10°C conditions.

		Climb and descent speeds below shall be . A wind component of ** of cruise wind has been considered during climb and descent.

3.19.5		An allowance of of fuel and is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.19.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing and manoeuvre as defined in paragraphs 3.19.2 to 3.19.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.19.4 above.

3.19.7		At the end of approach and landing ** of usable fuel shall remain in the tanks.

		This represents the estimated fuel required for a continued cruise at and at an initial weight equal to the landing weight at the destination airport.

3.20		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.19.1 to 3.19.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .


		LA 8E — 16 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.19.2 to 3.19.5 above.

3.21		The Payload and Fuel Burn Guarantees defined in paragraphs 3.1 to 3.20 inclusive above are based on an Operating Weight Empty defined as the sum of:

	a)		the Manufacturer’s Weight Empty of the basic Aircraft as defined in the Specification which shall be derived from the weighing of the Aircraft with corrections according to Section 13 of the Specification,

	b)		** for Customer Changes and Operators Items (see Appendix A).

4		Structural Usable Load

		The Seller guarantees that the difference between:

	–		the Maximum Zero Fuel Weight (MZFW) of the Aircraft (as defined in the A340-300 Standard Specification set forth in Paragraph 1)

			and

	–		the Manufacturer’s Weight Empty (as defined in the A340-300 Standard Specification set forth in Paragraph 1) and which shall be derived from the weighing of the Aircraft

		shall not be less than **

		The Manufacturer’s Weight Empty is subject to adjustment as defined in Paragraph 8.2 below.

5		NOISE

5.1		Exterior Noise


		LA 8E — 17 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

5.1.1		Noise Certification

		The A340-313 powered by CFM56-5C4/P engines at a MTOW of and a MLW of shall be certified in accordance with the requirements of Chapter 4 of ICAO Annex 16, Volume I, Amendment 7, effective March 21, 2002, with a cumulative margin of **.

		Noise data shall be obtained and evaluated in accordance with the requirements of Appendix 2 of Third Edition of ICAO Annex 16, Volume I.

5.2		Interior Noise

5.2.1		Interior Noise On Ground

5.2.1.1		Cabin

		During ground operation, with the APU and the air conditioning in normal operation and passenger doors open or closed, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) in the passenger seated area shall be as follows:


		Guarantee
SPL [dB(A)]		**
SIL [dB]		**

		Noise levels shall be measured at a height of 1.0 m above the passenger compartment floor on the aisle center lines in the passenger seated area.

5.2.2		Interior Noise in Flight

5.2.2.1		Cockpit

		At a pressure altitude of and a true Mach number of in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) shall be as follows:


		Guarantee
SPL dB(A)]		**
SIL [dB]		**

Noise levels shall be measured at the Captain’s and First Officer’s seat position at head level with normal cockpit air conditioning and ventilation in operation.


		LA 8E — 18 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

5.2.2.2		Cabin

		At a pressure altitude of and a true Mach number of in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) shall be as follows:


		Guarantee
SPL [dB(A)]		**
SIL [dB]		**

		Noise levels shall be measured at a height of ** above the passenger compartment floor on the aisle center lines in the passenger seated area.

6		GUARANTEE CONDITIONS

6.1		The performance and noise certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.

6.2		For the determination of FAR take-off and landing performance a hard dry level runway surface with no runway strength limitations, no line-up allowances, no obstacles, zero wind, atmosphere according to ISA, except as otherwise noted, and the use of centre of gravity positions, speed brakes, flaps, landing gear and engines in the conditions liable to provide the best results will be assumed.

6.2.1		When establishing take-off and second segment performance no air will be bled from the engines for cabin air conditioning or anti-icing.

6.3		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with cabin differential pressure as defined in Section 21-30.31 of the Specification. Cabin air conditioning management during performance demonstration as described in Subparagraph 8.3 below may be such as to optimise the Aircraft performance while meeting the normal air conditioning requirements defined above. Unless otherwise stated no air will be bled from the engines for anti-icing.

		Cruise performance at ** and above is based on an optimized centre of gravity position.

6.4		The engines will be operated using not more than the engine manufacturer’s maximum recommended outputs for take-off, maximum go-round, maximum continuous, maximum climb and cruise for normal operation unless otherwise stated.


		LA 8E — 19 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

6.5		Where applicable the Guarantees assume the use of an approved fuel having a density of per US gallon and a lower heating value of .

6.6		Speech Interference Level (SIL) is defined as the arithmetic average of the sound pressure levels in the **. A-Weighted sound pressure level (dB(A)) is as defined in the American National Standard Specification ANSI.4-1971.

6.7		All guaranteed interior noise levels refer to an A340-300 Aircraft with standard acoustic insulation and an interior completely furnished. The effect of Buyer furnished equipment other than standard passenger cloth seats shall be the responsibility of the Buyer. Effects on noise of Buyer furnished equipment and installations by or on behalf of the Buyer are not covered by this guarantee.

7		GUARANTEE COMPLIANCE

7.1		Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.

7.2		Compliance with the take-off, second segment, en-route one engine inoperative, approach climb and landing elements of the Guarantees will be demonstrated with reference to the approved Flight Manual.

7.3		Compliance with those parts of the Guarantees defined in paragraph 2 and 3 above not covered by the requirements of the certifying Airworthiness Authority shall be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) aircraft of the same aerodynamic configuration as the Aircraft and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the Aircraft.

7.4		Compliance with the Structure Usable Load guarantee defined in Paragraph 4 shall be demonstrated with reference to a weight compliance report.

7.5		The approved A340-300 Aircraft flight manual shall be used to demonstrate compliance with the guarantees of certification noise levels.

7.6		Compliance with the interior noise guarantees shall be demonstrated with reference to noise surveys conducted on one (or more, at the Seller’s discretion) A340-300 Aircraft of an acoustically equivalent standard to those A340-300 Aircraft purchased by the Buyer.

7.7		Data derived from flight tests and noise surveys shall be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices to show compliance with the Guarantees.



		LA 8E — 20 of 24

USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

7.8		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.

7.9		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at, or as soon as possible after, the delivery of each of the A340-300 Aircraft.

8		ADJUSTMENT OF GUARANTEES

8.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“rule change”) by any governmental agency made subsequent to the date of the Agreement and such rule change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.

8.2		The Guarantees apply to the Aircraft as described in paragraph 1 of this Letter Agreement and may be adjusted in the event of:

	i)		Any further configuration change which is the subject of a SCN

	ii)		Variation in actual weights of items defined in Section 13-10 of the Specification

	iii)		Changes required to obtain certification that cause modifications to the performance or weight of the A340-300 Aircraft

EXCLUSIVE GUARANTEES

10		**

10.1		**

10.2		**

10.3		**



		LA 8E — 21 of 24

USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

ASSIGNMENT

COUNTERPARTS



		LA 8E — 22 of 24

USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir Name: Thomas T. Weir	By:	/s/ John J. Leahy Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers



		LA 8E

USA Airbus A330 Purchase Agreement EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX A to LETTER AGREEMENT No. 8E



		LA 8E — 24 of 24

USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8F

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: A340-300 PERFORMANCE GUARANTEES

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”), and Airbus S.A.S. (the “ Seller ”), have entered into an Airbus A330 Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8F (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.



		LA 8F — 1 of 24

USA — Airbus A330 Purchase Agreement EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

AIRCRAFT CONFIGURATION

1.1

The Guarantees defined below are applicable to the A340-300 Aircraft as described in the Standard Specification Ref. ** as amended by the Specification Change Notices (SCN’s) for:

(i)

Change in Design Weights to:


Maximum Design Take-Off Weight		**
Maximum Design Landing Weight		**
Maximum Design Zero Fuel Weight		**

(ii)

fitting of CFM International CFM56-5C4/P Bump Engines

herein after referred as “the Specification” without taking into account any further changes thereto as provided in the Agreement.

GUARANTEED PERFORMANCE

2.1

Take-off Field Length

FAR take-off field length (“TOFL”) at an Aircraft gross weight of ** at the start of Take-Off Distance Available (TODA) at Sea Level pressure altitude in ISA+15°C conditions shall be not more than a guaranteed value of **.

2.2

Second Segment Climb

The Aircraft shall meet FAR 25 regulations for one engine inoperative climb after take-off, undercarriage retracted, at a weight corresponding to the stated weight at the start of ground run, at the altitude and temperature, and in the configuration of flap angle and safety speed required to comply with the performance guaranteed in paragraph 2.1 and 2.3.

2.3

Take-off Weight

2.3.1

When operated under the following conditions **


Pressure altitude		: **
Ambient temperature		: **
Take-off run available		: **
Take-off distance available		: **
Accelerate-stop distance available		: **
Slope		: **
Wind		: **
Line-up allowance TODA/TORA		: **
Line-up allowance ASDA		: **
Obstacles (Height/Distance above/from start of TODA):		**

LA 8F — 2 of 24


USA — Airbus A330 Purchase Agreement
EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

the maximum permissible take-off weight at the start of Take-off Distance Available shall be not less than a guaranteed value of ** (Max Structural)

2.3.2

When operated under the following conditions **


Pressure altitude		: **
Ambient temperature		: **
Take-off run available		: **
Take-off distance available		: **
Accelerate-stop distance available		: **
Slope		: **
Wind		: **
Line-up allowance TODA/TORA		: **
Line-up allowance ASDA		: **
Obstacles (Height/Distance above/from end of TODA):		**
		**
		**
		**
		**
		**

the maximum permissible take-off weight at the start of Take-off Distance Available shall be not less than a guaranteed value of ** (Max Structural).

2.3.3

When operated under the following conditions **


Pressure altitude		: **
Ambient temperature		: **
Take-off run available		: **
Take-off distance available		: **
Accelerate-stop distance available		: **
Slope		: **
Wind		: **
Line-up allowance TODA/TORA		: **
Line-up allowance ASDA		: **
Obstacles		: **

the maximum permissible take-off weight at the start of Take-off Distance Available shall be not less than a guaranteed value of ** (Max Structural).

2.3.4

When operated under the following conditions **

LA 8F — 3 of 24


USA — Airbus A330 Purchase Agreement
EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL


Pressure altitude		: **
Ambient temperature		: **
Take-off run available		: **
Take-off distance available		: **
Accelerate-stop distance available		: **
Slope		: **
Wind		: **
Line-up allowance TODA/TORA		: **
Line-up allowance ASDA		: **
Obstacles (Height/Distance above/from start of TODA):		**
		**
		**
		**
		**
		**
		**
		**
		**
		**
		**

the maximum permissible take-off weight at the start of Take-off Distance Available shall be not less than a guaranteed value of ** (Max Structural)

2.3.5

When operated under the following conditions **


Pressure altitude		: **
Ambient temperature		: **
Take-off run available		: **
Take-off distance available		: **
Accelerate-stop distance available		: **
Slope		: **
Wind		: **
Line-up allowance TODA/TORA		: **
Line-up allowance ASDA		: **
Obstacles (Height/Distance above/from start of TODA):		**

the maximum permissible take-off weight at the start of Take-off Distance Available shall be not less than a guaranteed value of ** (Max Structural)

2.3.6

When operated under the following conditions **

LA 8F — 4 of 24


USA — Airbus A330 Purchase Agreement
EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL


Pressure altitude		: **
Ambient temperature		: **
Take-off run available		: **
Take-off distance available		: **
Accelerate-stop distance available		: **
Slope		: **
Wind		: **
Line-up allowance TODA/TORA		: **
Line-up allowance ASDA		: **
Obstacles		: **

the maximum permissible take-off weight at the start of Take-off Distance Available shall be not less than a guaranteed value of ** (Max Structural).

2.4

Landing Field Length

FAR certified dry landing field length (“LFL”) at an Aircraft gross weight of ** at Sea Level pressure altitude shall not be more than a guaranteed value of
** .

2.5

Speed

		Level flight speed at an Aircraft gross weight of at a pressure altitude of in ISA+10C conditions using a thrust not exceeding maximum cruise thrust will be not less than a guaranteed true Mach number of **.

3		MISSION GUARANTEES

3.1		Mission Payload : **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of when operated under the conditions defined below:

3.1.1		The departure airport conditions ** are as defined in paragraph 2.3.3 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. Pressure altitude is **.

3.1.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.1.3		An allowance of of fuel and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance covered in these segments.

3.1.4		Climb from ** pressure altitude up to cruise altitude using maximum climb thrust, cruise at

LA 8F — 5 of 24


USA — Airbus A330 Purchase Agreement
EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

		a fixed Mach number of at pressure altitudes of between and and descent to pressure altitude are conducted in ISA conditions.

		Climb and descent speeds below shall be . A wind component of ** of cruise wind has been considered during climb and descent.

3.1.5		An allowance of of fuel and is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.1.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.1.2 to 3.1.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.1.4 above.

3.1.7		At the end of approach and landing of usable fuel shall remain in the tanks. This represents the estimated fuel required for a continued cruise at ** and at an initial weight equal to the landing weight at the destination airport.

3.2		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.1.1 to 3.1.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.1.2 to 3.1.5 above.

3.3		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of when operated under the conditions defined below:

3.3.1		The departure airport conditions ** are as defined in paragraph 2.3.2 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. Pressure altitude is **.

3.3.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.3.3		An allowance of of fuel and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance covered in these segments.

LA 8F — 6 of 24


USA — Airbus A330 Purchase Agreement
EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

3.3.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes between and descent to pressure altitude are conducted in ISA conditions.

		Climb and descent speeds below shall be . A wind component of ** of cruise wind has been considered during climb and descent.

3.3.5		An allowance of of fuel and is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.3.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.3.2 to 3.3.5 above. Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.3.4 above.

3.3.7		At the end of approach and landing of usable fuel shall remain in the tanks. This represents the estimated fuel required for a continued cruise at ** and at an initial weight equal to the landing weight at the destination airport.

3.4		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.3.1 to 3.3.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.3.2 to 3.3.5 above.

3.5		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of when operated under the conditions defined below:

3.5.1		The departure airport conditions ** are as defined in paragraph 2.3.2 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. Pressure altitude is 115 ft.

3.5.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.5.3		An allowance of of fuel and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance covered in these segments.

LA 8F — 7 of 24


USA — Airbus A330 Purchase Agreement
EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

3.5.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes of between and and descent to ** pressure altitude are conducted in ISA conditions.

		Climb and descent speeds below shall be CAS. A wind component of 70% of cruise wind has been considered during climb and descent.

3.5.5		An allowance of of fuel and is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.5.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing and manoeuvre as defined in paragraphs 3.5.2 to 3.5.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.5.4 above.

3.5.7		At the end of approach and landing ** of usable fuel shall remain in the tanks.

		This represents the estimated fuel required for a continued cruise at and at an initial weight equal to the landing weight at the destination airport.

3.6		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.5.1 to 3.5.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.5.2 to 3.5.5 above.

3.7		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of when operated under the conditions defined below:

3.7.1		The departure airport conditions ** are as defined in paragraph 2.3.1 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. Pressure altitude is **.

3.7.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.7.3		An allowance of of fuel and is included for take-off and climb to ** pressure altitude

LA 8F — 8 of 24


USA — Airbus A330 Purchase Agreement
EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

		with acceleration to climb speed at a temperature of **. No credit is taken for the distance covered in these segments.

3.7.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes between and descent to pressure altitude are conducted in ISA conditions.

		Climb and descent speeds below shall be CAS. A wind component of ** of cruise wind has been considered during climb and descent.

3.7.5		An allowance of ** of fuel and 4 minutes is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.7.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing and manoeuvre as defined in paragraphs 3.7.2 to 3.7.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.7.4 above.

3.7.7		At the end of approach and landing ** of usable fuel shall remain in the tanks.

		This represents the estimated fuel required for a continued cruise at and at an initial weight equal to the landing weight at the destination airport.

3.8		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.7.1 to 3.7.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.7.2 to 3.7.5 above.

3.9		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of when operated under the conditions defined below:

LA 8F — 9 of 24


USA — Airbus A330 Purchase Agreement
EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

3.9.1		The departure airport conditions ** are as defined in paragraph 2.3.2 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. Pressure altitude is **.

3.9.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.9.3		An allowance of of fuel and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance covered in these segments.

3.9.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes beween and descent to pressure altitude are conducted in ISA conditions.

		Climb and descent speeds below shall be . A wind component of ** of cruise wind has been considered during climb and descent.

3.9.5		An allowance of ** of fuel and 4 minutes is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.9.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing and manoeuvre as defined in paragraphs 3.9.2 to 3.9.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.9.4 above.

3.9.7		At the end of approach and landing ** of usable fuel shall remain in the tanks.

		This represents the estimated fuel required for a continued cruise at and at an initial weight equal to the landing weight at the destination airport.

3.10		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.9.1 to 3.9.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.9.2 to 3.9.5 above.

LA 8F — 10 of 24


USA — Airbus A330 Purchase Agreement
EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

3.11		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of when operated under the conditions defined below:

3.11.1		The departure airport conditions ** are as defined in paragraph 2.3.4 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. Pressure altitude is **.

3.11.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.11.3		An allowance of of fuel and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance covered in these segments.

3.11.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes between and descent to pressure altitude are conducted in ISA conditions.

		Climb and descent speeds below shall be . A wind component of ** of cruise wind has been considered during climb and descent.

3.11.5		An allowance of of fuel and is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.11.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing and manoeuvre as defined in paragraphs 3.11.2 to 3.11.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.11.4 above.

3.11.7		At the end of approach and landing ** of usable fuel shall remain in the tanks.

		This represents the estimated fuel required for a continued cruise at and at an initial weight equal to the landing weight at the destination airport.

3.12		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.11.1 to 3.11.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .

LA 8F — 11 of 24


USA — Airbus A330 Purchase Agreement
EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.11.2 to 3.11.5 above.

3.13		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of when operated under the conditions defined below:

3.13.1		The departure airport conditions ** are as defined in paragraph 2.3.2 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. Pressure altitude is 12 ft.

3.13.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.13.3		An allowance of of fuel and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance covered in these segments.

3.13.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes between and descent to pressure altitude are conducted in ISA conditions.

		Climb and descent speeds below shall be CAS. A wind component of 70% of cruise wind has been considered during climb and descent.

3.13.5		An allowance of of fuel and is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.13.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing and manoeuvre as defined in paragraphs 3.13.2 to 3.13.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.13.4 above.

3.13.7		At the end of approach and landing of usable fuel shall remain in the tanks. This represents the estimated fuel required for a continued cruise at ** and at an initial weight equal to the landing weight at the destination airport.

LA 8F — 12 of 24


USA — Airbus A330 Purchase Agreement
EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

3.14		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.13.1 to 3.13.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.13.2 to 3.13.5 above.

3.15		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of when operated under the conditions defined below:

3.15.1		The departure airport conditions ** are as defined in paragraph 2.3.6 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. Pressure altitude is **.

3.15.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.15.3		An allowance of of fuel and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance covered in these segments.

3.15.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes between and descent to pressure altitude are conducted in ISA conditions.

		Climb and descent speeds below shall be . A wind component of ** of cruise wind has been considered during climb and descent.

3.15.5		An allowance of of fuel and is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.15.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing and manoeuvre as defined in paragraphs 3.15.2 to 3.15.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.15.4 above.

3.15.7		At the end of approach and landing of usable fuel shall remain in the tanks. This represents the estimated fuel required for a continued cruise at ** and at an initial

LA 8F — 13 of 24


USA — Airbus A330 Purchase Agreement
EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

weight equal to the landing weight at the destination airport.

3.16		Mission fuel burn: PVG — PHL

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.15.1 to 3.15.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.15.2 to 3.15.5 above.

3.17		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of when operated under the conditions defined below:

3.17.1		The departure airport conditions ** are as defined in paragraph 2.3.5 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. Pressure altitude is **.

3.17.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.17.3		An allowance of of fuel and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance covered in these segments.

3.17.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes between and descent to pressure altitude are conducted in ISA conditions.

		Climb and descent speeds below shall be . A wind component of ** of cruise wind has been considered during climb and descent.

3.17.5		An allowance of of fuel and is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.17.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing and manoeuvre as defined in paragraphs 3.17.2 to 3.17.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.17.4 above.

3.17.7		At the end of approach and landing of usable fuel shall remain in the tanks. This represents the estimated fuel required for a continued cruise at ** and at an initial

LA 8F — 14 of 24


USA — Airbus A330 Purchase Agreement
EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

		weight equal to the landing weight at the destination airport.

3.18		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.17.1 to 3.17.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.17.2 to 3.17.5 above.

3.19		Mission Payload: **

		The A340-300 Aircraft shall be capable of carrying a guaranteed Payload of not less than over a still air stage distance of when operated under the conditions defined below:

3.19.1		The departure airport conditions ** are as defined in paragraph 2.3.2 above.

		The destination airport conditions are such to allow the required Landing Weight to be used without any restriction. Pressure altitude is **.

3.19.2		An allowance of of fuel and is considered for engine start-up and taxi-out.

3.19.3		An allowance of of fuel and is included for take-off and climb to pressure altitude with acceleration to climb speed at a temperature of . No credit is taken for the distance covered in these segments.

3.19.4		Climb from pressure altitude up to cruise altitude using maximum climb thrust, cruise at a fixed Mach number of at pressure altitudes between and descent to pressure altitude are conducted in ISA conditions.

		Climb and descent speeds below shall be . A wind component of ** of cruise wind has been considered during climb and descent.

3.19.5		An allowance of of fuel and is considered for approach and landing at the destination airport. No credit is taken for the distance covered in these segments.

3.19.6		Trip fuel is defined as the fuel used during engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing and manoeuvre as defined in paragraphs 3.19.2 to 3.19.5 above.

		Stage distance is defined as the distance covered during climb, cruise and descent as described in paragraph 3.19.4 above.

3.19.7		At the end of approach and landing of usable fuel shall remain in the tanks. This represents the estimated fuel required for a continued cruise at ** and at an initial

LA 8F — 15 of 24


USA — Airbus A330 Purchase Agreement
EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

		weight equal to the landing weight at the destination airport.

3.20		Mission fuel burn: **

		In carrying a fixed Payload of over a still air stage distance of the trip fuel burnt when operated under the conditions defined in paragraphs 3.19.1 to 3.19.7 inclusive above shall be not more than a guaranteed value of and the block time will not be more than a guaranteed value of .

		Block time is defined as the time for engine start-up and taxi-out, take-off, climb, cruise, descent, approach and landing as defined in paragraphs 3.19.2 to 3.19.5 above.

3.21		The Payload and Fuel Burn Guarantees defined in paragraphs 3.1 to 3.20 inclusive above are based on an Operating Weight Empty defined as the sum of:

	a)		the Manufacturer’s Weight Empty of the basic Aircraft as defined in the Specification which shall be derived from the weighing of the Aircraft with corrections according to Section 13 of the Specification,

	b)		** for Customer Changes and Operators Items (see Appendix A).

STRUCTURAL USABLE LOAD

	The Seller guarantees that the difference between:

	-		the Maximum Zero Fuel Weight (MZFW) of the Aircraft (as defined in the A340-300 Standard Specification set forth in Paragraph 1)

			and

	-		the Manufacturer’s Weight Empty (as defined in the A340-300 Standard Specification set forth in Paragraph 1) and which shall be derived from the weighing of the Aircraft

		shall not be less than **

		The Manufacturer’s Weight Empty is subject to adjustment as defined in Paragraph 8.2 below.

LA 8F — 16 of 24


USA — Airbus A330 Purchase Agreement
EXECUTION **Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

5		NOISE

5.1		Exterior Noise

5.1.1		Noise Certification

		The A340-313 powered by CFM56-5C4/P engines at a MTOW of and a MLW of shall be certified in accordance with the requirements of Chapter 4 of ICAO Annex 16, Volume I, Amendment 7, effective March 21, 2002, with a cumulative margin of **.

		Noise data shall be obtained and evaluated in accordance with the requirements of Appendix 2 of Third Edition of ICAO Annex 16, Volume I.

5.2		Interior Noise

5.2.1		Interior Noise On Ground

5.2.1.1		Cabin

		During ground operation, with the APU and the air conditioning in normal operation and passenger doors open or closed, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) in the passenger seated area shall be as follows:


		Guarantee
SPL [dB(A)]		**
SIL [dB]		**

Noise levels shall be measured at a height of ** above the passenger compartment floor on the aisle center lines in the passenger seated area.

	5.2.2		Interior Noise in Flight

	5.2.2.1		Cockpit

			At a pressure altitude of and a true Mach number of in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) shall be as follows:


		Guarantee
SPL dB(A)]		**
SIL [dB]		**


		LA 8F — 17 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

Noise levels shall be measured at the Captain’s and First Officer’s seat position at head level with normal cockpit air conditioning and ventilation in operation.

	5.2.2.2		Cabin

			At a pressure altitude of and a true Mach number of in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) shall be as follows:


		Guarantee
SPL [dB(A)]		**
SIL [dB]		**

Noise levels shall be measured at a height of ** above the passenger compartment floor on the aisle center lines in the passenger seated area.

6		GUARANTEE CONDITIONS

6.1		The performance and noise certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.

6.2		For the determination of FAR take-off and landing performance a hard dry level runway surface with no runway strength limitations, no line-up allowances, no obstacles, zero wind, atmosphere according to ISA, except as otherwise noted, and the use of centre of gravity positions, speed brakes, flaps, landing gear and engines in the conditions liable to provide the best results will be assumed.

6.2.1		When establishing take-off and second segment performance no air will be bled from the engines for cabin air conditioning or anti-icing.

6.3		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with cabin differential pressure as defined in Section 21-30.31 of the Specification. Cabin air conditioning management during performance demonstration as described in Subparagraph 7.3 below may be such as to optimise the Aircraft performance while meeting the normal air conditioning requirements defined above. Unless otherwise stated no air will be bled from the engines for anti-icing.

		Cruise performance at ** and above is based on an optimized centre of gravity position.

6.4		The engines will be operated using not more than the engine manufacturer’s maximum recommended outputs for take-off, maximum go-round, maximum continuous, maximum climb and cruise for normal operation unless otherwise stated.


		LA 8F — 18 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

6.5

Where applicable the Guarantees assume the use of an approved fuel having a density of ** per US gallon and a lower heating value of **.


		LA 8F — 19 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

6.6		Speech Interference Level (SIL) is defined as the arithmetic average of the sound pressure levels in the **. A-Weighted sound pressure level (dB(A)) is as defined in the American National Standard Specification ANSI.4-1971.

6.7		All guaranteed interior noise levels refer to an A340-300 Aircraft with standard acoustic insulation and an interior completely furnished. The effect of Buyer furnished equipment other than standard passenger cloth seats shall be the responsibility of the Buyer. Effects on noise of Buyer furnished equipment and installations by or on behalf of the Buyer are not covered by this guarantee.

7		GUARANTEE COMPLIANCE

7.1		Compliance with the Guarantees shall be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.

7.2		Compliance with the take-off, second segment, en-route one engine inoperative, approach climb and landing elements of the Guarantees will be demonstrated with reference to the approved Flight Manual.

7.3		Compliance with those parts of the Guarantees defined in paragraph 2 and 3 above not covered by the requirements of the certifying Airworthiness Authority shall be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) aircraft of the same aerodynamic configuration as the Aircraft and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the Aircraft.

7.4		Compliance with the Structure Usable Load guarantee defined in Paragraph 4 shall be demonstrated with reference to a weight compliance report.

7.5		The approved A340-300 Aircraft flight manual shall be used to demonstrate compliance with the guarantees of certification noise levels.

7.6		Compliance with the interior noise guarantees shall be demonstrated with reference to noise surveys conducted on one (or more, at the Seller’s discretion) A340-300 Aircraft of an acoustically equivalent standard to those A340-300 Aircraft purchased by the Buyer.

7.7		Data derived from flight tests and noise surveys shall be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices to show compliance with the Guarantees.

7.8		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.


		LA 8F — 20 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

7.9		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at, or as soon as possible after, the delivery of each of the A340-300 Aircraft.

8		ADJUSTMENT OF GUARANTEES

8.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“rule change”) by any governmental agency made subsequent to the date of the Agreement and such rule change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees shall be appropriately modified to reflect the effect of any such change.

8.2		The Guarantees apply to the Aircraft as described in paragraph 1 of this Letter Agreement and may be adjusted in the event of:

	i)		Any further configuration change which is the subject of a SCN

	ii)		Variation in actual weights of items defined in Section 13-10 of the Specification

	iii)		Changes required to obtain certification that cause modifications to the performance or weight of the A340-300 Aircraft

9		EXCLUSIVE GUARANTEES

		The Guarantees are exclusive and are provided in lieu of any and all other performance and weight guarantees of any nature which may be stated, referenced or incorporated in the Specification or any other document.

10		**

10.1		**

10.2		**

10.3		**

11		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without prior written consent of the Seller and any attempted assignment or transfer in contravention of the provisions of this sentence will be void and of no force and effect.

12		COUNTERPARTS


		LA 8F — 21 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.


		LA 8F — 22 of 24
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.

US AIRWAYS, INC.

AIRBUS S.A.S.

By:

/s/ Thomas T. Weir

By:

/s/ John J. Leahy

Name:

Thomas T. Weir

Name:

John J. Leahy

Title:

Vice President and Treasurer

Title:

Chief Operating Officer
Customers

US AIRWAYS, INC.

AIRBUS S.A.S.

By:

/s/ Thomas T. Weir

By:

/s/ John J. Leahy

Name:

Thomas T. Weir

Name:

John J. Leahy

Title:

Vice President and Treasurer

Title:

Chief Operating Officer
Customers


		LA 8F
USA Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX A to Letter Agreement No. 8F


		LA 8F — 24 of 24
USA Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

LETTER AGREEMENT NO. 9

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: MISCELLANEOUS

Ladies and Gentlemen,

US Airways, Inc., (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Airbus A330 Purchase Agreement dated as of the even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 9 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions that are inconsistent, the specific provisions contained in this Letter Agreement will govern.



		LA 9 — 1 of 3
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

1.		TERMINATION

1.1		**

1.2		Paragraph 21.2(1)(i) of the Agreement is amended to read as follows between the “QUOTE” and “UNQUOTE”

		QUOTE

(1)

		UNQUOTE

1.3		The paragraphs numbered 1 through 6 in Clause 21.2 (2) (A) of the Agreement are hereby superseded and replaced by the following text: **

2.		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Paragraph 2 will be void and of no force or effect.

3.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one same instrument.



		LA 9 — 2 of 3
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer
			Customers



		LA 9
USA Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 10

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

[INTENTIONALLY LEFT BLANK]



		LA 10 — 1 of 1
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 11

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

[INTENTIONALLY LEFT BLANK]



		LA 11 — 1 of 1
USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 12A

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc., (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Airbus A330 Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain A330-200 Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 12A (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the A330-200 Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions which are inconsistent, the specific provisions contained in this Letter Agreement will govern.



		LA 12A — 1 of 8
USA — Airbus A330 Purchase Agreement
EXECUTION
		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

1		PREAMBLE

1.1		AIRCRAFT CONFIGURATION

		The guarantee set forth in this Letter Agreement is applicable to the A330-200 Aircraft powered by Pratt & Whitney PW4168A-1D or PW4170 engines, as described in the Standard Specification Ref. G 000 02000 Issue 4.3 dated 13th July 2006, hereinafter referred as the “Specification” without taking into account any further changes thereto as provided in the Agreement.

1.2		**

2		**

2.1		**

2.2		**

3		**

3.1		**

3.1.1		**

3.1.2		**

3.1.3		**

3.1.4		**

3.1.5		**

3.1.6		**

3.1.7		**

3.1.8		**



		LA 12A — 2 of 8
USA — Airbus A330 Purchase Agreement
EXECUTION
		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

3.1.9		**

3.2		**

3.3		**

4		**

4.1		**

4.2		**

4.3		**

4.4		**

4.5		**

4.6		**

4.6.1		**

4.7		**

4.8		**

4.9		**

4.10		**



		LA 12A —3 of 8
USA — Airbus A330 Purchase Agreement
EXECUTION
		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

5		**

5.1		**

5.2		**

5.3		**

6.		**

7.		**

7.1		**

7.2		**

8		TERMINATION

8.1		**

8.2		**

8.3		**

	i)		**

	ii)		**

8.4		**

9		**

10		**

11		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without prior written consent of the Seller and any attempted assignment or transfer in contravention of the provisions of this sentence will be void and of no force and effect.



		LA 12A — 4 of 8
USA — Airbus A330 Purchase Agreement
EXECUTION
		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

12		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one same instrument.



		LA 12A — 5 of 8
USA — Airbus A330 Purchase Agreement
EXECUTION
		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer
			Customers



		LA 12A
USA Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX A TO LETTER AGREEMENT NO. 12A

Planning for the delivery of the A330-200 aircraft:


Month	Year	Quantity
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**		**


USA Airbus A330 Purchase Agreement		LA 12A — 7 of 8
EXECUTION

**Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

APPENDIX B TO LETTER AGREEMENT NO. 12A
PERFORMANCE MONITORING METHOD


USA Airbus A330 Purchase Agreement		LA 12A — 8 of 8
EXECUTION

**Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 12B

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc., (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Airbus A330 Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain A330-200 Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 12B (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the A330-200 Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions which are inconsistent, the specific provisions contained in this Letter Agreement will govern.


USA — Airbus A330 Purchase Agreement		LA 12B — 1 of 8
EXECUTION
**Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

1		PREAMBLE

1.1		AIRCRAFT CONFIGURATION

The guarantee set forth in this Letter Agreement is applicable to the A330-200 Aircraft powered by General Electric CF6-80E1A4 engines, as described in the Standard Specification Ref. G 000 02000 Issue 4.3 dated 13th July 2006, hereinafter referred as the “ Specification ” without taking into account any further changes thereto as provided in the Agreement.

1.2		**

2		**

2.1		**

	(a)		**

	(b)		**

	(c)		**

2.2		**

3		**

3.1		**

3.1.1		**

3.1.2		**

3.1.3		**

3.1.4		**

3.1.5		**

3.1.6		**

3.1.7		**


USA — Airbus A330 Purchase Agreement		LA 12B — 2 of 8
EXECUTION
**Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

3.1.8		**

3.1.9		**

3.2		**

3.3		**

4		**

4.1		**

4.2		**

4.3		**

4.4		**

4.5		**

4.6		**

4.6.1		**

4.7		**

4.8		**

4.9		**


USA — Airbus A330 Purchase Agreement		LA 12B — 3 of 8
EXECUTION
**Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

4.10		**

5		**

5.1		**

5.2		**

5.3		**

6.		**

7.		**

7.1		**

7.2		**

8		TERMINATION

8.1		**

8.2		**

8.3		**

	i)		**

	ii)		**

8.4		**

9		**

10		**

11		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner


USA — Airbus A330 Purchase Agreement		LA 12B — 4 of 8
EXECUTION
**Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

		without prior written consent of the Seller and any attempted assignment or transfer in contravention of the provisions of this sentence will be void and of no force and effect.

12		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one same instrument.


USA — Airbus A330 Purchase Agreement		LA 12B — 5 of
EXECUTION		8
**Confidential Treatment Requested.		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer
			Customers


USA Airbus A330 Purchase Agreement		LA 12B
EXECUTION
		PRIVILEGED AND CONFIDENTIAL

APPENDIX A

Planning for the delivery of the A330-200 aircraft:


Month	Year	Quantity
**	**	**

**	**	**

**	**	**

**	**	**

**	**	**

**	**	**

**	**	**

**	**	**

**		**

LA 12B — 7 of 8


USA Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

APPENDIX B

PERFORMANCE MONITORING METHOD

LA 12B — 8 of 8


USA Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

LETTER AGREEMENT NO. 12C

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc., (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Airbus A330 Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain A330-200 Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No 12B (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the A330-200 Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions which are inconsistent, the specific provisions contained in this Letter Agreement will govern.

LA 12C — Page 1 of 8


USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

1 PREAMBLE

1.1

AIRCRAFT CONFIGURATION

The guarantee set forth in this Letter Agreement is applicable to the A330-200 Aircraft powered by Rolls-Royce Trent 772B EP engines, as described in the Standard Specification Ref. G 000 02000 Issue 4.3 dated 13th July 2006, hereinafter referred as the “ Specification ” without taking into account any further changes thereto as provided in the Agreement.

1.2


		**

2		**

2.1		**

2.2		**

3		**

3.1		**

3.1.1		**

3.1.2		**

3.1.3		**

3.1.4		**

3.1.5		**

3.1.6		**

3.1.7		**

3.1.8		**

3.1.9		**

LA 12C — Page 2 of 8


USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

3.2 **

3.3



4		**

4.1		**

4.2		**

4.3		**

4.4		**

4.5		**

4.6		**

4.6.1		**

4.7		**

4.8		**

4.9		**

4.10		**

5		**

5.1		**

LA 12C — Page 3 of 8


USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.


5.2		**

5.3		**

6.		**

7.		**

7.1		**

7.2		**

TERMINATION

8.1


8.2	**

8.3	**

		i)	**

		ii)	**

8.4	**

9	**

10	**

ASSIGNMENT

COUNTERPARTS

LA 12C — Page 4 of 8


USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

LA 12C — Page 5 of 8


USA — Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy
	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers

LA 12C


USA Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX A TO LETTER AGREEMENT NO. 12C

Planning for the delivery of the A330-200 aircraft:


Month	Year	Quantity
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**		**



		LA 12C — 7 of 8
USA Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

APPENDIX B TO LETTER AGREEMENT 12C

PERFORMANCE MONITORING METHOD


		LA 12C — 8 of 8
USA Airbus A330 Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.

Exhibit 10.5

Amendment No. 1

to the

A330 Purchase Agreement

dated as of October 2, 2007

between

AIRBUS S.A.S.

and

US AIRWAYS, INC.

This amendment to the A330 Purchase Agreement between Airbus S.A.S. and US Airways, Inc., (this “ Amendment ”) is entered into as of November 15, 2007, by and between Airbus S.A.S., a société par actions simplifiée, organized and existing under the laws of the Republic of France, having its registered office located at 1, rond-point Maurice Bellonte, 31700 Blagnac, France (the “ Seller ”), and US Airways, Inc., a corporation organized and existing under the laws of the State of Delaware, United States of America, having its principal corporate offices located at 111 West Rio Salado Parkway, Tempe, Arizona 85281, U.S.A. (the “ Buyer ”);

WITNESSETH:

WHEREAS, the Buyer and the Seller entered into an Airbus A330 Purchase Agreement, dated as of October 2, 2007, relating to the sale by the Seller and the purchase by the Buyer of certain Airbus A330 model aircraft, which, together with all Exhibits, Appendices and Letter Agreements attached thereto, is hereinafter called the “Agreement.”

WHEREAS, the Buyer and the Seller agree to modify certain provisions relating to the order for Aircraft under the Agreement, including the number of aircraft the Seller offers to sell and the Buyer agrees to purchase.

NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

Capitalized terms used herein and not otherwise defined in this Amendment will have the meanings assigned to them in the Agreement. The terms “herein,” “hereof,” and “hereunder” and words of similar import refer to this Amendment.


USA — Airbus A330 Purchase Agreement
Amendment 1
Execution		CONFIDENTIAL AND PRIVILEGED

1/4

1.		ADDITIONAL A330-200 AIRCRAFT

		The Seller will manufacture, sell and deliver, and the Buyer will purchase and take delivery of, an additional five (5) A330-200 Aircraft from the Seller, subject to the terms and conditions in the Amendment and the Agreement (the “Additional Aircraft”). Such Additional Aircraft are scheduled for delivery in **. Except as set forth in this Amendment, all terms and conditions in the Agreement that are applicable to A330-200 Aircraft will apply to the Additional Aircraft.

		The Seller acknowledges having received an Initial Payment in the amount of US dollars — ) for each Additional Aircraft for an aggregate amount of US dollars — ). Notwithstanding the table in Clause 5.2.3 of the Agreement, the balance of the first (1 ^st ) Predelivery Payment with respect to each such Additional Aircraft is due within ** from the date hereof; all subsequent Predelivery Payments will be due and payable in accordance with the schedule in such Clause 5.2.3 of the Agreement.

2.		DELIVERY

		As a consequence of Paragraph 1, the delivery schedule set forth in Clause 9.1.1 of the Agreement is hereby deleted and restated to read in its entirety as follows:

		QUOTE

9.1.1

Subject to any delay contemplated by Clauses 2, 7, 8, 10 or 18, the Seller will have the A330-200 Aircraft Ready for Delivery at the Delivery Location within the following months (each a “ Scheduled Delivery Month ”).


Rank Number	Scheduled Delivery Month	Year
1	**	**
2	**	**
3	**	**
4	**	**
5	**	**
6	**	**
7	**	**
8	**	**
9	**	**
10	**	**
11	**	**
12	**	**
13	**	**
14	**	**
15	**	**

UNQUOTE


USA — Airbus A330 Purchase Agreement
Amendment 1
Execution		CONFIDENTIAL AND PRIVILEGED
**Confidential Treatment Requested.

2/4

3.		EFFECT OF AMENDMENT

3.1		Upon execution, Amendment will constitute a valid amendment to the Agreement and the Agreement will be deemed to be amended to the extent herein provided and, except as specifically amended hereby, will continue in full force and effect in accordance with its original terms. This Amendment supersedes any previous understandings, commitments or representations whatsoever, whether oral or written, related to the subject matter of this Amendment.

3.2		Both parties agree that this Amendment will constitute an integral, nonseverable part of the Agreement, that the provisions of the Agreement are hereby incorporated herein by reference, and that this Amendment will be governed by the provisions of the Agreement, except that if the Agreement and this Amendment have specific provisions that are inconsistent, the specific provisions contained in this Amendment will govern.

4.		CONFIDENTIALITY

		This Amendment is subject to the confidentiality provisions set forth in Clause 22.7 of the Agreement.

5.		COUNTERPARTS

		This Amendment may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument.


USA — Airbus A330 Purchase Agreement
Amendment 1
Execution		CONFIDENTIAL AND PRIVILEGED

3/4

IN WITNESS WHEREOF, these presents were entered into as of the day and year first above written.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ Christophe Mourey
	Its: Vice President and Treasurer		Its: Senior Vice President Contracts


USA — Airbus A330 Purchase Agreement
Amendment 1
Execution		CONFIDENTIAL AND PRIVILEGED
**Confidential Treatment Requested.

4/4

LETTER AGREEMENT NO. 1
TO AMENDMENT NO. 1

As of November 15, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen:

US Airways, Inc., (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an A330 Purchase Agreement dated as of October 2, 2007 (the “ Agreement”) , which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in Amendment No. 1 to the Agreement dated as of even date herewith (the “ Amendment ”) and in this Letter Agreement No. 1 to the Amendment (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions that are inconsistent, the specific provisions contained in this Letter Agreement will govern.

LA1 to AM1 — 1 of 3

**Confidential Treatment Requested.

USA — Airbus A330 Purchase Agreement
Letter Agreement No. 1 to Amendment No. 1



Execution		PRIVILEGED AND CONFIDENTIAL

1.		**

2.		CONFIDENTIALITY

		This Letter Agreement is subject to the confidentiality provisions set forth in Clause 22.7 of the Agreement.

3.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument.

LA1 to AM1 — 2 of 3

**Confidential Treatment Requested.

USA — Airbus A330 Purchase Agreement
Letter Agreement No. 1 to Amendment No. 1



Execution		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ Christophe Mourey

	Name: Thomas T. Weir		Name: Christophe Mourey
	Title: Vice President and Treasurer		Title: Senior Vice President Contracts

LA1 to AM1 — 3 of 3

USA — Airbus A330 Purchase Agreement
Letter Agreement No. 1 to Amendment No. 1



Execution		PRIVILEGED AND CONFIDENTIAL

Exhibit 10.18

Amendment No. 11

to the

A330/A340 PURCHASE AGREEMENT

dated as of November 24, 1998

between

AIRBUS S.A.S.

and

US AIRWAYS GROUP, INC.

This amendment to the A330/A340 Purchase Agreement between Airbus S.A.S. (legal successor to AVSA, S.A.R.L.) and US Airways Group, Inc., (this “Amendment”) entered into as of October 2, 2007, by and between Airbus S.A.S., a société par actions simplifiée, organized and existing under the laws of the Republic of France, having its registered office located at 1, rond-point Maurice Bellonte, 31700 Blagnac, France (the “Seller”), and US Airways Group, Inc., a corporation organized and existing under the laws of the State of Delaware, United States of America, having its executive offices located at 111 W Rio Salado Parkway, Tempe, Arizona 85281, U.S.A. (the “Buyer”);

WITNESSETH:

WHEREAS, the Buyer and the Seller entered into an Airbus A330/A340 Purchase Agreement, dated as of November 24, 1998, relating to the sale by the Seller and the purchase by the Buyer of certain Airbus A330 and A340 model aircraft, which, together with all Exhibits, Appendices and Letter Agreements attached thereto and as amended by Amendment No.1 dated as of March 23, 2000, Amendment No. 2 dated as of June 29, 2000, Amendment No. 3 dated as of November 27, 2000, Amendment No. 4 dated as of September 20, 2001, Amendment No. 5 dated as of July 17, 2002, Amendment No. 6 dated as of March 29, 2003, Amendment No. 7 dated as of August 30, 2004, Amendment No. 8 dated as of December 22, 2004, Amendment No. 9 dated as of January 17, 2005, and Amendment No. 10, dated as of September 27, 2005, is hereinafter called the “Agreement.”

WHEREAS, the Buyer and the Seller agree to modify certain provisions of the Agreement relating to the order for Aircraft under the Agreement, including the number of aircraft the Seller offers to sell the Buyer and the Buyer agrees to purchase from the Seller.

NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

US Airways — A330/A340 — Amendment 11

CONFIDENTIAL AND PRIVILEGED

1/5

1.		DELIVERY

		Clause 9.1.1 of the Agreement is hereby amended and restated to read in its entirety as follows:

		QUOTE

9.1.1

Subject to any delay contemplated by Clauses 2, 7, 8, 10 or 18, the Seller will have the Rescheduled Aircraft Ready for Delivery at the Seller’s delivery location in Toulouse within the following months (each a “ Scheduled Delivery Month ”).

Scheduled Delivery

Aircraft No.

CAC I.D.

Type

Quarter

34641

A330-200

159176

A330-200

159196

A330-200

159197

A330-200

159198

A330-200

159199

A330-200

159200

A330-200

159201

A330-200

159202

A330-200

159203

A330-200

		UNQUOTE

2.		PREDELIVERY PAYMENTS

		The Parties acknowledge that as of the date hereof, the Buyer has paid and the Seller has received and holds US dollars — ($US ) for each Rescheduled Aircraft. The parties acknowledge that the Seller holds no monies other than as stated in the preceding sentence in respect of the Rescheduled Aircraft.

US Airways — A330/A340 — Amendment 11

CONFIDENTIAL AND PRIVILEGED

**Confidential Treatment Requested.

2/5

		Paragraph 2 of Amendment No. 8 is hereby rendered void; and, notwithstanding any reading of Paragraph 2 of Letter Agreement No. 1 to Amendment No. 6 to the Agreement to the contrary, Clause 6.2.2.1 of the Agreement is hereby amended and restated to read in its entirety as follows, and is in full force and effect:

		QUOTE

		Predelivery payments for the Aircraft are nonrefundable and will be paid to the Seller for each such Aircraft according to the following schedule.


**	*	*	*	*
**	*	*	*	*
**	*	*	*	*
**	*	*	*	*
**	*	*	*	*
**	*	*	*	*
**	*	*	*	*
**			*	*

		UNQUOTE

3.		RESCHEDULING RIGHT

		Paragraph 5.2 of Amendment No. 10 to the Agreement is hereby deleted and replaced to read in its entirety as follows:

		QUOTE

5.2

The Buyer’s order for the Rescheduled Aircraft will be cancelable by the Buyer **, except that (x) if the Buyer fails to notify the Seller in writing that it waives its right to cancel any Rescheduled Aircraft ** , then the Buyer’s order for and the Seller’s obligation to deliver the Rescheduled Aircraft will automatically be cancelled at that time, **. The Buyer’s right to cancel its order for the Rescheduled Aircraft pursuant to this Paragraph 5.2 supersedes any right the Seller may have under Clause 21.1.2 of the Agreement.

		UNQUOTE

4.		EFFECT OF AMENDMENT

4.1		The provisions of this Amendment are binding on both parties upon signature hereof. The Agreement will be deemed amended to the extent herein provided, and, except as specifically amended hereby, will continue in full force and effect in accordance with its

US Airways — A330/A340 — Amendment 11

CONFIDENTIAL AND PRIVILEGED

**Confidential Treatment Requested.

3/5

		Original terms. This Amendment supersedes any previous understandings, commitments, or representations whatsoever, whether oral or written, related to the subject matter of this Amendment.

4.2		The parties agree that this Amendment will constitute an integral, nonseverable part of the Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Amendment will be governed by the provisions of said Agreement, except that if the Agreement and this Amendment have specific provisions that are inconsistent, the specific provisions contained in this Amendment will govern.

5.		CONFIDENTIALITY

		This Amendment is subject to the confidentiality provisions set forth in Clause 22.7 of the Agreement.

6.		COUNTERPARTS

		This Amendment may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument.

US Airways — A330/A340 — Amendment 11

CONFIDENTIAL AND PRIVILEGED

4/5

IN WITNESS WHEREOF, these presents were entered into as of the day and year first above written.


US AIRWAYS GROUP, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ Christophe Mourey

	Name: Thomas T. Weir	Name:	Christophe Mourey
	Title: Vice President and Treasurer	Title:	Senior Vice President Contracts

US Airways — A330/A340 — Amendment 11

CONFIDENTIAL AND PRIVILEGED

5/5

Exhibit 10.19

AMENDED AND RESTATED

AIRBUS A350 XWB PURCHASE AGREEMENT

dated as of October 2, 2007

between

AIRBUS S.A.S.
Seller

and

US AIRWAYS, INC.
Buyer



USA — Amended and Restated Airbus A350 XWB Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

C O N T E N T S


0 DEFINITIONS			8

1 SALE AND PURCHASE			15

2 SPECIFICATION			16

2.1 Specification Documents			16
2.2 Customization Milestones Chart			17
2.3 Propulsion Systems			17

3 PRICE			18

3.1 Base Price of Aircraft			18
3.2 The Final Contract Price of an Aircraft			19
3.3 Taxes, Duties and Imposts			19

4 PRICE REVISION			21

5 PAYMENT TERMS			22

5.1 Payments			22
5.2 Predelivery Payments			22
5.3 Initial Payment			24
5.4 Payment of Balance of the Final Contract Price			24
5.5 Application of Payments			25
5.6 Overdue Payments			25
5.7 Proprietary Interest			25
5.8 Payment in Full			26

6 INSPECTION			27

6.1 Manufacture Procedures			27
6.2 Inspection Procedures			27
6.3 Representatives			27

7 CERTIFICATION			29

7.1 Type Certification			29
7.2 Export Certificate of Airworthiness			29
7.3 Additional FAA Requirements			29
7.4 Additional EASA Requirements			29
7.5 Specification Changes After Delivery			30

8 TECHNICAL ACCEPTANCE			31

8.1 Technical Acceptance Process			31
8.2 Buyer’s Attendance			31
8.3 Certificate of Acceptance			32



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		ii
EXECUTION		PRIVILEGED AND CONFIDENTIAL


8.4 Finality of Acceptance			32
8.5 Aircraft Utilization			32

9 DELIVERY			33

9.1 Delivery Schedule			33
9.2 Delivery Process			33
9.3 Flyaway			34

10 EXCUSABLE DELAY AND TOTAL LOSS			35

10.1 Scope of Excusable Delay			35
10.2 Consequences of Excusable Delay			35
10.3 Termination on Excusable Delay			36
10.4 Total Loss, Destruction or Damage			37
10.5 Remedies			37

11 INEXCUSABLE DELAY			38

11.1 Liquidated Damages			38
11.2 Renegotiation			38
11.3 Termination			38
11.4 Remedies			39

12 WARRANTIES AND SERVICE LIFE POLICY			40

12.1 Warranty			40
12.2 Seller Service Life Policy			49
12.3 Supplier Warranties and Service Life Policy			53
12.4 Interface Commitment			54
12.5 Exclusivity of Warranties			55
12.6 Duplicate Remedies			57
12.7 Negotiated Agreement			57
12.8 Survivability			57

13. PATENT AND COPYRIGHT INDEMNITY			58

13.1 Indemnity			58
13.2 Administration of Patent and Copyright Indemnity Claims			59

14 TECHNICAL DATA AND SOFTWARE SERVICES			61

14.1 Supply			61
14.2 Aircraft Identification for Technical Data			61
14.3 Integration of Equipment Data			62
14.4 Delivery			62
14.5 Revision Service			63
14.6 Service Bulletins Incorporation			63
14.7 Future Developments			64
14.8 Technical Data Familiarization			64
14.9 Customer Originated Changes			64
14.10 Software Products			66



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		iii
EXECUTION		PRIVILEGED AND CONFIDENTIAL


14.11 Warranties			67
14.12 Proprietary Rights			68

15 SELLER REPRESENTATIVES			70

15.1 Seller Representatives			70
15.2 Resident Customer Support Representatives			70
15.3 Customer Support Director			70
15.4 Spare Parts Field Representative			71
15.5 Buyer’s Service			71
15.6 Temporary Assignment and Withdrawal of Resident Customer Support Representative			71
15.7 Representatives’ Status			71

16 TRAINING AND TRAINING AIDS			72

16.1. General			72
16.2. Scope			72
16.3. Training Organization / Location			72
16.4 Training Courses			72
16.5 Prerequisites			74
16.6. Logistics			74
16.7 Flight Operations Training			76
16.8 Maintenance Training			77
16.9 Supplier and Engine Manufacturer Training			78
16.10 Training Aids for the Buyer’s Training Organization			78
16.11 Proprietary Rights			80
Appendix A to Clause 16			81
Appendix B to Clause 16			84

17 SUPPLIER PRODUCT SUPPORT			87

17.1 Equipment Supplier Product Support Agreements			87
17.2 Supplier Compliance			87
17.3 Supplier Part Repair Stations			88

18 BUYER FURNISHED EQUIPMENT			89

18.1 Administration			89
18.2 Requirements			90
18.3 Buyer’s Obligation and Seller’s Remedies			90
18.4 Title and Risk of Loss			91
18.5 Disposition of BFE Following Termination			91

19 INDEMNITIES AND INSURANCE			93

19.1 Seller’s Indemnities			93
19.2 Buyer’s Indemnities			93
19.3 Notice and Defense of Claims			94
19.4 Insurance			94

20 ASSIGNMENTS AND TRANSFERS			96



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		iv
EXECUTION		PRIVILEGED AND CONFIDENTIAL


20.1 Assignments by Buyer			96
20.2 Assignments on Sale, Merger or Consolidation			96
20.3 Designations by Seller			96
20.4 Transfer Prior to Delivery			96
20.5 Post Delivery Resale or Lease			97

21. TERMINATION			98

21.1 Termination Events			98
21.2 Remedies In Event of Termination			99
21.3 Definitions			100
21.4 Notice of Termination Event			100
21.5 Adequate Assurance of Performance			100
21.6 Information Covenants			100
21.7 Information Undertakings			102

22 MISCELLANEOUS			103

22.1 Data Retrieval			103
22.2 Notices			103
22.3 Waiver			104
22.4 Interpretation and Law			104
22.5 Waiver of Jury Trial			105
22.6 No Representations outside of this Agreement			105
22.7 Confidentiality			106
22.8 Severability			106
22.9 Alterations to Contract			106
22.10 Inconsistencies			107
22.11 Language			107
22.12 Headings			107
22.13 Counterparts			107

23 CERTAIN REPRESENTATIONS OF THE PARTIES			108

23.1. Buyer’s Representations			108
23.2 Seller’s Representations			108



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		v
EXECUTION		PRIVILEGED AND CONFIDENTIAL

C O N T E N T S


EXHIBITS

EXHIBIT A-1.A		ADD A350-800 XWB AIRCRAFT

EXHIBIT A-1.B		A350-800 XWB STANDARD SPECIFICATION

EXHIBIT A-2.A		ADD A350-900 XWB AIRCRAFT

EXHIBIT A-2.B		A350-900 XWB STANDARD SPECIFICATION

EXHIBIT A-3.A		ADD A350-1000 XWB AIRCRAFT

EXHIBIT A-3.B		A350-1000 XWB STANDARD SPECIFICATION

EXHIBIT B-1.A		SCN FORM

EXHIBIT B-1.B		SCNs FOR A350-800 XWB

EXHIBIT B-2		MSCN FORM

EXHIBIT C		SELLER SERVICE LIFE POLICY: ITEMS COVERED

EXHIBIT D		FORM OF CERTIFICATE OF ACCEPTANCE

EXHIBIT E		FORM OF BILL OF SALE

EXHIBIT F		TECHNICAL DATA INDEX

EXHIBIT G-1		SELLER PRICE REVISION FORMULA (2005)

EXHIBIT G-2		SELLER PRICE REVISION FORMULA (2007)

EXHIBIT H		TERMS AND CONDITIONS FOR LICENSE FOR USE OF SOFTWARE



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		vi
EXECUTION		PRIVILEGED AND CONFIDENTIAL

A M E N D E D AND R E S T A T E D

A I R B U S A350 XWB P U R C H A S E A G R E E M E N T

This Agreement is made this 2nd day of October 2007

between

AIRBUS S.A.S., organized and existing under the laws of the Republic of France, having its registered office located at

1, rond-point Maurice Bellonte
31700 Blagnac, France

(hereinafter referred to as the “ Seller ”)

and

US Airways, Inc., a corporation organized and existing under the laws of the State of Delaware, United States of America, having its principal corporate offices located at 111 West Rio Salado Parkway, Tempe, Arizona 85281 (the “ Buyer ”).

WHEREAS the Buyer and the Seller have entered into an A350 Purchase Agreement, dated as of September 27, 2005, as amended from time to time (the “ Original Agreement ”), relating to, inter alia , the sale by the Seller and the purchase by the Buyer of certain Airbus aircraft.

WHEREAS, the Buyer agrees to place an order with the Seller for certain Airbus A350 XWB model aircraft, on the terms and conditions herein provided.

WHEREAS, the Buyer and the Seller wish to amend and restate the Original Agreement to read in its entirety as set forth herein.

NOW THEREFORE IT IS AGREED AS FOLLOWS:



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 7 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

0		DEFINITIONS

		For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following terms will have the following meanings:

		A350-800 XWB Aircraft —any or all of the Airbus A350-800 XWB model aircraft sold to the Buyer by the Seller pursuant to this Agreement, for which the Scheduled Delivery Month is set forth in Clause 9.1.1, together with all components, equipment, parts and accessories installed in or on such aircraft and the A350-800 XWB Propulsion Systems installed thereon.

		A350-800 XWB Propulsion Systems —the two (2) Rolls-Royce Trent XWB72 powerplants installed on an A350-800 XWB Aircraft or to be installed on an A350-800 XWB Aircraft at Delivery, each composed of the powerplant (as such term is defined in Chapters 70-80 of the applicable ATA Specification, but limited to the equipment, components, parts and accessories included in the powerplant, as so defined) that have been sold to the Seller by Rolls-Royce plc.

		A350-800 XWB Specification —the A350-800 XWB Standard Specification, as amended from time to time in accordance with this Agreement.

		A350-800 XWB Standard Specification —the A350-800 XWB standard specification document number Issue 1, to be published by the Seller, which includes a maximum take-off weight ( MTOW ) of 245 metric tons, maximum landing weight ( MLW ) of 182.5 metric tons and maximum zero-fuel weight ( MZFW ) of 171 metric tons, a copy of which is annexed as Exhibit A-1.B.

		A350-900 XWB Aircraft —any or all of the Airbus A350-900 XWB model aircraft to be sold to the Buyer by the Seller pursuant to this Agreement, together with all components, equipment, parts and accessories installed in or on such aircraft and the A350-900 XWB Propulsion Systems installed thereon.

		A350-900 XWB Propulsion Systems —the two (2) Rolls-Royce Trent XWB87 powerplants installed on an A350-900 XWB Aircraft or to be installed on an A350-900 XWB Aircraft at Delivery, each composed of the powerplant (as such term is defined in Chapters 70-80 of the applicable ATA Specification, but limited to the equipment, components, parts and accessories included in the powerplant, as so defined) that have been sold to the Seller by Rolls-Royce plc.

		A350-900 XWB Specification —the A350-900 XWB Standard Specification, as amended from time to time in accordance with this Agreement.

		A350-900 XWB Standard Specification —the A350-900 XWB standard specification document number Issue 1, to be published by the Seller, which includes an MTOW of 265 metric tons, MLW of 202.5 metric tons and MZFW of 189.5 metric tons, a copy of which is annexed as Exhibit A-2.B.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 41 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		A350-1000 XWB Aircraft —any or all of the Airbus A350-1000 XWB model aircraft to be sold to the Buyer by the Seller pursuant to this Agreement, together with all components, equipment, parts and accessories installed in or on such aircraft and the A350-1000 XWB Propulsion Systems installed thereon.

		A350-1000 XWB Propulsion Systems —the two (2) Rolls-Royce Trent XWB95 powerplants installed on an A350-1000 XWB Aircraft or to be installed on an A350-1000 XWB Aircraft at Delivery, each composed of the powerplant (as such term is defined in Chapters 70-80 of the applicable ATA Specification, but limited to the equipment, components, parts and accessories included in the powerplant, as so defined) that have been sold to the Seller by Rolls-Royce plc.

		A350-1000 XWB Specification —the A350-1000 XWB Standard Specification, as amended from time to time in accordance with this Agreement.

		A350-1000 XWB Standard Specification —the A350-1000 XWB standard specification document number Issue 1, to be published by the Seller, which includes an MTOW of 295 metric tons, MLW of 225 metric tons and MZFW of 211 metric tons, a copy of which is annexed as Exhibit A-3.B.

		ADD —collectively or individually, the ADD A350-800 XWB Aircraft, ADD A350-900 XWB Aircraft and/or ADD A350-1000 XWB Aircraft.

		ADD A350-800 XWB Aircraft —A350-800 XWB Aircraft Description Document No. V 000 0800 Issue D dated December 15, 2006, which may be superseded by issues with a later date, and, ultimately, by the A350-800 XWB Standard Specification, a copy of which is annexed as Exhibit A-1.A.

		ADD A350-900 XWB Aircraft —A350-900 XWB Aircraft Description Document No. V 000 0900 Issue D dated December 15, 2006, which may be superseded by issues with a later date, and, ultimately, by the A350-900 XWB Standard Specification, a copy of which is annexed as Exhibit A-2.A.

		ADD A350-1000 XWB Aircraft —A350-1000 XWB Aircraft Description Document No. V 000 1000 Issue D dated December 15, 2006, which may be superseded by issues with a later date, and, ultimately, by the A350-1000 XWB Standard Specification, a copy of which is annexed as Exhibit A-3.A.

		Affiliate —with respect to any person or entity, any other person or entity directly or indirectly controlling, controlled by or under common control with such person or entity.

		Agreement —this amended and restated Airbus A350 XWB purchase agreement , including exhibits and appendices attached hereto as the same may be amended or modified and in effect from time to time.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 9 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		Aircraft —any or all of the A350-800 XWB Aircraft, A350-900 XWB Aircraft or A350-1000 XWB Aircraft under firm order and set forth in Clause 9.1.1.

		Airframe —any Aircraft, excluding the Propulsion Systems therefor.

		ANACS —Airbus North America Customer Services, Inc., a corporation organized and existing under the laws of Delaware, having an office located at 198 Van Buren Street, Suite 300, Herndon, VA 20170, or any successor thereto.

		ATA Specification —recommended specifications developed by the Air Transport Association of America reflecting consensus in the commercial aviation industry on accepted means of communicating information, conducting business, performing operations and adhering to accepted practices.

		Aviation Authority —when used with respect to any jurisdiction, the government entity that, under the laws of such jurisdiction, has control over civil aviation or the registration, airworthiness or operation of civil aircraft in such jurisdiction.

		Balance of the Final Contract Price —means the amount payable by the Buyer to the Seller on the Delivery Date for an Aircraft after deducting from the Final Contract Price for such Aircraft the amount of all Predelivery Payments received by the Seller from the Buyer, in respect of such Aircraft on or before the Delivery Date.

		Base Price —as defined in Clause 3.1.

		BFE — see Buyer Furnished Equipment

		Buyer Furnished Equipment or BFE —for any Aircraft, all the items of equipment that will be furnished by the Buyer and installed in the Aircraft by the Seller pursuant to Clause 18, as listed in the Specification.

		Certificate of Acceptance —as defined in Clause 8.3.

		Change in Law —as defined in Clause 7.4.1.

		COC — see Customer Originated Changes.

		Customer Originated Changes or COC —data originating from the Buyer that are introduced into Seller’s Technical Data and Documentation, as more completely set forth in Clause 14.9.

		Delivery —the transfer of title to the Aircraft from the Seller to the Buyer.

		Delivery Date —the date on which Delivery occurs.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 10 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		Delivery Location —the facilities of the Seller at the location of final assembly of the Aircraft, which is currently at the works of Airbus France S.A.S. in Toulouse, France, or any other mutually agreed upon location.

		Development Changes —as defined in Clause 2.1.4.

		DGAC —the Direction Générale de l’Aviation Civile of France or any successor agency thereto.

		EASA —European Aviation Safety Agency or any successor agency thereto.

		Excusable Delay —as defined in Clause 10.1.

		Export Certificate of Airworthiness —an export certificate of airworthiness issued by the Aviation Authority of the Delivery Location.

		FAA —the U.S. Federal Aviation Administration or any successor agency thereto.

		FCA — see Free Carrier.

		Final Contract Price —as defined in Clause 3.2.

		Free Carrier or FCA —as defined in Incoterms 2000: ICC Official Rules for the Interpretation of Trade Terms , published by the International Chamber of Commerce.

		Goods and Services –means any goods, excluding Aircraft, and services that may be purchased by the Buyer from the Seller or its designee from the Airbus Customer Services Catalog.

		In-house Warranty Labor Rate —as defined in Clause 12.1.8(v)(b).

		In-house Warranty Repair —as defined in Clause 12.1.8(i).

		Initial Payment —each of the initial payment amounts described in Clause 5.3.

		Interface Problem —as defined in Clause 12.4.1.

		LIBOR —the London Interbank Offered Rate determined on the basis of the offered rates for deposits in US dollars for a stated interest period (or for six-month deposits in US dollars if no interest period is stated), which appears on the Reuters Screen LIBO Page as of 11:00 a.m., London time, on the second Working Day prior to the start of the relevant interest period. If at least two (2) such offered rates appear on the Reuters Screen LIBO Page, the rate for that interest period will be the arithmetic mean of such offered rates rounded to the nearest one-hundred thousandth of a basis point. If only one (1) offered rate appears, the rate for that interest period will be “LIBOR” as quoted by National Westminster Bank, plc, or any successor thereto. “Reuters Screen LIBO Page” means the



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 11 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		display designated as page “LIBO” on the Reuters Monitor Money Rates Service (or any successor to such page or service).

		Manufacturer Specification Change Notice or MSCN —as defined in Clause 2.1.3.

		MSCN — see Manufacturer Specification Change Notice.

		Predelivery Payment —any of the payments made in accordance with Clause 5.2.

		Predelivery Payment Reference Price —as defined in Clause 5.2.2.

		Propulsion Systems —collectively or individually, the A350-800 XWB Propulsion Systems, A350-900 XWB Propulsion Systems and/or A350-1000 XWB Propulsion Systems.

		Ready for Delivery —with respect to any Aircraft, the term applicable to such Aircraft when (i) the Technical Acceptance Process has been successfully completed for such Aircraft and (ii) the Export Certificate of Airworthiness has been issued therefor.

		Resident Customer Support Representative —as set forth in Clause 15.2.1.

		Scheduled Delivery Month —as defined in Clause 9.1.1.

		SCN —s ee Specification Change Notice.

		Seller Price Revision Formula —as set forth in Exhibit G-1 or G-2, as applicable.

		Service Life Policy —as set forth to in Clause 12.2.

		SFE — see Seller Furnished Equipment .

		Seller Furnished Equipment —as set forth to in Clause 17.1.1.

		Software Products —software, whether bundled with data or not, specifically designed to provide the Buyer with certain maintenance and operation capabilities further detailed in the ANACS Customer Support Catalog.

		Specification —collectively or individually, as applicable, the A350-800 XWB Specification, A350-900 XWB Specification and/or the A350-1000 XWB Specification.

		Specification Change Notice —as defined in Clause 2.1.2.

		Standard Specification —collectively or individually, the A350-800 XWB Standard Specification, the A350-900 XWB Standard Specification, and/or the A350-1000 XWB Standard Specification.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 12 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		Supplier —any supplier of Supplier Parts.

		Supplier Part —any component, equipment, accessory or part installed in an Aircraft at the time of Delivery thereof, not including the Propulsion Systems or Buyer Furnished Equipment, for which there exists a Supplier Product Support Agreement.

		Supplier Product Support Agreement —an agreement between the Seller and a Supplier containing enforceable and transferable warranties (and in the case of landing gear suppliers, service life policies for selected structural landing gear elements).

		Technical Data —as set forth in Exhibit F.

		Technical Acceptance Process —as defined in Clause 8.1.1.

		Termination Event —as defined in Clause 21.1.

		Training Conference —as defined in Clause 16.4.1.

		Training Course Catalog — as defined in Clause 16.4.1.

		Type Certificate —as defined in Clause 7.1.

		Warranted Part —as defined in Clause 12.1.1.

		Warranty Claim —as defined in Clause 12.1.7(v).

		Working Day —with respect to any action to be taken hereunder, a day other than a Saturday, Sunday or other day designated as a holiday in the jurisdiction in which such action is required to be taken.

		The terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement, and not a particular Clause thereof. The definition of a singular in this Clause will apply to plurals of the same words.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 13 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		Except for the purposes of and as provided in Clause 22.10, references in this Agreement to an exhibit, schedule, article, section, subsection or clause refer to the appropriate exhibit or schedule to, or article, section, subsection or clause in this Agreement.

		Except for the preceding sentence, each agreement defined in this Clause 0 will include all appendices, exhibits and schedules to such agreement. If the prior written consent of any person is required hereunder for an amendment, restatement, supplement or other modification to any such agreement and the consent of each such person is obtained, references in this Agreement to such agreement will be to such agreement as so amended, restated, supplemented or modified.

		References in this Agreement to any statute will be to such statute as amended or modified and in effect at the time any such reference is operative.

		Technical and trade terms used but not defined herein will be defined as generally accepted in the airline and/or aircraft manufacturing industries or as otherwise described.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 14 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1		SALE AND PURCHASE

		The Seller will manufacture, sell and deliver, and the Buyer will purchase and take delivery of the Aircraft from the Seller, subject to the terms and conditions in this Agreement.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 15 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2		SPECIFICATION

2.1		Specification Documents

2.1.1		The Aircraft will be manufactured in accordance with the applicable Specification.

		The applicable Standard Specification will supersede the applicable ADD at no additional cost to the Buyer and the applicable airframe will be manufactured in accordance with the applicable Standard Specification, as may already have been modified or varied by the ADD specification changes contemplated in Exhibit B-1.B for the Aircraft. It is understood that, subject to the Seller’s certification, industrial and commercial constraints, some equipment currently set forth in the ADD may be replaced by equipment with equivalent functions, but that in no event will the Standard Specification of the Aircraft contain any equipment not having functions at least equivalent to those set forth in the applicable ADD.

		The Seller agrees to promptly inform the Buyer of any applicable Standard Specification evolutions that the Seller is contemplating offering to other airlines for incorporation in the Aircraft.

		Without prejudice to the foregoing, the Seller is currently considering turning certain items that are Buyer Furnished Equipment in the ADD into Seller Furnished Equipment items in the applicable Standard Specification and the parties agree that such Buyer Furnished Equipment items will be excluded from the preceding paragraph and will be chargeable to the Buyer should they become Seller Furnished Equipment; provided, however, that items transferred from Buyer Furnished Equipment to Seller Furnished Equipment will be of equivalent function and form and at no additional charge to the Buyer as compared to the amount that the Buyer would have paid for the original Buyer Furnished Equipment.

2.1.2		Specification Change Notice

		The Specification may be amended in writing by the Buyer and the Seller by a Specification Change Notice in substantially the form set out in Exhibit B-1 (each, an “ SCN ” ). An SCN will set out the SCN’s effectivity and the particular change to be made to the Specification and the effect, if any, of such change on design, performance, weight, Scheduled Delivery Month of the Aircraft affected thereby, interchangeability or replaceability requirements of the Specification and text of the Specification. An SCN may result in an adjustment of the Base Price of the Aircraft, which adjustment, if any, will be specified in the SCN. SCNs will not be binding on either party until signed by persons duly authorized by the Buyer and the Seller, but upon being so signed, will constitute amendments to this Agreement.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 16 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.1.3		Manufacturer Specification Change Notice

		The Specification may also be amended in writing by the Seller by a Manufacturer’s Specification Change Notice. Each MSCN will be substantially in the form set out in Exhibit B-2 and will set out the MSCN’s effectivity and the particular change to be made to the Specification and the effect, if any, of such change on design, performance, weight, Scheduled Delivery Month of the Aircraft affected thereby, interchangeability or replaceability requirements of the Specification and text of the Specification. MSCNs will be subject to the Buyer’s acceptance, except in the case of Development Changes (as defined below) or changes resulting from Airworthiness Directives, government-mandated regulations arising after the date of the Specification or equipment obsolescence.

2.1.4		Development Changes

		As stated in Clause 2.1.3, changes may be made by the Seller without the Buyer’s consent when changes to the Aircraft do not adversely affect price, Scheduled Delivery Month, weight of the Aircraft affected thereby, **interchangeability requirements or replaceability requirements of the Specifications of the Aircraft affected thereby are deemed by the Seller to be necessary to improve the Aircraft affected thereby, prevent delay or ensure compliance with this Agreement ( “ Development Changes ” ). Development Changes will be made by either an MSCN or a manufacturer’s information document prior to Delivery of the relevant Aircraft.

2.2		Customization Milestones Chart

		Within a reasonable period after signature of this Agreement, the Seller will provide the Buyer with a chart called the “ Customization Milestones Chart ,” defining the lead times before Delivery needed for agreeing on items requested by the Buyer from the Standard Specifications and Configuration Guides CD-ROM.

2.3		Propulsion Systems

		Each Airframe will be equipped with a set of Propulsion Systems. Each Airframe will be equipped with nacelles and thrust reversers.

**Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 17 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3		PRICE

3.1		Base Price of Aircraft

3.1.1		The Base Price of each A350-800 XWB Aircraft is the sum of

	(i)		US $ (US dollars—), representing the price of an A350-800 XWB model aircraft built to the A350-800 XWB Standard Specification (excluding Buyer Furnished Equipment and SCNs), at delivery conditions prevailing in **;

	(ii)		US $ (US dollars—), representing the price of all SCNs in Exhibit B-1.B at delivery conditions prevailing in **; and

	(iii)		the price of any SCNs that may be mutually agreed upon subsequent to signature of this Agreement.

3.1.2

The Base Price of each A350-900 XWB Aircraft is the sum of

	(i)		US $ (US dollars—), representing the price of an A350-900 XWB model aircraft built to the A350-900 XWB Standard Specification (excluding Buyer Furnished Equipment and SCNs), at delivery conditions prevailing in **;

	(ii)		US $ (US dollars— ), at delivery conditions prevailing in ; and

	(iii)		the price of any SCNs that may be mutually agreed upon subsequent to signature of this Agreement.

3.1.3

The Base Price of each A350-1000 XWB Aircraft is the sum of

	(i)		US $ (US dollars—), representing the price of an A350-1000 XWB model aircraft built to the A350-1000 XWB Standard Specification (excluding Buyer Furnished Equipment and SCNs), at delivery conditions prevailing in **;

	(ii)		US $ (US dollars— the price of all SCNs at delivery conditions prevailing in **; and

**Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 18 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

(iii)

the price of any SCNs that may be mutually agreed upon subsequent to signature of this Agreement.

3.2		The Final Contract Price of an Aircraft

		The Final Contract Price of an Aircraft will be the sum of:

	(i)		the Base Price of the applicable Aircraft, adjusted to the Delivery Date of such Aircraft in accordance with the applicable Seller Price Revision Formula;

	(ii)		the price of any SCNs for the Aircraft entered into after the date of signature of this Agreement, as adjusted to the Delivery Date in accordance with the applicable Seller Price Revision Formula; and

	(iii)		any other amount resulting from any other provisions of this Agreement and/or any other written agreement between the Buyer and the Seller relating to the Aircraft.

3.3		Taxes, Duties and Imposts

3.3.1		The Seller will pay any and all taxes, duties, imposts or similar charges of any nature whatsoever, except for taxes based on or measured by the income of the Buyer, or any taxes of a similar nature or charges levied against the Buyer or its Affiliates for the privilege of doing business in any jurisdiction, that are (i) imposed upon the Buyer, (ii) imposed upon the Seller with an obligation on the Buyer to withhold or collect the amount thereof from the Seller or (iii) imposed upon the Buyer with an obligation on the Seller to withhold or collect such amount from the Buyer, and that are levied, assessed, charged or collected for or in connection with the fabrication, manufacture, modification, assembly, sale, delivery, use of, or payment by it under this Agreement for, any Aircraft, component, accessory, equipment or part delivered or furnished by it hereunder, provided such taxes, duties, imposts or similar charges have been promulgated and are enforceable under the laws of any country, province, municipality or other jurisdiction or government entity thereof and are asserted with respect to events or circumstances occurring on or before Delivery of such Aircraft.

		Notwithstanding anything to the contrary in this Clause 3.3.1, the Seller will not be required to bear or pay or to indemnify the Buyer for taxes, imposts, charges, or duties, (i) to the extent imposed as the result of the Buyer’s engaging in activities in the jurisdiction imposing such tax which activities are unrelated to the transactions contemplated by this Agreement or as the result of being incorporated or organized in such jurisdiction or maintaining an office or having a place of business or other presence therein, (ii) arising out of or caused by the willful misconduct or gross negligence of the Buyer, (iii) that are interest, penalties, fines or additions to tax that would not have been imposed but for any failure by the Buyer to file any tax return or information return in a timely and proper manner, (iv) that are being contested by the Seller in good faith by appropriate proceedings during the pendency of such contest, or (v) that are imposed on



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 19 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		or payable by a transferee of all or any part of the interest of the Buyer in the Aircraft or any of its rights or obligations under this Agreement to the extent in excess of the taxes that would have been imposed on or payable by the Buyer in the absence of any such transfer.

3.3.2		The Buyer will pay any and all taxes, duties, imposts or similar charges of any nature whatsoever, except for taxes based on or measured by the income of the Seller or any taxes of a similar nature or charges levied against the Seller or its Affiliates for the privilege of doing business in any jurisdiction, that are (i) imposed upon the Seller, (ii) imposed upon the Buyer with an obligation on the Seller to collect the amount thereof for the Buyer or (iii) imposed upon the Seller with an obligation on the Buyer to withhold such amount from the Seller, and that are levied, assessed, charged or collected for or in connection with the fabrication, manufacture, modification, assembly, sale, delivery or use of or payment under this Agreement for any Aircraft, component, accessory, equipment or part delivered or furnished by it hereunder, provided such taxes, duties, imposts or similar charges have been levied, assessed, charged or collected under laws promulgated and enforceable under the laws of any country, province, municipality or other jurisdiction or government entity thereof and are asserted with respect to events or circumstances occurring after Delivery of such Aircraft.

		Notwithstanding anything to the contrary in this Clause 3.3.2, the Buyer will not be required to bear or pay or to indemnify the Seller for taxes, imposts, charges, or duties, (i) to the extent imposed as the result of Seller’s engaging in activities in the jurisdiction imposing such tax which activities are unrelated to the transactions contemplated by this Agreement or as the result of being incorporated or organized in such jurisdiction or maintaining an office or having a place of business or other presence therein, (ii) arising out of or caused by the willful misconduct or gross negligence of the Seller, (iii) that are interest, penalties, fines or additions to tax that would not have been imposed but for any failure by the Seller to file any tax return or information return in a timely and proper manner, (iv) that are being contested by the Buyer in good faith by appropriate proceedings during the pendency of such contest, or (v) that are imposed on or payable by a transferee of all or any part of the interest of the Seller in the Aircraft or any of its rights or obligations under this Agreement to the extent in excess of the taxes that would have been imposed on or payable by the Seller in the absence of any such transfer.

3.3.3		The Seller will arrange for the exportation of the Aircraft from the country of the Delivery Location and will pay any customs duties, taxes and fees required to be paid with respect to such exportation of the Aircraft.

3.3.4		The Buyer will arrange for the importation of the Aircraft into any country or jurisdiction and will pay any customs duties, taxes and fees required to be paid with respect to such importation of the Aircraft.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 20 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

4		PRICE REVISION

		the Base Price of the Aircraft (and SCN prices) is subject to revision up to and including the Delivery Date, in accordance with the Seller Price Revision Formula in Exhibit G-1 for Base Prices quoted in delivery conditions and in Exhibit G-2 for Base Prices (or SCN prices) quoted in ** delivery conditions.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 21 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

5		PAYMENT TERMS

5.1		Payments

5.1.1		The Buyer will pay the Predelivery Payments, the Balance of the Final Contract Price and any other amount due hereunder in immediately available funds in United States dollars to the Seller’s account with **, or to such other account within the United States as may be designated by the Seller.

5.1.2		Payments with payment due dates that fall on a Saturday, Sunday or a bank holiday will be due on the first Working Day following such payment due date.

5.2		Predelivery Payments

5.2.1 **

5.2.2 **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 22 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

5.2.3		Predelivery Payments will be paid according to the following schedule.

		**

		**

5.2.4		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 23 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

5.2.5		SCN Predelivery Payment

		In addition to Predelivery Payments payable under Clause 5.2.3, the Seller will be entitled to request Predelivery Payments for each SCN executed after signature of this Agreement to the extent that the aggregate price of all SCNs selected by the Buyer exceeds US$ (US dollars – ).

		(i) For each such SCN executed **
		(ii) For each such SCN executed **

5.3		Initial Payment

		The Seller acknowledges that it has received from the Buyer the sum of US $ (US dollars—), which represents a nonrefundable fee of $ (US dollars—) (the “ Initial Payment ” ) for each A350-800 XWB Aircraft. **

5.4		Payment of Balance of the Final Contract Price

		Concurrent with each Delivery, the Buyer will pay to the Seller the Balance of the Final Contract Price for the applicable Aircraft. The Seller’s receipt of the full amount of all Predelivery Payments and of the Balance of the Final Contract Price, including any amounts due under Clause 5.6, will be a condition precedent to the Seller’s obligation to deliver such Aircraft to the Buyer.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 24 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

5.5		Application of Payments

		Notwithstanding any other rights the Seller may have at contract or at law, the Buyer and the Seller hereby agree that should any amount (whether under this Agreement or under any other agreement between the Buyer or any of its Affiliates and the Seller or any of its Affiliates and whether at the stated maturity of such amount, by acceleration or otherwise) become due and payable by the Buyer or its Affiliates, and not be paid in full in immediately available funds on the date due, then the Seller will have the right to debit and apply, in whole or in part, the Predelivery Payments paid to the Seller by the Buyer hereunder against such unpaid amount. The Seller will promptly notify the Buyer in writing after such debiting and application, and the Buyer will immediately pay to the Seller the amount owed to comply with Clause 5.2.3.

5.6		Overdue Payments

		If any payment due the Seller is not received by the Seller on the date or dates agreed on between the Buyer and the Seller, the Seller will have the right to claim from the Buyer and the Buyer will promptly pay to the Seller on receipt of such claim interest at the rate on the amount of such overdue payment, to be calculated from and including the due date of such payment to (but excluding) the date such payment is received by the Seller, The Seller’s right to receive such interest will be in addition to any other rights of the Seller hereunder or at law.

5.7		Proprietary Interest

		Notwithstanding any provision of law to the contrary, the Buyer will not, by virtue of anything contained in this Agreement (including, without limitation, the making of any Predelivery Payments hereunder, or any designation or identification by the Seller of a particular aircraft as an Aircraft to which any of the provisions of this Agreement refers) acquire any proprietary, insurable or other interest whatsoever in any Aircraft before Delivery of and payment for such Aircraft, as provided in this Agreement.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 25 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

5.8 Payment in Full

The Buyer’s obligation to make payments to the Seller hereunder will not be affected by and will be determined without regard to any setoff, counterclaim, recoupment, defense or other right that the Buyer may have against the Seller or any other person and all such payments will be made without deduction or withholding of any kind. The Buyer will ensure that the sums received by the Seller under this Agreement will be equal to the full amounts expressed to be due the Seller hereunder, without deduction or withholding on account of and free from any and all taxes, levies, imposts, duties or charges of whatever nature, except that if the Buyer is compelled by law to make any such deduction or withholding, the Buyer will pay such additional amounts to the Seller as may be necessary so that the net amount received by the Seller after such deduction or withholding will equal the amounts that would have been received in the absence of such deduction or withholding.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 26 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

6		INSPECTION

6.1		Manufacture Procedures

		The Airframe will be manufactured in accordance with the requirements of the laws of the jurisdiction of incorporation of the Seller or of its relevant Affiliate as enforced by the Aviation Authority of such jurisdiction.

6.2		Inspection Procedures

6.2.1		All work to be carried out on the Aircraft and all materials and parts thereof will be at all reasonable times open to inspection during business hours by duly authorized representatives of the Buyer or its designee at the works of the relevant manufacture facility of the Seller or its Affiliates and, if possible, at the works of their respective subcontractors. These representatives will have access to such relevant technical data as are reasonably necessary for this purpose (except that, if access to any part of the respective works where construction is in progress or materials or parts are stored is restricted for security reasons, the Seller, its Affiliates and relevant subcontractors, as the case may be, will be allowed a reasonable time to make the items available for inspection elsewhere). The actual detailed inspection of the Aircraft, materials and parts thereof will take place only in the presence of the respective inspection department personnel of the Seller, its Affiliates or relevant subcontractors. The procedures for such inspections will be agreed on with the Buyer before any inspection. The Seller will ensure that such personnel will be available at all reasonable times during business hours as described above.

6.2.2		All inspections, examinations and discussions with the Seller’s or its subcontractors’ engineering or other personnel by the Buyer and its representatives will be performed in such a manner as not to delay or hinder either the work to be carried out on the Aircraft or the proper performance of this Agreement. In no event will the Buyer or its representatives be permitted to inspect any aircraft other than the Aircraft. **

6.3		Representatives

		For the purposes of Clause 6.2, starting at a mutually agreed date and continuing until Delivery of the last Aircraft, the Seller will furnish free-of-charge secretarial assistance and suitable space, office equipment and facilities in or conveniently located with respect to the Delivery Location for the use of not more than ** representatives of the Buyer during the aforementioned period. The Seller will provide internet access, electronic mail, facsimile and a telephone at the Seller’s cost.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 27 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

6.4

The Seller and its Affiliates, as applicable, will correct or otherwise resolve any deviations from the applicable Specification discovered during any inspection or examination conducted under this Clause 6.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 28 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

7		CERTIFICATION

		Except as set forth in this Clause 7, the Seller will not be required to obtain any certificate or approval with respect to the Aircraft.

7.1		Type Certification

		A type certificate for the Aircraft will have been issued by each of EASA and the FAA in the transport category (each, a “ Type Certificate ”) prior to Delivery of the first Aircraft.

7.2		Export Certificate of Airworthiness

		Subject to the provisions of Clause 7.3, each Aircraft will be delivered to the Buyer with an Export Certificate of Airworthiness issued by the DGAC or EASA, as applicable, and in a condition enabling the Buyer (or an eligible person under then applicable law) to obtain a Standard Airworthiness Certificate issued pursuant to Part 21 **of the US Federal Aviation Regulations and a Certificate of Sanitary Construction issued by the U.S. Public Health Service Food and Drug Administration. However, the Seller will have no obligation to make and will not be responsible for any costs of alterations or modifications to any Aircraft to enable such Aircraft to meet FAA or U.S. Department of Transportation requirements for specific operation on the Buyer’s routes, except as may be provided pursuant to Clause 7.3, whether before, at or after Delivery of any Aircraft.

7.3		Additional FAA Requirements

		If the FAA requires additional data before the issuance of a Standard Airworthiness Certificate for an Aircraft, the Seller will provide such data at the expense of the Buyer.

7.4		Additional EASA Requirements

7.4.1		If, is Ready for Delivery, any law, rule or regulation is enacted, promulgated, becomes effective and/or an interpretation of any law, rule or regulation is issued (a “ Change in Law ”) by the EASA that requires any change to the Specification for the purposes of obtaining the Export Certificate of Airworthiness, the Seller will make the required modification and the parties will sign an SCN for such modification.

7.4.2		The Seller will as far as practicable, but at its sole discretion and without prejudice to the requirements of Clause 7.4.3, take into account the information available to it concerning any proposed law, rule or regulation or interpretation by the EASA that could become a Change in Law in order to minimize the costs of changes to the Specification if the same becomes such a Change in Law.

**Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 29 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

7.4.3		The cost of implementing any modifications referred to in Clause 7.4.1 will be shared equally by the Seller and the Buyer if a Change in Law by the EASA becomes effective after issuance of a Type Certificate by the EASA but before the Aircraft is Ready for Delivery;

7.4.4		Notwithstanding the provisions of Clauses 7.4.3, if a Change in Law relates to an item of BFE or to the Propulsion Systems (including to engine accessories, quick engine change units or thrust reversers) the costs relating thereto will be borne in accordance with such arrangements as may be made separately between the Buyer and the manufacturer of the BFE or the Propulsion Systems, as applicable, and the Seller will have no obligation with respect thereto.

7.5		Specification Changes After Delivery

		Nothing in Clause 7.4 will require the Seller to make any changes or modifications to, or to make any payments or take any other action with respect to, any Aircraft that is Ready for Delivery before the compliance date of any law or regulation referred to in Clause 7.4. Any such changes or modifications made to an Aircraft after it is Ready for Delivery will be at the Buyer’s expense.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 30 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

8		TECHNICAL ACCEPTANCE

8.1		Technical Acceptance Process

8.1.1		Prior to Delivery, the Aircraft will undergo a technical acceptance process developed by the Seller, **(the “ Technical Acceptance Process ”). Completion of the Technical Acceptance Process will demonstrate the satisfactory functioning of the Aircraft and will be deemed to demonstrate compliance with the applicable Specification. Should it be established that the Aircraft fails to complete the Technical Acceptance Process satisfactorily, the Seller will without hindrance from the Buyer be entitled to and will carry out any necessary changes to correct the reason for such failure and, as soon as practicable thereafter, resubmit the Aircraft in order to complete the Technical Acceptance Process.

8.1.2		The Technical Acceptance Process will

	(i)		start on a date notified by the Seller to the Buyer at least **in advance,

	(ii)		take place at the Delivery Location,

	(iii)		be carried out by the personnel of the Seller,

	(iv)		include a technical acceptance flight that will not exceed **, and

	(v)		conclude in **.

8.2		Buyer’s Attendance

8.2.1		The Buyer is entitled to attend and observe the Technical Acceptance Process.

8.2.2		If the Buyer attends the Technical Acceptance Process, the Buyer

	(i)		will comply with the reasonable requirements of the Seller, with the intention of completing the Technical Acceptance Process within **and

	(ii)		may have a maximum of representatives (no more than of whom will have access to the cockpit at any one time) accompany the Seller’s representatives on the technical acceptance flight, during which the Buyer’s representatives will comply with the instructions of the Seller’s representatives.

8.2.3

If the Buyer does not attend or fails to cooperate in the Technical Acceptance Process, the Seller will be entitled to complete the Technical Acceptance Process in compliance with Clause 8.1.1, without the Buyer’s attendance, and the Buyer will be deemed to have accepted that the Aircraft is functioning satisfactorily and is in compliance with the Specification, in all respects.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 31 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

8.3		Certificate of Acceptance

		Upon successful completion of the Technical Acceptance Process, the Buyer will, on or before the Delivery Date, sign and deliver to the Seller a certificate of acceptance in respect of the Aircraft in the form of Exhibit D (the “ Certificate of Acceptance ”). Any discrepancies in the condition of the Aircraft, and any agreements between the Buyer and the Seller with respect thereto, will be documented in a separate agreement, but the same will not, unless otherwise agreed, affect the Buyer’s rights under Clause 12 with respect to such discrepancy.

8.4		Finality of Acceptance

		The Buyer’s signature of the Certificate of Acceptance for the Aircraft will constitute waiver by the Buyer of any right it may have under the Uniform Commercial Code as adopted by the State of New York or otherwise to revoke acceptance of the Aircraft for any reason, whether known or unknown to the Buyer at the time of acceptance.

8.5		Aircraft Utilization

		The Seller will, without payment or other liability, be entitled to use the Aircraft before Delivery to obtain the certificates required under Clause 7. Such use will not limit the Buyer’s obligation to accept Delivery.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 32 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

9		DELIVERY

9.1		Delivery Schedule

9.1.1		Subject to any delay contemplated by Clauses 2, 7, 8, 10 and 18, the Seller will have the Aircraft Ready for Delivery at the Delivery Location within the following months (each a “ Scheduled Delivery Month ”).


Year	Number	Aircraft	Scheduled Delivery Month
2014	1 2 3 4	A350-900 XWB Aircraft A350-900 XWB Aircraft A350-900 XWB Aircraft A350-900 XWB Aircraft
2015	5 6 7 8 9 10	A350-800 XWB Aircraft A350-800 XWB Aircraft A350-800 XWB Aircraft A350-800 XWB Aircraft A350-800 XWB Aircraft A350-800 XWB Aircraft
2016	11 12 13 14 15 16 17 18 19 20	A350-800 XWB Aircraft A350-800 XWB Aircraft A350-800 XWB Aircraft A350-800 XWB Aircraft A350-800 XWB Aircraft A350-800 XWB Aircraft A350-800 XWB Aircraft A350-800 XWB Aircraft A350-800 XWB Aircraft A350-800 XWB Aircraft
2017	21 22	A350-800 XWB Aircraft A350-800 XWB Aircraft
TOTAL	22

9.1.2		Delivery Notices

9.1.2.1		**.

9.1.2.2		**

9.1.2.3		**

9.2		Delivery Process


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 33 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

9.2.1

The Buyer will send its representatives to the Delivery Location to take Delivery within **after the date on which the Aircraft is Ready for Delivery.

9.2.2

The Seller will transfer title to the Aircraft to the Buyer free and clear of all encumbrances other than those arising by or through the Buyer, provided that the Balance of the Final Contract Price has been paid by the Buyer, pursuant to Clause 5.4 and that the Certificate of Acceptance has been signed and delivered to the Seller pursuant to Clause 8.3. The Seller will provide the Buyer with a bill of sale in the form of Exhibit E and/or such other documentation confirming transfer of title and receipt of the Final Contract Price as may reasonably be requested by the Buyer. Property interest in and risk of loss of or damage to the Aircraft will pass to the Buyer contemporaneously with the delivery by the Seller to the Buyer of such bill of sale.

9.2.3

If (i) the Buyer fails to deliver the signed Certificate of Acceptance to the Seller on or before the Delivery Date, or (ii) the Buyer fails to pay the Balance of the Final Contract Price for the Aircraft to the Seller on the Delivery Date, then the Buyer will be deemed to have rejected Delivery wrongfully when the Aircraft was duly tendered pursuant to this Agreement. If such a deemed rejection arises, the Seller will retain title to the applicable Aircraft and the Buyer will indemnify and hold the Seller harmless against any and all costs (including but not limited to any parking, storage, and insurance costs) and consequences resulting from the Buyer’s rejection. These rights of the Seller will be in addition to the Seller’s other rights and remedies in this Agreement.

9.3

Flyaway

9.3.1

The Buyer and the Seller will cooperate to obtain any licenses that may be required by the relevant Aviation Authority for the purpose of exporting the Aircraft.

9.3.2

All expenses of, or connected with, flying the Aircraft from the Delivery Location after Delivery will be borne by the Buyer. The Buyer will make direct arrangements with the supplying companies for the fuel and oil required for all delivery flights.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 34 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

10		EXCUSABLE DELAY AND TOTAL LOSS

10.1		Scope of Excusable Delay

		Neither the Seller nor any Affiliate of the Seller, will be responsible for or be deemed to be in default on account of delays in delivery or failure to deliver or otherwise in the performance of this Agreement or any part hereof due to causes reasonably beyond the Seller’s control or not occasioned by the Seller’s fault or negligence (“Excusable Delay”), including, but not limited to: (i) acts of God or the public enemy, natural disasters, fires, floods, storms beyond ordinary strength, explosions or earthquakes; epidemics or quarantine restrictions; serious accidents; total or constructive total loss; any law, decision, regulation, directive or other act (whether or not having the force of law) of any government or of the Council of the European Union or the Commission of the European Union or of any national, Federal, State, municipal or other governmental department, commission, board, bureau, agency, court or instrumentality, domestic or foreign; governmental priorities, regulations or orders affecting allocation of materials, facilities or a completed Aircraft; war, civil war or warlike operations, terrorism, insurrection or riots; failure of transportation strikes or labor troubles causing cessation, slow down or interruption of work; inability after due and timely diligence to procure materials, accessories, equipment or parts or to cause a subcontractor or Supplier to furnish materials, components, accessories, equipment or parts; (iii) any delay caused directly or indirectly by the action or inaction of the Buyer, and (iv) delay in delivery or otherwise in the performance of this Agreement by the Seller due in whole or in part to any delay in or failure of the delivery of, or any other event or circumstance relating to **BFE.

10.2		Consequences of Excusable Delay

10.2.1		If an Excusable Delay occurs,

(a)

the Seller will

	(i)		notify the Buyer of such Excusable Delay as soon as practicable after becoming aware of the same;

	(ii)		not be deemed to be in default in the performance of its obligations hereunder as a result of such Excusable Delay;

	(iii)		not be responsible for any damages arising from or in connection with such Excusable Delay suffered or incurred by the Buyer; and



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 35 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

(iv)

subject to the provisions of Clause 10.3 below, as soon as practicable after the removal of the cause of such Excusable Delay, resume performance of its obligations under this Agreement and notify the Buyer of the revised Scheduled Delivery Month**

10.3

Termination on Excusable Delay

10.3.1

If any Delivery is delayed as a result of an Excusable Delay for a period of more than ** after the last day of the Scheduled Delivery Month, then either party may terminate this Agreement with respect to the affected Aircraft, by giving written notice to the other party within ** after the expiration of such **. However, the Buyer will not be entitled to terminate this Agreement pursuant to this Clause 10.3.1 if the Excusable Delay is caused directly or indirectly by the action or inaction of the Buyer.

10.3.2

If the Seller advises the Buyer of a revised Scheduled Delivery Month pursuant to Clause 10.2.1(iv) that there will be a delay in Delivery of an Aircraft of more than ** after the last day of the Scheduled Delivery Month, then the Buyer may terminate this Agreement with respect to the affected Aircraft. Termination will be made by giving written notice to the other party within ** after the Buyer’s receipt of the notice of a revised Scheduled Delivery Month. However, the Buyer will not be entitled to terminate this Agreement pursuant to this Clause 10.3.2 if the Excusable Delay is caused directly or indirectly by the action or inaction of the Buyer.

10.3.3

Any termination pursuant to Clause 10.3.1 or 10.3.2 with respect to an affected Aircraft will discharge the obligations and liabilities of the parties hereunder with respect to such Aircraft,**.

10.3.4

If this Agreement is not terminated under the terms of Clause 10.3.1 or 10.3.2, then the Seller and the Buyer will mutually agree upon a new Scheduled Delivery Month after the ** period referred to in Clause 10.3.1 or 10.3.2, and this new Scheduled Delivery Month will be deemed to be an amendment to the applicable Scheduled Delivery Month in Clause 9.1.1.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 36 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

10.4		Total Loss, Destruction or Damage

		If prior to Delivery, any Aircraft is lost, destroyed or in the reasonable opinion of the Seller is damaged beyond economic repair (“ Total Loss ”), the Seller will notify the Buyer to this effect within of such occurrence. The Seller will include in said notification (or as soon after the issue of the notice as such information becomes available to the Seller) the earliest date consistent with the Seller’s other commitments and production capabilities that an aircraft to replace the Aircraft may be delivered to the Buyer and the Scheduled Delivery Month will be extended as specified in the Seller’s notice to accommodate the delivery of the replacement aircraft. However, if the Scheduled Delivery Month is extended to a month that is later than after the last day of the original Scheduled Delivery Month, then this Agreement will terminate with respect to said Aircraft unless:

	(i)		the Buyer notifies the Seller within **of the date of receipt of the Seller’s notice that it desires the Seller to provide a replacement aircraft during the month quoted in the Seller’s notice; and

	(ii)		the parties execute an amendment to this Agreement recording the variation in the Scheduled Delivery Month.

Nothing herein will require the Seller to manufacture and deliver a replacement aircraft if such manufacture would require the reactivation of its production line for the model or series of aircraft that includes the Aircraft. Any termination pursuant to this Clause 10.4 as to a particular Aircraft will discharge the obligations and liabilities of the parties hereunder with respect to such Aircraft, **.

10.5		Remedies

		THIS CLAUSE 10 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE BUYER FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER, OTHER THAN SUCH DELAYS AS ARE COVERED BY CLAUSE 11, AND THE BUYER HEREBY WAIVES ALL RIGHTS TO WHICH IT WOULD OTHERWISE BE ENTITLED IN RESPECT THEREOF, INCLUDING, WITHOUT LIMITATION, ANY RIGHTS TO INCIDENTAL AND CONSEQUENTIAL DAMAGES OR SPECIFIC PERFORMANCE. THE BUYER WILL NOT BE ENTITLED TO CLAIM THE REMEDIES AND RECEIVE THE BENEFITS PROVIDED IN THIS CLAUSE 10 WHERE THE DELAY REFERRED TO IN THIS CLAUSE 10 IS CAUSED DIRECTLY OR INDIRECTLY BY THE NEGLIGENCE OR FAULT OF THE BUYER OR ITS REPRESENTATIVES.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 37 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

11		INEXCUSABLE DELAY

11.1		Liquidated Damages

		Should an Aircraft not be Ready for Delivery within after the last day of the Scheduled Delivery Month (as such month may be changed pursuant to Clauses 2, 7 or 10) and such delay is not as a result of an Excusable Delay or Total Loss, then such delay will be termed an “ Inexcusable Delay .” In the event of an Inexcusable Delay, the Buyer will have the right to claim, and the Seller will pay the Buyer liquidated damages of US $ )

		In no event will the amount of liquidated damages exceed the total of US $ (US dollars—) in respect of any one Aircraft.

		The Buyer’s right to liquidated damages in respect of an Aircraft is conditioned on the Buyer’s submitting a written claim for liquidated damages to the Seller not later than ** after the last day of the Scheduled Delivery Month.

11.2		Renegotiation

		If, as a result of an Inexcusable Delay, Delivery does not occur within after the last day of the Scheduled Delivery Month the Buyer will have the right, exercisable by written notice to the Seller given to require from the Seller a renegotiation of the Scheduled Delivery Month for the affected Aircraft. Unless otherwise agreed between the Seller and the Buyer during such renegotiation, the said renegotiation will not prejudice Buyer’s right to receive liquidated damages in accordance with Clause 11.1.

11.3		Termination

		If, as a result of an Inexcusable Delay, Delivery does not occur within after the last day of the Scheduled Delivery Month and the parties have not renegotiated the Delivery Date pursuant to Clause 11.2, then both parties will have the right exercisable by written notice to the other party, given between to terminate this Agreement in respect of the affected Aircraft. In the event of termination, neither party will have any claim against the other, except that the Seller will pay to the Buyer any amounts due pursuant to Clause 11.1 and will pay the Buyer an amount equal to the Predelivery Payments received from the Buyer hereunder in respect of the Aircraft as to which this Agreement has been terminated.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 38 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

11.4		Remedies

		THIS CLAUSE 11 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE BUYER FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER, OTHER THAN SUCH DELAYS AS ARE COVERED BY CLAUSE 10, AND THE BUYER HEREBY WAIVES ALL RIGHTS TO WHICH IT WOULD OTHERWISE BE ENTITLED IN RESPECT THEREOF, INCLUDING WITHOUT LIMITATION ANY RIGHTS TO INCIDENTAL AND CONSEQUENTIAL DAMAGES OR SPECIFIC PERFORMANCE. THE BUYER WILL NOT BE ENTITLED TO CLAIM THE REMEDIES AND RECEIVE THE BENEFITS PROVIDED IN THIS CLAUSE 11 WHERE THE DELAY REFERRED TO IN THIS CLAUSE 11 IS CAUSED BY THE NEGLIGENCE OR FAULT OF THE BUYER OR ITS REPRESENTATIVES.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 39 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

12		WARRANTIES AND SERVICE LIFE POLICY

12.1		Warranty

12.1.1		Nature of Warranty

		Subject to the limitations and conditions hereinafter provided, and except as provided in Clause 12.1.2, the Seller warrants to the Buyer that each Aircraft and each Warranted Part will at the time of Delivery hereunder be free from defects:

	(i)		in material,

	(ii)		in workmanship, including, without limitation, processes of manufacture,

	(iii)		in design (including, without limitation, selection of materials parts and components) having regard to the state of the art at the date of such design, and

	(iv)		arising from failure to conform to the Specification, except as to immaterial deviations from those portions of the Specification that are expressly stated in the Specification to be estimates or approximations or design aims.

		For the purposes of this Agreement, the term “ Warranted Part ” will mean any Seller proprietary component, equipment, accessory or part that (a) is installed on or incorporated into an Aircraft at Delivery, (b) is manufactured to the detail design of the Seller or a subcontractor of the Seller and (c) bears a part number of the Seller at the time of Delivery.

12.1.2		Exceptions

		The warranties set forth in Clause 12.1.1 will not apply to Buyer Furnished Equipment, Propulsion Systems, or to any component, accessory, equipment or part purchased by the Buyer or the Seller ** that is not a Warranted Part, provided, however, that:

(i)

any defect in the Seller’s workmanship in respect of the installation of such items in or on the Aircraft, including any failure by the Seller to conform to the installation instructions of the manufacturers of such items that invalidates any applicable warranty from such manufacturers, will constitute a defect in workmanship for the purpose of this Clause 12.1 and be covered by the warranty set forth in Clause 12.1.1(ii), and


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 40 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

(ii)

any defect inherent in the Seller’s design of the installation, considering the state of the art at the date of such design, that impairs the use or function of such items will constitute a defect in design for the purposes of this Clause 12.1 and be covered by the warranty set forth in Clause 12.1.1(iii).

12.1.3		Warranty Periods

		The warranties described in Clauses 12.1.1 and 12.1.2 will be limited to those defects that become apparent within ** after Delivery of the affected Aircraft (the “ Warranty Period ”).

12.1.4		Limitations of Warranty

	(i)		The Buyer’s remedy and the Seller’s obligation and liability under Clauses 12.1.1 and 12.1.2 are limited to, at the Seller’s expense and option, the repair, replacement or correction of, or the supply of modification kits rectifying the defect to any defective Warranted Part, as mutually agreed between and satisfactory to the Buyer and the Seller, ** However, the Seller may furnish a credit to the Buyer for the future purchase of Goods and Services (not including Aircraft) equal to the price at which the Buyer is then entitled to acquire a replacement for the defective Warranted Part.

	(ii)		If the Seller corrects a defect covered by Clause 12.1.1(iii) that becomes apparent within the Warranty Period, on the written request of the Buyer the Seller will correct any such defect in any Aircraft that has not already been delivered to the Buyer. The Seller will not be responsible for, nor deemed to be in default on account of, any delay in Delivery of any Aircraft or otherwise, in respect of performance of this Agreement, due to the Seller’s undertaking to make such correction. In the alternative, the Buyer and the Seller may agree to deliver such Aircraft with subsequent correction of the defect by the Buyer at the Seller’s expense, or the Buyer may elect to accept Delivery and thereafter file a Warranty Claim as though the defect had become apparent immediately after Delivery of such Aircraft.

	(iii)		**

12.1.5

Cost of Inspection

(i)

(a)

to determine whether a defect exists in any Warranted Part within the Warranty Period; or


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA – 41 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

(b)

pending the Seller’s provision of a corrective technical solution.

(ii)

The Seller’s liability under Clause 12.1.5(i) is subject to the following conditions:

	(a)		such inspections are recommended by a Seller Service Bulletin to be performed within the Warranty Period;

	(b)		the labor rate for the reimbursements will be the In-house Warranty Labor Rate, and

	(c)		the hours used to determine such reimbursement will not exceed the Seller’s estimate of the labor hours required for such inspections. **

12.1.6		Warranty Claim Requirements

		The Buyer’s remedy and the Seller’s obligation and liability under this Clause 12.1, with respect to each claimed defect, are subject to the following conditions precedent:

	(i)		the existence of a defect covered by the provisions of this Clause 12.1,

	(ii)		the defect becomes apparent within the Warranty Period, **

	(iii)		the Buyer submits to the Seller evidence reasonably satisfactory to the Seller that the claimed defect is due to a matter covered under the provisions of this Clause 12. **the Buyer will submit additional information as deemed necessary by the Seller to make a determination that such defect did not result from any act or omission of the Buyer, including but not limited to, any failure to operate and maintain the affected Aircraft or part thereof in accordance with the standards set forth in Clause 12.1.11 or from any act or omission of any third party,

	(iv)		the Buyer returns as soon as practicable the Warranted Part claimed to be defective to the repair facilities designated by the Seller, unless the Buyer elect to repair a defective Warranted Part in accordance with the provisions of Clause 12.1.8,

	(v)		the Seller receives a “ Warranty Claim ” complying with the provisions of Clause 12.1.7(v).

12.1.7

Warranty Administration


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 42 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

The warranties set forth in Clause 12.1 will be administered as hereinafter provided:

	(i)		Claim Determination . Determination as to whether any claimed defect in any Warranted Part entitles the Buyer to a remedy under this Clause 12.1 will be made by the Seller, in consultation with the Buyer, and will be based on claim details, reports from the Seller’s regional representative, historical data logs, inspections, tests, findings during repair, defect analysis and other relevant documents and information.

	(ii)		Transportation Costs . Transportation costs associated with (a) the sending of a defective Warranted Part as to which a remedy is available under this Clause 12 to the facilities designated by the Seller**

	(iii)		On-Aircraft Work by the Seller . If either (a) the Seller determines that a defect subject to this Clause 12.1 requires the dispatch by the Seller of a working team to the facilities of the Buyer to repair or correct such defect, **or (b) the Seller accepts the return of an Aircraft to perform or have performed a repair or correction, then, the labor costs for such on-Aircraft work will be borne by the Seller.

			On-Aircraft work by the Seller will be undertaken only if, in the Seller’s opinion, the work requires the Seller’s technical expertise. In such case, the Seller and the Buyer will agree on a schedule and place for the work to be performed.

	(iv)		Return of an Aircraft . If the Buyer desires to return an Aircraft to the Seller for consideration of a Warranty Claim, the Buyer will notify the Seller of its intention to do so, and the Seller will, prior to such return, have the right to inspect such Aircraft, and without prejudice to the Seller’s rights hereunder, to repair such Aircraft either at the Buyer’s facilities or at another mutually acceptable location at the Seller’s expense. If the Seller agrees that the return or movement of the Aircraft to another facility is necessary to effect the repair or correction, the Aircraft will be transported to and from such facility at the Seller’s expense.

			If the Seller does not agree that the return of an Aircraft is necessary for the handling of a Warranty Claim, then the return of such Aircraft by the Buyer to the Seller and return of such Aircraft to the Buyer’s facilities will be at the Buyer’s expense.

	(v)		Warranty Claim Substantiation . For each claim under this Clause 12.1, the Buyer will give written notice to the Seller that contains at least the data listed below, with respect to an Aircraft or Warranted Part, as applicable (“ Warranty Claim ”). The Buyer will provide to the Seller a


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 43 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

Warranty Claim within ** but in no event later than ** of discovering each defect giving rise to a warranty claim under Clause 12.1.

	(a)		Description of the defect and any action taken

	(b)		Date of incident and/or removal

	(c)		Description of the Warranted Part claimed to be defective

	(d)		Part number

	(e)		Serial number (if applicable)

	(f)		Position on Aircraft, according to Catalog Sequence Number of the Illustrated Parts Catalog, ** Component Maintenance Manual or Structural Repair Manual, as applicable

	(g)		Total flying hours or calendar times, as applicable, at the date of appearance of a defect **

	(h)		Time since last shop visit at the date of appearance of defect **

	(i)		Manufacturer’s serial number (MSN) of the Aircraft and/or its registration number

	(j)		Aircraft total flying hours and/or number of landings at the date of appearance of defect

	(k)		Claim number

	(l)		Date of claim

	(m)		Date of delivery of an Aircraft or Warranted Part to the Buyer

	Warranty Claims are to be addressed as follows:

Airbus S.A.S.
Customer Services Directorate
Warranty Administration
Rond-Point Maurice Bellonte
B.P. 33
F-31707 Blagnac Cedex, France

	(vi)		Replacements . ** Replaced components, equipment, accessories or parts will become the Seller’s property.

			Title to and risk of loss of any Aircraft, component, accessory, equipment or part returned by the Buyer to the Seller will at all times remain with the Buyer, except that (i) when the Seller has possession of a returned Aircraft, component, accessory, equipment or part to which the Buyer has title, the Seller will have such responsibility therefor as is chargeable by law to a bailee for hire, but the Seller will not be liable for loss of use, and (ii) title to and risk of loss of a returned component, accessory, equipment


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 44 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

			or part will pass to the Seller on shipment by the Seller to the Buyer of any item furnished by the Seller to the Buyer as a replacement therefor or on the Seller’s issuance of a credit with respect thereto. Upon the Seller’s shipment to the Buyer of any replacement component, accessory, equipment or part provided by the Seller pursuant to this Clause 12.1, title to and risk of loss of such component, accessory, equipment or part will pass to the Buyer.

	(vii)		Seller’s Acceptance and Rejection . The Seller will provide reasonable written substantiation in case of rejection of a Warranty Claim. The Buyer will pay the Seller (a) reasonable inspection and test charges incurred by the Seller in connection with the investigation and processing of a rejected Warranty Claim,

	(viii)		Inspection . The Seller will have the right to inspect the affected Aircraft and documents and other records relating thereto in the event of any claim under this Clause 12.1 on reasonable prior written notice to the Buyer and such inspection will not unreasonably interfere with the Buyer’s operation and personnel.

12.1.8

In-house Warranty Repair

	(i)		Authorization . The Buyer is hereby authorized to repair Warranted Parts, subject to the terms of this Clause 12.1.8 (“ In-house Warranty Repair ”). When the estimated labor cost of an In-house Warranty Repair exceeds US$ (US dollars — ), the Buyer will notify the Resident Customer Support Representative if available of its decision to perform any In-house Warranty Repairs before such repairs are commenced. Such Buyer’s notice will include sufficient detail regarding the defect, estimated or actual labor hours and material, as applicable, to allow the Seller to ascertain the reasonableness of the estimate. **

	(ii)		Conditions of Authorization . The Buyer will be entitled to the benefits under this Clause 12.1.8 for repair of Warranted Parts:

	(a)		**

	(b)		if adequate facilities and qualified personnel are available to the Buyer,


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 45 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(c)		if repairs are to be performed in accordance with the Seller’s written instructions set forth in applicable Technical Data, **

	(d)		only to the extent reasonably necessary to correct the defect, in accordance with the standards set forth in Clause 12.1.11.

	(iii)		Seller’s Rights . The Seller will have the right to require the delivery to it of any Warranted Part, or any part removed therefrom that is claimed to be defective, if, in the Seller’s judgment, the nature of the claimed defect requires technical investigation. Such delivery will be subject to the provisions of Clause 12.1.7(ii).

			Subject to applicable safety rules, the Seller will have the right to have a representative present as an observer during the disassembly, inspection and testing of any Warranted Part claimed to be defective. Such representatives will not unreasonably interfere with the Buyer’s operation and personnel.

	(iv)		In-house Warranty Claim Substantiation . Claims for In-house Warranty Repair credit will comply with the requirements in Warranty Claims under Clause 12.1.7(v) and in addition, to the extent ascertainable, will include:

	(a)		A report of technical findings with respect to the defect, if applicable

	(b)		For parts required to remedy the defect

	§		part numbers,

	§		serial numbers (if applicable),

	§		description of the parts,

	§		quantity of parts,

	§		unit price of parts,

	§		related Seller’s or third party’s invoices (if applicable),

	§		total price of parts

	(c)		Detailed number of labor hours

	(d)		In-house Warranty Labor Rate

	(e)		Total claim amount


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 46 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

(v)

	(a)		To determine direct labor costs, only the labor hours spent on disassembly, inspection, repair, reassembly, and final inspection and test of the Warranted Part alone will be counted. The hours required for maintenance work concurrently being carried out on the Aircraft or Warranted Part will not be included.

	(b)		The labor hours counted as set forth above will be multiplied by the In-house Warranty Labor Rate. Such rate is deemed to represent the Buyer’s composite average hourly labor rate paid to the Buyer’s employees or to a third party that the Buyer has authorized to perform the repair, whose jobs, in both cases, are directly related to the performance of the repair. This labor rate is US$ (US dollars prevailing in ** (the “ In-house Warranty Labor Rate ”).

			The In-house Warranty Labor Rate is subject to adjustment annually by multiplying the same by the ratio ECIn/ECIb. For the purposes of this Clause 12.1.8(v) only, ECIn is equal to the Labor Index defined in the Seller Price Revision Formula for January of the year in which the hours are spent and ECIb is equal to such Labor Index for **.

	(c)		Direct material costs are determined by the prices at which the Buyer acquired such replacement material, excluding any parts and materials used for overhaul or repair furnished free of charge by the Seller.

	(vi)		Limitation on Credit . The Buyer will in no event be credited for repair costs (including labor and material) for any Warranted Part to the extent that such repair costs exceed, the lower of, (x) the Seller’s then current catalog price for a replacement of such Warranted Part

			The Seller will substantiate the costs referred to in Clause 12.1.8(vi)(y) in writing on reasonable request by the Buyer.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 47 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(vii)		Scrapped Material . The Buyer may, with the agreement of the Resident Customer Support Representative, scrap any defective Warranted Parts that are beyond economic repair and not required for technical evaluation. If the Buyer does not obtain the written agreement of the Resident Customer Support Representative to scrap a Warranted Part, then the Buyer will retain such Warranted Part and any defective part removed from a Warranted Part during repair for a period of either after the date of completion of repair or after submission of a claim for In-house Warranty Repair credit relating thereto, whichever is longer. Such parts will be returned to the Seller within **

	(viii)		DISCLAIMER OF SELLER LIABILITY FOR BUYER’S REPAIR

			THE SELLER WILL NOT BE LIABLE FOR, AND THE BUYER WILL INDEMNIFY THE SELLER AGAINST, CLAIMS OF ANY THIRD PARTIES FOR LOSSES DUE TO ANY DEFECT, NONCONFORMANCE OR PROBLEM OF ANY KIND, ARISING OUT OF OR IN CONNECTION WITH ANY REPAIR OF WARRANTED PARTS UNDERTAKEN BY THE BUYER UNDER THIS CLAUSE 12.1.8 OR ANY OTHER ACTIONS UNDERTAKEN BY THE BUYER UNDER THIS CLAUSE 12.1.8, WHETHER SUCH CLAIM IS ASSERTED IN CONTRACT OR IN TORT, OR IS PREMISED ON ALLEGED, ACTUAL, IMPUTED, ORDINARY OR INTENTIONAL ACTS OR OMISSIONS OF THE BUYER OR THE SELLER.

12.1.9		Warranty Transferability

		The warranties provided for in this Clause 12.1 for any Warranted Part will accrue to the benefit of any operator other than the Buyer if the Warranted Part enters into the possession of such operator as a result of a pooling agreement between such operator and the Buyer, in accordance with the terms and subject to the limitations and exclusions of the foregoing warranties and to applicable laws or regulations.

12.1.10		Warranty for Corrected, Replacement or Repaired Warranted Parts

		Whenever any Warranted Part that contains a defect for which the Seller is liable under this Clause 12.1 has been corrected, repaired or replaced pursuant to the terms of this Clause 12, the period of the Seller’s warranty with respect to such corrected, repaired or replacement Warranted Part, will be the remaining portion of the original Warranty Period in respect of such corrected, repaired or replaced


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 48 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		Warranted Part. If a defect is attributable to a defective repair or replacement by the Buyer, a Warranty Claim with respect to such defect will be rejected, notwithstanding any subsequent correction or repair, and will immediately terminate the remaining warranties under this Clause 12.1 in respect of the affected Warranted Part.

12.1.11		Standard Airline Operation — Normal Wear and Tear

		The Buyer’s rights under this Clause 12.1 are subject to the Aircraft and each component, equipment, accessory and part thereof being maintained, overhauled, repaired and operated in accordance with FAA regulations**

		The Seller’s liability under this Clause 12.1 will not extend to normal wear and tear nor, to the extent caused by any of the following:

	(i)		any Aircraft or component, equipment, accessory or part thereof that has been repaired, altered or modified after Delivery in a manner inconsistent with the requirements of the applicable Aviation Authority or the aircraft repair manuals, as applicable;

	(ii)		any component, equipment or accessory or part thereof that has been operated in a damaged state**

	(iii)		any component, equipment, accessory or part from which the trademark, trade name, part or serial number or other identification marks have been removed.

		The limitations of the Seller’s liability under this Clause 12.1.11 resulting from causes described in Clauses 12.1.11(i) and 12.1.11(ii) will apply only to the extent the Seller submits reasonable evidence that the defect arose from or was contributed to by such causes.

12.2		Seller Service Life Policy

12.2.1		Scope and Definitions

		In addition to the warranties set forth in Clause 12.1, the Seller agrees that, should a Failure occur in any Item (as such terms are defined below), then, subject to the general conditions and limitations set forth in Clauses 12.2.3 and 12.2.4, the provisions of this Clause 12.2 will apply.

		For the purposes of this Clause 12.2,


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 49 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(i)		“ Item ” means any of the Seller components, equipment, accessories or parts listed in Exhibit C that are installed on an Aircraft at any time during the period of effectiveness of the Service Life Policy as defined below in Clause 12.2.2;

	(ii)		“ Failure ” means any breakage of, or defect in, an Item that

	(a)		materially impairs the utility or safety of the Item,

	(b)		did not result from any breakage or defect in any other Aircraft part or component or from any other extrinsic force, and

	(c)		has occurred or can reasonably be expected to occur, but does not necessarily occur, on a repetitive or fleetwide basis.

		The Seller’s obligations under this Clause 12.2 are referred to as the “ Service Life Policy ”.

12.2.2		Periods and Seller’s Undertaking

		Subject to the general conditions and limitations set forth in Clause 12.2.4, the Seller agrees that if a Failure occurs in an Item within ** after the Delivery of the Aircraft on which such Item is installed, the Seller will, at its discretion, as promptly as practicable and for a price that reflects the Seller’s financial participation as hereinafter provided:

	(i)		design and furnish to the Buyer a ** correction for such Item and provide any parts required for such correction (including Seller designed standard parts but excluding industry standard parts), or

	(ii)		replace such Item.

12.2.3		Seller’s Participation in the Cost

		Any part or Item that the Seller is required to furnish to the Buyer under this Service Life Policy will be furnished at the Seller’s current sales price therefor, less the Seller’s financial participation, which will be determined in accordance with the following formula:

		P = C ( N — T ) / N

		where

		P: financial participation of the Seller,


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 50 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

			C: the Seller’s then current sales price for the required Item or required Seller designed parts,

			T: total time in months since Delivery of the Aircraft in which the Item subject to a Failure was originally installed, and

			N: **.

12.2.4		General Conditions and Limitations

12.2.4.1		Notwithstanding any provision of this Clause 12.2, during the Warranty Period, all Items will be covered by the provisions of Clause 12.1 and not by the provisions of this Clause 12.2.

12.2.4.2		The Buyer’s remedies and the Seller’s obligations and liabilities under this Service Life Policy are subject to compliance by the Buyer with the following conditions:

	(i)		The Buyer will generate and maintain log books and other historical records as required by the FAA, and will retain the same for the duration of this Service Life Policy, with respect to each Item adequate to enable the determination as to whether the alleged Failure is covered by this Service Life Policy and, if so, to allocate the portion of the cost to be borne by the Seller in accordance with Clause 12.2.3.

	(ii)		The Buyer will keep the Seller informed, by making available any relevant records ** of any significant incidents relating to an Aircraft, howsoever occurring or recorded.

	(iii)		The conditions of Clause 12.1.11 will have been complied with.

	(iv)		The Buyer will implement specific structural inspection programs for monitoring purposes as may be established from time to time by the Seller and the Buyer. Such programs will be, to the extent possible, compatible with the Buyer’s operational requirements and will be carried out at the Buyer’s expense. Reports relating thereto will be regularly furnished to the Seller **

	(v)		The Buyer will report in writing any breakage or defect that may be covered by the Service Life Policy to the Seller within ** after such breakage or defect becomes apparent, whether or not the same can reasonably be expected to occur in any other Aircraft, and the Buyer will inform the Seller in sufficient detail about such breakage or defect to enable the Seller to determine whether the same is subject to this Service Life Policy.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 51 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

12.2.4.3		Except as otherwise provided in this Clause 12.2, any claim under this Service Life Policy will be administered as provided in, and will be subject to the terms and conditions of, Clause 12.1.6.

12.2.4.4		If the Seller has issued a service bulletin modification applicable to an Aircraft, the purpose of which is to avoid a Failure, the Seller will offer the necessary modification kit free of charge or under a pro rata formula established by the Seller. If such a kit is so offered to the Buyer, then, in respect of such Failure and any Failures that could ensue therefrom, the Seller’s commitment under this Clause 12.2 will be subject to the Buyer’s incorporating such modification in the relevant Aircraft, within a reasonable time, as promulgated by the Seller and in accordance with the Seller’s instructions.

12.2.4.5		THIS SERVICE LIFE POLICY IS NEITHER A WARRANTY, PERFORMANCE GUARANTEE, NOR AN AGREEMENT TO MODIFY ANY AIRCRAFT OR AIRFRAME COMPONENTS TO CONFORM TO NEW DEVELOPMENTS OCCURRING IN THE STATE OF AIRFRAME DESIGN AND MANUFACTURING ART. THE SELLER’S OBLIGATION UNDER THIS CLAUSE 12.2 IS TO MAKE ONLY THOSE CORRECTIONS TO THE ITEMS OR FURNISH REPLACEMENTS THEREFOR AS PROVIDED IN THIS CLAUSE 12.2. THE BUYER’S SOLE REMEDY AND RELIEF FOR THE NONPERFORMANCE OF ANY OBLIGATION OR LIABILITY OF THE SELLER ARISING UNDER OR BY VIRTUE OF THIS SERVICE LIFE POLICY WILL BE ** LIMITED TO THE AMOUNT THE BUYER REASONABLY EXPENDS IN PROCURING A CORRECTION OR REPLACEMENT FOR ANY ITEM THAT IS THE SUBJECT OF A FAILURE COVERED BY THIS SERVICE LIFE POLICY AND TO WHICH SUCH NONPERFORMANCE IS RELATED, LESS THE AMOUNT THAT THE BUYER OTHERWISE WOULD HAVE BEEN REQUIRED TO PAY UNDER THIS CLAUSE 12.2 IN RESPECT OF SUCH CORRECTED OR REPLACEMENT ITEM. WITHOUT LIMITING THE EXCLUSIVITY OF WARRANTIES AND GENERAL LIMITATIONS OF LIABILITY PROVISIONS SET FORTH IN CLAUSE 12.5, THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL CLAIMS TO ANY FURTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF PROFITS AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES, ARISING UNDER OR BY VIRTUE OF THIS SERVICE LIFE POLICY.

12.2.5		Transferability

		The Buyer’s rights under this Clause 12.2 will not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise, without the Seller’s prior written consent.

** Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 52 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		Any unauthorized assignment, sale, transfer or other alienation of the Buyer’s rights under this Service Life Policy will, as to the Aircraft involved, immediately void this Service Life Policy in its entirety.

12.3		Supplier Warranties and Service Life Policy

12.3.1		Seller’s Support

		Before Delivery of the first Aircraft, the Seller will provide the Buyer with the warranties and service life policies that the Seller has obtained pursuant to the Supplier Product Support Agreements.

12.3.2		Supplier’s Default

12.3.2.1		If any Supplier under any warranty referred to in Clause 12.3.1 defaults in the performance of any material obligation under such warranty with respect to a Supplier Part, the Buyer has used its best efforts to enforce its rights under such warranty, and the Buyer submits reasonable evidence, within a reasonable time, that such default has occurred, then Clause 12.1 of this Agreement will apply to the extent it would have applied had such Supplier Part been a Warranted Part, to the extent the Seller can reasonably perform said Supplier’s obligations, except that the Supplier’s warranty period indicated in the applicable Supplier Product Support Agreement will apply.

12.3.2.2		If any Supplier under any service life policy referred to in Clause 12.3.1 defaults in the performance of any material obligation under such service life policy with respect to a Supplier Part, the Buyer has used best efforts to enforce its rights under such service life policy, and the Buyer submits within a reasonable time to the Seller reasonable evidence that such default has occurred, then Clause 12.2 will apply to the extent the same would have applied had such Supplier Part been listed in Exhibit C, to the extent that the Seller can reasonably perform said Supplier’s service life policy.

12.3.2.3		At the Seller’s request, the Buyer will assign to the Seller, and the Seller will be subrogated to, all of the Buyer’s rights against the relevant Supplier with respect to, and arising by reason of, such default and the Buyer will provide reasonable assistance to enable the Seller to enforce the rights so assigned.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 53 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

12.4		Interface Commitment

12.4.1		Interface Problem

		If the Buyer experiences any technical problem in the operation of an Aircraft or its systems, the cause of which, after due and reasonable investigation, is not readily identifiable by the Buyer, but which the Buyer reasonably believes to be attributable to the design characteristics of one or more components of the Aircraft and/or its systems (an “ Interface Problem ”), the Seller will, if requested by the Buyer, and without additional charge to the Buyer, promptly conduct or have conducted an investigation and analysis of such problem to determine, if possible, the cause or causes of the problem and to recommend such corrective action as may be feasible, provided, however, that if the Seller determines, after such investigation, that the Interface Problem was due to or caused by any act or omission of the Buyer in its performance of its obligations hereunder, the Buyer will pay to the Seller all reasonable costs and expenses incurred by the Seller during such investigation. The Buyer will furnish to the Seller all data and information relevant to the Interface Problem in its possession and will reasonably cooperate with the Seller in the conduct of the Seller’s investigations and such tests as may be required. At the conclusion of such investigation the Seller will promptly advise the Buyer in writing of the Seller’s opinion as to the cause or causes of the Interface Problem and the Seller’s recommendations as to corrective action.

12.4.2		Seller’s Responsibility

		If the Seller determines that the Interface Problem is primarily attributable to the design of a Warranted Part, the Seller will, if requested by the Buyer, take prompt action to correct the design of such Warranted Part, pursuant to the terms and conditions of Clause 12.1.

12.4.3		Supplier’s Responsibility

		If the Seller determines that the Interface Problem is primarily attributable to the design of any Supplier Part, the Seller will at the Buyer’s request, assist the Buyer in processing any warranty claim the Buyer may have against the manufacturer of such Supplier Part. **

12.4.4		Joint Responsibility

		If the Seller determines that the Interface Problem is attributable partially to the design of a Warranted Part and partially to the design of any Supplier Part, the Seller will, if requested by the Buyer, seek a solution to the Interface Problem through cooperative efforts of the Seller and any Supplier(s) involved. The Seller will promptly advise the Buyer of any corrective action proposed by the Seller



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 54 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		and any such Supplier(s). Such proposal will be consistent with any then existing obligations of the Seller hereunder and of any such Supplier to the Buyer. Such corrective action, unless reasonably rejected by the Buyer, will constitute full satisfaction of any claim the Buyer may have against either the Seller or any such Supplier(s) with respect to such Interface Problem, unless such corrective action does not resolve the Interface Problem.

12.4.5		General

12.4.5.1		All requests under this Clause 12.4 will be directed both to the Seller and the affected Suppliers.

12.4.5.2		Except as specifically set forth in this Clause 12.4, this Clause 12.4 will not be deemed to impose on the Seller any obligations not expressly set forth elsewhere in this Agreement.

12.4.5.3		All reports, recommendations, data and other documents furnished by the Seller to the Buyer pursuant to this Clause 12.4 will be deemed to be delivered under this Agreement and will be subject to the terms, covenants and conditions set forth in this Clause 12 and in Clause 22.7.

12.5		Exclusivity of Warranties

		THIS CLAUSE 12 (INCLUDING ITS SUBPROVISIONS) SETS FORTH THE EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE OBLIGATIONS OF THE SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO THE BUYER, WHETHER UNDER THIS AGREEMENT OR OTHERWISE, ARISING FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE DELIVERED BY THE SELLER UNDER THIS AGREEMENT.

		THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN THIS CLAUSE 12 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYER FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN THE GOODS AND SERVICES SUPPLIED UNDER THIS AGREEMENT. THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS, GUARANTEES AND LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, WHETHER EXPRESS OR IMPLIED BY CONTRACT, TORT, STATUTORY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT OR PROBLEM OF ANY KIND IN ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE DELIVERED BY THE SELLER UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO:



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 55 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(1)		ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE;

	(2)		ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

	(3)		ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

	(4)		ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO, ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE, INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;

	(5)		ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;

	(6)		ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL STATUTE OR AGENCY;

	(7)		ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

	(a)		LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;

	(b)		LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;

	(c)		LOSS OF PROFITS AND/OR REVENUES;

	(d)		ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 56 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		UNENFORCEABLE, THE REMAINDER OF THIS CLAUSE 12 WILL REMAIN IN FULL FORCE AND EFFECT.

		FOR THE PURPOSE OF THIS CLAUSE 12.5, “SELLER” WILL BE UNDERSTOOD TO INCLUDE THE SELLER, ITS AFFILIATES AND SUPPLIERS.

		**

12.6		Duplicate Remedies

		The remedies provided to the Buyer under this Clause 12 as to any defect in respect of the Aircraft or any part thereof are mutually exclusive and not cumulative. The Buyer will be entitled to the remedy that provides the maximum benefit to it, as the Buyer may elect, pursuant to the terms and conditions of this Clause 12 for any defect for which remedies are provided under this Clause 12 provided, however, that the Buyer will not be entitled to elect a remedy under more than one part of this Clause 12 for the same defect. The Buyer’s rights and remedies herein for the nonperformance of any obligations or liabilities of the Seller arising under these warranties will be in monetary damages limited to the amount the Buyer expends in procuring a correction or replacement for any covered part subject to a defect or nonperformance covered by this Clause 12, and the Buyer will not have any right to require specific performance by the Seller.

12.7		Negotiated Agreement

		The Buyer specifically recognizes that:

	(i)		the Specification has been agreed upon after careful consideration by the Buyer using its judgment as professional operators of, and maintenance providers with respect to, aircraft used in public transportation and as such is are professionals within the same industry as the Seller;

	(ii)		this Agreement, and in particular this Clause 12, has been the subject of discussion and negotiation and is fully understood by the Buyer;

	(iii)		the price of the Aircraft and the other mutual agreements of the Buyer set forth in this Agreement were arrived at in consideration of, inter alia, the provisions of this Clause 12, specifically including the Exclusivity of Warranties set forth in Clause 12.5.

12.8		Survivability

		In respect of all delivered Aircraft, the provisions of this Clause 12 will survive any termination of this Agreement, except any termination following a Termination Event referred to in Clause 21(1), (2), (3) or (4).

** Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 57 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

13.		PATENT AND COPYRIGHT INDEMNITY

13.1		Indemnity

13.1.1		Subject to the provisions of Clause 13.2.3, the Seller will indemnify the Buyer from and against any damages, costs and expenses including legal costs (excluding damages, costs, expenses, loss of profits and other liabilities in respect of or resulting from loss of use of the Aircraft) resulting from any infringement or claim of infringement by the Airframe or any part or software installed therein at Delivery of

	(i)		any British, French, German, Spanish or U.S. patent;

	(ii)		any patent issued under the laws of any other country in which the Buyer may lawfully operate the Aircraft, provided that from the time of design of such Airframe or any part or software installed therein at Delivery and until infringement claims are resolved, the country of the patent and the flag country of the Aircraft are both parties to:

	(a)		the Chicago Convention on International Civil Aviation of December 7, 1944, and are each fully entitled to all benefits of Article 27 thereof, or,

	(b)		the International Convention for the Protection of Industrial Property of March 20, 1883; and

(iii)

in respect of computer software installed on the Aircraft, any copyright, provided that the Seller’s obligation to indemnify will be limited to infringements in countries which, at the time of design, are members of The Berne Union and recognize computer software as a “work” under the Berne Convention.

13.1.2

Clause 13.1.1 will not apply to

	(i)		Buyer Furnished Equipment;

	(ii)		the Propulsion Systems;

	(iii)		Supplier Parts; or

	(iv)		software not developed by the Seller.

13.1.3



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 58 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(i)		procure for the Buyer the right to use the affected Airframe, part or software free of charge; or

	(ii)		replace the infringing part or software as soon as possible with a non-infringing substitute.

13.2		Administration of Patent and Copyright Indemnity Claims

13.2.1		If the Buyer receives a written claim or a suit is threatened or begun against the Buyer for infringement of a patent or copyright referred to in Clause 13.1, the Buyer will

	(i)		forthwith notify the Seller, giving particulars thereof;

	(ii)		furnish to the Seller all data, papers and records within the Buyer’s control or possession relating to such patent or claim;

	(iii)		refrain from admitting any liability or making any payment, or assuming any expenses, damages, costs or royalties, or otherwise acting in a manner prejudicial to the defense or denial of the suit or claim, it being agreed that nothing in this Clause 13.2.1(iii) will prevent the Buyer from paying the sums that may be required to obtain the release of the Aircraft, provided that payment is accompanied by a denial of liability and is made without prejudice;

	(iv)		fully cooperate with, and render all assistance to, the Seller as may be pertinent to the defense or denial of the suit or claim; and

	(v)		act to mitigate damages and/or to reduce the amount of royalties that may be payable, and act to minimize costs and expenses.

13.2.2.1

13.2.3

The Seller’s liability hereunder will be conditional on the strict and timely compliance by the Buyer with the terms of this Clause and is in lieu of any other liability to the Buyer, whether express or implied, that the Seller might incur at law as a result of any infringement or claim of infringement of any patent or copyright.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 59 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 60 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

14		TECHNICAL DATA AND SOFTWARE SERVICES

		The Seller will make available or will cause the Seller’s designee ANACS to make available to the Buyer the Technical Data and certain additional services under the terms and conditions set forth in this Clause 14.

14.1		Supply

		The Technical Data will be supplied in the English language using the aeronautical terminology in common use.

		**

		The Buyer will not receive compensation or credits of any kind for return of unused or partially used Technical Data.

14.2		Aircraft Identification for Technical Data

14.2.1		For Technical Data customized to the Aircraft, the Buyer agrees to the allocation of fleet serial numbers (“ FSN(s) ” ) in the form of block of numbers selected in the range from 001 to 999.

14.2.2		The sequence will not be interrupted except if two (2) different Propulsion Systems or two (2) different Aircraft models are selected.

14.2.3		The Buyer will indicate to the Seller the FSNs allocated to each Aircraft corresponding to the Aircraft rank in the delivery schedule set forth in Clause 9.1.1 not later than ** prior to the Scheduled Delivery Month for the first Aircraft to be delivered hereunder. The allocation of such FSNs to such Aircraft will not constitute any proprietary, insurable or other interest of the Buyer in any Aircraft prior to its Delivery.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 61 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

14.3		Integration of Equipment Data

14.3.1		Supplier Equipment

		If necessary for the understanding of the affected systems, information relating to Supplier Equipment that is installed on the Aircraft by the Seller, will be introduced ** into the first issue, subsequent to the installation of the Supplier equipment of the customized Technical Data supplied to the Buyer, provided Clause 14.3.2.2 is complied with (the “ First Issue ” ).

14.3.2		Buyer Furnished Equipment

14.3.2.1		The Seller will introduce BFE data, for equipment installed on the Aircraft by the Seller, into the customized Technical Data at no additional charge to the Buyer for the First Issue, provided such data are provided in accordance with the conditions set forth in Clauses 14.3.2.2 through 14.3.2.5.

14.3.2.2		The Buyer will to supply the BFE data to the Seller at least before the scheduled delivery of the customized Technical Data and the full set of BFE data will be provided to the Seller at the latest ** before the scheduled delivery of the customized Technical Data. The BFE data supplied to the Buyer by the Seller will be in English.

14.3.2.3		The BFE data will be in general compliance with the then applicable revision of the S1000D Specification jointly defined by the Aerospace and Defense Industries Association of Europe, Aerospace Industries Association and Air Transport Association of America, as applicable to the corresponding aircraft type.

14.3.2.4		The Buyer and the Seller will agree on the requirements for the provision to the Seller of BFE data for “on-aircraft maintenance.” These requirements include but are not limited to time frame, media and format, to facilitate the efficient, expedited and economic integration of BFE data into Technical Data.

14.3.2.5		The BFE data will be delivered in digital format and/or in Portable Document Format, as agreed between the Buyer and the Seller.

14.3.2.6		All costs related to the delivery to the Seller of BFE data will be borne by the Buyer.

14.3.2.7		Clause 14.3.2 will apply to the BFE data provided by the Seller under the terms of Clause 18.1.3.

14.4		Delivery


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 62 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

14.4.1		The Technical Data are delivered on-line and/or off-line, as set forth in Exhibit F.

14.4.2		For Technical Data delivered off-line, the Technical Data and corresponding revisions will be sent to one address only. The Buyer will specify such address.

14.4.3		Packing and shipment of the Technical Data and their revisions will be carried out by the quickest transportation methods. Shipment will be FCA Toulouse, France, FCA Hamburg, Germany, and/or FCA Ashburn, VA, USA.

14.4.4		The delivery schedule of the First Issue will be phased as mutually agreed to correspond with Aircraft deliveries. The Buyer agrees to provide ** notice when requesting a change to the delivery schedule.

14.4.5		The Buyer will be responsible for coordinating with and satisfying the requirements of the FAA for Technical Data. ** FCA Toulouse, France, FCA Hamburg, Germany, and/or FCA Ashburn, VA, USA.

14.4.6		**

14.5		Revision Service

		Unless otherwise specifically stated, revision service will be provided **

14.6		Service Bulletins Incorporation

		During the period of revision service and upon the Buyer’s request for incorporation, which will be made within ** after issuance of a Service Bulletin, Seller’s Service Bulletin information will be incorporated into the Technical Data for the Aircraft after formal notification by the Buyer of its intention to accomplish a Service Bulletin. Post-Service Bulletin status will be shown in the applicable customized maintenance and operation Technical Data after the Seller receives notification from the Buyer of Service Bulletin accomplishment pertaining to such Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 63 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

14.7		Future Developments

		The Seller will continuously monitor technological developments and apply them to data and document production and methods of transmission where beneficial and economical. The Buyer agrees to give reasonable consideration to any new development proposed by the Seller for implementation.

14.8		Technical Data Familiarization

		Upon request by the Buyer, the Seller will provide a Technical Data familiarization training at the Seller’s or at the facilities of one of the Buyer. If such familiarization is conducted at the Buyer’s facilities, the Buyer will .

14.9		Customer Originated Changes

14.9.1		Data on Customer Originated Changes may be incorporated into the following Technical Data when customized to the Buyer’s

	-		Aircraft Maintenance Manual

	-		Illustrated Parts Catalog

	-		Trouble Shooting Manual

	-		Aircraft Wiring Manual

	-		Aircraft Schematics Manual

	-		Aircraft Wiring Lists

	-		Flight Crew Operating Manual

	-		Quick Reference Handbook

14.9.2		COC data will be developed by the Buyer according to the “Customer Guide for Customer Originated Changes” issued by the Seller. The Buyer will ensure that any such COC data is in compliance with the requirements of the FAA.

		COC data will be incorporated by the Seller into all affected customized Technical Data unless the Buyer specifies in writing the documents into which the Buyer desires the COC to be incorporated. Following incorporation of the COC into the customized Technical Data, the relevant Technical Data will show only the aircraft configuration that reflects the COC data and not the configuration before such COC data are incorporated.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 64 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL


14.9.3. (i)		The Buyer hereby acknowledges and accepts that the incorporation of any COC data into the Technical Data issued by the Seller will be at the Buyer’s sole risk, that the Seller will have no obligation to check the COC data for accuracy or validity, and that the Seller will have no liability whatsoever with respect to (a) the contents of any COC data (including omissions or inaccuracies therein) (b) any effect that the incorporation of such COC data may have on the Technical Data or (c) any costs of any nature that the COC data may add to subsequent Service Bulletins or modifications.

	(ii)		THE SELLER HEREBY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OR LIABILITIES, EXPRESSED OR IMPLIED, ORAL OR WRITTEN, ARISING BY LAW, COURSE OF DEALING OR OTHERWISE, AND WITHOUT LIMITATION ALL WARRANTIES AS TO QUALITY, OPERATION, MERCHANTABILITY, FITNESS FOR ANY INTENDED PURPOSE, AND ALL OTHER CHARACTERISTICS WHATSOEVER, INCLUDING ANY OMISSIONS OR INACCURACIES THEREIN, OF ANY COC DATA INCORPORATED INTO THE TECHNICAL DATA ISSUED BY THE SELLER.

	(iii)		The Buyer will indemnify and hold the Seller harmless from and against any losses (including reasonable attorneys’ fees) arising from claims by any third party for injury, loss or damage incurred directly or indirectly as a result of the incorporation of any COC data into the Technical Data issued by the Seller.

	(iv)		If the Buyer sells, leases or otherwise transfers any Aircraft to which the COC data apply:

	(a)		the Buyer will remain fully liable for the COC data and any and all effects of their incorporation, as set forth in this Clause 14.9;

	(b)		the Seller may disclose the COC data to the subsequent owner(s) or operator(s) of the transferred Aircraft;

	(c)		it will be the sole responsibility of the Buyer to notify, or cause notification to be made to, the subsequent owner(s) or operator(s) of the existence of the such COC data in the Technical Data applicable to the corresponding Aircraft.

The Seller hereby disclaims any and all liabilities whatsoever for the COC data in the event of transfer, sale or lease of any Aircraft to which COC data apply.

14.9.4

The incorporation of any COC will be performed under the conditions specified in the Seller’s then current Customer Services Catalog.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 65 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

14.10		Software Products

		Software Products are available to the Buyer exclusively from ANACS and may be licensed under the General Terms and Conditions of Licensing set forth in Exhibit H.

14.10.1		Performance Engineer’s Programs

	(i)		In addition to the standard operational manuals, the Seller will provide to the Buyer software components and databases composing the Performance Engineer’s Programs (“ PEP ” ) for the Aircraft.

	(ii)		The license to use the PEP will be granted for as long as the revisions of the PEP are in accordance with Clause 14.5. At the end of such period, license fees may be charged and yearly revision service for the PEP will be provided to the Buyer at the standard commercial conditions set forth in the then current ANACS Customer Services Catalog.

14.10.2		AirN@v and/or ADOC N@vigator Based Consultation

		The affected Technical Data covered under an Advanced Consultation Tool based on ADOC N@vigator browser are:

-		Engineering Drawings Parts Usage

-		Engineering Drawings Parts List

		The Technical Data listed below will be provided on DVD and include integrated software (the “ AirN@v Services ”):

AirN@v Planning
AirN@v Repair
AirN@v Workshop
AirN@v Associated Data
AirN@v Engineering
AirN@v Maintenance:

		The applicable Technical Data pursuant to each of the above AirN@v Services is listed in Exhibit F.

		The licensing conditions for the use of AirN@v Services will be as set forth in Exhibit H. The license to use AirN@v and/or ADOC N@vigator based products for the Aircraft will be granted free of charge for as long as the revisions of such Technical Data are free of charge in accordance with Clause 14.5. At the end of such period, license fees may be charged and the yearly revision service for AirN@v and/or ADOC N@vigator will be provided to the Buyer at the standard


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 66 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		commercial conditions set forth in the then current ANACS Customer Services Catalog.

14.10.3		AirbusWorld Customer Portal

14.10.3.1		The Buyer will be entitled to obtain access to a wide range of information and services, including Technical Data, available in the secure zone of the Seller’s Customer Portal AirbusWorld (“ AirbusWorld ”). Access will be free of charge for as long as the Buyer operates the Aircraft.

		Access to the secure zone of AirbusWorld (the “ Secure Zone ”) is reserved to Airbus owners and operators and is subject to the prior signature by the Buyer of the “General Terms and Conditions of Access to and Use of Airbus Secure Area of Customer Portal”.

		A description of the basic services available to the Buyer in the Secure Zone is set forth in the ANACS Customer Services Catalog.

14.10.3.2		On-Line Technical Data

	(i)		The Technical Data specified in Exhibit F as being provided on-line will be made available to the Buyer through the Secure Zone at no cost as long as revision service for such Technical Data is free of charge in accordance with Clause 14.5.

	(ii)		The list of the Technical Data available on-line may be amended from time to time.

			For any Technical Data that are or become available on-line, the Seller will notify the Buyer thereof and the Seller reserves the right to discontinue other formats for such Technical Data. On-line and old formats of such Technical Data are to be available in parallel for a period of twelve (12) months or two (2) revision cycles, whichever is shorter.

14.10.3.3		Access to the Secure Zone will be granted free of charge for a reasonable number, to be agreed by the parties, of the Buyer’s users (including one Buyer administrator) for the Technical Data related to the Aircraft that will be operated by the Buyer.

14.11		Warranties

14.11.1		The Seller warrants that the Technical Data (exclusive of COC) are prepared in accordance with the state of art at the date of their conception. Should any Technical Data prepared by the Seller contain any nonconformity or defect, the sole and exclusive liability of the Seller will be to take all reasonable and proper steps, at its option, to correct or replace such Technical Data.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 67 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

14.11.2

	(A)		ANY WARRANTY AGAINST HIDDEN DEFECTS

	(B)		ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;

	(C)		ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

	(D)		ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY, WHETHER CONTRACTUAL OR DELICTUAL AND WHETHER OR NOT ARISING FROM THE SELLER’S AND/OR ITS SUPPLIERS’ NEGLIGENCE, ACTUAL OR IMPUTED; AND

	(E)		ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OR DAMAGE TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART THEREOF OR ANY TECHNICAL DATA DELIVERED HEREUNDER.

			THE SELLER AND/OR ITS SUPPLIERS WILL HAVE NO OBLIGATION OR LIABILITY, HOWSOEVER ARISING, FOR LOSS OF USE, REVENUE OR PROFIT OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT IN ANY TECHNICAL DATA DELIVERED UNDER THIS AGREEMENT.

			FOR THE PURPOSES OF THIS CLAUSE 14.11.2, “THE SELLER” WILL INCLUDE THE SELLER, ITS AFFILIATES AND ANY OF THEIR RESPECTIVE INSURERS.

14.12 Proprietary Rights


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 68 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

Data, or as otherwise expressly authorized by the Seller. These proprietary rights will also apply to any translation of Technical Data into a language or languages or medium or media that may have been performed or caused to be performed by the Buyer.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 69 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

15		SELLER REPRESENTATIVES

15.1		Seller Representatives

		The Seller will provide or cause to be provided **to the Buyer the services described in this Clause 15, at the main base of the Buyer or at other locations to be mutually agreed.

15.2		Resident Customer Support Representatives

15.2.1		The Seller will provide representatives to act in an advisory capacity (“ Resident Customer Support Representative ”) as follows:

	(i)		The Seller will provide one or more dedicated Resident Customer Support Representatives for pre-entry-into-service support of the Aircraft, commencing at**

	(ii)		In addition, the Seller will provide a total of ** man-months of Resident Customer Support Representatives for support of the Aircraft in the Buyer’s fleet.

	(iii)		The actual number of Resident Customer Support Representatives assigned to the Buyer at any one time will not exceed **.

15.2.2

The Seller will provide to the Buyer an annual written account of the consumed months and any remaining balance of months.

15.2.3

Should the Buyer request additional services that exceed the amounts set forth in Clause 15.2.1(ii), the Seller may provide additional service subject to the terms and conditions agreed by the Buyer and the Seller at the time of such request.

15.2.4

The Seller will cause similar services to be provided by the representatives of the Propulsion System manufacturer and by representatives of the Suppliers when necessary and applicable.

15.3		Customer Support Director

		The Seller will assign the services of Customer Support Director based in Herndon, Virginia, to liaise between the Seller and the Buyer on product support matters after signature of this Agreement for .


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 70 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

15.4		Spare Parts Field Representative

		The Seller will provide free of charge one (1) Spare Parts Field Representative for a total of six (6) months, to assist the Buyer with its initial provisioning planning of Material (the “ Spare Parts Field Representative ” ).

15.5		Buyer’s Service

15.5.1		From the date of arrival of the first Resident Customer Support Representative and Spare Parts Field Representative and until the duration of the assignment, the Buyer will provide, suitable office space, office equipment and facilities for the sole use of the Resident Customer Support Representative(s) in or conveniently near the maintenance facilities of one of the Buyer.

15.5.2		**

	(i)		** and

	(ii)		when said Resident Customer Support Representative(s) are assigned away from the locations mentioned above in Clause 15.2.1 at the Buyer’s request, transportation on similar basis between the said locations and the place of assignment.

15.5.3		The parties will give each other all necessary reasonable assistance with general administrative functions specific to their respective countries and procurement of the documents necessary to live and work there.

15.6		Temporary Assignment and Withdrawal of Resident Customer Support Representative

		The Seller will have the right, upon written notice to and communication with the Buyer, to transfer or recall any Resident Customer Support Representative(s) on a temporary or permanent basis if, in the Seller’s opinion, conditions are dangerous to the Resident Customer Support Representative’s safety or health or prevent the fulfillment of such Resident Customer Support Representative’s contractual tasks. The Buyer will ** for the man-days during which any Resident Customer Support Representative is absent from the Buyer’s facility pursuant to this Clause 15.

15.7		Representatives’ Status

		In providing the above technical service, the Seller’s employees, including Resident Customer Support Representative(s), the Spare Parts Field Representative and the Customer Support Director, are deemed to be acting in an advisory capacity only and at no time will they be deemed to be acting, either directly or indirectly, as the employees or agents of the Buyer.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 71 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

16		TRAINING AND TRAINING AIDS

16.1.		General

		This Clause 16 covers the terms and conditions for the supply of training and training aids for the Buyer’s personnel to support the Aircraft operation.

16.2.		Scope

16.2.1		The range and quantity of training and training aids to be provided free of charge under this Agreement are covered in Appendix A to this Clause 16. The Seller will arrange availability of such training and training aids in relation to the delivery schedule for the Aircraft set forth in Clause 9.1.1.

16.2.2		The Maintenance Training and Flight Training courses described in Appendix A to this Clause 16 will be provided **

16.2.3		** no compensation or credit of any sort will be provided for unused or partially used training or training aids offered pursuant to this Clause 16.

16.3.		Training Organization / Location

16.3.1		The Seller will provide the training at the Airbus Training Center in Miami, Florida (the “ Seller’s Training Center ” ), and/or at its affiliated training center in Blagnac, France (the “ Affiliated Training Center ” ).

16.3.2		If unavailability of facilities or scheduling difficulties make training by the Seller impractical at the training centers listed in Clause 16.3.1, the Seller will ensure that the Buyer is provided such training at locations other than those named in Clause 16.3.1.

16.3.3		Upon the Buyer’s request, the Seller may also provide certain training at one of the Buyer’s bases, if and when practicable for the Seller, under terms and conditions to be mutually agreed upon. In this event, all additional charges listed in Clause 16.6.2 will be borne by the Buyer.

16.4		Training Courses

16.4.1		Training courses, as well as the minimum and maximum numbers of trainees per course provided for the Buyer’s personnel, are defined in the applicable training course catalog (the “ Training Course Catalog ”) and will be scheduled as mutually agreed upon during a training conference (the “ Training Conference ”) that will be


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 72 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

held as soon as practicable after signature of this Agreement and no later than ** prior to delivery of the first Aircraft.

16.4.2

The following terms will apply when training is performed by the Seller:

	(i)		Training courses will be the Seller’s standard courses as described in the Seller’s applicable Training Course Catalog valid at the time of execution of the course. The Seller will be responsible for all training course syllabi, training aids and training equipment necessary for the organization of the training courses.

	(ii)		The training curricula and the training equipment may not be fully customized. However, they may be modified to include the most significant aspects of the Specification as known, at the latest, ** prior to the date of the first training course planned for the Buyer and will be configured in order to obtain the relevant Aviation Authority’s approval and to support the Seller’s training programs.

	(iii)		Training data and documentation necessary for training detailed in Appendix A to this Clause 16 will be **. Training data and documentation will be marked “FOR TRAINING ONLY” and as such will be supplied for the sole and express purpose of training.

	(iv)		Upon the request of the Buyer **, the Seller will collect and pack for consolidated shipment to the facility of the Buyer, all training data and documentation of the Buyer’s trainees attending training at the Airbus Training Center in Miami, Florida or Blagnac, France, as applicable. This training data and documentation will be delivered FCA Miami International Airport. The Buyer will designate in writing one Buyer to receive title to such training data and documentation and title to and risk of loss of the training data and documentation will pass to the Buyer upon delivery.

16.4.3

If the Buyer decides to cancel or reschedule a training course, a minimum advance notice of ** will be required. Any later cancellation or change from the Buyer, when courses cannot be allocated to other customers, will be deducted from the training allowances defined herein or will be charged to the Buyer, as applicable.

16.4.4

The Seller will deliver, or will cause any third party training provider to deliver, to the trainees a certificate of completion at the end of any such training course. No such certificate will represent authority or qualification by any Aviation Authority but may be presented to such officials in order to obtain relevant formal qualification.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 73 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

16.4.5		**

16.5		Prerequisites

16.5.1		Training will be conducted in English and all training aids are written in English using common aeronautical terminology. Trainees must have the prerequisite experience set forth in Appendix B to this Clause 16.

		The Seller’s training courses are “ Transition Training Courses ” and not “ Ab Initio Training Courses .”

		The Buyer will be responsible for the selection of the trainees and for any liability with respect to the entry knowledge level of the trainees.

16.5.2		The Buyer will provide the Seller with an attendance list of the trainees for each course with the validated qualification of each trainee. The Seller reserves the right to verify the trainees’ proficiency and previous professional experience. The Seller will in no case warrant or otherwise be held liable for any trainee’s performance as a result of any training services provided.

16.5.3		The Seller will provide to the Buyer an Airbus Pre-Training Survey, and/or the “Maintenance Training Survey,” as applicable, to obtain the trainee’s associated background. The Buyer will complete such survey(s) and return them to the Seller at least ** prior to the start of the training course.

16.5.4		If the Buyer makes a change to any trainee attendance list within the ** period stated in Clause 16.5.3, the Buyer will immediately inform the Seller thereof and send the Seller an updated Airbus Pre-Training Survey and/or Maintenance Training Survey reflecting requested information for the replacement trainee(s).

16.6.		Logistics

16.6.1		Trainees

(i)

When training is done at the Airbus Training Center in Miami, Florida, the Seller will provide ** for the duration of the training course on the basis of **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 74 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(ii)		When training is done at the Airbus Training Center in Blagnac, France, the Seller will **

	(iii)		**

16.6.2

Training at External Location

	(i)		Seller’s Instructors

			If at the Buyer’s request, training is provided by the Seller’s instructors at any location other than the Seller’s training centers, **

	(ii)		Living Expenses for the Seller’s Instructors

			Such expenses, covering the entire period from day of secondment to day of return to the Seller’s base, will include but will not be limited to lodging, food and local transportation to and from the place of lodging and the training course location. **

	(iii)		Air Travel

			**

	(iv)		Training Material

			The Buyer will reimburse the Seller for the reasonable cost of shipping the training material needed to conduct such courses.

	(v)		Buyer’s Indemnity


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 75 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

			The Buyer will be solely liable for any and all cancellation or delay in the performance of the training outside of the Seller’s training centers that is associated with the transportation provided under Clause 16.6.2(iii) **

	(vi)		Training Equipment Availability

			Training equipment necessary for course performance at any course location other than the Seller’s training centers or the facilities of the training provider selected by the Seller will be provided by the Buyer in accordance with the Seller’s specifications.

16.7		Flight Operations Training

16.7.1		Flight Crew Training Course

	(i)		The Seller will perform a flight crew training course program for the Buyer’s flight crews. A flight crew will consist of either (i) one captain (1) and one (1) first officer, (ii) two (2) captains, or (iii) two (2) first officers. The training manual used will be the Seller’s Flight Crew Operating Manual (“ FCOM ” ), except for the base flight training, for which the Buyer’s customized FCOM will be used.

	(ii)		The Buyer will use delivered Aircraft for any required in-flight training. This training will not exceed session of per pilot. When in-flight crew training is performed in Blagnac, France, the Seller will provide free-of-charge line maintenance, including servicing, preflight checks and changing of minor components, subject to conditions agreed in this Agreement.

	(iii)		The Buyer will provide mutually agreed spare parts as required to support said in-flight training and will provide evidence of insurance coverage required under Clause 19.

	(iv)		In all cases, the Buyer will bear the expenses of fuel, oil and landing fees.

16.7.2

Flight Crew Line Initial Operating Experience

(i)

In order to assist the Buyer with initial operating experience after Delivery of the first Aircraft, the Seller will provide to the Buyer pilot instructor(s) as described in Exhibit A to this Clause 16.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 76 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(ii)		Additional pilot instructors can be provided at the Buyer’s expense upon conditions to be mutually agreed.

	(iii)		Prior to any flight training to be performed by the Seller on the Aircraft, the Buyer will provide to the Seller evidence of insurance coverage as required under Clause 19.

16.7.3		Instructor Cabin Attendants’ Familiarization Course

		The Seller will provide instructor cabin attendant’s course(s) to the Buyer’s cabin attendants, as described in Exhibit A to this Clause 16, at the Seller’s Training Center.

		The instructor cabin attendants familiarization course, when incorporating the features of the Aircraft, will be given no earlier than and no later than before the Delivery of the first Aircraft. The instructor cabin attendants’ familiarization course material will be provided no later than ** before the Delivery of the first Aircraft.

16.7.4		Performance / Operations Course

		The Seller will provide performance/operations training for the Buyer’s personnel as described in Exhibit A to this Clause 16.

		The available courses are listed in the Seller’s applicable Training Courses Catalog.

16.7.5		Transition Type Rating Instructor Course

		The Seller will provide transition type rating instructor training for the Buyer’s flight crew instructors as described in Exhibit A to this Clause 16. This course provides the Buyer’s instructors with the training in flight instruction and synthetic instruction required to instruct on Airbus aircraft.

16.7.6		During any and all flights performed in accordance with this Clause 16.7, the Buyer will bear full responsibility for the aircraft upon which the flight is performed, including but not limited to any required maintenance, all expenses such as fuel, oil or landing fees and the provision of insurance required under Clause 19.

16.8		Maintenance Training

16.8.1		The Seller will provide maintenance training for the Buyer’s ground personnel as described in Exhibit A to this Clause 16. The available courses are listed in the Seller’s applicable Training Course Catalog. The practical training provided in the frame of maintenance training is performed exclusively on the training devices in use in the Seller’s Training Center or the Affiliated Training Center. If additional


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 77 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		practical training is required, such additional practical training can be organized with the assistance of the Seller, in accordance with Clause 16.8.2.

16.8.2		Practical Training

		If the Buyer requires practical training to be organized at another airline’s facilities, then the Seller will assist the Buyer in organizing this training without guaranteeing the availability of any other airline’s facilities. The provision of an instructor by the Seller for such practical training will be deducted from the trainee-day allowance set forth in Paragraph 2.1 of Exhibit A to this Clause 16 in the manner described in Paragraph 3 of such Exhibit A. The Buyer will reimburse the Seller the expenses for said instructor in accordance with Clause 16.6.2.

16.8.3		Line Maintenance Initial Operating Experience Training

		In order to assist the Buyer during the entry into service of the Aircraft, the Seller will provide to the Buyer maintenance instructor(s) at the Buyer’s main A350 base as set forth in Appendix A to this Clause 16.

	(i)		Line maintenance initial operating experience training will cover training in handling and servicing of Aircraft, flight crew and maintenance coordination, use of Technical Data and/or any other activities which may be deemed necessary after Delivery of the first Aircraft.

	(ii)		The Buyer will reimburse the expenses for said instructor(s) in accordance with Clause 16.6.2. Additional maintenance instructors can be provided at the Buyer’s expense.

16.9		Supplier and Engine Manufacturer Training

		The Seller will ensure that major Suppliers and the Propulsion System manufacturer provide maintenance training and overhaul training on their products at appropriate times. A copy of the Supplier Training Catalog, listing the suppliers that provide training, will be supplied to the Buyer on request.

16.10		Training Aids for the Buyer’s Training Organization

16.10.1		The Seller will provide to the Buyer Airbus computer based training (“ Airbus CBT ”), training aids, as used in the Seller’s Training Centers and the Virtual Aircraft (Walk Around and Component Location), free of charge as set forth in Exhibit A to this Clause 16.

		The Airbus CBT and training aids supplied to the Buyer will be similar to those used at the Airbus Training Centers for training. The Seller has no obligation to revise the Airbus CBT. The Airbus CBT in use at the Seller’s Training Center may



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 78 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		be revised on a regular basis, and such revisions, if any, will be provided to the Buyer until the expiration of the period when training courses provided under this Clause 16 are performed for the Buyer, or up to ** after delivery of the Airbus CBT or Virtual Aircraft to the Buyer, whichever occurs first.

16.10.2		Delivery

	(i)		The Seller will deliver to the Buyer the Airbus CBT and training aids, at a date to be mutually agreed during the Training Conference, but no later than ** months before the Delivery Date of the first Aircraft.

	(ii)		Those items supplied to the Buyer pursuant to Clause 16.10.1 will be delivered FCA Toulouse, France, and/or FCA Hamburg, Germany. Title to and risk of loss of said items will pass to the Buyerupon delivery.

16.10.3

Installation of Airbus CBT System

	(i)		Before the initial delivery of the Airbus CBT, the Seller will provide an “Airbus CBT Administrator Course” to up to ** trainees of the Buyer, at the facilities of the Buyer. To conduct the course, the workstations and/or servers, as applicable, will be ready for use and will comply with the latest “Airbus CBT Workstation Technical Specification” or “Airbus CBT Server Technical Specification”, as applicable.

	(ii)		The Buyer will provide any and all the necessary hardware on which the Airbus CBT will be installed and Seller will not be responsible for any incompatibility of such hardware with the Airbus CBT.

	(iii)		The Airbus CBT will be installed by the Buyer’s personnel who have completed the Airbus CBT training, and the Seller will be held harmless from any damage to person and/or to property caused by or in any way connected with the handling and/or installation of the Airbus CBT by the Buyer’s personnel.

	(iv)		In accordance with Clause 16.6.2, the Buyer will reimburse the expenses for the Seller’s personnel required at the Buyer’s facility to conduct Airbus CBT Training and/or provide installation assistance.

16.10.4

License

(i)

The Seller will grant the Buyer a license to use the Airbus CBT and the Virtual Aircraft that will incorporate Exhibit H, “Terms and Conditions for License for Use of Software.”


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 79 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

(ii)

16.10.5		The Seller will not be responsible for, and hereby disclaims any and all liabilities resulting from or in connection with the use by the Buyer of the Airbus CBT, the Virtual Aircraft and any other training aids at the Buyer’s facilities.

16.11		Proprietary Rights

		The Seller’s training data and documentation, Airbus CBT and training aids are proprietary to the Seller and its suppliers. All such training materials are supplied for the sole use by the Buyer in training its personnel to maintain and operate the Aircraft. These proprietary rights will also apply to any translation of such Material into a language or languages or medium or media that may have been performed or caused to be performed by the Buyer.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 80 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

Appendix A to Clause 16

TRAINING ALLOWANCES

1.		FLIGHT OPERATIONS TRAINING

1.1		Flight Crew Training

		The Seller will provide flight crew training (standard transition course or CCQ, as applicable) free of charge for of the Buyer’s flight crews per Aircraft. The Buyer may agree to convert training for up to flight crews at the conversion rate of US$ (US dollars - ) per transition course into credits applicable to the purchase of other training services from the Seller or software proprietary to the Seller on such terms as the Buyer and the Seller may agree.

1.2		Flight Crew Line Initial Operating Experience

		The Seller will provide to the Buyer pilot instructor(s) for a period of pilot instructor months to assist with flight-crew initial operating experience. The maximum number of pilot instructors present at all sites of the Buyer at any one time is **.

1.3		Instructor Cabin Attendants’ Familiarization Course

		The Seller will provide to the Buyer’s cabin attendants’ training for up to of the Buyer’s cabin attendants instructor(s).

1.4		Dispatch/Performance/Operations Course(s)

		The Seller will provide to the Buyer trainee days of dispatch, performance and/or operations training for the Buyer’s dispatchers, performance engineers and load-master specialists. Such trainee days will be used solely for the dispatch, performance and/or operations training courses as defined in the Seller’s applicable Training Course Catalog.

1.5		Transition Type Rating Instructor course

		The Seller will provide to the Buyer type rating instructor training (standard transition course or CCQ, as applicable) for of the Buyer’s flight instructors.

2.		MAINTENANCE TRAINING

2.1		The Seller will provide to the Buyer trainee days of maintenance training for the Buyer’s personnel. These trainee days will be used solely for the maintenance training courses as defined in the Seller’s applicable Training Course Catalog. The Buyer may convert up to ** of such maintenance trainee days into credits applicable to the purchase of other training services from the Seller or software proprietary to the Seller on such terms as the Buyer and the Seller may agree.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 81 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.2

The number of Engine Run-up courses within the trainee day allowance in Paragraph 2.1 will not exceed ** course for ** trainees per firmly ordered Aircraft and to a maximum of ** courses in total.

3.		TRAINEE DAYS ACCOUNTING

		Trainee days are counted as follows:

	(i)		For instruction at the Seller’s Training Center or Affiliated Training Center, , and the number of trainees as confirmed by the Buyer before the beginning of the course will be counted as the number of trainees considered to have taken the course.

	(ii)		For instruction outside of the Seller’s Training Center or Affiliated Training Center, not including practical training, **

	(iii)		For instruction outside of the Seller’s Training Center or Affiliated Training Center that is practical training, **

			If training is to be provided outside of the Seller’s Training Center or Affiliated Training Center specifically at the Seller’s request, Paragraph 3(i) will be applicable to the trainee days accounting for such training facility.

TRAINING AIDS, AIRBUS CBT AND VIRTUAL AIRCRAFT FOR BUYER’S TRAINING ORGANIZATION

4.1

The Seller will provide to the Buyer ** Airbus CBT (flight, cabin and/or maintenance), related to the Aircraft. The Seller will also provide ** updates to courseware in Paragraph 4.2 when developed by the Seller, continuing through to the **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 82 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

4.2

The Airbus CBT supplied to the Buyer will consist of

			- ** Airbus CBT (flight and/or maintenance) installation/utilization guide

			- ** set Airbus CBT courseware

			- ** set Airbus CBT software for maintenance as applicable.

			- ** Virtual Aircraft (Walk Around and Component Location) related to the Aircraft type(s);

			- ** set of training documentation on CD-ROM;

			- ** CD-ROM of cockpit panels for training.

The detailed description of the Airbus CBT and the Virtual Aircraft will be provided at the Training Conference.

		Future Generation Courseware

		As the training courses herein evolve in their technology, they will continue to be available to the Buyer under the same terms and conditions as set forth in this Agreement.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 83 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX B TO CLAUSE 16

Appendix B to Clause 16
MINIMUM RECOMMENDED QUALIFICATION
IN RELATION TO TRAINING REQUIREMENTS

(Standard Transition Courses)

CAPTAIN prerequisites

	•		Previously qualified on JAR/FAR/CS 25 aircraft and commercial operations

	•		Valid and current Airlines Transport License (ATPLY)

	•		Previous command experience

	•		Fluency in English

	•		Jet experience

	•		** minimum flying experience as pilot

	•		** experience on FAR/JAR 25/CS 25 aircraft

	•		** experience as airline, corporate pilot or military transport pilot

	•		Must have flown transport type aircraft, as flying pilot, within the last 12 months.

FIRST OFFICER prerequisites

	•		Previously qualified on JAR/FAR/CS 25 aircraft and commercial operations

	•		Aircraft and commercial operations valid and current commercial pilot license with instrument rating

	•		Fluency in English

	•		Jet experience

	•		** minimum flying experience as pilot of fixed wing aircraft

	•		** experience on FAR/JAR/CS 25 aircraft

	•		** flying experience as airline pilot or a corporate pilot or military transport pilot

For both CAPTAIN and FIRST OFFICER, if one or several of the above criteria are not met, the trainee must follow

	(i)		an adapted course or

	(ii)		an entry level training program before entering the regular or the adapted course.

Such course(s), if required, will be at the Buyer’s expense.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 84 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

FIRST TYPE RATING COURSE

This course is designed for ab initio pilots who do not hold an aircraft type rating on their pilot licenses

Pilot prerequisites

	•		Valid and current commercial pilot license

	•		Valid and current instrument rating on multi engine aircraft

	•		Airlines Transport License (ATPLY) written examination

	•		Fluency in English

	•		Flight experience:

			- ** as pilot

			- ** as pilot in command

			- on multi engine aircraft (up to can be completed in a simulator)

CQ ADDITIONAL prerequisites

In addition to the prerequisites set forth for the Flight Crew Standard Transition Course, both CAPTAIN and FIRST OFFICER must:

	•		be qualified and current on the base aircraft type

	•		have minimum and minimum of operations on the base aircraft type.

TRI COURSE ADDITIONAL prerequisites

In addition to the prerequisites set forth for the Flight Crew Standard Transition Course, it is the responsibility of the Buyer to:

	-		select instructor candidate(s) with airmanship and behavior corresponding to the role and responsibility of an airline instructor, and

	-		designate instructor candidate(s) that have met the Seller prerequisite that corresponds to the JAR requirements (ref JAR — FCL 1 - Requirements/ Subparts H — Instructor rating (Aeroplane) C.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 85 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

MAINTENANCE PERSONNEL prerequisites

	(i)		For all maintenance courses:

			Fluency in English Experience on first or second generation jet transport category aircraft

	(ii)		Additional prerequisites for Aircraft Rigging Engine Run-Up and Maintenance Initial Operating Course:

			Qualified as line or line and base mechanic on the relevant aircraft type (for Maintenance Initial Operating Experience Course).

	(iii)		Additional prerequisites — Maintenance Initial Operating Experience

			Be currently qualified as line or base mechanic on the base Aircraft

	(iv)		Additional prerequisites

MAINTENANCE TRAINING DIFFERENCE COURSE

Be current and operating on the base aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 86 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

17		SUPPLIER PRODUCT SUPPORT

17.1		Equipment Supplier Product Support Agreements

17.1.1		The Seller will, **, transfer to the Buyer the Supplier Product Support Agreements transferable to the Buyer from Suppliers of equipment listed as “Seller Furnished Equipment” in the Specification on Delivery. These agreements are based on the “World Airlines and Suppliers Guide” and include Supplier commitments contained in the Supplier Product Support Agreements, which include the following:

	(i)		Technical data and manuals required to operate, maintain, service and overhaul the Supplier items will (a) be prepared in accordance with the provisions of the applicable ATA Specification in accordance with Clause 14, (b) include revision service, and (c) be published in the English language. The Seller will make reasonable efforts to ensure that software data, supplied in the form of an appendix to the Component Maintenance Manual, be provided in compliance with the applicable ATA Specification to protect Suppliers’ proprietary interests,

	(ii)		Warranties and guarantees, including Suppliers’ standard warranties, and in the case of Suppliers of landing gear, service life policies for selected landing gear structures,

	(iii)		Training to ensure efficient operation, maintenance and overhaul of the Suppliers’ items for the Buyer’s instructors, shop and line service personnel.

	(iv)		Spares data in compliance with the applicable ATA Specification, initial provisioning recommendations, spares and logistics service, including routine and emergency deliveries, and

	(v)		Technical service to assist the Buyer with maintenance, overhaul, repair, operation and inspection of Supplier items as well as required tooling and spares provisioning.

17.2		Supplier Compliance

		The Seller will monitor Supplier compliance with support commitments defined in the Supplier Product Support Agreements and will take action together with the Buyer, if necessary.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 87 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

17.3		Supplier Part Repair Stations

		The Seller has developed with the Suppliers a comprehensive network of repair stations in the United States of America and Canada for those Supplier Parts originating from outside these countries. **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 88 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

18		BUYER FURNISHED EQUIPMENT

18.1		Administration

18.1.1		Without additional charge and in accordance with the Specification, the Seller will provide for the installation of the Buyer Furnished Equipment, provided that the BFE is referred to in the Airbus BFE Catalog of Approved Suppliers by Products valid at the time the BFE is ordered.

		The Seller will advise the Buyer of the dates by and location to which, in the planned release of engineering for the Aircraft, the Seller requires a written detailed engineering description. This description will include the dimensions and weight of BFE, the information related to its certification and information necessary for the installation and operation thereof. The Buyer will furnish such detailed description and information by the dates specified. Thereafter, no information, dimensions or weights will be revised unless authorized by an SCN.

		The Seller will also provide the Buyer in due time with a schedule of dates and shipping addresses for delivery of BFE and (when requested by the Seller) additional spare BFE in order permit installation of the BFE in the Aircraft and delivery of the Aircraft in accordance with the delivery schedule. The Buyer will provide the BFE by such dates in a serviceable condition, to allow performance of any assembly, test, or acceptance process in accordance with the Seller’s industrial schedule.

		The Buyer will also provide, when requested by the Seller, at Airbus France S.A.S. works and/or at Airbus Deutschland GmbH works, as applicable and needed, adequate field service, including support from BFE suppliers to act in a technical advisory capacity to the Seller in the installation, calibration and possible repair of any BFE.

18.1.2		The BFE will be imported into France or into Germany by the Buyer under a suspensive customs system (“ Régime de l’entrepôt industriel pour fabrication coordonnée ” or “ Zollverschluss ”) without application of any French or German tax or customs duty, and will be Delivered Duty Unpaid (DDU) (as defined in Incoterms 2000: ICC Official Rules for the Interpretation of Trade Terms, published by the International Chamber of Commerce), to

Airbus France S.A.S.
316 Route de Bayonne
31300 Toulouse, France
or
Airbus Deutchland GmbH
Division Hamburger Flugzeugbau
Kreetslag 10
21129 Hamburg
Federal Republic of Germany



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 89 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		as provided in Clause 18.1.1.

18.1.3		If the Buyer requests the Seller to supply directly certain items that are considered BFE according to the Specification, and if such request is notified to the Seller in due time in order not to affect the Delivery Date of the Aircraft, the Seller may agree to order such items subject to the execution of an SCN reflecting the effect on price, escalation adjustment, and any other customary conditions of the Agreement. In such a case the Seller will be entitled to the payment of a handling charge not to exceed ** and will bear no liability in respect of delay and product support commitments for such items.

18.2		Requirements

		The Buyer is responsible for assuring and warranting, at its expense, that BFE will (i) be manufactured by a qualified supplier in accordance with the provisions of Clause 18.1.1, (ii) meet the requirements of the applicable Specification, (iii) comply with applicable requirements incorporated by reference to the Type Certificate and listed in the Type Certificate Data Sheet, and (iv) be approved by the applicable Aviation Authority delivering the Export Certificate of Airworthiness and by the FAA for installation and use on the Aircraft at the time of Delivery of such Aircraft. The Seller will be entitled to refuse any item of BFE that it considers incompatible with the Specification, the engineering description mentioned above in Clause 18.1.1 or the certification requirements.

18.3		Buyer’s Obligation and Seller’s Remedies

18.3.1		Any delay or failure in

	(i)		furnishing the BFE in serviceable condition at the requested delivery date,

	(ii)		complying with the warranty in Clause 18.2 or in providing the descriptive information or service representatives mentioned in Clause 18.1.1, or

	(iii)		in obtaining any required approval for such equipment under the regulations of the above mentioned Aviation Authorities


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 90 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

18.3.2

In addition to the consequences outlined in Clause 18.3.1, in the event of a delay or failure described in Clause 18.3.1,

	(i)		the Seller may select, purchase and install equipment similar to the BFE at issue, in which event the Final Contract Price of the affected Aircraft will also be increased by the purchase price of such equipment, plus reasonable costs and expenses incurred by the Seller for handling charges, transportation, insurance, packaging and, if required and not already provided for in the price of the Aircraft, for adjustment and calibration; or

	(ii)		if the BFE is delayed more than beyond, or unapproved within of the date specified in Clause 18.1.1, then the Seller may deliver or the Buyer may elect to have the Aircraft delivered without the installation of such equipment, notwithstanding the terms of Clause 7.2 insofar as it may otherwise have applied, whereupon the Seller will be relieved of all obligations to install such equipment.

18.4		Title and Risk of Loss

		Title to (subject to Clause 18.5(iv)) and risk of loss of BFE will at all times remain with the Buyer that is the owner thereof, except that risk of loss (limited to cost of replacement of said BFE and excluding in particular loss of use) will be with the Seller for as long as the BFE is in the care, custody and control of the Seller.

18.5		Disposition of BFE Following Termination

		If a termination of this Agreement pursuant to the provisions of Clause 21 occurs with respect to an Aircraft in which all or any part of the BFE has been installed prior to the date of such termination, the Seller will be entitled, but not required, to remove all items of BFE that can be removed without causing damage to the Aircraft or rendering any system in the Aircraft unusable and to undertake commercially reasonable efforts to facilitate the sale of such items of BFE to other customers, retaining and applying the proceeds of such sales to reduce Seller’s damages resulting from the termination. In addition, the following terms will apply in the case of such a termination:

(i)

The Buyer will cooperate with the Seller in facilitating the sale of BFE pursuant to the first paragraph of this Clause 18.5 and will be responsible for all costs incurred by the Seller in removing and facilitating the sale of such BFE. ** . The Buyer will reimburse the Seller for all such costs within ** of receiving documentation of such costs from the Seller.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 91 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

(ii)		The Seller will notify the Buyer as to those items of BFE not sold by the Seller pursuant to the first paragraph of this Clause 18.5, and, at the Seller’s request, the Buyer will remove such items from the Seller’s facility within thirty (30) days of the date of such notice. The Buyer will have no claim against the Seller for damage or destruction of any item of BFE removed from the Aircraft and not removed from Seller’s facility within such period.

(iii)		The Buyer will have no claim against the Seller for damage to or destruction of any item of BFE damaged or destroyed in the process of being deinstalled from the Aircraft, provided that the Seller will use reasonable care in such deinstallation.

(iv)		The Buyer will grant title to the Seller for any BFE items that cannot be removed from the Aircraft.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 92 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

INDEMNITIES AND INSURANCE

19.1

Seller’s Indemnities

The Seller will, except in the case of gross negligence or willful misconduct of the Buyer, its directors, officers, agents, and employees, be solely liable for and will indemnify and will hold the Buyer and its respective directors, officers, agents and employees, Affiliates, the Buyer’s representatives, and the respective assignees, directors, officers, agents and employees of each of the foregoing harmless against all losses, liabilities, claims, damages, costs and expenses, including court costs and reasonable attorneys’ fees (“ Losses ”), arising from claims for

	(i)		injuries to, or deaths of, the Seller’s directors, officers, agents or employees, or loss or damage to property of the Seller, or its employees or agents when such losses occur during or are incidental to (a) the exercise by the Buyer of its inspection rights under Clause 6, (b) the Technical Acceptance Process described in Clause 8, (c) the provision of Resident Customer Support Representative support pursuant to Clause 15 or (iv) the provision of training pursuant to Clause 16; and

	(ii)		injuries to or deaths of third parties, or loss of property of third parties, occurring during, or incidental to (a) the exercise by the Buyer of its inspection rights pursuant to Clause 6 or (b) the Technical Acceptance Process described in Clause 8.

19.2		Buyer’s Indemnities

		The Buyer will, except in the case of gross negligence or willful misconduct of the Seller, its directors, officers, agents and employees, be solely liable for and will indemnify and will hold the Seller and its subcontractors and Affiliates, the Seller’s representatives, and the respective assignees, directors, officers, agents and employees of each of the foregoing, harmless against all Losses arising from:

	(i)		injuries to or deaths of the Buyer’s directors, officers, agents or employees, or loss or damage to property of the Buyer or to its employees or agents, when such losses occur during or are incidental to (a) the exercise by the Buyer of its inspection rights under Clause 6; (b) the Technical Acceptance Process described in Clause 8, (c) the provision of Resident Customer Support Representative support pursuant to Clause 15, or (d) the provision of training pursuant to Clause 16; and

	(ii)		claims for injuries to or deaths of third parties, or loss of property of third parties occurring during or incidental to (a) the provision of Resident Customer Support Representative support under Clause 15 or (b) arise out of the provision of



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 93 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

training pursuant to Clause 16 and are not caused by a defect of the type specified in Clause 12.1.1 that is not excluded under Clause 12.1.2.

19.3

Notice and Defense of Claims

	(i)		If any claim is made or suit is brought against a party or entity entitled to indemnification under this Clause 19 (the “ Indemnitee ”) for damages for which liability has been assumed by the other party under this Clause 19, (the “ Indemnitor ”), the Indemnitee will promptly give notice to the Indemnitor and the Indemnitor (unless otherwise requested by the Indemnitee) will assume and conduct the defense, or settlement, of such suit, as the Indemnitor will deem prudent. Notice of the claim or suit will be accompanied by all information pertinent to the matter as is reasonably available to the Indemnitee and will be followed by such cooperation by the Indemnitee as the Indemnitor or its counsel may reasonably request at the expense of the Indemnitor.

	(ii)		If the Indemnitor fails or refuses to assume the defense of any claim or lawsuit notified to it under this Clause 19, the Indemnitee will have the right to proceed with the defense or settlement of the claim or lawsuit as it deems prudent and will have a claim over against the Indemnitor for any judgments, reasonable settlements, costs or expenses, including reasonable attorneys’ fees. Further, in such event, the Indemnitor will be deemed to have waived any objection or defense to the Indemnitee’s claim based on the reasonableness of any settlement.

19.4		Insurance

		For all training periods on aircraft, the Buyer will cause the Seller and its Affiliates, as defined in this Clause 19.4 to be named as additional insured under its aviation legal liability insurance policies, including passenger legal liability, bodily injury liability, products liability (exclusive of manufacturer’s product liability insurance), property damage liability, contractual liability and war risks and allied perils liability, to the extent of the Buyer’s undertaking set forth in Clause 19.2. With respect to the Buyer’s hull all risks and hull war risks insurances and allied perils, the Buyer will cause its hull insurance underwriters to waive all rights of subrogation against the Seller, as defined in this Clause 19.4 to the extent of the Buyer’s undertaking set forth in Clause 19.2.

		Any applicable deductible will be borne by the Buyer. With respect to the above policies, the Buyer will furnish to the Seller, not less than seven (7) Working Days prior to the start of any such training period, certificates of insurance, in English, evidencing the limit of liability cover and period of insurance in a form acceptable to the Seller from its respective insurance broker(s) certifying that such policies have been endorsed as follows:

(i)

under the aviation legal liability insurances referred to above, the Buyer’s policies are primary and non-contributory to any insurance maintained by the Seller;



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 94 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(ii)		such insurance can only be cancelled or materially altered by the giving of not less than thirty (30) days (but seven (7) days or such lesser period as may be customarily available in respect of war risks and allied perils) and ten (10) days in respect of cancellation for non-payment of premium) prior written notice thereof to the Seller; and

	(iii)		under any such cover, all rights of subrogation against the Seller and its Affiliates have been waived to the extent of the Buyer’s undertaking and specially referring to Clause 19.2 and to this Clause 19.4.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 95 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

20		ASSIGNMENTS AND TRANSFERS

20.1		Assignments by Buyer

		Except as hereinafter provided, the Buyer may not sell, assign or transfer its rights or obligations under this Agreement to any person without the prior written consent of the Seller.

20.2		Assignments on Sale, Merger or Consolidation

		The Buyer will be entitled to assign its rights under this Agreement at any time due to a merger or consolidation involving the Buyer, provided the Buyer first obtains the written consent of the Seller. The Seller will provide its consent if:

	(i)		the surviving or acquiring entity is organized and existing under the laws of the United States;

	(ii)		the surviving or acquiring entity has executed an assumption agreement, in form and substance reasonably acceptable to the Seller, agreeing to assume all of the Buyer’s obligations under this Agreement;

	(iii)		at the time, and immediately following the consummation, of the merger, consolidation or sale, no event of default exists or will have occurred and be continuing;

	(iv)		there exists with respect to the surviving or acquiring entity no basis for a Termination Event within the meaning of Clause 21; and

	(v)		the surviving or acquiring entity holds an air carrier operating certificate issued by the FAA at the time, and immediately following the consummation, of such sale, merger or consolidation.

20.3		Designations by Seller

		The Seller may at any time by notice to the Buyer designate facilities or personnel of ANACS or any Affiliate of the Seller at which or by whom the services to be performed under this Agreement will be performed. The Seller may also designate any of its Affiliates as the party responsible on behalf of the Seller for providing to the Buyer all or any of the services to be performed under this Agreement. Notwithstanding such designation, the Seller will remain ultimately responsible for fulfillment of all obligations undertaken by the Seller in this Agreement.

20.4


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 96 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

20.5 **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 97 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

21.		TERMINATION

21.1		Termination Events

		Each of the following will constitute a “ Termination Event ”:

	(1)		The Buyer commences in any jurisdiction any case, proceeding or other action with respect to the Buyer or its properties relating to bankruptcy, insolvency, reorganization, winding-up, liquidation, dissolution or other relief from, or with respect to, or readjustment of, its debts or obligations.

	(2)		An action is commenced in any jurisdiction seeking the appointment of a receiver, trustee, custodian or other similar official for the Buyer or for all or any substantial part of its assets, and such action remains unstayed, undismissed or undischarged for **, or the Buyer makes a general assignment for the benefit of its creditors.

	(3)		An action is commenced in any jurisdiction against the Buyer seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets, and such action remains unstayed, undismissed or undischarged for **.

	(4)		The Buyer becomes the object, in any jurisdiction, of a case, proceeding or action similar or analogous to any of the events mentioned in Clause 21.1(1), (2) or (3).

	(5)		The Buyer is generally not, or is unable to, or admits in writing its inability to, pay its debts as they become due.

	(6)		The Buyer commences negotiations with significant creditors, existing or potential, with the intention of restructuring all or substantially all of its outstanding obligations or in preparation for a bankruptcy filing under the U.S. Bankruptcy Code.

	(7)		The Buyer or any of its respective Affiliates fails to make (i) payment of all or part of the Final Contract Price of any Aircraft required to be made under this Agreement on the due date therefore; when such payment is due, (ii) any Predelivery Payment required to be made under this Agreement after the date on which such amount is due (iii) any other payment required to be made under this Agreement or any other material agreement between the Buyer or any of its Affiliates and the Seller or any of its Affiliates , of such failure to pay which such payment is due.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 98 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(8)		The Buyer repudiates, cancels or terminates this Agreement in whole or in part.

	(9)		The Buyer defaults in its obligation to take delivery of an Aircraft as provided in Clause 9.

	(10)		The Buyer or any of its Affiliates defaults in the observance or performance of any other covenant, undertaking or obligation contained in this Agreement or any other material agreement between the Buyer or its Affiliates, on the one hand, and the Seller or its Affiliates on the other hand, provided that, if such breach or default is capable of being cured, such breach or default is not cured within any specified cure period **.

	(11)		Any other event that the parties will have agreed in writing constitutes a Termination Event hereunder.

21.2

	(1)		**;

	(2)		**

	(A)		**

	(a)		**

	(b)		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 99 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	1.		**

	2.		**

	3.		**

	4.		**

	5.		**

	6.		**

	(B)		**

	(3)		**

	(4)		**

21.3

		**

	(i)		**

	(ii)		**

	(iii)		**

21.4		Notice of Termination Event

		Promptly upon obtaining knowledge of the occurrence of a Termination Event by the Buyer, the Buyer will notify the Seller of such occurrence in writing, provided, that any failure by the Buyer to notify the Seller will not prejudice the Seller’s rights or remedies hereunder.

21.5		**

		**

21.6		Information Covenants


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 100 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

The Buyer hereby covenants and agrees that, from the date of this Agreement until no further Aircraft are to be delivered hereunder, the Buyer will furnish or cause to be furnished to the Seller the following, it being understood that this covenant with respect to Clauses 21.6 (a), (b) and (c) will be deemed satisfied if the information requested in those clauses is filed, un-redacted, with the U.S. Securities and Exchange Commission and is publicly available on EDGAR (or any successor online resource):

	(a)		Annual Financial Statements. As soon as available and in any event no later than the date that the Buyer furnish such annual statements to the Securities and Exchange Commission or successor thereto (the “ SEC ” ) (i) a copy of the SEC Form 10-K filed by the Buyer with the SEC for such fiscal year, or, if no such Form 10-K was filed by the Buyer for such fiscal year, **following the close of such fiscal year of the Buyer, the consolidated balance sheet of the Buyer and its Subsidiaries, as at the end of such fiscal year and the related consolidated statements of operations, of common stockholders’ equity (deficit) (in the case of the Buyer and its Subsidiaries) and of cash flows for such fiscal year, setting forth comparative consolidated figures as of the end of and for the preceding fiscal year, and examined by any firm of independent public accountants of recognized standing selected by the Buyer and reasonably acceptable to the Seller, whose opinion will not be qualified as to the scope of audit or as to the status of the Buyer as a going concern, and (ii) a certificate of such accounting firm stating that its audit of the business of the Buyer was conducted in accordance with generally accepted auditing standards.

	(b)		Quarterly Financial Statements . As soon as available and in any event no later than the date that the Buyer furnish such quarterly statements to the SEC, a copy of the SEC Form 10-Q filed by the Buyer, as a group, with the SEC for such quarterly period, or, if no such Form 10-Q was filed by the Buyer with respect to any such quarterly period, no later than the ** following the close of such quarterly period, the consolidated balance sheet of the Buyer and its Subsidiaries, as at the end of such quarterly period and the related consolidated statements of operations for such quarterly period and for the elapsed portion of the fiscal year ended with the last day of such quarterly period and in each case setting forth comparative consolidated figures as of the end of and for the related periods in the prior fiscal year, all of which will be certified by an Authorized Officer of the Buyer, subject to changes resulting from audit and normal year-end audit adjustments.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 101 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

(c)

Other Information . Promptly upon transmission thereof, copies of any filings and registrations with, and reports to, the SEC by the Buyer or any of its Affiliates, and, with reasonable promptness, such other information or documents (financial or otherwise) as the Seller may reasonably request from time to time.

		For the purposes of this Clause 21.6, (x) an “ Authorized Officer ” of the Buyer will mean the Chief Executive Officer, the Chief Financial Officer or any Vice President and above thereof who reports directly or indirectly to the Chief Financial Officer and (y) “ Subsidiaries ” will mean, as of any date of determination, those companies owned by the Buyer whose financial results the Buyer is required to include in its statements of consolidated operations and consolidated balance sheets.

21.7		Information Undertakings

		The Buyer undertakes, from the date of this Agreement until no further Aircraft are to be delivered hereunder, to use best efforts to furnish or cause to be furnished to the Seller the following information:

	(a)		Debt Rescheduling. (i) Promptly upon the commencement by the Buyer of negotiations with one or more of its significant creditors with a view to general readjustment or rescheduling of all or any material part of its indebtedness under circumstances in which a reasonable business person, in the exercise of prudent business judgment, would conclude that the Buyer would otherwise not be able to pay such indebtedness as it falls due, notice of commencement of such negotiations, and (ii) thereafter timely advice of the progress of such negotiations until such negotiations are terminated or completed.

	(b)		Acceleration of other indebtedness . Immediately upon knowledge by the Buyer that the holder of any bond, debenture, promissory note or any similar evidence of indebtedness of the Buyer or any Affiliate thereof ( “ Other Indebtedness ” ) has demanded payment, given notice or exercised its right to a remedy having the effect of acceleration with respect to a claimed event of default under any Other Indebtedness, where the impact of the acceleration is likely to have a material adverse effect on the Buyer’s ability to perform its obligations under or in connection with the transactions contemplated by this Agreement, notice of the demand made, notice given or action taken by such holder and the nature and status of the claimed event of default and what the action the Buyer is taking with respect thereto.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 102 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

22		MISCELLANEOUS

22.1		Data Retrieval

		On the Seller’s reasonable request, the Buyer will provide the Seller with all the necessary data, as customarily compiled by it and pertaining to the operation of the Aircraft, to assist the Seller in making an efficient and coordinated survey of all reliability, maintenance, operational and cost data with a view to improving the safety, availability and operational costs of the Aircraft.

22.2		Notices

		All notices and requests required or authorized hereunder will be given in writing either by personal delivery to a responsible officer of the party to whom the same is given or by commercial courier, certified air mail (return receipt requested) or facsimile at the addresses and numbers set forth below. The date on which any such notice or request is so personally delivered, or if such notice or request is given by commercial courier, certified air mail or facsimile the date on which it is given, will be deemed to be the effective date of such notice or request.

		The Seller will be addressed at:

1, rond-point Maurice Bellonte
31700 Blagnac France
Attention: Director – Contracts

Telephone: 33 05 61 30 40 12
Telecopy: 33 05 61 30 40 11

The Buyer will be addressed, in the case of any item to be delivered other than via courier or personal service or delivery, at:

4000 East Sky Harbor Blvd.
Phoenix, AZ 85034
Attention: Senior Vice President and Chief Financial Officer
Telephone: (480) 693-5710
Fax: (480) 693-2899

cc: General Counsel
Fax: (480) 693-5932



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 103 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

And, in the case of any item to be delivered via commercial courier or personal service or overnight delivery service,

111 West Rio Salado Parkway
Tempe, AZ 85281
Attention: Senior Vice President and Chief Financial Officer

		From time to time, the party receiving the notice or request may designate another address or another person.

22.3		Waiver

		The failure of either party to enforce at any time any of the provisions of this Agreement, to exercise any right herein provided or to require at any time performance by the other party of any of the provisions hereof will in no way be construed to be a present or future waiver of such provisions nor in any way to affect the validity of this Agreement or any part hereof or the right of the other party thereafter to enforce each and every such provision. The express waiver by either party of any provision, condition or requirement of this Agreement will not constitute a waiver of any future obligation to comply with such provision, condition or requirement.

22.4		Interpretation and Law

		THIS AGREEMENT WILL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE THEREOF WILL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

		THE PARTIES HEREBY ALSO AGREE THAT THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS WILL NOT APPLY TO THIS TRANSACTION.

		REGARDING THE CAPE TOWN CONVENTION ON INTERNATIONAL INTERESTS IN MOBILE EQUIPMENT, THE BUYER AGREES THAT IT WILL NOT, AND IT WILL NOT PERMIT ANY LENDER OR FINANCIER FINANCING EITHER AIRCRAFT OR PREDELIVERY PAYMENTS TO, REGISTER ANY INTEREST IN AN UNDELIVERED AIRCRAFT OR IN ANY PROPULSION SYSTEM INSTALLED THEREON AT THE INTERNATIONAL REGISTRY IN CONNECTION WITH SUCH FINANCING.

		Each party (i) hereby irrevocably submits itself to the nonexclusive jurisdiction of the courts of the state of New York in New York County and, to the extent permitted by applicable law, of the United States District Court for the Southern District of New York,



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 104 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		for the purposes of any suit, action or other proceeding arising out of this Agreement or any of the transactions contemplated hereby brought by any party or parties hereto, and (ii) hereby waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any such suit, action or proceeding, to the extent permitted by applicable law, the defense of sovereign immunity, any claim that it is not personally subject to the jurisdiction of the above-named courts by reason of sovereign immunity or otherwise or that it or its property is exempt or immune from jurisdiction of such court or from legal process (whether through service of notice, attachment prior to judgment, attachment in aid of execution or judgment, execution of judgment or otherwise) and to the extent permitted by applicable law, that the suit, action or proceeding which is referred to in clause (i) above is brought in an inconvenient forum, that the venue of such suit, action or proceeding is improper, or that this Agreement or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by these courts.

22.4.1		Service of process in any suit, action or proceeding in respect of any matter as to which the Buyer has submitted to jurisdiction under Clause 22.4 may be made on the Buyer by delivery of the same personally or by dispatching the same via Federal Express, UPS, or similar international air courier, service prepaid to, CT Corporation, 111 Hudson St., New York, NY (or such other office in the City of New York as such agent will then be occupying), as agent for the Buyer, it being agreed that service upon CT Corporation will constitute valid service upon the Buyer or by any other method authorized by the laws of the State of New York.

22.4.2		Service of process in any suit, action or proceeding in respect of any matter as to which the Seller has submitted to jurisdiction under Clause 22.4 may be made on the Seller by delivery of the same personally or by dispatching the same via Federal Express, UPS, or similar international air courier, service prepaid to, CT Corporation, 111 Hudson St., New York, NY (or such other office in the City of New York as such agent will then be occupying), as agent for the Seller, it being agreed that service upon CT Corporation will constitute valid service upon the Seller or by any other method authorized by the laws of the State of New York.

22.5		Waiver of Jury Trial

		EACH OF THE PARTIES HERETO WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM OR CROSS-CLAIM THEREIN.

22.6		No Representations outside of this Agreement

		The parties declare that, prior to the execution of this Agreement, they, with the advice of their respective counsel, apprised themselves of sufficient relevant data in order that they might intelligently exercise their own judgments in deciding whether to execute this Agreement and in deciding on the contents of this Agreement. Each party further declares that its decision to execute this Agreement is not predicated on or influenced by any declarations or representations by any other person, party, or any predecessors in



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 105 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		interest, successors, assigns, officers, directors, employees, agents or attorneys of any said person or party, except as set forth in this Agreement. This Agreement resulted from negotiation involving counsel for all of the parties hereto and no term herein will be construed or interpreted against any party under the contra proferentum or any related doctrine.

22.7		Confidentiality

		Subject to any legal or governmental requirements of disclosure, or a request in a judicial proceeding (in which case, the party subject to the request will duly inform the other parties to the Agreement of such request so that such parties may seek appropriate protective order) the parties (which for this purpose will include their employees, agents and advisors) will maintain the terms and conditions of this Agreement and any reports or other data furnished hereunder (including, but not limited to, Clauses 14 and 16) strictly confidential. Without limiting the generality of the foregoing, the Buyer and the Seller will each use its best efforts to limit the disclosure of the contents of this Agreement to the extent legally permissible in any filing required to be made by the Buyer with any governmental agency and will make such applications as will be necessary to implement the foregoing.

		With respect to any public disclosure or filing, the Buyer agrees to submit to the Seller a copy of the proposed document to be filed or disclosed and will give the Seller a reasonable period of time in which to review said document. The Buyer and the Seller will consult with each other prior to the making of any public disclosure or filing, permitted hereunder, of this Agreement or the terms and conditions thereof.

		The provisions of this Clause 22.7 will survive any termination of this Agreement.

22.8		Severability

		If any provision of this Agreement should for any reason be held to be without effect, the remainder of this Agreement will remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Agreement prohibited or unenforceable in any respect.

22.9		Alterations to Contract

		This Agreement, including its Exhibits and Appendices, together with other agreements between the parties executed as of the date hereof, contains the entire agreement between the parties with respect to the subject matter hereof and thereof and supersedes any previous understanding, commitments or representations whatsoever, whether oral or written including that certain term sheet between the Seller and the Buyer, dated June 14, 2007]. This Agreement will not be amended or modified except by an instrument in writing of even date herewith or subsequent hereto executed by both parties or by their fully authorized representatives.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 106 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

22.10		Inconsistencies

		In the event of any inconsistency between the terms of this Agreement and the terms contained in either (i) the Specification, or (ii) any other Exhibit attached to this Agreement, in each such case the terms of such Specification, Exhibit will prevail over this Agreement. For the purpose of this Clause 22.10, the term Agreement will not include either Specification or any Exhibit**

22.11		Language

		All correspondence, documents and any other written matters in connection with this Agreement will be in English.

22.12		Headings

		All headings in this Agreement are for convenience of reference only and do not constitute a part of this Agreement.

22.13		Counterparts

		This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered will be an original, but all such counterparts will together constitute one and the same instrument.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 107 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

23		CERTAIN REPRESENTATIONS OF THE PARTIES

23.1.		Buyer’s Representations

		The Buyer represents and warrants to the Seller:

	(i)		it is a corporation organized and existing in good standing under the laws of the State of Delaware and has the corporate power and authority to enter into and perform its obligations under this Agreement;

	(ii)		neither the execution and delivery by it of this Agreement, nor the consummation of any of the transactions by it contemplated hereby, nor the performance by it of the obligations hereunder, constitutes a breach of any agreement to which it is a party or by which its assets are bound; and

	(iii)		this Agreement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

23.2		Seller’s Representations

		The Seller represents and warrants to the Buyer:

	(i)		the Seller is a societe à responsabilité limitée organized and existing in good standing under the laws of the Republic of France and has the corporate power and authority to enter into and perform its obligations under this Agreement;

	(ii)		neither the execution and delivery by the Seller of this Agreement, nor the consummation of any of the transactions by the Seller contemplated hereby, nor the performance by the Seller of the obligations hereunder, constitutes a breach of any agreement to which the Seller is a party or by which its assets are bound; and

	(iii)		this Agreement has been duly authorized, executed and delivered by the Seller and constitutes the legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA — 108 of 109
EXECUTION		PRIVILEGED AND CONFIDENTIAL

IN WITNESS WHEREOF, these presents were entered into as of the day and year first above written.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

Title: Vice President and Treasurer		Title:	Chief Operating Officer Customers



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		PA
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT A-1.A

The Aircraft Definition Document A350-800 XWB is contained in a separate folder.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. A-1.A — 1 of 1
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT A-1.B

The A350-800 XWB Standard Specification will be contained in a separate folder.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. A-1.B — 1 of 1
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT A-2.A

The Aircraft Definition Document A350-900 XWB is contained in a separate folder.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. A-2.A — 1 of 1
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT A-2.B

The A350-900 XWB Standard Specification will be contained in a separate folder.



USA — Amended and Restate Airbus A350 XWB Purchase Agreement		Exh. A-2.B — 1 of 1
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT A-3.A

The Aircraft Definition Document A350-1000 XWB is contained in a separate folder.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. A-3.A — 1 of 1
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT A-3.B

The A350-1000 XWB Standard Specification will be contained in a separate folder.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. A-3.B — 1 of 1
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-1.A


AIRBUS		SCN No.
SPECIFICATION CHANGE NOTICE		Issue
(SCN)		Dated
		Page No.

TITLE

DESCRIPTION

EFFECT ON WEIGHT
Manufacturer’s Weight Empty Change:

Operational Weight Empty Change:

Allowable Payload Change:

REMARKS/REFERENCES
Response to RFC

SPECIFICATION CHANGED BY THIS SCN

THIS SCN REQUIRES PRIOR OR CONCURRENT ACCEPTANCE OF THE FOLLOWING SCN(s)

PRICE PER AIRCRAFT

US DOLLARS:

AT DELIVERY CONDITIONS:

This change will be effective on Aircraft No. and subsequent
provided approval is received by .


BUYER APPROVAL		SELLER APPROVAL

By:		By:

Title: (Authorized Finance Department Officer)		Date:

By:

Title: (Authorized maintenance or flight operations officer)

Date:



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh B — 1.A-1 of 2
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-1.A


AIRBUS		SCN No.
SPECIFICATION CHANGE NOTICE		Issue
(SCN)		Dated
		Page No.

SCOPE OF CHANGE (FOR INFORMATION ONLY)



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh B — 1.A-2 of 2
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT B.1.B

A350-800XWB Technical SCN List (ADD Specification changes)


	A350 Jan
RFC (from - 300 for ref)	07 DC	TITLE	REMARKS
**	**	**	**

**Confidential Treatment Requested.



USA — Amended and Restated Airbus A350XWB Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT B.1.B

A350-800XWB Technical SCN List (ADD Specification changes)

**Confidential Treatment Requested.



USA — Amended and Restated Airbus A350XWB Purchase Agreement
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-2


AIRBUS		Airline


MANUFACTURER’S SPECIFICATION		MSCN Number
CHANGE NOTICE		Issue
		Dated
(MSCN)		Page 1 of 3

Title:

Description

Effect on weight

Manufacturer’s Weight Empty Change :
Operational Weight Empty Change :
Allowable Payload Change :

Remarks / References

Specification changed by this MSCN

Price per aircraft

US DOLLARS :

AT DELIVERY CONDITIONS :

This change will be effective on AIRCRAFT N° and subsequent.
Provided MSCN is not rejected by


		Buyer Approval		Seller Approval

		By :		By :

		Date :		Date :



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh B—1 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-2


AIRBUS		Airline


MANUFACTURER’S SPECIFICATION		MSCN Number
CHANGE NOTICE		Issue
		Dated
(MSCN)		Page 2 of 3

Specification repercussion:

After contractual agreement with respect to weight, performance, delivery, etc, the indicated part of the specification wording will read as follows:

Price per aircraft

US DOLLARS :

AT DELIVERY CONDITIONS :

This change will be effective on AIRCRAFT N° and subsequent.

Provided MSCN is not rejected by


		Buyer Approval		Seller Approval

		By :		By :

		Date :		Date :



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh B—2 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT B-2


AIRBUS		Airline

MANUFACTURER’S SPECIFICATION		MSCN Number
CHANGE NOTICE		Issue
		Dated
(MSCN)		Page 3 of 3

Scope of change (FOR INFORMATION ONLY)

Price per aircraft

US DOLLARS :

AT DELIVERY CONDITIONS :

This change will be effective on AIRCRAFT N° and subsequent.

Provided MSCN is not rejected by


		Buyer Approval		Seller Approval

		By :		By :

		Date :		Date :



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh B—3 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT C

SELLER SERVICE LIFE POLICY
ITEMS COVERED


1		The Items covered by the Service Life Policy pursuant to Clause 12.2 are those Seller Items of primary and auxiliary structure described hereunder.

2		WINGS — CENTER AND OUTER WING BOX (LEFT AND RIGHT)

2.1		Wing Structure

2.1.1		**

2.1.2		**

2.1.3		**

2.2		Fittings

2.2.1		**
2.2.2		**

2.2.3 2.2.4

2.3		Auxiliary Support Structure

2.3.1		**

2.3.1.1		**

2.3.1.2		**

2.3.2		**

2.3.2.1		**
2.3.2.2		**

2.3.3		**

2.3.3.1		**

2.3.3.2		**

**Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh C—1 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT C


2.4		Pylon

2.4.1		**

2.4.1.1		**

2.4.1.2		**

2.4.1.3		**

2.4.1.4		**

3		FUSELAGE

3.1		Fuselage structure

3.1.1		**

3.1.2		**

3.1.3		**

3.1.4		**

3.1.5		**

3.1.6		**

3.1.7		**

3.1.8		**

3.2		Fittings

3.2.1		**

3.2.2		**

3.2.3		**

**Confidential Treatment Requested.



USA-Amended and Restated Airbus A350 XWB Purchase Agreement		Exh C—2 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT C


4		STABILIZERS

4.1		Horizontal Stabilizer Main Structural Box

4.1.1		**

4.1.2		**

4.1.3		**

4.1.4		**

4.1.5		**

4.1.5.1		**

4.1.5.2		**

4.2		Vertical Stabilizer Main Structural Box

4.2.1		**

4.2.2		**

4.2.3		**

4.2.4		**

4.2.5		**

4.2.5.1		**

4.2.5.2		**

5		EXCLUSIONS

		**

**Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh C—3 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT D

Form of

CERTIFICATE OF ACCEPTANCE
for A350 XWB Aircraft

In accordance with the terms of that certain Amended and Restated Airbus A350 XWB Purchase Agreement dated as of , between , (“Buyer”) and AIRBUS S.A.S. (“AIRBUS”) (the “Purchase Agreement”), the acceptance inspections relating to the Airbus A350 XWB aircraft, Manufacturer’s Serial Number: ___, U.S. Registration Number: ___with two (2) Rolls-Royce Trent series propulsion systems installed thereon, serial nos. ___(position #1) and ___ (position #2) (the “A350 XWB Aircraft”), have taken place at Toulouse, France, on the ___day of , ___.

In view of said inspections having been carried out with satisfactory results, and with any remaining discrepancies note separately, Buyer hereby approves the A350 XWB Aircraft as being in conformity with the provisions of the Purchase Agreement.

This acceptance does not impair the rights of the Buyer that may be derived from the warranties relating to the A350 XWB Aircraft set forth in the Purchase Agreement.


		RECEIPT AND ACCEPTANCE OF THE ABOVE-DESCRIBED A350 XWB AIRCRAFT ACKNOWLEDGED

		US AIRWAYS, INC.

		By:

		Its:


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. D—1 of 1
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT E

BILL OF SALE
for A350 [-800][-900][-1000] XWB Aircraft

Know all persons by these presents that AIRBUS S.A.S. (“ AIRBUS ”), organized and existing under the laws of the Republic of France, whose address is 1 rond-point Maurice Bellonte, 31700 Blagnac, FRANCE, is the owner of the full legal and beneficial title to the following airframe (the “ Airframe ”), the attached propulsion systems as specified (the “ Propulsion System ”) and all appliances, components, parts, instruments, accessories, furnishings, modules and other equipment of any nature, excluding buyer furnished equipment, incorporated therein, installed thereon or attached thereto on the date hereof (the “ Parts ”):


MANUFACTURER OF AIRFRAME :		MANUFACTURER OF ENGINES :

AIRBUS		ROLLS-ROYCE

MODEL : A350 [-800][-900][-1000] XWB		MODEL : Trent [72][87][95]

MANUFACTURER’S		SERIAL NUMBERS :
SERIAL NUMBER : [ ]		LH : [ ]
		RH : [ ]

REGISTRATION NO : [ ]

The Airframe, Propulsion System and Parts are hereafter together referred to as the aircraft (the “ A350 -[-800][-900][-1000] XWB Aircraft ”).

AIRBUS does this ___day of ___sell, transfer and deliver all of its above described rights, title and interest to the A350 XWB Aircraft to the following company forever, said A350 [-800][-900][-1000] XWB Aircraft to be the property thereof:

US AIRWAYS, INC. (the “Buyer”)

AIRBUS hereby warrants to the Buyer, its successors and assigns that it has on the date hereof good and lawful right to sell, deliver and transfer title to the A350 [-800][-900][-1000] XWB Aircraft to the Buyer and that there is hereby conveyed to the Buyer on the date hereof good, legal and valid title to the A350 [-800][-900][-1000] XWB Aircraft, free and clear of all liens, claims, charges, encumbrances and rights of others, other than those arising by or through the Buyer and that the Seller will warrant and defend such title forever against all claims and demands whatsoever.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. E—1 of 2
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT E

IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed by its duly authorized representative this ___day of [ ]

AIRBUS S.A.S.
By:
Title:
Signature:
Location:


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. E — 2 of 2
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT F

EXHIBIT F

TECHNICAL DATA INDEX

**Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. F—1 of 9
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT F

TECHNICAL DATA INDEX

**Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. F—2 of 9
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT F

Advanced

Consultation

Specific

NOMENCLATURE

Abbreviation

XML

Tool

format

Type

Qty

Deliv

Comments

FLIGHT OPERATIONAL DATA


**		Confidential Treatment Requested.



USA Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. F — 3 of 9
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT F

Advanced

Consultation

Specific

NOMENCLATURE

Abbreviation

XML

Tool

format

Type

Qty

Deliv

Comments

MAINTENANCE AND ASSOCIATED DATA

Advanced

Consultation

Specific

NOMENCLATURE

Abbreviation

XML

Tool

format

Type

Qty

Deliv

Comments

MAINTENANCE AND ASSOCIATED DATA


**		Confidential Treatment Requested.



USA Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. F — 4 of 9
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT F

Advanced

Consultation

Specific

NOMENCLATURE

Abbreviation

XML

Tool

format

Type

Qty

Deliv

Comments

MAINTENANCE AND ASSOCIATED DATA(continued)


**		Confidential Treatment Requested.



USA Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. F — 5 of 9
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT F

Adavanced

Consultation

Specific

NOMENCLATURE

Abbreviation

XML

Tool

format

Type

Qty

Deliv

Comments

STRUCTURAL DATA


**		Confidential Treatment Requested.



USA Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. F — 7 of 9
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT F

Adavanced

Consultation

Specific

NOMENCLATURE

Abbreviation

XML

Tool

format

Type

Qty

Deliv

Comments

OVERHAUL DATA

Advanced

Consultation

Specific

NOMENCLATURE

Abbreviation

XML

Tool

format

Type

QTY

Deliv

Comments

ENGINEERING DATA

Advanced

Consultation

Specific

NOMENCLATURE

Abbreviation

XML

Tool

format

Type

QTY

Deliv

Comments

ENGINEERING DATA (continued)


**		Confidential Treatment Requested.



USA Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. F — 8 of 9
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT F

Advanced

Consultation

Specific

NOMENCLATURE

Abbreviation

XML

Tool

format

Type

Qty

Deliv

Comments

MISCELLANEOUS TECHNICAL DATA


**		Confidential Treatment Requested.



USA Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. F — 9 of 9
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT G-1

SELLER PRICE REVISION FORMULA

1		BASE PRICE

		The Base Price of the A350-800 Aircraft is quoted in Clause 3.1.1 and of the A350-900 Aircraft in Clause 3.1.2 of the Agreement. Each Base Price is subject to adjustment for changes in economic conditions as measured by data obtained from the ** , and in accordance with the provisions hereof.

2		BASE PERIOD

		The Base Prices enumerated above in Paragraph 1 of this Exhibit G-1 have been established in accordance with the average economic conditions prevailing in and corresponding to a theoretical delivery in as defined by “ECIb” and “ICb” index values indicated hereafter.

		“ECIb” and “ICb” index values indicated herein will not be subject to any revision.

3		INDEXES

		Labor Index: Material Index :

4		**

5		**

5.1		**

5.2		**

5.3		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. G-1 — 1 of 1
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT G-2

SELLER PRICE REVISION FORMULA

1		BASE PRICE

		The Base Price of the applicable Additional Aircraft, Growth Additional Aircraft, Merger Additional Aircraft is as quoted in Letter Agreement No. 3 to the Agreement. The Base Price of the A350-1000 XWB Aircraft converted from firm A350-800 XWB Aircraft is as quoted in Clause 3.1.3 of the Agreement.

		Each Base Price is subject to adjustment for changes in economic conditions as measured by data obtained from the ** , and in accordance with the provisions hereof.

2		BASE PERIOD

		The Base Prices enumerated above in Paragraph 1 of this Exhibit G-2 have been established in accordance with the average economic conditions prevailing in and corresponding to a theoretical delivery in as defined by “ECIb” and “ICb” index values indicated in Paragraph 4 of this Appendix C-1.

		“ECIb” and “ICb” index values indicated herein will not be subject to any revision.

3		INDEXES

		Labor Index : Material Index :

4		**

5		**

5.1		**

5.2		**

5.3		**


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. G-2 — 1 of 1
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT H

General Conditions of Licensing of Software

These General Conditions of Licensing of Software (the “ General Conditions ”) will provide the conditions for the supply of software developed by and proprietary to Airbus S.A.S (“ Airbus ”) and licensed to Airbus North America Customer Services, Inc . (” ANACS ”) for supply and license to any user (such user, whether provided with the software** basis is referred to hereinafter as the “ Buyer ”). These General Conditions will be incorporated into any product-specific license agreement entered into between the Buyer and ANACS and will apply to any software license granted to the Buyer to the extent not in conflict with any such product-specific agreement that post-dates execution of these General Conditions.

10.		MISCELLANEOUS

10.1		Severability

		If a court holds any provision of these General Conditions or any part thereof to be illegal, invalid or unenforceable, the remaining provisions and remainder of the relevant provision will remain in full force and effect and the parties will amend these General Conditions to give effect to the remainder of the clause to the maximum extent possible.

10.2		Injunctive relief

		The Buyer agrees that money damages would not be a sufficient remedy for any breach of these General Conditions by the Buyer or its representatives and that ANACS will be entitled to injunctive relief, specific performance and any other appropriate equitable remedies for any such breach, in addition to all other remedies available at law or equity.

10.3		No Waiver

		The failure of either party to enforce at any time any obligations hereunder or to require performance of the same by the other party shall in no way be construed to be a present or future waiver of such obligation.

10.4		Notices

		All notices and requests required or authorized hereunder shall be given in writing either by registered mail (return receipt requested) or by telefax. In the case of any such notice or request being given by registered mail, the date upon which the answerback is recorded by the addressee or, in case of a telefax, the date upon which it is sent a correct confirmation printout, shall be deemed to be the effective date of such notice or request.

10.5		Applicable Law


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. H — 1 of 2
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT H


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		Exh. H — 2 of 2
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 1

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: SPARE PARTS PROCUREMENT

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”), and AIRBUS S.A.S. (the “ Seller ”) have entered into an Amended and Restated Airbus A350 XWB Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 1 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 1 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

CONTENTS

PARAGRAPHS


1 -		GENERAL

2 -		INITIAL PROVISIONING

3 -		STORES

4 -		DELIVERY

5 -		PRICE

6 -		PAYMENT PROCEDURES AND CONDITIONS

7 -		TITLE

8 -		PACKAGING

9 -		DATA RETRIEVAL

10 -		BUY-BACK

11 -		WARRANTIES

12 -		**

13 -		TERMINATION

14 -		ASSIGNMENT

15 -		COUNTERPARTS


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 2 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1.		GENERAL

1.1		Material

		This Letter Agreement covers the terms and conditions for the services offered by the Seller to the Buyer in respect of the Aircraft spare parts and other equipment (“ Material Support ”) listed below in Paragraphs 1.1(a) through 1.1(f) (“ Material ”) and is intended by the parties to be and will constitute an agreement of sale of all Material furnished to the Buyer by the Seller pursuant hereto.

		The Material will comprise:

	(a)		Seller Parts (defined as industrial proprietary components, equipment, accessories or parts of the Seller manufactured to the detailed design of the Seller or a subcontractor of it and bearing official part numbers of the Seller or material for which the Seller has exclusive sales rights in the United States).

	(b)		Supplier Parts classified as Repairable Line Maintenance Parts in accordance with the applicable ATA Specification.

	(c)		Supplier Parts classified as Expendable Line Maintenance Parts in accordance with the applicable ATA Specification.

	(d)		Ground Support Equipment (GSE) and Specific (To-Type) tools.

	(e)		Hardware and standard material.

	(f)		Consumables and raw material as a package.

		It is expressly understood that Seller Parts will not include parts manufactured pursuant to a parts manufacturing authority.

		Material covered under Paragraphs 1.1(e) and 1.1(f) is available only as a package when supplied as part of the Initial Provisioning defined in Paragraph 1.2.1.

1.2		Scope of Material Support

1.2.1		The Material Support to be provided by the Seller hereunder covers all Material purchased by the Buyer from the Seller during the Initial Provisioning Period (defined below in Paragraph 2) (the “ Initial Provisioning ”) and all items in Paragraphs 1.1(a) through 1.1(d) for purchases additional to the Initial Provisioning.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 3 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1.2.2		Propulsion Systems, including associated parts and spare parts therefor, are not covered under this Letter Agreement and will be subject to direct negotiations between the Buyer and the Propulsion Systems manufacturer(s). **

1.2.3		During a period commencing on the date hereof and continuing as long as at least aircraft of the type of the Aircraft are operated in commercial air transport service of which, at least is operated by the Buyer (the “ Term ”), the Seller will maintain or cause to be maintained such stock of Seller Parts as the Seller deems reasonable and will furnish at reasonable prices Seller Parts adequate to meet the Buyer’s needs for maintenance of the Aircraft. Such Seller Parts will be sold and delivered in accordance with Paragraphs 4 and 5 of this Letter Agreement, upon receipt of the Buyer’s orders.

		The Seller will use its reasonable efforts to obtain a similar service from all Suppliers of parts that are originally installed on the Aircraft and not manufactured by the Seller.

1.3		Purchase Source of Material

		The Buyer agrees to purchase from the Seller, or another source in compliance with FAA requirements, the Seller Parts required for the Buyer’s own needs during the Term, and in addition, the Buyer may purchase Seller Parts of other airlines operating aircraft of the type of the Aircraft, or may purchase items equivalent to Seller Parts from airlines or from distributors or dealers, on the condition that the Seller Parts have been designed and manufactured by, or obtained from, the Seller, and the Buyer may also exercise its rights under Paragraph 1.4.

1.4		Manufacture of Material by the Buyer

1.4.1		The provisions of Paragraph 1.3 of this Letter Agreement notwithstanding, the Buyer may manufacture or have manufactured Seller Parts for its own use or may purchase for its own use Seller Parts from any source other than those listed in Paragraph 1.3 in the following cases:

	(a)		after expiration of the Term, provided that at such time the Seller is out of stock of a required Seller Part;

	(b)		at any time, to the extent Seller Parts are needed to effect AOG repairs on any Aircraft and are not available from the Seller within a lead time shorter than or equal to the time in which the Buyer can procure said Seller Parts from another source, provided the Buyer will sell or lease such Seller Parts only if they are assembled in an Aircraft that is sold or leased;


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 4 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(c)		at any time, if the Seller fails to fulfill its obligations with respect to any Seller Parts pursuant to Paragraph 1.2 above within a reasonable period after written notice thereof from the Buyer;

	(d)		at any time, if with respect to certain Seller Parts, the Seller has granted, under the Illustrated Parts Catalog supplied in accordance with this Letter Agreement, the right of local manufacture of Seller Parts; and

	(e)		after written approval by the Seller, such approval not to be unreasonably withheld.

1.4.2		The Buyer may manufacture the Seller’s proprietary tooling from drawings and other data supplied by the Seller or the manufacturer.

1.4.3		The rights granted to the Buyer in Paragraph 1.4.1 will not in any way be construed as a license, nor will they in any way obligate the Buyer to pay any license fee, royalty or obligation whatsoever, nor will they in any way be construed to affect the rights of third parties.

1.4.4		The Seller will provide the Buyer with all technical data reasonably necessary to manufacture Seller Parts and the Seller’s proprietary tooling, in the event the Buyer is entitled to do so pursuant to Paragraphs 1.4.1 and 1.4.2. The proprietary rights to such technical data will be subject to the terms of Clause14.12 of the Agreement.

2.		INITIAL PROVISIONING

		The period up to and including the ** after delivery of the last Aircraft will hereinafter be referred to as the Initial Provisioning Period.

2.1		Seller-Supplied Data

		The Seller will prepare and supply to the Buyer the following data:


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 5 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.1.1		Initial Provisioning Data — Seller

		The Seller will provide to the Buyer initial provisioning data provided for in the applicable ATA Specification (“ Initial Provisioning Data ”) in a form, format and within a time period to be mutually agreed upon.

		A free of charge revision service will be effected every **, up to the end of the Initial Provisioning Period.

		The Seller will ensure that Initial Provisioning Data is released to the Buyer in time to allow the necessary evaluation time by the Buyer and the on-time delivery of ordered Material.

2.1.2		Supplementary Data

		The Seller will provide the Buyer with Local Manufacture Tables (X-File), as part of the Illustrated Parts Catalog (Additional Cross-Reference Tables), which will be a part of the Initial Provisioning Data package.

2.1.3		Data for Standard Hardware

		The Initial Provisioning Data provided to the Buyer will include data for hardware and standard material.

2.2		Supplier-Supplied Data

2.2.1		General

		Suppliers will prepare and issue CMM parts and IPL parts (T-files) in the English language for those Supplier components for which the Buyer has elected to receive data and the Seller will make reasonable efforts to ensure that the Suppliers take such actions.

		Said data (initial issue and revisions) will be transmitted to the Buyer through the Suppliers and/or the Seller. The Seller will **

		The Seller will ensure the supply of Initial Provisioning Data to the Buyer in time to allow the necessary evaluations by the Buyer and on-time deliveries.

2.2.2		Initial Provisioning Data — Supplier


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 6 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		Initial Provisioning Data for Supplier products provided for in the applicable ATA Specification will be furnished as mutually agreed upon during a Preprovisioning Meeting (defined below), with free of charge revision service assured up to the end of the Initial Provisioning Period, or until it reflects the configuration of the delivered Aircraft.

2.3		Preprovisioning Meeting

2.3.1		The Seller will organize a meeting (i) at the Manufacturer’s spares center in Hamburg, Germany (“ MSC ”), (ii) at ANACS or (iii) at a place to be mutually agreed, in order to formulate an acceptable schedule and working procedure to accomplish the Initial Provisioning of Material (the “ Preprovisioning Meeting ”).

2.3.2		The date of the Preprovisioning Meeting will be mutually agreed upon, but it will take place no earlier than after the Agreement will have taken effect and no later than before delivery of the first Aircraft.

2.4		Initial Provisioning Training

		The Seller will furnish, at the Buyer’s request and at no charge to the Buyer, training courses related to the Seller’s provisioning documents, purchase order administration and handling at MSC or at a mutually agreed location. The areas covered in these training courses are (i) familiarization of the Buyer with the provisioning; (ii) explanation of the technical function as well as the necessary technical and commercial Initial Provisioning Data; and (iii) familiarization with the Seller’s purchase order administration system.

2.5		Initial Provisioning Conference

		The Seller will organize an Initial Provisioning conference at MSC, ANACS or a location to be mutually agreed upon that will include participation of major Suppliers, as agreed upon during the Pre-provisioning Meeting (the “ Initial Provisioning Conference ”).

		Such Initial Provisioning Conference will take place no earlier than eight (8) weeks after Buyer Furnished Equipment (BFE) selection or Customer Definition Freeze (CDF), whichever last occurs.

2.6		Initial Provisioning Data Compliance

2.6.1		Initial Provisioning Data generated by the Seller and supplied to the Buyer will comply with the latest configuration of the Aircraft to which such data relate, as


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 7 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		known ** before the data are issued. Said data will enable the Buyer to order Material conforming to its Aircraft as required for maintenance and overhaul.

		This provision will not cover Buyer modifications unknown to the Seller, or modifications not agreed to or designed by the Seller.

2.7		Delivery of Initial Provisioning Material

2.7.1		During the Initial Provisioning Period, Material will conform with the latest configuration standard of the affected Aircraft and with the Initial Provisioning Data transmitted by the Seller. The Seller, in addition, will use its reasonable efforts to cause Suppliers to provide a similar service for their items. Should the Seller default in this obligation, it will immediately replace such Seller parts and/or authorize return shipment at no transportation cost to the Buyer. The Buyer will make reasonable efforts to minimize such cost.

2.7.2		The Seller will use its reasonable efforts to deliver Initial Provisioning Material in Paragraph 1.1(a) of this Letter Agreement against the Buyer’s orders from the Seller and according to the following schedule, provided the orders are received by the Seller in accordance with published leadtime.

		Initial Provisioning Material will be delivered as provided below:

	(a)		At least of the ordered quantity of each Line Replacement or Line Maintenance item: (for items identified as line station items, ** before delivery of the first Aircraft of each block of Aircraft for which the Buyer has placed Initial Provisioning orders for Material defined above in Paragraph 1.1(a).

	(b)		**

	(c)		() of the ordered quantity of each item, including line station items: after delivery of the first Aircraft of each block of Aircraft for which the Buyer has placed Initial Provisioning orders for Material, as defined above in Paragraph 1.1(a). If said cannot be accomplished, the Seller will endeavor to have such items available at its facilities for immediate supply, in case of an AOG.

		The size of each block of Aircraft referred to in the schedule above will be defined at the Pre-Provisioning Conference and the Material will be delivered in sequence.

2.7.3		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 8 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.7.4

The Buyer may cancel or modify Initial Provisioning orders placed with the Seller with no cancellation charge as follows:

	(a)		“ Long Lead-Time Material ” (lead time exceeding , not later than before scheduled delivery of said Material.

	(b)		Normal lead time Material, not later than before scheduled delivery of said Material, provided however, that for Material that has a lead time of , the published lead time for the Buyer’s right to cancel or modify orders will be equal to the published lead time for such Material plus **.

	(c)		Buyer-specific Material and Material described in Paragraphs 1.1(b) through 1.1(f), not later than the quoted lead time before scheduled delivery of said Material.

2.7.5		Should the Buyer cancel or modify any orders for Material outside the time limits defined above in Paragraph 2.7.4, the Seller will have no liability for the cancellation or modification, and the Buyer will reimburse the Seller for any direct cost incurred in connection therewith.

2.7.6		Except as otherwise set forth herein, all transportation costs for the return of Material under this Paragraph 2, including any insurance and customs duties applicable or other related expenditures, will be borne by the Buyer.

3.		STORES

3.1		ANACS Spares Center

		The Seller has established and will maintain or cause to be maintained, as long as at least aircraft of the type of the Aircraft are in commercial air transport service of which at least is operated by the (the “ US Term ”), a US store in North America known as the ANACS Spares Center (“ ANACS Spares Center ”). The ANACS Spares Center will be operated for the handling of AOG and critical orders for Seller Parts.

3.2		Material Support Center, Germany

		The Manufacturer has established and will maintain or cause to be maintained during the Term a store of Seller Parts at MSC. MSC will be operated **.

3.3		Other Points of Shipment


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 9 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

The Seller reserves the right to effect deliveries from distribution centers other than the ANACS Spares Center or MSC and from any of the production facilities of the Associated Contractors.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 10 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

4.		DELIVERY

4.1		General

		The Buyer’s purchase orders will be administered in accordance with **.

		The provisions of Paragraph 4.2 of this Letter Agreement do not apply to Initial Provisioning Data or Material as described in Paragraph 2 of this Letter Agreement.

4.2		Lead Times

4.2.1		In general, the lead times are (and, unless otherwise agreed, will at all times be) in accordance with the definition in the “World Airline and Suppliers Guide” (latest edition).

4.2.2		Material will be dispatched within the lead times quoted in the published Seller’s price catalog for Material described in Paragraph 1.1(a), and within the Supplier’s or supplier’s lead time augmented by the Seller’s own order and delivery processing time (such in-house processing time not to exceed **) for Material described in Paragraphs 1.1(b) through 1.1(d). The Seller will endeavor to improve its lead times and neither the Seller, the Manufacturer nor any of their Affiliates will discriminate against the Buyer in delivery processing time.

4.2.3		Expedite Service

		The Seller operates a ** expedite service to supply the relevant Seller Parts available in the Seller’s stock, workshops and assembly line, including high-cost/long-lead-time items, to the international airport nearest the location of such items (the “ Expedite Service ”).

		The Expedite Service is operated in accordance with the “World Airlines and Suppliers Guide.” Accordingly, the Seller will notify the Buyer of the action taken to effect the Expedite Service as follows:

	(a)		** hours after receipt of an AOG order,

	(b)		** hours after receipt of a critical order (imminent AOG or work stoppage),

	(c)		** days after receipt of an expedite order from the Buyer (nil stock at the Buyer’s for no-go items).


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 11 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		The Seller and its subcontractors will deliver Seller Parts requested on expedite basis against normal orders previously placed by the Buyer or upon requests by telephone or facsimile by the Buyer’s representatives, such requests to be confirmed by the Buyer’s subsequent order for such Seller Parts within a reasonable time.

4.3		Delivery Status

		The Seller agrees to report to the Buyer the status of supplies against orders on a monthly basis or on a mutually agreed timeframe.

4.4		Excusable Delay

		Clause 10.1 of the Agreement will apply to the Material support as defined in Paragraph 1 of this Letter Agreement.

4.5		Shortages, Overshipments, Nonconformance in Orders

4.5.1		Within ** after receipt of Material delivered pursuant to a purchase order, the Buyer will advise the Seller of any alleged shortages or overshipments with respect to such purchase order and of all claimed nonconformance to specification of parts in such order.

		In the event that the Buyer has not reported such alleged shortages, overshipments or nonconformance within such period, the Buyer will be deemed to have accepted the deliveries unless, in the case of shortages, the Buyer can prove within a reasonable period of time that it did not receive the Material.

4.5.2		In the event that the Buyer reports over-shipments or nonconformance to the specifications within the period specified in Paragraph 4.5.1, the Seller will, if such report is accepted, either replace the Material concerned or credit the Buyer for Material paid for but returned to the Seller. In such case, transportation charges will be borne by the Seller.

		The Buyer will endeavor to minimize such costs.

4.6		**

4.7		**

4.8		Cessation of Deliveries

		The Seller reserves the right to stop or otherwise suspend deliveries if the Buyer fails to meet its obligations under Paragraph 6.

5.		PRICE


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 12 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

5.1		The Material prices will be:

5.1.1		**

5.1.2		**

5.2		Validity of Prices

5.2.1		The Material prices are the Seller’s published prices in effect on the date of receipt of the purchase order (subject to reasonable quantities and delivery time) and will be expressed in US dollars. Payment will be made by the Buyer to the Seller in US dollars as set forth below in Paragraph 6.1.

5.2.2		Prices of Seller Parts will be in accordance with the then current “Airbus Spare Parts Price Catalog and Repair Guide”. Prices will be firm for each calendar year, except that the Seller reserves the right to revise the prices of Seller Parts during the course of the calendar year in the following cases:

	•		significant revision in manufacturing costs,

	•		significant revision in Manufacturer’s purchase price of materials (including significant variation of exchange rates),

	•		significant error in estimation of expression of any price.

		**

5.2.3		**

5.2.4		The Seller warrants that, should the Buyer purchase from the Seller of the recommended Initial Provisioning of Material identified in Paragraphs 1.1(b) through 1.1(d), above, the average handling charge on the total package will not exceed ). This average handling charge will be increased to ) on any orders placed less than prior to delivery of the first Aircraft, provided, however, that the handling charge on any individual item will not exceed ($).


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 13 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

6.		PAYMENT PROCEDURES AND CONDITIONS

6.1		Currency

		Payment will be made in US dollars.

6.2		Time and Means of Payment

6.2.1		Payment will be made by transfer of immediately available funds from the Buyer to the Seller within from the date of invoice.

6.2.2		All invoices from Seller to Buyer pursuant to this Letter Agreement, (the “ Invoices ”) will be paid within the terms hereof except in the case of any disputed charges. The Buyer will provide notice of any such disputed charges to the Seller promptly following identification thereof, and in all cases prior to the initial due date of the Invoice. Each such notice of dispute shall be in writing and set forth the disputed amount(s), the invoice number(s) a reasonably detailed description of such disputed amount(s), and in reasonable detail, the basis of the dispute. The Buyer will pay all undisputed amount(s) on or prior to the due date therefor in accordance with the terms of the Invoice. The Buyer and Seller agree to negotiate in good faith any disputed charges, and any balance due either party at conclusion of those negotiations will be netted against other amounts, if any, due from such party hereunder or, if there are no such other amounts, within ** of resolution, or the original due date, whichever is later.

6.3		Bank Accounts

		The Buyer will make all payments hereunder in full without setoff, counterclaim, deduction or withholding of any kind to the accounts listed below, unless otherwise directed by the Seller:

	(a)		For wire transfer, in favor of Airbus North America Customer Services, Inc.:

			**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 14 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	(b)		For direct deposit (lockbox), in favor of Airbus North America Customer Services, Inc.:

			**

6.4		Taxes

		All payments due the Seller hereunder will be made in full without setoff or counterclaim and without deduction or withholding of any kind. Consequently, the Buyer will assure that the sums received by the Seller under this Letter Agreement are equal to the full amounts expressed to be due the Seller hereunder, without deduction or withholding on account of and free from any and all taxes, levies, imposts, dues or charges of whatever nature except that if the Buyer is compelled by law to make any such deduction or withholding the Buyer will pay such additional amounts as may be necessary in order that the net amount received by the Seller after such deduction or withholding will equal the amounts that would have been received in the absence of such deduction or withholding.

6.5		If any payment due the Seller is not received in accordance with the time period provided in Paragraph 6.2, the Seller will have the right to claim from the Buyer and the Buyer will promptly pay to the Seller interest on the unpaid amount at an annual rate equal to LIBOR for month deposits of a similar amount plus () per year to be calculated from (and including) the due date to (but excluding) the date payment is received by the Seller, on the basis of a year and actual number of days elapsed. The Seller’s claim to such interest will not prejudice any other rights the Seller may have under this Letter Agreement or applicable law.

7.		TITLE

		Title to any Material purchased under this Letter Agreement will remain with the Seller until full payment of the invoices therefore and any interest thereon has been received by the Seller.

		The Buyer will undertake that Material to which title has not passed to the Buyer will be kept free from any lien, security interest mortgage or other charge or claim in favor of any third party.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 15 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

8.		PACKAGING

		All Material will be packaged in accordance with the applicable ATA Specification, Category III for consumable/expendable Material and Category II for rotables. Category I containers will be used if requested by the Buyer and the difference between Category I and Category II packaging costs will be paid by the Buyer together with payment for the respective Material.

9.		DATA RETRIEVAL

		The Buyer undertakes to provide periodically to the Seller, as the Seller may reasonably request, during the Term, a quantitative list of the parts used for maintenance and overhaul of the Aircraft. The range and contents of this list will be established by mutual agreement between the Seller and the Buyer.

10.		BUY-BACK

10.1		Buy-Back of Obsolete Material

		The Seller agrees to buy back unused Seller Parts that may become obsolete for the Buyer’s fleet ** as a result of mandatory modifications required by the Buyer’s or Seller’s Aviation Authorities, subject to the following:

	(a)		the Seller Parts involved will be those which the Seller directs the Buyer, or the Aviation Authority determines are unusable, to scrap or dispose of and which cannot be reworked or repaired to satisfy the revised standard;

	(b)		the Seller will grant the Buyer a credit equal to the purchase price paid by the Buyer for any such obsolete parts, such credit will not exceed the value of the provisioning quantities recommended by the Seller in the Initial Provisioning recommendation as mutually agreed upon at the Initial Provisioning Conference;

	(c)		the Seller will use its reasonable efforts to obtain for the Buyer the same protection from Suppliers and will promptly assist the Buyer if so requested by the Buyer.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 16 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

10.2		Buy-Back of Surplus Material

10.2.1		The Seller agrees that at any time after and within after delivery of the first Aircraft to the Buyer, the Buyer will have the right to return to the Seller, unused and undamaged Material described in Paragraphs 1.1(a) and 1.1(b) originally purchased from the Seller under the terms hereof, provided (i) that the selected protection level does not exceed () with a turnaround time of , (ii) that said Material does not exceed the provisioning quantities recommended by the Seller in the Initial Provisioning recommendations, does not have a limited shelf life nor contain any shelf-life limited components with less than ) of their shelf life remaining when returned to the Seller, and (iii) that the Material is returned with the Seller’s original documentation and any such documentation (including tags, certificates) required to identify, substantiate the condition of and enable the resale of such Material.

10.2.2		The Seller’s agreement in writing is necessary before any Material in excess of the Seller’s recommendation may be considered for buy-back.

10.2.3		It is expressly understood and agreed that the rights granted to the Buyer under this Paragraph 10.2 will not apply to Material that may become obsolete at any time or for any reason other than as set forth in Paragraph 10.1.

10.2.4		**

10.3		Except as otherwise set forth herein, all transportation costs for the return of surplus Material under this Paragraph 10, including any applicable insurance and customs duties or other related expenditures, will be borne by the Seller.

10.4		The Seller’s obligation to repurchase surplus and obsolete Material depends upon the Buyer’s demonstration, by the Buyer’s compliance with the requirements set forth in Paragraph 9 of this Letter Agreement, that such Material exceeds the Initial Provisioning requirements.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 17 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

11		WARRANTIES

11.1		WARRANTIES ON SELLER PARTS

11.1.1		Nature of Warranty

		Subject to the limitations and conditions hereinafter provided, and except as provided in Paragraph 11.1.2, the Seller warrants to the Buyer that each Seller Part will at the time of Delivery to the Buyer be free from defects:

	(i)		in material,

	(ii)		in workmanship, including, without limitation, processes of manufacture,

	(iii)		in design (including, without limitation, selection of materials) having regard to the state of the art at the date of such design, and

	(iv)		arising from failure to conform to the Specification, except as to those portions of the Specification that are expressly stated in the Specification to be estimates or approximations or design aims.

11.1.2		**

11.1.3		Exceptions

		The warranties set forth in Paragraph 11.1.1 will not apply to Buyer Furnished Equipment, Propulsion Systems, or to any component, accessory, equipment or part purchased by the Buyer that is not a Seller Part, provided, however, that any defect inherent in the Seller’s design of the installation, considering the state of the art at the date of such design, that impairs the use of such items will constitute a defect in design for the purposes of this Paragraph 11.1 and be covered by the warranty set forth in Paragraph 11.1.1(iii).

11.1.4		Warranty Period

		The warranties described in Paragraphs 11.1.1 will be limited to those defects that become apparent within ** after delivery of the Seller Part (the “ Seller Part Warranty Period ”).

11.1.5		Buyer’s Remedy and Seller’s Obligation


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 18 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		The Buyer’s remedy and the Seller’s obligation and liability under Paragraph 11.1 are limited to, at the Seller’s expense, the repair, replacement or correction of, or the supply of modification kits rectifying the defect to any defective Seller Part, **

		**

		The provisions of Clauses 12.1.6, 12.1.7, 12.1.8 and 12.1.9 of the Agreement will, as applicable, also apply to this Paragraph 11.

11.2		EXCLUSIVITY OF WARRANTIES

		THIS PARAGRAPH 11 (INCLUDING ITS SUBPARTS) SETS FORTH THE EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE OBLIGATIONS OF THE SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO THE BUYER, WHETHER UNDER THIS LETTER AGREEMENT OR OTHERWISE, ARISING FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY SELLER PART DELIVERED BY THE SELLER UNDER THIS AGREEMENT.

		THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN THIS PARAGRAPH 11 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYER FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN THE SELLER PARTS SUPPLIED UNDER THIS LETTER AGREEMENT. THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS, GUARANTEES AND LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, WHETHER EXPRESS OR IMPLIED BY CONTRACT, TORT, STATUTORY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT OR PROBLEM OF ANY KIND IN ANY SELLER PART DELIVERED BY THE SELLER UNDER THIS LETTER AGREEMENT, INCLUDING BUT NOT LIMITED TO:

	(1)		ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE;

	(2)		ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

	(3)		ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

	(4)		ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 19 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

			THEORY OF LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO, ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE, INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;

	(5)		ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;

	(6)		ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL STATUTE OR AGENCY;

	(7)		ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

	(a)		LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, OR PART PROVIDED UNDER THE AGREEMENT DUE TO A DEFECT, NONCONFORMITY OR OTHER PROBLEM IN ANY SELLER PART;

	(b)		LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART DUE TO A DEFECT, NONCONFORMITY OR OTHER PROBLEM IN ANY SELLER PART;

	(c)		LOSS OF PROFITS AND/OR REVENUES;

	(d)		ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.

THE WARRANTIES PROVIDED BY THIS LETTER AGREEMENT WILL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE SELLER AND THE BUYER. IN THE EVENT THAT ANY PROVISION OF THIS PARAGRAPH 11 SHOULD FOR ANY REASON BE HELD UNLAWFUL, OR OTHERWISE UNENFORCEABLE, THE REMAINDER OF THIS PARAGRAPH 11 WILL REMAIN IN FULL FORCE AND EFFECT.

FOR THE PURPOSE OF THIS PARAGRAPH 11.2, “SELLER” WILL BE UNDERSTOOD TO INCLUDE THE SELLER, ITS AFFILIATES, SUPPLIERS AND ASSOCIATED CONTRACTORS.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 20 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		THE FOREGOING DOES NOT APPLY TO CLAIMS BY THE BUYER AGAINST THE SELLER FOR CONTRIBUTION TOWARD THIRD PARTY CLAIMS FOR BODILY INJURY OR PROPERTY DAMAGE TO THE EXTENT SUCH CLAIMS RESULT IN AN ORDER OF A COURT OF COMPETENT JURISDICTION NOT SUBJECT TO APPEAL FINDING LIABILITY ON THE PART OF THE SELLER WITH RESPECT TO SUCH CLAIM.

11.3		DUPLICATE REMEDIES

		The remedies provided to the Buyer under Paragraph 11 are mutually exclusive and not cumulative. The Buyer will be entitled to the remedy that provides the maximum benefit to it, as the Buyer may elect, pursuant to the terms and conditions of this Paragraph 11 for any such particular defect for which remedies are provided under this Paragraph 11, provided, however, that the Buyer will not be entitled to elect a remedy under more than one part of this Paragraph 11 for the same defect. **

11.4		NEGOTIATED AGREEMENT

		The Buyer and Seller agree that this Paragraph 11 has been the subject of discussion and negotiation and is fully understood by the parties, and that the price of the Aircraft and the other mutual agreements of the parties set forth in the Agreement were arrived at in consideration of, inter alia, the Exclusivity of Warranties and General Limitations of Liability provisions and Duplicate Remedies provisions set forth in this Paragraph 11.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 21 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

12.		**

13.		TERMINATION

		Any termination under Paragraph 10, 11 or 21 of the Agreement or under the Letter Agreements thereto will discharge all obligations and liabilities of the parties hereunder with respect to undelivered Material, services, data or other items to be purchased hereunder that are applicable to those Aircraft as to which the Agreement has been terminated, provided that the Seller will nevertheless repurchase new and unused Material in excess of the Buyer’s requirements due to an Aircraft cancellation pursuant to Paragraph 10 or 11 of the Agreement, as provided in Paragraph 10.2. In the case of any termination of this Letter Agreement in connection with a termination under Clause 21 of the Agreement, the Seller will not have any obligation to repurchase Material delivered in respect of any undelivered Aircraft and the Seller’s rights to payment for services or spare parts actually delivered to the Buyer or, in the case of spare parts, the return thereof in new and unused condition, in their original packaging with all applicable documentation will not be limited by the liquidated damages provision included in Clause 21 of the Agreement.

14.		MISCELLANEOUS

		**

15.		NEGOTIATED AGREEMENT

		THE BUYER AND THE SELLER AGREE THAT THIS LETTER AGREEMENT HAS BEEN THE SUBJECT OF DISCUSSIONS AND NEGOTIATION BY THE PARTIES AND THAT THE AGREEMENTS OF THE PARTIES SET FORTH IN THE AGREEMENT WERE ARRIVED AT IN CONSIDERATION OF, INTER ALIA, THE PROVISIONS OF THIS LETTER AGREEMENT.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 22 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

16.		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this paragraph will be void and of no force or effect.

17.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 23 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy
	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX A TO LETTER AGREEMENT NO. 1

AILERONS

AUXILIARY POWER UNIT (APU) DOORS

CARGO DOORS

PASSENGER DOORS

ELEVATORS

FLAPS

LANDING GEAR DOORS

RUDDER

TAIL CONE

WING SLATS

SPOILERS

AIRBRAKES

WING TIPS

RADOMES (If such part is a Seller Part in respect of the Aircraft)


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA1 — 25 of 25
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 2

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281


Re:		PREDELIVERY PAYMENTS

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A350 XWB Purchase Agreement dated as of even date herewith, (the “ Agreement ”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 2 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.


**		Confidential Treatment Requested.



USA Amended and Restated Airbus A350 XWB Purchase Agreement		LA2 — 1 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1.		PREDELIVERY PAYMENTS

1.1		Predelivery Payment Schedule

1.1.1		Clauses 5.2.1, 5.2.2 and 5.2.3 of the Agreement are deleted in their entirety and replaced with the following quoted text:

		**

2.		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Paragraph 2 will be void and of no force or effect.

3.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument.


**		Confidential Treatment Requested.



USA Amended and Restated Airbus A350 XWB Purchase Agreement		LA2 — 2 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir Name: Thomas T. Weir	By:	/s/ John J. Leahy Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.



USA Amended and Restated Airbus A350 XWB Purchase Agreement		LA2
EXECUTION		CONFIDENTIAL TREATMENT REQUESTED

LETTER AGREEMENT NO. 3

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A350 XWB Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 3 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA3 — 1 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

7.		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Letter Agreement will be void and of no force or effect.

8.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 3 — 2 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir Name: Thomas T. Weir	By:	/s/ John J. Leahy Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 4

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A350 XWB Purchase Agreement dated as of even date herewith, (the “ Agreement ”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 4 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions that are inconsistent, the specific provisions contained in this Letter Agreement will govern.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 4 — 1 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.		COUNTERPARTS

		This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 4 — 2 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please execute the original and two (2) copy hereof in the space provided below and return one (1) copy to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy
	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 4
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 5

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A350 XWB Purchase Agreement dated as of even date herewith, (the “ Agreement ”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 5 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions that are inconsistent, the specific provisions contained in this Letter Agreement will govern.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 5 — 1 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Letter Agreement will be void and of no force or effect.

4.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 5 — 2 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy
	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 5
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 6

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, AZ 85281

Re: SPECIFICATION MATTERS

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A350 XWB Purchase Agreement dated as of even date herewith, (the “ Agreement ”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 6 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions that are inconsistent, the specific provisions contained in this Letter Agreement will govern.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 6 — 1 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		**

4.		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Letter Agreement will be void and of no force or effect.

5.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 6 — 2 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy
	Name: Thomas T. Weir		Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 6
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 7

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, AZ 85281

Re: PRODUCT SUPPORT

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A350 XWB Purchase Agreement dated as of even date herewith, (the “ Agreement ”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 7 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 7 — 1 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1.		TRAINING SUPPORT

1.1		** .

1.2		**

1.3		**

1.4		The following quoted text is added as Paragraph 1.6 to Appendix A of Clause 16:

		QUOTE

1.6

UNQUOTE

4.		TECHNICAL DATA AND SOFTWARE SERVICES

		The first sentence of Clause 14.5 of the Agreement is superseded and replaced by the following:

		QUOTE

**

		UNQUOTE

5.		MAINTENANCE PLANNING

		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 7 — 2 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

6.		OPERATION SUPPORT

6.1		The Seller will provide to the Buyer the following software tools during the **preceding the first day of the Scheduled Delivery Month of the first Aircraft:

		**

		(collectively, the “ Software Tools ”).

		The Buyer will be granted a license for the use of the Software Tools, or any successor product thereto. Such license will be subject to the provisions of Exhibit H, except that if any provision of this Letter Agreement conflicts with any provision of Exhibit H, this Letter Agreement will govern to the extent of such inconsistency.

		**

		The license to use Software Tools will be granted following Delivery of the first Aircraft and will be subject to termination by the Seller during such period (a) immediately, in the event of a breach by the Buyer of paragraph 2.2 of Exhibit H and (b) in the event of any other material breach by the Buyer of the terms of such license, following notice to the Buyer and the Buyer’s failure to cure such other material breach within from the Date of Seller’s notice. **

		Notwithstanding the provisions of Paragraph 2.3 of Exhibit H, the Buyer may install Software Tools on its computer network, provided that the Buyer takes adequate measures satisfactory to the Seller to preclude any unauthorized access to Software Tools, which measures include but are not limited to (i) control of access to Software (with respect to Software Tools) strictly by the head of information systems and his/her designee (ii) control of access to the Product (with respect to Software Tools) only by Authorized Users of the Buyer, the aggregate of which Authorized Users shall not exceed the number agreed by the Seller and (iii) any other reasonable measures deemed appropriate by the Seller.

		Provided that the Seller gives the Buyer ** prior notice, the Buyer will permit the Seller to review the network installation to assure it meets the Seller’s security requirements. In the event that the Seller deems the Buyer’s network installation to be inadequate, at the Seller’s request the Buyer will remove Software Tools from the Buyer’s network. Failure to do shall be a cause for termination of the Buyer’s license for Software Tools.

6.2		The Seller will provide to the Buyer the Performance Engineering Program for the Aircraft under the same terms and conditions as set forth in Paragraph 6.1, from the Delivery of the first Aircraft .


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 7 — 3 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

7.		WARRANTY AND SERVICE LIFE POLICY

7.1		The provisions in Clauses 12.1.3 and 12.1.4 of the Agreement are deleted in their entirety and replaced with the following text between the “QUOTE” and “UNQUOTE”:

		QUOTE

	12.1.3		Warranty Period

			**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 7 — 4 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

	12.1.4		Limitations of Warranty

	(i)		The Buyer’s remedy and the Seller’s obligation and liability under Clauses 12.1.1 and 12.1.2 are limited to, at the Seller’s expense and option, **

	(ii)		If the Seller corrects a defect covered by Clause 12.1.1(iii) that becomes apparent within the Warranty Period, on the written request of the Buyer the Seller will correct any such defect in any Aircraft that has not already been delivered to the Buyer. Subject to the provisions of Clause 8 to the Agreement, the Seller will not be responsible for, nor deemed to be in default on account of, any delay in Delivery of any Aircraft or otherwise, in respect of performance of this Agreement, due to the Seller’s undertaking to make such correction. In the alternative, the Buyer and the Seller may agree to deliver such Aircraft with subsequent correction of the defect by the Buyer at the Seller’s expense, or the Buyer may elect to accept Delivery and thereafter file a Warranty Claim as though the defect had become apparent immediately after Delivery of such Aircraft. **

	(iii)		If a defect that would otherwise be covered under this Clause 12 becomes apparent and the Buyer has complied with the requirements of Clause 12, and the Seller has no then available correction for the defect and the Seller believes the defect can reasonably be expected to affect all or a substantial portion of the Aircraft, then the Buyer will be deemed to have given notice of such defect for all Aircraft that thereafter experience such defect.

UNQUOTE


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 7 — 5 of 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

7.2 Clause 12.2.2 of the Agreement is deleted in its entirety and replaced by the following:

QUOTE

	12.2.2		Periods and Seller’s Undertaking

			Subject to the general conditions and limitations set forth in Clause 12.2.4 the Seller agrees that if a Failure occurs in an Item within ** after the Delivery of the Aircraft on which such item is installed, the Seller will, at its discretion, as promptly as practicable and for a price that reflects the Seller’s financial participation as hereinafter provided:

	(i)		design and furnish to the Buyer a terminating correction for such Item and provide any parts required for such correction, or

	(ii)		provide a replacement part or parts.

UNQUOTE

7.3 The definition of “N” in Clause 12.2.3 of the Agreement is deleted in its entirety and replaced by the following:

		QUOTE

		N: **

		UNQUOTE

8. CUSTOMER ORIGINATED CHANGE (COC)

The following sentence between QUOTE and UNQUOTE is added to the end of Clause 14.9.3(i):

QUOTE

Without prejudice to any other provisions in Clause 14.9.3, if it is determined that the Seller made any error in incorporating the Buyer’s data into Technical Data, then the Buyer’s sole remedy, upon the Buyer’s notification to the Seller of such error, shall be to request the Seller to correct such COC on a mutually agreed schedule.


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 7- 6 of 10 PRIVILEGED AND CONFIDENTIAL

UNQUOTE

9. AIRCRAFT MAINTENANCE MANUAL LIMITS

The Seller endeavors to harmonize all relevant production limits with the relevant limits specified in the Aircraft Maintenance Manual provided to the Buyer pursuant to Clause 14 of the Agreement.

10. ETOPS SUPPORT

The Seller will support the Buyer’s efforts to obtain FAA approval for ETOPS operation of the A350-800 XWB model Aircraft.

11. **

12. AIRBUS ONLINE CONTENT MANAGEMENT

		Airbus On Line Content Management enables the Buyer to access from the Airbus on-line portal Airbus Technical Data in order to perform modifications to this Technical Data prior to producing the AirN@v consultation database used by the Buyer.

		Tasks regarding administration of the hardware and software will be performed by the Seller. Modification of the Technical Data carried out by the Buyer’s authors is under the full responsibility of the Buyer.

		**

13. **

14. ENTRY-INTO-SERVICE SUPPORT

The Seller will provide the Buyer with entry-into-service assistance for **

15.

16. **

17. GOODS AND SERVICES **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 7- 7 of 10 PRIVILEGED AND CONFIDENTIAL

18. **

19.		**

**		the Seller will introduce the “Damage Tracer Tool” that will enable an airline to view via the Customization and Delivery Information System (“ CDIS ”) all dents, scratches, rivets pull-in and related concessions on a given aircraft. **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 7- 8 of 10 PRIVILEGED AND CONFIDENTIAL

20. ASSIGNMENT

Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Letter Agreement will be void and of no force or effect.

21. COUNTERPARTS


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 7- 9 of 10 PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir Name: Thomas T. Weir	By:	/s/ John J. Leahy Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.



USA Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 7 PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8-1.A

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: A350-800 XWB PERFORMANCE GUARANTEES (SUMMER)

Ladies and Gentlemen,

US Airways, Inc., (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated Airbus A350 XWB Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain A350-800 XWB Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8-1.A (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the A350-800XWB Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions which are inconsistent, the specific provisions contained in this Letter Agreement will govern.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 1 of 21 PRIVILEGED AND CONFIDENTIAL

1 AIRCRAFT CONFIGURATION

The Guarantees defined below are applicable to the A350-800 XWB Aircraft powered by Rolls Royce Trent XWB engines, as described in the Standard Specification ** and in the Aircraft Description Document **, herein after referred as “the Specification” without taking into account any further changes thereto as provided in the Agreement.

2 GUARANTEED PERFORMANCE

2.1 Take-off Field Length

2.2 Second Segment Climb

The Aircraft will meet FAR 25 regulations for one engine inoperative climb after take-off, undercarriage retracted, at a weight corresponding to the stated weight at the start of ground run, at the altitude and temperature, and in the configuration of flap angle and safety speed required to comply with the performance guaranteed in paragraph 2.1 and 2.3.

2.3 Take-off Weight

2.3.1 When operated under the following conditions (**)


Pressure altitude		:**
Ambient temperature		:**
Take-off run available		:**
Take-off distance available		:**
Accelerate-stop distance available		:**
Slope		:**
Wind		:**
Line-up allowance TOD		:**
Line-up allowance ASD		:**
Obstacles (Height/Distance above/from start of TODA):		**
		**
		**
		**
		**
		**
		**
		**
		**
		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 2 of 21 PRIVILEGED AND CONFIDENTIAL

the maximum permissible take-off weight at the start of Take-off Distance Available will **

2.3.2 When operated under the following conditions (**)


Pressure altitude		:**
Ambient temperature		:**
Take-off run available		:**
Take-off distance available		:**
Accelerate-stop distance available		:**
Slope		:**
Wind		:**
Line-up allowance TOD		:**
Line-up allowance ASD		:**
Obstacles (Height/Distance above/from end of TODA):
		**
		**
		**
		**
		**
		**

the maximum permissible take-off weight at the start of Take-off Distance Available will **.

2.3.3 When operated under the following conditions (**)


Pressure altitude		:**
Ambient temperature		:**
Take-off run available		:**
Take-off distance available		:**
Accelerate-stop distance available		:**
Slope		:**
Wind		:**
Line-up allowance TOD		:**
Line-up allowance ASD		:**
Obstacles (Height/Distance above/from end of TODA
		**
		**
		**
		**
		**
		**
		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 3 of 21 PRIVILEGED AND CONFIDENTIAL

the maximum permissible take-off weight at the start of Take-off Distance Available will **.

Note: This guarantee is based on an adapted take-off rating

2.3.4 When operated under the following conditions (**)


Pressure altitude		:**
Ambient temperature		:**
Take-off run available		:**
Take-off distance available		:**
Accelerate-stop distance available		:**
Slope		:**
Wind		:**
Line-up allowance TOD		:**
Line-up allowance ASD		:**
Obstacles (Height/Distance above/from start of TODA)		:**

the maximum permissible take-off weight at the start of Take-off Distance Available will **.

2.3.5 When operated under the following conditions (**)


Pressure altitude		:**
Ambient temperature		:**
Take-off run available		:**
Take-off distance available		:**
Accelerate-stop distance available		:**
Slope		:**
Wind		:**
Line-up allowance TOD		:**
Line-up allowance ASD		:**
Obstacles (Height/Distance above/from start of TODA):		**
		**
		**
		**
		**
		**
		**
		**
		**
		**
		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 4 of 21 PRIVILEGED AND CONFIDENTIAL

the maximum permissible take-off weight at the start of Take-off Distance Available will **

2.3.6 When operated under the following conditions (**)


Pressure altitude	:	**
Ambient temperature	:	**
Take-off run available	:	**
Take-off distance available	:	**
Accelerate-stop distance available	:	**
Slope	:	**
Wind	:	**
Line-up allowance TOD	:	**
Line-up allowance ASD	:	**
Obstacles (Height/Distance above/from start of TODA):		**

the maximum permissible take-off weight at the start of Take-off Distance Available will **

Note: This guarantee is based on an adapted take-off rating

2.3.7 When operated under the following conditions (**)


Pressure altitude	:	**
Ambient temperature	:	**
Take-off run available	:	**
Take-off distance available	:	**
Accelerate-stop distance available	:	**
Slope	:	**
Wind	:	**
Line-up allowance TOD	:	**
Line-up allowance ASD	:	**
Obstacles (Height/Distance above/from start of TODA)	:	**

the maximum permissible take-off weight at the start of Take-off Distance Available will **.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 5 of 21 PRIVILEGED AND CONFIDENTIAL

2.4 Landing Field Length

FAR certified dry landing field length (“ LFL ”) at an Aircraft gross weight of ** at Sea Level pressure altitude will **.

2.5 Speed

Level flight speed at an A350-800 XWB Aircraft gross weight of ** at a pressure altitude of ** conditions using a thrust not exceeding maximum cruise thrust will **.

3 MISSION GUARANTEES

3.1 **

3.1.1 **

3.1.2 **

3.1.3 **

3.1.4

3.1.5 **

3.1.6 **

3.1.7

3.2 Mission fuel burn: **

3.3 Mission Payload: **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 6 of 21 PRIVILEGED AND CONFIDENTIAL

3.3.1

3.3.2 **

3.3.3 **

3.3.4

3.3.5 **

3.3.6		**

3.3.7		**

3.4 Mission fuel burn: **

3.5 Mission Payload: **

3.5.1

3.5.2 **

3.5.3 **

3.5.4

3.5.5 **

3.5.6		**

3.5.7		**

3.6 Mission fuel burn: **

3.7 Mission Payload: **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 7 of 21 PRIVILEGED AND CONFIDENTIAL

3.7.1

3.7.2 **

3.7.3 **

3.7.4

3.7.5 **

3.7.6		**

3.7.7		**

3.8 Mission fuel burn: **

3.9 Mission Payload: **

3.9.1

3.9.2 **

3.9.3 **

3.9.4


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 8 of 21 PRIVILEGED AND CONFIDENTIAL

3.9.5 **

3.9.6		**

3.9.7		**

3.10 Mission fuel burn: **

3.11 Mission Payload: **

3.11.1

3.11.2 **

3.11.3 **

3.11.4

3.11.5 **

3.11.6		**

3.11.7		**

3.12 Mission fuel burn: **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 9 of 21 PRIVILEGED AND CONFIDENTIAL

3.13 Mission Payload: **

3.13.1

3.13.2 **

3.13.3 **

3.13.4

3.13.5 **

3.13.6	**

3.13.7	**

3.14 Mission fuel burn: **

3.15 Mission Payload: **

3.15.1

3.15.2 **

3.15.3 **

3.15.4

3.15.5 **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 10 of 21 PRIVILEGED AND CONFIDENTIAL

3.15.6	**

3.15.7	**

3.16 Mission fuel burn: **

3.17 Mission Payload: **

		**

3.17.1	**

3.17.2 **

3.17.3 **

3.17.4

3.17.5 **

3.17.6	**

3.17.7	**

3.18 Mission fuel burn: **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 11 of 21 PRIVILEGED AND CONFIDENTIAL

3.19 Mission Payload: **

3.19.1

3.19.2 **

3.19.3 **

3.19.4

3.19.5 **

3.19.6	**

3.19.7	**

3.20 Mission fuel burn: **

3.21 Mission Payload: **

3.21.1

3.21.2 **

3.21.3 **

3.21.4

3.21.5 **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 12 of 21 PRIVILEGED AND CONFIDENTIAL

3.21.6	**

3.21.7		**

3.22 Mission fuel burn: **

3.23 Mission Payload: **

3.23.1

3.23.2 **

3.23.3 **

3.23.4

3.23.5 **

3.23.6	**

3.23.7	**

3.24 Mission fuel burn: **

3.25 **

a) **

b) **

4 STRUCTURAL USABLE LOAD


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 13 of 21 PRIVILEGED AND CONFIDENTIAL

5 NOISE

5.1 Exterior Noise

5.1.1 Noise Certification

The A350-800 XWB powered by Trent XWB engines at a MTOW of** and a MLW of ** will **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 14 of 21 PRIVILEGED AND CONFIDENTIAL

5.1.2 APU Noise

The APU of the A350-800 XWB will **

5.2 Interior Noise

5.2.1 Interior Noise in Flight

5.2.1.1 Cockpit Noise

At a pressure altitude of ** and a true Mach number of ** in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) will not exceed the following values:


		Guarantee
SPL dB(A)		**
SIL dB		**

Noise levels will be measured at the Captain’s and First Officer’s seat position at head level with normal cockpit air conditioning and ventilation in operation.

5.2.1.2 Cabin Noise

At a pressure altitude of ** and a true Mach number of ** in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) will not exceed the following values, considering leather seats are part of the cabin lay-out.


		Guarantee
		(a 2 dB extra is accounted for leather seats installation)
SPL dB(A)		**
SIL dB		**

Noise levels will be measured at a height of ** above the passenger compartment floor on the aisle center lines in the passenger seated area. Effects on noise of Buyer furnished equipment and installations by or on behalf of the Buyer are not covered by this guarantee. The noise levels are provided for leather seats.

6 EMISSIONS (for information only)

Seller position is that the Engine Manufacturer directly provides AWE/USA with an aircraft engine emissions guarantee. Consequently the following is a reminder (for information only) of the regulations the engine will have to comply with during its certification.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 15 of 21 PRIVILEGED AND CONFIDENTIAL

The RR Trent XWB engines will have to meet the emission levels for Smoke as defined in ICAO Annex 16, Volume II ‘Aircraft Engine Emissions’, Second Edition effective 11 ^th November 1993, section 2.2.2.

The RR Trent XWB engines will have to meet the emission levels for Unburned Hydrocarbons (HC), Carbon Monoxide (CO) as defined in ICAO Annex 16, Volume II ‘Aircraft Engine Emissions’, Second Edition effective 11 ^th November 1993, section 2.3.2.

The RR Trent XWB engines will have to meet the emission levels for Oxides of Nitrogen (NOx) as specified in the ICAO Annex 16, Volume II ‘Aircraft Engine Emissions’, Second Edition effective 11 ^th November 1993, Chapter 2.3.2d (CAEP/6).

Engine emission data will be obtained and evaluated in accordance with the requirements of the ICAO Annex 16, Volume II ‘Aircraft Engine Emissions’, Second Edition effective 11 ^th November 1993.

7 GUARANTEE CONDITIONS

7.1		The performance and noise certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.

7.2		For the determination of FAR take-off and landing performance a hard dry level runway surface with no runway strength limitations, no line-up allowances, no obstacles, zero wind, atmosphere according to ISA, except as otherwise noted, and the use of centre of gravity positions, speed brakes, flaps, landing gear and engines in the conditions liable to provide the best results will be assumed.

7.2.1		When establishing take-off and second segment performance no air will be bled from the engines for cabin air conditioning or anti-icing.

7.2.2		The guarantees provided in paragraphs 2.3.3, 2.3.6, 3.7, 3.8, 3.13, 3.14, 3.21 and 3.22 assume the use of a Trent XWB engine with adapted take-off rating providing enhanced hot day thrust.

7.3		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with cabin differential pressure as defined in Section 21-30.31 of the Specification. Cabin air conditioning management during performance demonstration as described in Subparagraph 8.3 below may be such as to optimise the Aircraft performance while meeting the normal air conditioning requirements defined above. Unless otherwise stated no air will be bled from the engines for anti-icing.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 16 of 21 PRIVILEGED AND CONFIDENTIAL

Cruise performance at ** and above is based on an optimized centre of gravity position.

7.4		The engines will be operated using not more than the engine manufacturer’s maximum recommended outputs for take-off, maximum go-round, maximum continuous, maximum climb and cruise for normal operation unless otherwise stated.

7.5		Where applicable the Guarantees assume the use of an approved fuel having a density of per US gallon and a lower heating value of .

7.6		Speech Interference Level (SIL) is defined as the arithmetic average of the sound pressure levels in the **. A-Weighted sound pressure level (dB(A)) is as defined in the American National Standard Specification ANSI.4-1971.

7.7		All guaranteed interior noise levels refer to an A350-800 XWB Aircraft with standard acoustic insulation and an interior completely furnished. The effect of Buyer furnished equipment other than leather passenger seats (leather seats or acoustically equivalent) will be the responsibility of the Buyer (Remark: Standard seats tend to decrease interior noise levels by 1-2 dB)

7.8		For purposes of the sound levels guaranteed in Clause 5.2.1.2 of this Letter Agreement, the APU and air conditioning system will be operating. Sound level measurements may be made at the prevailing ambient temperature with the air conditioning packs controlled to approximate air conditioning machinery rotational speed appropriate to an ambient temperature of 25C.

8 GUARANTEE COMPLIANCE

8.1		Compliance with the Guarantees will be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.

8.2		Compliance with the take-off, second segment, en-route one engine inoperative, approach climb and landing elements of the Guarantees will be demonstrated with reference to the approved Flight Manual.

8.3		Compliance with those parts of the Guarantees defined in paragraph 2 and 3 above not covered by the requirements of the certifying Airworthiness Authority will be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) aircraft of the same aerodynamic configuration as the Aircraft and incorporated in the In-Flight Performance Program and data bases (the “ IFP ”) appropriate to the Aircraft.

8.4		Compliance with the Structure Usable Load guarantee defined in Paragraph 4 will be demonstrated with reference to a weight compliance report.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 17 of 21 PRIVILEGED AND CONFIDENTIAL

8.5		The approved A350-800 XWB Aircraft flight manual will be used to demonstrate compliance with the guarantees of certification noise levels.

8.6		Compliance with the APU noise and interior noise guarantees will be demonstrated with reference to noise surveys conducted on one (or more, at the Seller’s discretion) A350-800 XWB Aircraft of an acoustically equivalent standard to those A350-800 XWB Aircraft purchased by the Buyer.

8.7		Data derived from flight tests and noise surveys will be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices to show compliance with the Guarantees.

8.8		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.

8.9		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at, or as soon as possible after, the delivery of each of the A350-800 XWB Aircraft.

9 ADJUSTMENT OF GUARANTEES

9.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“rule change”) by any governmental agency made subsequent to the date of the Agreement and such rule change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees will be appropriately modified to reflect the effect of any such change.

9.2		The Guarantees apply to the Aircraft as described in paragraph 1 of this Letter Agreement and may be adjusted in the event of:

	i)		Any further configuration change which is the subject of a SCN

	ii)		Variation in actual weights of items defined in Section 13-10 of the Specification

	iii)		Changes required to obtain certification that cause modifications to the performance or weight of the A350-800 XWB Aircraft

10 EXCLUSIVE GUARANTEES

11 **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 18 of 21 PRIVILEGED AND CONFIDENTIAL

12. ASSIGNMENT

13. COUNTERPARTS


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 19 of 21 PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir Name: Thomas T. Weir	By:	/s/ John J. Leahy Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A PRIVILEGED AND CONFIDENTIAL

APPENDIX A TO LETTER AGREEMENT NO. 8-1.A


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.A — 21 of 21 PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8-1.B

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: A350-800 XWB PERFORMANCE GUARANTEES (WINTER)

Ladies and Gentlemen,

US Airways, Inc., (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated Airbus A350 XWB Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain A350-800 XWB aircraft (the “Aircraft”), under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8-1.B (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the A350-800XWB Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions which are inconsistent, the specific provisions contained in this Letter Agreement will govern.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.B — 1 of 18 PRIVILEGED AND CONFIDENTIAL

1 AIRCRAFT CONFIGURATION

1.1

2 GUARANTEED PERFORMANCE

2.1 Take-off Field Length

FAR take-off field length (“ TOFL ”) at an Aircraft gross weight of 540,133 lb (245,000 kg) at the start of Take-Off Distance Available (TODA) at Sea Level pressure altitude in ISA+15°C conditions will be **.

2.2 Second Segment Climb

2.3 Take-off Weight

2.3.1 When operated under the following conditions **


Pressure altitude		: **
Ambient temperature		: **
Take-off run available		: **
Take-off distance available		: **
Accelerate-stop distance available		: **
Slope		: **
Wind		: **
Line-up allowance TOD		: **
Line-up allowance ASD		: **
Obstacles (Height/Distance above/from start of TODA):		**
		**
		**
		**
		**
		**
		**
		**
		**
		**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.B — 2 of 18 PRIVILEGED AND CONFIDENTIAL

the maximum permissible take-off weight at the start of Take-off Distance Available will **.

2.3.2 When operated under the following conditions **


		Pressure altitude		: **
		Ambient temperature		: **
		Take-off run available		: **
		Take-off distance available		: **
		Accelerate-stop distance available		: **
		Slope		: **
		Wind		: **
		Line-up allowance TOD		: **
		Line-up allowance ASD		: **
		Obstacles (Height/Distance above/from end of TODA):
				**
				**

the maximum permissible take-off weight at the start of Take-off Distance Available will **.

2.3.3

When operated under the following conditions **


		Pressure altitude		: **
		Ambient temperature		: **
		Take-off run available		: **
		Take-off distance available		: **
		Accelerate-stop distance available		: **
		Slope		: **
		Wind		: **
		Line-up allowance TOD		: **
		Line-up allowance ASD		: **
		Obstacles (Height/Distance above/from end of TODA

				**
				**
				**
				**
				**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.B — 3 of 18 PRIVILEGED AND CONFIDENTIAL

the maximum permissible take-off weight at the start of Take-off Distance Available will **.

2.3.4

When operated under the following conditions **


		Pressure altitude		: **
		Ambient temperature		: **
		Take-off run available Take-off distance available		: :
		Accelerate-stop distance available		: **
		Slope		: **
		Wind		: **
		Line-up allowance TOD		: **
		Line-up allowance ASD		: **
		Obstacles (Height/Distance above/from start of TODA)		: **

the maximum permissible take-off weight at the start of Take-off Distance Available will **.

2.3.5

When operated under the following conditions **


		Pressure altitude		: **
		Ambient temperature		: **
		Take-off run available		: **
		Take-off distance available		: **
		Accelerate-stop distance available		: **
		Slope		: **
		Wind		: **
		Line-up allowance TOD		: **
		Line-up allowance ASD		: **
		Obstacles (Height/Distance above/from start of TODA):		**
				**
				**
				**
				**
				**
				**
				**
				**
				**
				**

the maximum permissible take-off weight at the start of Take-off Distance Available will **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.B — 4 of 18 PRIVILEGED AND CONFIDENTIAL

2.3.6

When operated under the following conditions **


		Pressure altitude		: **
		Ambient temperature		: **
		Take-off run available		: **
		Take-off distance available		: **
		Accelerate-stop distance available		: **
		Slope		: **
		Wind		: **
		Line-up allowance TOD		: **
		Line-up allowance ASD		: **
		Obstacles (Height/Distance above/from start of TODA):		**

the maximum permissible take-off weight at the start of Take-off Distance Available will **

2.3.7

When operated under the following conditions **


		Pressure altitude		: **
		Ambient temperature		: **
		Take-off run available		: **
		Take-off distance available		: **
		Accelerate-stop distance available		: **
		Slope		: **
		Wind		: **
		Line-up allowance TOD		: **
		Line-up allowance ASD		: **
		Obstacles (Height/Distance above/from start of TODA)		: **

the maximum permissible take-off weight at the start of Take-off Distance Available will **.

2.4		Landing Field Length

		FAR certified dry landing field length (“ LFL ”) at an Aircraft gross weight of at Sea Level pressure altitude will .

2.5		Speed

		Level flight speed at an A350-800 XWB Aircraft gross weight of at a pressure altitude of using a thrust not exceeding maximum cruise thrust will be **.

3		MISSION GUARANTEES


		** Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.B — 5 of 18 PRIVILEGED AND CONFIDENTIAL

3.1 **

3.1.1

3.1.2 **

3.1.3 **

3.1.4

3.1.5 **

3.1.6		**

3.1.7		**

3.2 Mission fuel burn: **

3.3 Mission Payload: **

3.3.1 **

3.3.2 **

3.3.3 **

3.3.4 **

3.3.5 **

3.3.6		**

3.3.7		**

3.4 Mission fuel burn: **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.B — 6 of 18 PRIVILEGED AND CONFIDENTIAL

3.5 Mission Payload: **

		**

3.5.1		**

3.5.2 **

3.5.3 **

3.5.4

3.5.5 **

3.5.6		**

3.5.7		**

3.6 Mission fuel burn: **

3.7 Mission Payload: **

3.7.1

3.7.2 **.

3.7.3 **

3.7.4

3.7.5 **

3.7.6		**

3.7.7		**

3.8 Mission fuel burn: **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.B — 7 of 18 PRIVILEGED AND CONFIDENTIAL

3.9 Mission Payload: **

3.9.1 **

3.9.2 **

3.9.3 **

3.9.4**

3.9.5 **

3.9.6 **

3.9.7**

3.10 Mission fuel burn: **

3.11 Mission Payload: **

3.11.1**

3.11.2 **

3.11.3 **

3.11.4**

3.11.5 **

3.11.6**

3.11.7**

3.12 Mission fuel burn: **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.B — 8 of 18 PRIVILEGED AND CONFIDENTIAL

3.13 Mission Payload: **

3.13.1**

3.13.2 **

3.13.3 **

3.13.4**

3.13.5 **

3.13.6 **

3.13.7**

3.14 Mission fuel burn: **

3.15 Mission Payload: **

3.15.1**

3.15.2 **

3.15.3 **

3.15.4**

3.15.5 **

3.15.6**

3.15.7**

3.16 Mission fuel burn: **

3.17 Mission Payload: **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.B — 9 of 18 PRIVILEGED AND CONFIDENTIAL

3.17.1**

3.17.2 **

3.17.3 **

3.17.4**

3.17.5 **

3.17.6**

3.17.7**

3.18 Mission fuel burn: **

3.19 Mission Payload: **

3.19.1**

3.19.2 **

3.19.3 **

3.19.4 **

3.19.5 **

3.19.6**

3.19.7**

3.20 Mission fuel burn: **

3.21 Mission Payload: **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.B — 10 of 18 PRIVILEGED AND CONFIDENTIAL

3.21.1**

3.21.2 **

3.21.3 **

3.21.4**

3.21.5 **

3.21.6**

3.21.7**

3.22 Mission fuel burn: **

3.23 Mission Payload: **

3.23.1**

3.23.2 **

3.23.3 **

3.23.4**

3.23.5 **

3.23.6**

3.23.7**

3.24 Mission fuel burn: **

3.25 **


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.B — 11 of 18 PRIVILEGED AND CONFIDENTIAL

4 STRUCTURAL USABLE LOAD

5 NOISE

5.1 Exterior Noise

5.1.1 Noise Certification

The A350-800 XWB powered by Trent XWB engines at a ** and a ** will **.

5.1.2 APU Noise

The APU of the A350-800 XWB will comply with the noise limits as defined in **.

5.2 Interior Noise

5.2.1 Interior Noise in Flight

5.2.1.1 Cockpit Noise

Noise levels will be measured at the Captain’s and First Officer’s seat position at head level with normal cockpit air conditioning and ventilation in operation.

5.2.1.2 Cabin Noise


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.B — 12 of 18 PRIVILEGED AND CONFIDENTIAL


				Guarantee
				(a 2 dB extra is accounted for leather seats installation)
		SPL dB(A)		**
		SIL dB		**

6 EMISSIONS (for information only)

The Seller’s position is that the Propulsion Systems manufacturer directly provides the Buyer with an aircraft engine emissions guarantee. Consequently the following is a reminder (for information only) of the regulations the engine will have to comply with during its certification.

Engine emission data will be obtained and evaluated in accordance with the requirements of the ICAO Annex 16, Volume II ‘Aircraft Engine Emissions’, Second Edition effective 11 ^th November 1993.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.B — 13 of 18 PRIVILEGED AND CONFIDENTIAL

7 GUARANTEE CONDITIONS

7.1		The performance and noise certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.

7.2		For the determination of FAR take-off and landing performance a hard dry level runway surface with no runway strength limitations, no line-up allowances, no obstacles, zero wind, atmosphere according to ISA, except as otherwise noted, and the use of centre of gravity positions, speed brakes, flaps, landing gear and engines in the conditions liable to provide the best results will be assumed.

7.2.1		When establishing take-off and second segment performance no air will be bled from the engines for cabin air conditioning or anti-icing.

7.3		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with cabin differential pressure as defined in Section 21-30.31 of the Specification. Cabin air conditioning management during performance demonstration as described in Subparagraph 8.3 below may be such as to optimise the Aircraft performance while meeting the normal air conditioning requirements defined above. Unless otherwise stated no air will be bled from the engines for anti-icing.

		Cruise performance at 20,000 ft and above is based on an optimized centre of gravity position.

7.4		The engines will be operated using not more than the engine manufacturer’s maximum recommended outputs for take-off, maximum go-round, maximum continuous, maximum climb and cruise for normal operation unless otherwise stated.

7.5		Where applicable the Guarantees assume the use of an approved fuel having a density of 6.7 lb per US gallon and a lower heating value of 18,590 BTU per lb.

7.6		Speech Interference Level (SIL) is defined as the arithmetic average of the sound pressure levels in the 1000, 2000 and 4000 Hz octave bands. A-Weighted sound pressure level (dB(A)) is as defined in the American National Standard Specification ANSI.4-1971.

7.7		All guaranteed interior noise levels refer to an A350-800 XWB Aircraft with standard acoustic insulation and an interior completely furnished. The effect of Buyer furnished equipment other than leather passenger seats (leather seats or acoustically equivalent) will be the responsibility of the Buyer (Remark: Standard seats tend to decrease interior noise levels by 1-2 dB)

7.8		For purposes of the sound levels guaranteed in Clause 5.2.1.2 of this Letter Agreement, the APU and air conditioning system will be operating. Sound level measurements may be


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.B — 14 of 18 PRIVILEGED AND CONFIDENTIAL

made at the prevailing ambient temperature with the air conditioning packs controlled to approximate air conditioning machinery rotational speed appropriate to an ambient temperature of 25C.

8 GUARANTEE COMPLIANCE

8.1		Compliance with the Guarantees will be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.

8.2		Compliance with the take-off, second segment, en-route one engine inoperative, approach climb and landing elements of the Guarantees will be demonstrated with reference to the approved Flight Manual.

8.3		Compliance with those parts of the Guarantees defined in paragraph 2 and 3 above not covered by the requirements of the certifying Airworthiness Authority will be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) aircraft of the same aerodynamic configuration as the Aircraft and incorporated in the In-Flight Performance Program and data bases (the “ IFP ”) appropriate to the Aircraft.

8.4		Compliance with the Structure Usable Load guarantee defined in Paragraph 4 will be demonstrated with reference to a weight compliance report.

8.5		The approved A350-800 XWB Aircraft flight manual will be used to demonstrate compliance with the guarantees of certification noise levels.

8.6		Compliance with the APU noise and interior noise guarantees will be demonstrated with reference to noise surveys conducted on one (or more, at the Seller’s discretion) A350-800 XWB Aircraft of an acoustically equivalent standard to those A350-800 XWB Aircraft purchased by the Buyer.

8.7		Data derived from flight tests and noise surveys will be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices to show compliance with the Guarantees.

8.8		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.

8.9		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at, or as soon as possible after, the delivery of each of the A350-800 XWB Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.B — 15 of 18 PRIVILEGED AND CONFIDENTIAL

9 ADJUSTMENT OF GUARANTEES

9.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“rule change”) by any governmental agency made subsequent to the date of the Agreement and such rule change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees will be appropriately modified to reflect the effect of any such change.

9.2		The Guarantees apply to the Aircraft as described in paragraph 1 of this Letter Agreement and may be adjusted in the event of:

	i)		Any further configuration change which is the subject of a SCN

	ii)		Variation in actual weights of items defined in Section 13-10 of the Specification

	iii)		Changes required to obtain certification that cause modifications to the performance or weight of the A350-800 XWB Aircraft

10 EXCLUSIVE GUARANTEES

11 **

12. ASSIGNMENT

13. COUNTERPARTS


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.B — 16 of 18 PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir Name: Thomas T. Weir	By:	/s/ John J. Leahy Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.B PRIVILEGED AND CONFIDENTIAL

APPENDIX A to Letter Agreement No. 8-1.B



**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement EXECUTION		LA 8-1.B — 18 of 18 PRIVILEGED AND CONFIDENTIAL

AMENDED AND RESTATED
LETTER AGREEMENT NO. 8-2.A

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: A350-900 XWB PERFORMANCE GUARANTEES (SUMMER)

Ladies and Gentlemen,

US Airways, Inc., (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated Airbus A350 XWB Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain A350-900 XWB Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8-2.A (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the A350-900XWB Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions which are inconsistent, the specific provisions contained in this Letter Agreement will govern.


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 1 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1		AIRCRAFT CONFIGURATION

1.1		The Guarantees defined below are applicable to the A350-900 XWB Aircraft powered by Rolls Royce Trent XWB engines, as described in the Standard Specification and in the Aircraft Description Document , herein after referred as “the Specification” without taking into account any further changes thereto as provided in the Agreement.

2		GUARANTEED PERFORMANCE

2.1		Take-off Field Length

		FAR take-off field length (“TOFL”) at an Aircraft gross weight of at the start of Take-Off Distance Available (TODA) at Sea Level pressure altitude in conditions will be **

2.2		Second Segment Climb

		The Aircraft will meet FAR 25 regulations for one engine inoperative climb after take-off, undercarriage retracted, at a weight corresponding to the stated weight at the start of ground run, at the altitude and temperature, and in the configuration of flap angle and safety speed required to comply with the performance guaranteed in paragraph 2.1 and 2.3.

2.3		Take-off Weight

2.3.1		When operated under the following conditions (**)


Pressure altitude	*	*
Ambient temperature	*	*
Take-off run available	*	*
Take-off distance available	*	*
Accelerate-stop distance available	*	*
Slope	*	*
Wind	*	*
Line-up allowance TOD	*	*
Line-up allowance ASD	*	*
Obstacles (Height/Distance above/from start of TODA)	: *	*
	*	*
	*	*
	*	*
	*	*
	*	*
	*	*
	*	*
	*	*
	*	*


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 2 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

the maximum permissible take-off weight at the start of Take-off Distance Available will **

2.3.2

When operated under the following conditions (**)


Pressure altitude Ambient temperature Take-off run available Take-off distance available
Accelerate-stop distance available		**
Slope		**
Wind		**
Line-up allowance TOD		**
Line-up allowance ASD		**
Obstacles (Height/Distance above/from end of TODA):		**
		**
		**
		**

the maximum permissible take-off weight at the start of Take-off Distance Available will **.

2.3.3

When operated under the following conditions (**)


Pressure altitude		**
Ambient temperature		**
Take-off run available		**
Take-off distance available		**
Accelerate-stop distance available		**
Slope		**
Wind		**
Line-up allowance TOD		**
Line-up allowance ASD		**
Obstacles (Height/Distance above/from end of TODA):
		**
		**
		**
		**
		**


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 3 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		the maximum permissible take-off weight at the start of Take-off Distance Available will **.

		Note: This guarantee is based on an adapted take-off rating

2.3.4

When operated under the following conditions (**)


Pressure altitude		**
Ambient temperature		**
Take-off run available		**
Take-off distance available		**
Accelerate-stop distance available		**
Slope		**
Wind		**
Line-up allowance TOD		**
Line-up allowance ASD		**
Obstacles (Height/Distance above/from start of TODA):		**

the maximum permissible take-off weight at the start of Take-off Distance Available will **.

2.3.5

When operated under the following conditions (**)


Pressure altitude		**
Ambient temperature		**
Take-off run available		**
Take-off distance available		**
Accelerate-stop distance available		**
Slope		**
Wind		**
Line-up allowance TOD		**
Line-up allowance ASD		**
Obstacles (Height/Distance above/from start of TODA):		**
		**
		**
		**
		**


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 4 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

the maximum permissible take-off weight at the start of Take-off Distance Available will **

2.3.6

When operated under the following conditions (**)


Pressure altitude		**
Ambient temperature		**
Take-off run available		**
Take-off distance available		**
Accelerate-stop distance available		**
Slope		**
Wind		**
Line-up allowance TOD		**
Line-up allowance ASD		**
Obstacles (Height/Distance above/from start of TODA):		**

		the maximum permissible take-off weight at the start of Take-off Distance Available will **

		Note: This guarantee is based on an adapted take-off rating

2.3.7

When operated under the following conditions (**)


Pressure altitude		**
Ambient temperature		**
Take-off run available		**
Take-off distance available		**
Accelerate-stop distance available		**
Slope		**
Wind		**
Line-up allowance TOD		**
Line-up allowance ASD		**
Obstacles (Height/Distance above/from start of TODA)		**

the maximum permissible take-off weight at the start of Take-off Distance Available will **


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 5 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.4		Landing Field Length

		FAR certified dry landing field length (“LFL”) at an Aircraft gross weight of at Sea Level pressure altitude will

2.5		Speed

		Level flight speed at an A350-900 XWB Aircraft gross weight of at a pressure altitude of using a thrust not exceeding maximum cruise thrust will be **

3		MISSION GUARANTEES

3.1		Mission Payload: **

		**

3.1.1		**

3.1.2		**

3.1.3		**

3.1.4

3.1.5


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 6 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.1.6		**

3.1.7		**

3.2		Mission fuel burn: **

		**

3.3		Mission Payload: **

		**

3.3.1		**

3.3.2		**

3.3.3		**

3.3.4		**

3.3.5		**

3.3.6		**

3.3.7		**

3.4		Mission fuel burn: **

		**

3.5		Mission Payload: **

		**


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 7 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.5.1

3.5.2		**

3.5.3		**

3.5.4		**

3.5.5		**

3.5.6		**

3.5.7		**

3.6		Mission fuel burn: **

		**

3.7		Mission Payload: **

		**

3.7.1

3.7.2		**

3.7.3		**

3.7.4

3.7.5

3.7.6		**

3.7.7		**

3.8		Mission fuel burn: **

		**

3.9		Mission Payload: **

		**

3.9.1


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 8 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.9.2		**

3.9.3		**

3.9.4

3.9.5

3.9.6		**

3.9.7		**

3.10		Mission fuel burn: **

		**

3.11		Mission Payload: **

		**

3.11.1

3.11.2

3.11.3

3.11.4		**

3.11.5		**

3.11.6		**

3.11.7		**

3.12

Mission fuel burn: **

3.13

Mission Payload: **

3.13.1		**

3.13.2		**

3.13.3		**

3.13.4

3.13.5


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 9 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.13.6		**

3.13.7		**


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 10 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.14

Mission fuel burn: **

3.15

Mission Payload: **

3.15.1

3.15.2		**

3.15.3		**

3.15.4

3.15.5


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 11 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.15.6		**

3.15.7		**

3.16

Mission fuel burn: **

3.17

Mission Payload: **

3.17.1

3.17.2


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 12 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.17.3

3.17.4

3.17.5

3.17.6

3.17.7

3.18

Mission fuel burn: **


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 13 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.19		Mission Payload: **

		**

3.19.1

3.19.2		**

3.19.3		**

3.19.4

3.19.5

3.19.6

3.19.7		**

3.20		Mission fuel burn: **

		**

3.21		Mission Payload: **

3.21.1

3.21.2		**

3.21.3		**

3.21.4

3.21.5

3.21.6		**

3.21.7		**

3.22

Mission fuel burn: **

3.23

Mission Payload: **


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 14 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.23.1

3.23.2


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 15 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.23.3

3.23.4

3.23.5

3.23.6		**

3.23.7		**

3.24

Mission fuel burn: **

3.25

	a)		**

	b)		**

STRUCTURAL USABLE LOAD

NOISE

5.1		Exterior Noise

		**

5.1.1		Noise Certification

		The A350-900 XWB powered by Trent XWB engines at a and a will **

5.1.2		APU Noise

		The APU of the A350-900 XWB will comply with the noise limits as defined in ICAO Annex 16, Vol. 1, Chapter 9, Attachment C, third edition, effective 11th November 1993.


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 16 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

5.2		Interior Noise

5.2.1		Interior Noise in Flight

5.2.1.1		Cockpit Noise

		At a pressure altitude of and a true Mach number in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) will not exceed the following values:


	Guarantee
SPL dB(A)		*	*
SIL dB		*	*

Noise levels will be measured at the Captain’s and First Officer’s seat position at head level with normal cockpit air conditioning and ventilation in operation.

5.2.1.2		Cabin Noise

		At a pressure altitude of and a true Mach number in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) will not exceed the following values, considering leather seats are part of the cabin lay-out.


	Guarantee
	(a 2 dB extra is accounted for leather seats installation)
SPL dB(A)		*	*
SIL dB		*	*

6		EMISSIONS (for information only)

		Seller position is that the Engine Manufacturer directly provides BUYER with an aircraft engine emissions guarantee. Consequently the following is a reminder (for information only) of the regulations the engine will have to comply with during its certification.


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 17 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		The RR Trent XWB engines will have to meet the emission levels for Smoke as defined in ICAO Annex 16, Volume II ‘Aircraft Engine Emissions’, Second Edition effective 11 ^th November 1993, section 2.2.2.

		The RR Trent XWB engines will have to meet the emission levels for Unburned Hydrocarbons (HC), Carbon Monoxide (CO) as defined in ICAO Annex 16, Volume II ‘Aircraft Engine Emissions’, Second Edition effective 11 ^th November 1993, section 2.3.2.

		The RR Trent XWB engines will have to meet the emission levels for Oxides of Nitrogen (NOx) as specified in the ICAO Annex 16, Volume II ‘Aircraft Engine Emissions’, Second Edition effective 11 ^th November 1993, Chapter 2.3.2d (CAEP/6).

		Engine emission data will be obtained and evaluated in accordance with the requirements of the ICAO Annex 16, Volume II ‘Aircraft Engine Emissions’, Second Edition effective 11 ^th November 1993.

7		GUARANTEE CONDITIONS

7.1		The performance and noise certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.

7.2		For the determination of FAR take-off and landing performance a hard dry level runway surface with no runway strength limitations, no line-up allowances, no obstacles, zero wind, atmosphere according to ISA, except as otherwise noted, and the use of centre of gravity positions, speed brakes, flaps, landing gear and engines in the conditions liable to provide the best results will be assumed.

7.2.1		When establishing take-off and second segment performance no air will be bled from the engines for cabin air conditioning or anti-icing.

7.2.2		The guarantees provided in paragraphs 2.3.3, 2.3.6, 3.7, 3.8, 3.13, 3.14, 3.21 and 3.22 assume the use of a Trent XWB engine with adapted take-off rating providing enhanced hot day thrust.

7.3		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with cabin differential pressure as defined in Section 21-30.31 of the Specification. Cabin air conditioning management during performance demonstration as described in Subparagraph 8.3 below may be such as to optimise the Aircraft performance while meeting the normal air conditioning requirements defined above. Unless otherwise stated no air will be bled from the engines for anti-icing.

		Cruise performance at 20,000 ft and above is based on an optimized centre of gravity position.


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 18 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

7.4		The engines will be operated using not more than the engine manufacturer’s maximum recommended outputs for take-off, maximum go-round, maximum continuous, maximum climb and cruise for normal operation unless otherwise stated.

7.5		Where applicable the Guarantees assume the use of an approved fuel having a density of 6.7 lb per US gallon and a lower heating value of 18,590 BTU per lb.

7.6		Speech Interference Level (SIL) is defined as the arithmetic average of the sound pressure levels in the 1000, 2000 and 4000 Hz octave bands. A-Weighted sound pressure level (dB(A)) is as defined in the American National Standard Specification ANSI.4-1971.

7.7		All guaranteed interior noise levels refer to an A350-900 XWB Aircraft with standard acoustic insulation and an interior completely furnished. The effect of Buyer furnished equipment other than leather passenger seats (leather seats or acoustically equivalent) will be the responsibility of the Buyer (Remark: Standard seats tend to decrease interior noise levels by 1-2 dB)

7.8		For purposes of the sound levels guaranteed in Clause 5.2.1.2 of this Letter Agreement, the APU and air conditioning system will be operating. Sound level measurements may be made at the prevailing ambient temperature with the air conditioning packs controlled to approximate air conditioning machinery rotational speed appropriate to an ambient temperature of 25C.

8		GUARANTEE COMPLIANCE

8.1		Compliance with the Guarantees will be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.

8.2		Compliance with the take-off, second segment, en-route one engine inoperative, approach climb and landing elements of the Guarantees will be demonstrated with reference to the approved Flight Manual.

8.3		Compliance with those parts of the Guarantees defined in paragraph 2 and 3 above not covered by the requirements of the certifying Airworthiness Authority will be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) aircraft of the same aerodynamic configuration as the Aircraft and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the Aircraft.

8.4		Compliance with the Structure Usable Load guarantee defined in Paragraph 4 will be demonstrated with reference to a weight compliance report.

8.5		The approved A350-900 XWB Aircraft flight manual will be used to demonstrate compliance with the guarantees of certification noise levels.


**		Confidential Treatment Requested.


USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A — 19 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

8.6		Compliance with the APU noise and interior noise guarantees will be demonstrated with reference to noise surveys conducted on one (or more, at the Seller’s discretion) A350-900 XWB Aircraft of an acoustically equivalent standard to those A350-900 XWB Aircraft purchased by the Buyer.

8.7		Data derived from flight tests and noise surveys will be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices to show compliance with the Guarantees.

8.8		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.

8.9		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at, or as soon as possible after, the delivery of each of the A350-900 XWB Aircraft.

9		ADJUSTMENT OF GUARANTEES

9.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“rule change”) by any governmental agency made subsequent to the date of the Agreement and such rule change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees will be appropriately modified to reflect the effect of any such change.

9.2		The Guarantees apply to the Aircraft as described in paragraph 1 of this Letter Agreement and may be adjusted in the event of:

	i)		Any further configuration change which is the subject of a SCN

	ii)		Variation in actual weights of items defined in Section 13-10 of the Specification

	iii)		Changes required to obtain certification that cause modifications to the performance or weight of the A350-900 XWB Aircraft

10		EXCLUSIVE GUARANTEES

		The Guarantees are exclusive and are provided in lieu of any and all other performance and weight guarantees of any nature which may be stated, referenced or incorporated in the Specification or any other document.


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A – 20 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

11		**

11.2		**

11.3		**

12.		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without prior written consent of the Seller and any attempted assignment or transfer in contravention of the provisions of this sentence will be void and of no force and effect.

13.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one same instrument.


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A – 21 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir Name: Thomas T. Weir	By:	/s/ John J. Leahy Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A – 22 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX A to Letter Agreement 8-2.A (A350-900 XWB Aircraft)

1.		**

2.		**

3.		**


**		Confidential Treatment Requested.



USA – Amended and Restated Airbus A350 XWB Purchase Agreement		LA 8-2.A – 23 of 23
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 8-2.B

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: A350-900 XWB PERFORMANCE GUARANTEES (WINTER)

Ladies and Gentlemen,

US Airways, Inc., (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated Airbus A350 XWB Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain A350-900 XWB Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 8-2.B (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the A350-900XWB Aircraft.

The parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions which are inconsistent, the specific provisions contained in this Letter Agreement will govern.


**		Confidential Treatment Requested.



USA — Amended and Restated A350 Purchase Agreement		LA 8-2.B – 1 of 16
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1		AIRCRAFT CONFIGURATION

1.1		The Guarantees defined below are applicable to the A350-900 XWB Aircraft powered by Rolls Royce Trent XWB engines, as described in the Standard Specification and in the Aircraft Description Document , herein after referred as “the Specification” without taking into account any further changes thereto as provided in the Agreement.

2		GUARANTEED PERFORMANCE

2.1		Take-off Field Length

		FAR take-off field length (“TOFL”) at an Aircraft gross weight of at the start of Take-Off Distance Available (TODA) at Sea Level pressure altitude in conditions will be **

2.2		Second Segment Climb

		The Aircraft will meet FAR 25 regulations for one engine inoperative climb after take-off, undercarriage retracted, at a weight corresponding to the stated weight at the start of ground run, at the altitude and temperature, and in the configuration of flap angle and safety speed required to comply with the performance guaranteed in paragraph 2.1 and 2.3.

2.3		Take-off Weight

2.3.1		When operated under the following conditions (**)


Pressure altitude		**
Ambient temperature		**
Take-off run available		**
Take-off distance available		**
Accelerate-stop distance available		**
Slope		**
Wind		**
Line-up allowance TOD		**
Line-up allowance ASD		**
Obstacles (Height/Distance above/from start of TODA)	:	**
		**
		**
		**
		**
		**
		**
		**
		**
		**


**		Confidential Treatment Requested.



USA — Amended and Restated A350 Purchase Agreement		LA 8-2.B – 2 of 16
EXECUTION		PRIVILEGED AND CONFIDENTIAL

the maximum permissible take-off weight at the start of Take-off Distance Available will **

2.3.2

When operated under the following conditions (**)


Pressure altitude		**
Ambient temperature		**
Take-off run available		**
Take-off distance available		**
Accelerate-stop distance available		**
Slope		**
Wind		**
Line-up allowance TOD		**
Line-up allowance ASD		**
Obstacles (Height/Distance above/from end of TODA):		**
		**
		**
		**
		**

		the maximum permissible take-off weight at the start of Take-off Distance Available will **

2.3.3		When operated under the following conditions (**)


Pressure altitude		**
Ambient temperature		**
Take-off run available		**
Take-off distance available		**
Accelerate-stop distance available		**
Slope		**
Wind		**
Line-up allowance TOD		**
Line-up allowance ASD		**
Obstacles (Height/Distance above/from end of TODA):
		**
		**
		**
		**
		**
		**
		**

		the maximum permissible take-off weight at the start of Take-off Distance Available will **

2.3.4		When operated under the following conditions (**)


**		Confidential Treatment Requested.



USA — Amended and Restated A350 Purchase Agreement		LA 8-2.B – 3 of 16
EXECUTION		PRIVILEGED AND CONFIDENTIAL


Pressure altitude		**
Ambient temperature		**
Take-off run available		**
Take-off distance available		**
Accelerate-stop distance available		**
Slope		**
Wind		**
Line-up allowance TOD		**
Line-up allowance ASD		**
Obstacles (Height/Distance above/from start of TODA):		**

		the maximum permissible take-off weight at the start of Take-off Distance Available will **

2.3.5		When operated under the following conditions **


Pressure altitude		**
Ambient temperature		**
Take-off run available		**
Take-off distance available		**
Accelerate-stop distance available		**
Slope		**
Wind		**
Line-up allowance TOD		**
Line-up allowance ASD		**
Obstacles (Height/Distance above/from start of TODA):		**
		**
		**
		**
		**
		**
		**
		**
		**
		**
		**


**		Confidential Treatment Requested.



USA — Amended and Restated A350 Purchase Agreement		LA 8-2.B – 4 of 16
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		the maximum permissible take-off weight at the start of Take-off Distance Available will **

2.3.6		When operated under the following conditions (**)


Pressure altitude		**
Ambient temperature		**
Take-off run available		**
Take-off distance available		**
Accelerate-stop distance available Slope
Wind		**
Line-up allowance TOD		**
Line-up allowance ASD		**
Obstacles (Height/Distance above/from start of TODA):		**

		the maximum permissible take-off weight at the start of Take-off Distance Available will **

2.3.7		When operated under the following conditions (**)


Pressure altitude		**
Ambient temperature		**
Take-off run available		**
Take-off distance available		**
Accelerate-stop distance available		**
Slope		**
Wind		**
Line-up allowance TOD		**
Line-up allowance ASD		**
Obstacles (Height/Distance above/from start of TODA):		**

		the maximum permissible take-off weight at the start of Take-off Distance Available will **

2.4		Landing Field Length

		FAR certified dry landing field length (“LFL”) at an Aircraft gross weight of at Sea Level pressure altitude will


**		Confidential Treatment Requested.



USA — Amended and Restated A350 Purchase Agreement		LA 8-2.B – 5 of 16
EXECUTION		PRIVILEGED AND CONFIDENTIAL

2.5		Speed

		Level flight speed at an A350-900 XWB Aircraft gross weight of at a pressure altitude of conditions using a thrust not exceeding maximum cruise thrust will be **

3		MISSION GUARANTEES

3.1		Mission Payload: **

		**


**		Confidential Treatment Requested.



USA — Amended and Restated A350 Purchase Agreement		LA 8-2.B – 6 of 16
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.2		Mission fuel burn: **

		**

3.3		Mission Payload: **

3.4		Mission fuel burn: **

		**

3.5		Mission Payload: **

**


**		Confidential Treatment Requested.



USA — Amended and Restated A350 Purchase Agreement		LA 8-2.B – 7 of 16
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.6

Mission fuel burn: **

3.7

Mission Payload: **

3.8		Mission fuel burn: **

		**

3.9		Mission Payload: **

		**

3.10

Mission fuel burn: **

3.11		Mission Payload: **

3.12		Mission fuel burn: **

3.13

Mission Payload: **


**		Confidential Treatment Requested.



USA — Amended and Restated A350 Purchase Agreement		LA 8-2.B – 8 of 16
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.14

Mission fuel burn: **

3.15

Mission Payload: **

3.16

Mission fuel burn: **

3.17		Mission Payload: **

		**

3.18		Mission fuel burn: **

3.19		Mission Payload: **

		**

3.20		Mission fuel burn: **

		**

3.21		Mission Payload: **

		**


**		Confidential Treatment Requested.



USA — Amended and Restated A350 Purchase Agreement		LA 8-2.B — 9 of 16
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.22		Mission fuel burn: **

		**

3.23		Mission Payload: **

		**

3.24		Mission fuel burn: **

		**

STRUCTURAL USABLE LOAD

5		NOISE

5.1		Exterior Noise

5.1.1		Noise Certification

		The A350-900 XWB powered by Trent XWB engines at and will **

5.1.2		APU Noise

		The APU of the A350-900 XWB will comply with the noise limits as defined in ICAO Annex 16, Vol. 1, Chapter 9, Attachment C, third edition, effective 11th November 1993.

5.2		Interior Noise

5.2.1		Interior Noise in Flight

5.2.1.1		Cockpit Noise

		At a pressure altitude of and a true Mach number of in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) will not exceed the following values:


		Guarantee
SPL dB(A)		**
SIL dB		**


**		Confidential Treatment Requested.



USA — Amended and Restated A350 Purchase Agreement		LA 8-2.B — 10 of 16
EXECUTION		PRIVILEGED AND CONFIDENTIAL

		Noise levels will be measured at the Captain’s and First Officer’s seat position at head level with normal cockpit air conditioning and ventilation in operation.

5.2.1.2		Cabin Noise

		At a pressure altitude of and a true Mach number of in straight and level flight in still air under ISA conditions, the guaranteed A-weighted Sound Pressure Level (SPL) and the Speech Interference Level (SIL) will not exceed the following values, considering leather seats are part of the cabin lay-out.


		Guarantee
		(a 2 dB extra is accounted for leather seats installation)
SPL dB(A)		**
SIL dB		**

		Noise levels will be measured at a height of 40 inches above the passenger compartment floor on the aisle center lines in the passenger seated area. Effects on noise of Buyer furnished equipment and installations by or on behalf of the Buyer are not covered by this guarantee. The noise levels are provided for leather seats.

6		EMISSIONS (for information only)

		Seller position is that the Engine Manufacturer directly provides BUYER with an aircraft engine emissions guarantee. Consequently the following is a reminder (for information only) of the regulations the engine will have to comply with during its certification.

		The RR Trent XWB engines will have to meet the emission levels for Smoke as defined in ICAO Annex 16, Volume II ‘Aircraft Engine Emissions’, Second Edition effective 11 ^th November 1993, section 2.2.2.

		The RR Trent XWB engines will have to meet the emission levels for Unburned Hydrocarbons (HC), Carbon Monoxide (CO) as defined in ICAO Annex 16, Volume II ‘Aircraft Engine Emissions’, Second Edition effective 11 ^th November 1993, section 2.3.2.

		The RR Trent XWB engines will have to meet the emission levels for Oxides of Nitrogen (NOx) as specified in the ICAO Annex 16, Volume II ‘Aircraft Engine Emissions’, Second Edition effective 11 ^th November 1993, Chapter 2.3.2 d (CAEP/6). Engine emission data will be obtained and evaluated in accordance with the requirements of the ICAO Annex 16, Volume II ‘Aircraft Engine Emissions’, Second Edition effective 11 ^th November 1993.


**		Confidential Treatment Requested.



USA – Amended and Restated A350 Purchase Agreement		LA 8-2.B – 11 of 16
EXECUTION		PRIVILEGED AND CONFIDENTIAL

7		GUARANTEE CONDITIONS

7.1		The performance and noise certification requirements for the Aircraft, except where otherwise noted, will be as stated in Section 02 of the Specification.

7.2		For the determination of FAR take-off and landing performance a hard dry level runway surface with no runway strength limitations, no line-up allowances, no obstacles, zero wind, atmosphere according to ISA, except as otherwise noted, and the use of centre of gravity positions, speed brakes, flaps, landing gear and engines in the conditions liable to provide the best results will be assumed.

7.2.1		When establishing take-off and second segment performance no air will be bled from the engines for cabin air conditioning or anti-icing.

7.3		Climb, cruise and descent performance associated with the Guarantees will include allowances for normal electrical load and for normal engine air bleed and power extraction associated with cabin differential pressure as defined in Section 21-30.31 of the Specification. Cabin air conditioning management during performance demonstration as described in Subparagraph 8.3 below may be such as to optimise the Aircraft performance while meeting the normal air conditioning requirements defined above. Unless otherwise stated no air will be bled from the engines for anti-icing.

		Cruise performance at 20,000 ft and above is based on an optimized centre of gravity position.

7.4		The engines will be operated using not more than the engine manufacturer’s maximum recommended outputs for take-off, maximum go-round, maximum continuous, maximum climb and cruise for normal operation unless otherwise stated.

7.5		Where applicable the Guarantees assume the use of an approved fuel having a density of 6.7 lb per US gallon and a lower heating value of 18,590 BTU per lb.

7.6		Speech Interference Level (SIL) is defined as the arithmetic average of the sound pressure levels in the 1000, 2000 and 4000 Hz octave bands. A-Weighted sound pressure level (dB(A)) is as defined in the American National Standard Specification ANSI.4-1971.

7.7		All guaranteed interior noise levels refer to an A350-900 XWB Aircraft with standard acoustic insulation and an interior completely furnished. The effect of Buyer furnished equipment other than leather passenger seats (leather seats or acoustically equivalent) will be the responsibility of the Buyer (Remark: Standard seats tend to decrease interior noise levels by 1-2 dB)

7.8		For purposes of the sound levels guaranteed in Clause 5.2.1.2 of this Letter Agreement, the APU and air conditioning system will be operating. Sound level measurements may be made at the prevailing ambient temperature with the air conditioning packs controlled to approximate air conditioning machinery rotational speed appropriate to an ambient temperature of 25C.


**		Confidential Treatment Requested.



USA — Amended and Restated A350 Purchase Agreement		LA 8-2.B — 12 of 16
EXECUTION		PRIVILEGED AND CONFIDENTIAL

8		GUARANTEE COMPLIANCE

8.1		Compliance with the Guarantees will be demonstrated using operating procedures and limitations in accordance with those defined by the certifying Airworthiness Authority and by the Seller unless otherwise stated.

8.2		Compliance with the take-off, second segment, en-route one engine inoperative, approach climb and landing elements of the Guarantees will be demonstrated with reference to the approved Flight Manual.

8.3		Compliance with those parts of the Guarantees defined in paragraph 2 and 3 above not covered by the requirements of the certifying Airworthiness Authority will be demonstrated by calculation based on data obtained during flight tests conducted on one (or more, at the Seller’s discretion) aircraft of the same aerodynamic configuration as the Aircraft and incorporated in the In-Flight Performance Program and data bases (“the IFP”) appropriate to the Aircraft.

8.4		Compliance with the Structure Usable Load guarantee defined in Paragraph 4 will be demonstrated with reference to a weight compliance report.

8.5		The approved A350-900 XWB Aircraft flight manual will be used to demonstrate compliance with the guarantees of certification noise levels.

8.6		Compliance with the APU noise and interior noise guarantees will be demonstrated with reference to noise surveys conducted on one (or more, at the Seller’s discretion) A350-900 XWB Aircraft of an acoustically equivalent standard to those A350-900 XWB Aircraft purchased by the Buyer.

8.7		Data derived from flight tests and noise surveys will be adjusted as required using conventional methods of correction, interpolation or extrapolation in accordance with established aeronautical practices to show compliance with the Guarantees.

8.8		Compliance with the Guarantees is not contingent on engine performance defined in the engine manufacturer’s specification.

8.9		The Seller undertakes to furnish the Buyer with a report or reports demonstrating compliance with the Guarantees at, or as soon as possible after, the delivery of each of the A350-900 XWB Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated A350 Purchase Agreement		LA 8-2.B — 13 of 16
EXECUTION		PRIVILEGED AND CONFIDENTIAL

9		ADJUSTMENT OF GUARANTEES

9.1		In the event of any change to any law, governmental regulation or requirement or interpretation thereof (“rule change”) by any governmental agency made subsequent to the date of the Agreement and such rule change affects the Aircraft configuration or performance or both required to obtain certification the Guarantees will be appropriately modified to reflect the effect of any such change.

9.2		The Guarantees apply to the Aircraft as described in paragraph 1 of this Letter Agreement and may be adjusted in the event of:

	i)		Any further configuration change which is the subject of a SCN

	ii)		Variation in actual weights of items defined in Section 13-10 of the Specification

	iii)		Changes required to obtain certification that cause modifications to the performance or weight of the A350-900 XWB Aircraft

10		EXCLUSIVE GUARANTEES

		The Guarantees are exclusive and are provided in lieu of any and all other performance and weight guarantees of any nature which may be stated, referenced or incorporated in the Specification or any other document.

11		**

12.		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without prior written consent of the Seller and any attempted assignment or transfer in contravention of the provisions of this sentence will be void and of no force and effect.

13.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one same instrument.


**		Confidential Treatment Requested.



USA — Amended and Restated A350 Purchase Agreement		LA 8-2.B — 14 of 16
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir Name: Thomas T. Weir	By:	/s/ John J. Leahy Name: John J. Leahy
	Title: Vice President and Treasurer		Title: Chief Operating Officer Customers


**		Confidential Treatment Requested.



USA — Amended and Restated A350 Purchase Agreement		LA 8-2.B — 15 of 16
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX A to Letter Agreement No. 8-2.B (A350-900 XWB Aircraft)


**		Confidential Treatment Requested.



USA — Amended and Restated A350 Purchase Agreement		LA 8-2.B — 16 of 16
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 9

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A350 XWB Purchase Agreement dated as of even date herewith, (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 9 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

The parties agree that this Letter Agreement will constitute an integral, non-severable part of said Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions which are inconsistent, the specific provisions contained in this Letter Agreement will govern.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 9 — 1 of 4
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LEASED AIRCRAFT

2.		EXCUSABLE DELAY AND TOTAL LOSS

		**

TERMINATION

3.1


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 9 — 2 of 4
EXECUTION		PRIVILEGED AND CONFIDENTIAL

3.2		Paragraph 21.2(1)(i) of the Agreement is amended to read as follows between the “QUOTE” and “UNQUOTE”

		QUOTE

(i)

UNQUOTE

3.3		The paragraphs numbered 1 through 6 in Clause 21.2 (2) (A) of the Agreement are hereby superseded and replaced by the following text between the “QUOTE” and “UNQUOTE”:

		QUOTE

UNQUOTE

4.		ASSIGNMENT

		Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Paragraph 4 will be void and of no force or effect.

5.		COUNTERPARTS

		This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 9 — 3 of 4
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

	Name: Thomas T. Weir		Name:	John J. Leahy
	Title: Vice President and Treasurer		Title:	Chief Operating Officer Customers



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 9
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 10

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A350 XWB Purchase Agreement dated as of even date herewith, (the “ Agreement ”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 10 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 10 — 1 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

ASSIGNMENT

Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Letter Agreement will be void and of no force or effect.

4. COUNTERPARTS


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 10 — 2 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

	Name: Thomas T. Weir		Name:	John J. Leahy
	Title: Vice President and Treasurer		Title:	Chief Operating Officer Customers



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 10
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 11

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A350 XWB Purchase Agreement dated as of even date herewith, (the “ Agreement ”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 11 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 11 — 1 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

12 ASSIGNMENT

13 COUNTERPARTS


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 11 — 2 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

	Name: Thomas T. Weir		Name:	John J. Leahy
	Title: Vice President and Treasurer		Title:	Chief Operating Officer Customers



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 11
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 12

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc., (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated Airbus A350 Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain A350-800 XWB aircraft (the “ Aircraft ”), under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 12 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 12 — 1 of 5
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1 PREAMBLE

1.1

AIRCRAFT CONFIGURATION

The guarantee set forth in this Letter Agreement is applicable to the A350-800 XWB Aircraft powered by Rolls Royce Trent XWB engines, as described in the Standard Specification ** and in the Aircraft Description Document ** hereinafter referred as the “ Specification ” without taking into account any further changes thereto as provided in the Agreement.

8 TERMINATION

8.1

This Letter Agreement and the obligations of the Seller hereunder will terminate ** after the first revenue flight of the first Aircraft delivered to the Buyer.

9 **

10 **

11 ASSIGNMENT

12 COUNTERPARTS


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 12 — 2 of 5
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

	Name: Thomas T. Weir		Name:	John J. Leahy
	Title: Vice President and Treasurer		Title:	Chief Operating Officer Customers



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 12
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX A TO LETTER AGREEMENT NO. 12
PERFORMANCE MONITORING METHOD


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 12 — 4 of 5
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX B TO LETTER AGREEMENT NO. 12

Planning for the delivery of the A350-800/Trent XWB 75,000 lb aircraft:


Scheduled Delivery Quarter	Year	Quantity
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**
**	**	**


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 12 — 5 of 5
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 13

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc., (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated Airbus A350 XWB Purchase Agreement dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain A350-800 XWB aircraft (“ A350-800 XWB Aircraft ”) and A350-900 XWB aircraft (“ A350-900 XWB Aircraft ”), (the A350-800 XWB Aircraft and A350-900 XWB Aircraft together, the “ A350 XWB Aircraft ”), under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 13 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the A350 XWB Aircraft.

The parties agree that this Letter Agreement will constitute an integral, non-severable part of said Agreement, that the provisions of said Agreement are hereby incorporated by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions which are inconsistent, the specific provisions contained in this Letter Agreement will govern.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 13 — 1 of 7
EXECUTION		PRIVILEGED AND CONFIDENTIAL

17. ASSIGNMENT

Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this paragraph will be void and of no force or effect.

18. COUNTERPARTS


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 13 — 2 of 7
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

	Name: Thomas T. Weir		Name:	John J. Leahy
	Title: Vice President and Treasurer		Title:	Chief Operating Officer Customers



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 13
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX 1 TO LETTER AGREEMENT NO. 13 — MAINTENANCE COST GUARANTEE

The following systems are covered by the Maintenance Cost Guarantee:


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 13 — 4 of 7
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX 1 TO LETTER AGREEMENT NO. 13 — MAINTENANCE COST GUARANTEE


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 13 — 5 of 7
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX 2 TO LETTER AGREEMENT NO. 13 — MAINTENANCE COST GUARANTEE


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 13 — 6 of 7
EXECUTION		PRIVILEGED AND CONFIDENTIAL

APPENDIX 3 TO LETTER AGREEMENT NO. 13 — MAINTENANCE COST GUARANTEE


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 13 — 7 of 7
EXECUTION		PRIVILEGED AND CONFIDENTIAL

LETTER AGREEMENT NO. 14

As of October 2, 2007

US Airways, Inc.
111 West Rio Salado Parkway
Tempe, Arizona 85281

Re: **

Ladies and Gentlemen,

US Airways, Inc. (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Amended and Restated A350 XWB Purchase Agreement dated as of even date herewith, (the “ Agreement ”) which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 14 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 14 — 1 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

1. **

5. ASSIGNMENT

Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Letter Agreement will be void and of no force or effect.

6. COUNTERPARTS


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 14 — 2 of 3
EXECUTION		PRIVILEGED AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please sign two (2) counterparts hereof in the space provided below and return one (1) such counterpart to the Seller.


US AIRWAYS, INC.		AIRBUS S.A.S.

By:	/s/ Thomas T. Weir	By:	/s/ John J. Leahy

	Name: Thomas T. Weir		Name:	John J. Leahy
	Title: Vice President and Treasurer		Title:	Chief Operating Officer Customers


**		Confidential Treatment Requested.



USA — Amended and Restated Airbus A350 XWB Purchase Agreement		LA 14
EXECUTION		PRIVILEGED AND CONFIDENTIAL

EXHIBIT 10.45

AMENDMENT NO. 2

AMERICA WEST CO-BRANDED CARD AGREEMENT

THIS AMENDMENT NO. 2 TO AMERICA WEST CO-BRANDED CARD AGREEMENT (“ Amendment No. 2 ”) is dated September 26, 2005, by and between AMERICA WEST AIRLINES, INC., a Delaware corporation (“ America West ”), US AIRWAYS GROUP, INC., a Delaware corporation ( “US Airways Group” ), and JUNIPER BANK (“ Juniper Bank ”).

RECITALS

WHEREAS, America West and Juniper Bank previously entered into that certain America West Co-Branded Card Agreement, dated January 25, 2005 (the “ Original Agreement ”) establishing and maintaining a co-branded credit card program for the benefit of members of America West’s FlightFund loyalty program (“ Flight Fund Program ”) and America West’s customers; and

WHEREAS, US Airways Group, America West and Juniper Bank entered into that certain Assignment and First Amendment to America West Co-Branded Card Agreement, dated August 8, 2005 (the “ First Amendment ”, and together with the Original Agreement, the “ Agreement ”), pursuant to which, upon consummation of the Merger Juniper Bank shall participate in US Airways Group’s Dividend Miles program and shall establish and maintain a US Airways co-branded credit card program;

WHEREAS, Juniper Bank desires to participate in the Dividend Miles Program and to establish and maintain a US Airways’ co-branded credit card program upon consummation of the Merger; and

WHEREAS, America West, US Airways Group and Juniper Bank understand and agree that the effectiveness of this Amendment No. 2 and the fulfillment of the respective rights and obligations contained herein shall be contingent upon consummation of the Merger.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

1. Definitions. All capitalized terms used herein, but not otherwise defined herein, shall have the meanings given to such terms in the Agreement.

2. Amendments.

	(a)		Section 1 of the Agreement is amended by adding the following definition in the appropriate alphabetical order:

			“ Five Year Term” means the five year period commencing at the expiration of the Dual Branding Period and ending on the fifth anniversary thereof, unless at the

expiration of the Dual Branding Period (i) US Airways Group continues to sell miles to Bank of America for the purpose of awarding such miles to holders of US Airways/Bank of America co-branded credit cards, and (ii) there are ** US Airways/Bank of America co-branded credit card accounts for which miles are being awarded, then the five year period shall commence **.

	(b)		The first sentence of Section 4.11 of the Agreement is hereby amended as follows:

			“4.11 Merger Bonus Payment . Juniper Bank shall pay, by wire transfer, US Airways Group a one-time payment of one hundred thirty million dollars ($130,000,000.00) (“ Merger Bonus Payment ”) within five (5) business days after the Merger Effective Date (the “Merger Bonus Payment Date”), provided that as of the Merger Bonus Payment Date each of the following conditions shall be satisfied: (i) completion of the funding of additional equity of five hundred million dollars ($500,000,000); (ii) completion of the two hundred fifty million dollars ($250,000,000) exit financing from Airbus, of which approximately one hundred forty million dollars ($140,000,000) will be complete on the Merger Effective Date; (iii) commencement of the unwinding of the US Airways tax trust in the amount of approximately one hundred seventy million dollars ($170,000,000) which will be fully realized as cash after a 90-day wind down period; (iv) successful approval and completion of the Merger; (v) Juniper Bank has the sole right to issue credit cards branded with US Airways Marks for the Term of this Agreement, provided that such right shall be non-exclusive during the Dual Branding Period; (vi) the Merged Entities have $1.1 billion in unrestricted cash, cash equivalents and short term investments inclusive of the funds to be realized pursuant to (ii) and (iii)but exclusive of any payments due from Juniper Bank pursuant to the First Amendment and this Amendment No. 2; and (vii) no material adverse change, individually or in the aggregate, in the business, financial or other condition of America West, US Airways Group, the Merged Entities or their respective consolidated subsidiaries, taken as a whole, other than any thereof which would not result in a Material Adverse Effect. In the event that US Airways Group does not deliver an officer’s certificate to the effect that the conditions set forth above in this Section 4.11 have been satisfied within five (5) business days after the Merger Effective Date, the Merger Bonus Payment shall be due within three (3) business days of receipt of such certification, provided that if such conditions set forth above shall not have been satisfied within thirty (30) days after the Merger Effective Date Juniper may, in its sole discretion, terminate this Agreement for cause.”

	(c)		Section 5.1 of the Agreement is hereby amended in its entirety as follows:

			“5.1 Term . This Agreement shall be effective as of the Effective Date and shall continue for a term (the “ Term ”) commencing on January 1, 2006 or, if later, the date upon which Juniper Bank commences marketing to the general public (the “ Commencement Date ”) and ending at the expiration of the Five Year Term (the “ Expiration Date ”), unless earlier terminated by either party pursuant to Section 12

** Confidential Treatment Requested.

			of this Agreement. As of the date of expiration or termination of this Agreement, FF Program mileage will no longer be granted for a FF Participant’s use of an Affinity Card. The termination of this Agreement shall not affect any rights or obligations which shall have accrued prior to the date of termination, including, but not limited to, payments due US Airways Group hereunder for FF Program mileage earned by FF Participants prior to said date, including adjustments posted following termination of this Agreement.”

	(d)		The first sentence of Section 7.4 of the Agreement is hereby amended as follows:

			“7.4 Contact Lists . Subject to internal privacy policies and to any other restrictions that may be imposed upon US Airways Group, America West or the Merged Entities by any applicable law, rule or regulation, America West, upon written request from Juniper Bank provided not more frequently than , shall provide Juniper Bank with a list of FF Participant names, (the “FF List" ).”

	(e)		The first sentence of Section 14.1 of the Agreement is hereby amended as follows:

			“14.1 Pre-Purchase of Miles . Juniper Bank will purchase Base Miles, for the sum of three hundred twenty-five million dollars ($325,000,000.00) (the “ Pre-Purchased Miles ”) within five (5) business days after the Merger Effective Date (the “ Pre-Purchase Date** ”), provided that as of the Pre-Purchase Date each of the following conditions shall be satisfied: (i) completion of the funding of additional equity of $500 million; (ii) completion of the two hundred fifty million dollars ($250,000,000) exit financing from Airbus, of which approximately one hundred forty million dollars ($140,000,000) will be complete on the Merger Effective Date; (iii) commencement of the unwinding of the US Airways tax trust in the amount of approximately one hundred seventy million dollars ($170,000,000) which will be fully realized as cash after a 90-day wind down period; (iv) successful approval and completion of the Merger; (v) Juniper Bank has the sole right to issue credit cards branded with US Airways Group’s Marks for the Term of this Agreement, provided that such right shall be non-exclusive during the Dual Branding Period; (vi) the Merged Entities have $1.1 billion in cash, cash equivalents and short term investments (in each case unrestricted) inclusive of the funds to be realized pursuant to (ii) and (iii) but exclusive of any payments due from Juniper Bank pursuant to the First Amendment and this Amendment No. 2 ; and (vii) no material adverse change, individually or in the aggregate, in the business, financial or other condition of America West, US Airways Group, the Merged Entities or their respective consolidated subsidiaries, taken as a whole, other than any thereof which would not result in a Material Adverse Effect. In the event that US Airways Group does not deliver an officer’s certificate to the effect that the conditions set forth above in this Section 14.1 have been satisfied within five (5) business days after the Merger Effective Date, the purchase of the Pre-Purchased Miles shall occur within three (3) business days of receipt of such certification, provided that if such conditions set forth above shall not have been satisfied within thirty (30) days after the Merger Effective Date, Juniper may, in its sole discretion, terminate this Agreement for cause.”

** Confidential Treatment Requested.

	(f)		Section 15 of the Agreement is hereby amended by adding the following sentence to the end thereof:

			“For the avoidance of doubt, ** it being understood that Bank of America is not permitted to accept applications or open new accounts that bear the US Airways Marks and/or are entitled to mileage awards for use of the account after the Dual Branding Period and upon termination of the US Airways/Bank of America Co-Branded Program.”

	(g)		The Agreement is hereby amended by adding the following new Section 25 to the end of the Agreement :

			“Section 25. **MILEAGE AWARD

			US Airways Group shall award frequent flyer miles to each of the . ”

	(h)		The Agreement is hereby amended by adding the following to Section 18:

			“(v) since the execution and delivery of the First Amendment, neither America West nor US Airways Group has entered into, or will enter into, any agreement with any third party financial institution providing for the issuance by such third party of US Airways co-branded credit cards pursuant to which a FF Participant may accumulate miles in the FF Program through the use of such credit card; and

			(vi) after the Dual Branding Period and termination of the US Airways/Bank of America Co-Branded Program, Bank of America will have no further right to issue to new accountholders or re-issue to existing accountholders credit cards bearing the US Airways Marks.”

3. Effectiveness of Amended Agreement . This Amendment No. 2 shall be effective on the Effective Date. In the event the Merger is not consummated, this Amendment No. 2 shall have no force and effect, the Original Agreement shall be reinstated without giving effect to any of the amendments contained herein, and the parties hereto shall be relieved from any obligations and liabilities that may have arisen hereunder.

4. Effect . Except as set forth in this Amendment No. 2, the Agreement shall remain in full force and effect and each of America West and Juniper Bank hereby restates and affirms all of the terms and provisions of the Agreement. If any conflict exists between the terms and provisions of the Agreement and this Amendment No. 2, the terms and provisions of this Amendment No. 2 will govern and control.

5. Entire Agreement . The Agreement, as amended by this Amendment No. 2, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior understandings with respect thereto.

6. Counterparts . This Amendment No. 2 may be executed in any number of counterparts, each of which shall be deemed an original and all of which when taken together shall constitute

** Confidential Treatment Requested.

one and the same instrument. Delivery of an executed counterpart signature page by telecopier shall be effective as a manually executed signature page.

[ remainder of page intentionally left blank; signature page follows]

IN WITNESS WHEREOF, Juniper Bank, America West and US Airways Group have executed and delivered this Amendment No. 2 as of the date first written above.


AMERICA WEST AIRLINES, INC .		JUNIPER BANK

/s/ J. Scott Kirby		/s/ Kevin Kleinschmidt

By: J. Scott Kirby		By: Kevin Kleinschmidt
Title: Executive Vice President, Sales and Marketing		Title: Managing Director

US AIRWAYS GROUP, INC.

/s/ Ronald E. Stanley
By: Ronald E. Stanley
Title: Executive Vice President, Chief Financial Officer

EXHIBIT 10.46

AMENDMENT NO. 3

AMERICA WEST CO-BRANDED CARD AGREEMENT

THIS AMENDMENT NO. 3 TO AMERICA WEST CO-BRANDED CARD AGREEMENT (“ Amendment No. 3 ”) is dated December 29, 2006, by and between US AIRWAYS GROUP, INC., a Delaware corporation ( “US Airways Group” ), and BARCLAYS BANK DELAWARE formerly known as JUNIPER BANK (“ Juniper Bank ”).

RECITALS

WHEREAS, America West Airlines, Inc. (“ America West ”) and Juniper Bank are parties to that certain America West Co-Branded Card Agreement, dated January 25, 2005 (the “ Original Agreement ”), and

WHEREAS, US Airways Group merged with America West’s parent company, America West Holdings Corporation, and America West assigned its rights and obligations under the Original Agreement to US Airways Group pursuant to that certain Assignment and First Amendment to America West Co-Branded Card Agreement, dated August 8, 2005 (the “ First Amendment” ), as amended by that certain Amendment No. 2 to America West Co-Branded Card Agreement, dated September 26, 2005 (the “ Second Amendment ”, and together with the First Amendment and the Original Agreement, the “ Agreement ”);

WHEREAS, on May 25, 2006, Juniper Bank changed its name to Barclays Bank Delaware;

WHEREAS, US Airways Group and Juniper Bank desire to amend and modify the terms of the Agreement to clarify the ** Mileage Award; and

WHEREAS, Juniper Bank intends to use the ** Mileage Award to award miles to ** ;

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

1. Definitions . All capitalized terms used herein, but not otherwise defined herein, shall have the meanings given to such terms in the Agreement.

2. Amendment . Section 25 of the Agreement is deleted in its entirety and replaced with the following:

“Section 25. **MILEAGE AWARD

US Airways Group shall provide ** frequent flyer miles **.”

3. Effectiveness . This Amendment No. 3 shall be effective on the Effective Date.


**		Confidential Treatment Requested.

4. Effect . Except as set forth in this Amendment No. 3, the Agreement shall remain in full force and effect and each of US Airways Group and Juniper Bank hereby restates and affirms all of the terms and provisions of the Agreement. If any conflict exists between the terms and provisions of the Agreement and this Amendment No. 3, the terms and provisions of this Amendment No. 3 will govern and control.

5. Entire Agreement . The Agreement, as amended by this Amendment No. 3, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior understandings with respect thereto.

6. Counterparts . This Amendment No. 3 may be executed in any number of counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same instrument. Delivery of an executed counterpart signature page by facsimile shall be effective as a manually executed signature page.

IN WITNESS WHEREOF, Juniper Bank and US Airways Group have executed and delivered this Amendment No. 3 as of the date first written above.


US AIRWAYS GROUP		BARCLAYS BANK DELAWARE
		Formerly known as
		JUNIPER BANK
/s/ Michael J. Minerva		/s/ Lawrence Drexler

By: Michael J. Minerva		By: Lawrence Drexler
Title: Vice President & Deputy General Counsel		Title: General Counsel

EXHIBIT 10.47

AMENDMENT NO. 4
TO
AMERICA WEST CO-BRANDED CARD AGREEMENT

THIS AMENDMENT NO. 4 TO AMERICA WEST CO-BRANDED CARD AGREEMENT (“ Amendment No. 4 ”) is dated December 5, 2007, by and between US AIRWAYS GROUP, INC., a Delaware corporation (“ US Airways Group ”), and BARCLAYS BANK DELAWARE formerly known as JUNIPER BANK (“ Juniper Bank ”).

RECITALS

WHEREAS, US Airways Group merged with America West’s parent company, America West Holdings Corporation, and America West assigned its rights and obligations under the Original Agreement to US Airways Group pursuant to that certain Assignment and First Amendment to America West Co-Branded Card Agreement, dated August 8, 2005 (the “ First Amendment ”), as amended by that certain Amendment No. 2 to America West Co-Branded Card Agreement, dated September 26, 2005 (the “ Second Amendment ”), and as amended by that certain Amendment No. 3 to America West Co-Branded Card Agreement, dated December 29, 2006 (the “ Third Amendment ”, and together with the First Amendment, Second Amendment and the Original Agreement, the “ Agreement ”);

WHEREAS, on May 25, 2006, Juniper Bank changed its name to Barclays Bank Delaware;

WHEREAS, Bank of America, N.A.(USA) (“ Bank of America ”) instituted litigation regarding Juniper Bank’s and US Airways Groups’ right to enter into the Agreement;

WHEREAS, US Airways Group, Juniper Bank and Bank of America entered into a Settlement Agreement and Mutual Release dated May 11, 2007, whereby US Airways, Juniper Bank and BofA resolved and settled such litigation (the “ Settlement ”);

WHEREAS, in consideration of entering into the Settlement, US Airways Group and Juniper Bank agreed to amend and modify certain terms of the Agreement to incorporate the terms of the settlement of the Bank of America litigation; and

WHEREAS, US Airways Group and Juniper Bank now desire to amend and modify the Agreement to incorporate such terms of the Settlement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

1. Definitions . All capitalized terms used herein, but not otherwise defined herein, shall

have the meanings given to such terms in the Agreement.

2. Amendment .

The definition of “Dual Branding Period” in Section 1 of the Agreement is deleted in its entirety and replaced with the following:

“ Dual Branding Period ” means the period beginning on the Commencement Date and ending on the earlier of the date Juniper Bank becomes the exclusive issuer of the co-branded credit cards bearing the Marks of US Airways Group and December 31, 2008, during which Juniper Bank and Bank of America shall each have the right to market co-branded credit cards bearing the Marks of US Airways Group; provided that at no time on or after January 1, 2006 shall Bank of America have the right to use the America West Marks.

The definition of “Existing Portfolio” in Section 1 of the Agreement is deleted in its entirety and replaced with the following:

““ Existing Portfolio ” means the Bank of America/America West FlightFund Visa portfolio and/or the US Airways/Bank of America Co-Branded Program portfolio.”

The definition of “Expiration Date” in Section 1 of the Agreement is deleted in its entirety and replaced with the following:

““ Expiration Date ” means March 31, 2015.”

	d.		The definition of “Five Year Term” in Section 1 of the Agreement is deleted in its entirety.

	e.		Section 1 of the Agreement is amended by adding the following definition in the appropriate alphabetical order:

“ Settlement ” as defined in the Recitals of this Agreement.

Section 4.2.2 of the Agreement is deleted in its entirety and replaced with the following:

“4.2.2. Bonus Mile Fees and Base Mile Fees . During the Term of this Agreement, Juniper Bank shall pay a Base Mile Fee to US Airways Group equal to ** for each Base Mile awarded to an Account. In addition, from the Commencement Date until termination or expiration of the US Airways/Bank of America Co-Branded Program, Juniper Bank shall pay a Bonus Mile Fee to US Airways Group equal to ** for each Bonus Mile awarded to an Account. Upon the earlier termination or expiration of the US Airways/Bank of America Co-Branded Program, Juniper Bank shall pay a Bonus Mile Fee to US Airways Group equal to ** for each Bonus Mile awarded to an Account for the remainder of the Term. Notwithstanding the foregoing, for any new Account originated by

**Confidential Treatment Requested.

Juniper Bank during the time period between January 1, 2009 through June 30, 2009 that has an Affinity Cardholder who earned Dividend Miles in the US Airways/Bank of America Co-Branded Program in the previous twelve (12) months, Juniper Bank shall pay a Bonus Mile Fee to US Airways Group equal to ** for each Bonus Mile awarded to such new Account during such time period. Should the US Airways/Bank of America Co-Branded Program terminate prior to its expiration and Juniper Bank purchases the entire Existing Portfolio, Juniper Bank shall pay a Bonus Mile Fee to US Airways Group equal to ** for each Bonus Mile awarded to an Account for the remainder of the Term. Base Mile Fees and Bonus Mile Fees shall be awarded as follows:

(a) US Airways Group shall award Base Miles as set forth in Exhibit A and Exhibit B attached hereto.

(b) US Airways Group will from time to time award Bonus Miles to Accounts. Bonus Miles will be awarded as agreed from time to time by the parties for, by way of example only and not limitation, rewards to Customers when they open Accounts, rewards to Affinity Cardholders for engaging in certain categories of transactions as the parties may agree, including, but not limited to, the use of an Account to purchase US Airways Group tickets. The Bonus Mile Fee shall be in addition to, and not in lieu of, the Base Mile Fee that is due for a transaction. For example:

For US Airways Group ticket purchases on the ** for which double miles are awarded for using the credit card, the first mile awarded by US Airways will be compensated by the Base Mile Fee, and the second (bonus) mile will be compensated by the Bonus Mile Fee.”

Section 4.6 of the Agreement is deleted in its entirety and replaced with the following :

“4.6 Early Termination Events . If either of the following occurs then Juniper Bank may, in its sole discretion terminate this Agreement:

(i) US Airways fails to maintain a frequent flyer program that is as competitive in the marketplace as the FF Program was as of **; provided that Juniper Bank provides written notice of such failure to maintain the competitiveness of the FF Program which will commence a forty-five (45) day period during which US Airways may cure such deficiency; or

(ii) Passenger Enplanements as measured each month or Active Frequent Flyers in the previous ** below the comparable months in the Passenger Enplanements Baseline Year or Active Frequent Flyer Baseline Year, as

**Confidential Treatment Requested.

applicable, and the number of active Affinity Cardholders or the Affinity Card Spend ** from the comparable months in the Affinity Cardholder or Affinity Spend Baseline Years.

In the event Juniper Bank terminates this Agreement pursuant to this Section 4.6 , US Airways will promptly repay an amount equal to ** For purposes of this Agreement, (i) “ Passenger Enplanements ” means the aggregate of ticketed passengers flown on America West and US Airways branded aircraft as reported by US Airways for the twelve month period ending September 30 (for avoidance of doubt, as of the date of this Agreement, Passenger Enplanements includes passengers flown on Mesa Airlines or any other carrier operated as America West Express or US Airways Express but does not include passengers flown on Hawaiian Airlines, except, for example, a passenger flown on an Albuquerque-Phoenix-Honolulu flight, the Albuquerque-Phoenix segment of such flight would be included as a Passenger Enplanement), and (ii) “ Active Frequent Flyer ” means a US Airways FF Participant who has accrued miles from flights on America West or US Airways in the twelve month period ending September 30. The “ Passenger Enplanements Baseline Year” shall be the combined pre-merger US Airways and America West Passenger Enplanements for the twelve month period ending September 30, 2005. The “ Active Frequent Flyer Baseline Year ” shall be the combined pre-merger US Airways Group and America West Active Frequent Flyers for the twelve month period ending September 30, 2005, less the number of FF Participant accounts eliminated as a result of the pre-merger membership in both the US Airways and America West frequent flyer programs. The “ Affinity Cardholder Baseline Year ” shall be the combined pre-merger US Airways and America West Active Cardholders for the twelve month period ending September 30, 2005 and the “ Affinity Spend Baseline Year ” shall be the combined pre-merger US Airways and America West spend on Affinity Cards for the twelve month period ending September 30, 2005.”

Section 4.11 of the Agreement is deleted in its entirety and replaced with the following:

“4.11 Merger Bonus Payment . Juniper Bank paid US Airways Group a one-time payment of one hundred thirty million dollars ($130,000,000.00) (“Merger Bonus Payment”) on October 3, 2005 as part consideration for entering into the Agreement.

Section 4.12 of the Agreement is amended by adding the following at the end of the Section:

“The foregoing notwithstanding, the Annual Bonus Payment due on February 1, 2008 shall be equal to ** and the Annual Bonus Payment Date in 2009 shall be ** Notwithstanding the foregoing, in the event Juniper Bank agrees to purchase ** of the Existing Portfolio prior to the Annual Bonus Payment Date, the amount of the Annual Bonus Payment to be paid shall be **.

**Confidential Treatment Requested.

Section 5.1 of the Agreement is deleted in its entirety and replaced with the following:

“5.1 Term . This Agreement shall be effective as of the Effective Date and shall continue for a term (the “ Term ”) commencing on January 1, 2006 (the “ Commencement Date ”) and ending on the Expiration Date, unless earlier terminated by either party pursuant to Section 12 of this Agreement. As of the date of expiration or termination of this Agreement, FF Program mileage will no longer be granted for a FF Participant’s use of an Affinity Card. The termination of this Agreement shall not affect any rights or obligations which shall have accrued prior to the date of termination, including, but not limited to, payments due US Airways Group hereunder for FF Program mileage earned by FF Participants prior to said date, including adjustments posted following termination of this Agreement.”

Section 9 of the Agreement is deleted in its entirety and replaced with the following:

“9. EXCLUSIVITY .

9.1 US Airways Commitments . During the Term of this Agreement, US Airways will not enter into any agreement, which has an effective date prior to the termination of this Agreement for participation in the FF Program pursuant to which a FF Participant may accumulate miles in the FF Program through use of a credit card pursuant to this Agreement.

9.2 Exceptions . Notwithstanding the provisions set forth in Section 9.1 above, US Airways may **

9.3 Juniper Bank Commitment . During the Term of this Agreement, Juniper Bank shall advise US Airways, in writing, of Juniper Bank’s participation in any other airline frequent flyer program as soon as reasonably practical after the commencement date of the agreement pertaining to such participation.”

	l.		Section 15 of the Agreement is deleted in its entirety.

	m.		The Agreement is amended by adding the following new sub-Sections (vii) and (viii) at the end of Section 18:

“(vii) **

(viii) US Airways Group and Bank of America have entered into a settlement agreement to resolve the litigation brought by Bank of America and said agreement contains certain provisions regarding notice to Bank of America Cardmembers at the end of the term of the US Airways-Bank of America co-branded agreement. **.”

The Agreement is amended by adding the following new Section 26 to the end of the Agreement:

**Confidential Treatment Requested.

“26. **

3. Effectiveness . This Amendment No. 4 shall be effective on the Effective Date.

4. Effect . Except as set forth in this Amendment No. 4, the Agreement shall remain in full force and effect and each of US Airways Group and Juniper Bank hereby restates and affirms all of the terms and provisions of the Agreement. If any conflict exists between the terms and provisions of the Agreement and this Amendment No. 4, the terms and provisions of this Amendment No. 4 will govern and control.

5. Entire Agreement . The Agreement, as amended by this Amendment No. 4, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior understandings with respect thereto.

6. Counterparts . This Amendment No. 4 may be executed in any number of counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same instrument. Delivery of an executed counterpart signature page by facsimile shall be effective as a manually executed signature page.

IN WITNESS WHEREOF, Juniper Bank and US Airways Group have executed and delivered this Amendment No. 4 as of the date first written above.


US AIRWAYS GROUP, INC.				BARCLAYS BANK DELAWARE
				Formerly known as
				JUNIPER BANK

/s/ J. Scott Kirby				/s/ Lloyd Wirshba
By: J. Scott Kirby				By: Lloyd Wirshba
Title: President				Title: Chief Executive Officer

**Confidential Treatment Requested.

Exhibit 10.96

US Airways Group, Inc.
2005 Equity Incentive Plan
Stock Bonus Award Agreement

for nonemployee directors

Pursuant to this Stock Bonus Award Agreement (“ Award Agreement ”), US Airways Group, Inc. (the “ Company ”) has awarded you a Stock Bonus Award (the “ Award ”) as an Annual Award under the Non-Discretionary Grant Program of the US Airways Group, Inc. 2005 Equity Incentive Plan (the “ Plan ”). Except where indicated otherwise, terms not explicitly defined in this Award Agreement but defined in the Plan shall have the same meaning as set forth in the Plan.

The details of your Award are as follows:

1. Name of eligible director . .

2. Date of Grant. Your Award has been granted as of .

3. Shares of Common Stock Subject to Your Award. The number of shares of Common Stock subject to your
Award is .

4. Payment . This Award was granted in consideration of your services to the Company. You will not be required to make any payment to the Company (other than your past and future services to the Company) with respect to your Award.

5. Vesting . The Common Stock subject to your Award is immediately vested on the Date of Grant.

6. Delivery of Shares . The Company will deliver to a broker designated by the Company (the “ Designated Broker ”), on your behalf, the number of shares of the Company’s Common Stock subject to your Award, as soon as practicable after the Date of Grant, in the form of electronic entry evidencing such shares.

7. Dividends . You will be entitled to receive payments equal to any cash dividends and other distributions paid with respect to the shares of Common Stock subject to your Award. Any cash dividends paid with respect to your Award will be paid at the same time that dividends are paid to the Company’s shareholders.

8. Securities Law Compliance . Notwithstanding anything to the contrary contained herein, you will not be issued any shares of Common Stock under your Award unless either (a) such shares are then registered under the Securities Act, or (b) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Your Award also must comply with other applicable laws and regulations governing the Award, and you will not receive any shares of Common Stock under your Award if the Company determines that such receipt would not be in material compliance with such laws and regulations.

9. Notices . Any notices provided for in the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company.

10. Miscellaneous .

(a) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your Award and this Award Agreement.

(b) You acknowledge and agree that you have reviewed your Award in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your Award and fully understand all provisions of your Award and this Award Agreement.

(c) This Award Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(d) All covenants, agreements and obligations of the Company under the Plan and this Award Agreement will be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

(e) This Award Agreement and the Plan set forth the entire understanding between you and the Company regarding your Award and supersedes all prior oral and written agreements relating to your Award.

11. Headings . The headings of the Sections in this Award Agreement are inserted for convenience only and shall not be deemed to constitute a part of this Award Agreement or to affect the meaning of this Award Agreement.

12. Severability . If all or any part of this Award Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of this Award Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Award Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

13. Governing Plan Document . Your Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event there is any conflict between your Award, this Award Agreement and the Plan, the provisions of the Plan shall control.

IN WITNESS WHEREOF , the parties have caused this Award Agreement to be executed as of the date written below:


		US AIRWAYS GROUP, INC.

		By:

		Title:


		Date:

Exhibit 10.106

November 15, 2007

[Name of Director]
[Address of Director]

Dear [Name of Director]:

The purpose of this letter agreement (the “Agreement”) is to set forth certain contractual obligations of the parties with respect to positive space travel benefits to be provided to you as a member of the Board of Directors (the “Board”) of US Airways Group, Inc. (the “Company”).

Directors Travel Program

So long as you continue to serve as a member of the Board (a “Director”), you, your spouse or authorized domestic partner, and your dependent children will be eligible to participate in the Positive Space Pleasure Travel Program for Members of the Board of Directors, as that program exists from time to time, or any similar travel program for Directors sponsored by the Company (the “Directors Travel Program”). The benefits provided under the Directors Travel Program are subject to the terms and conditions set forth in the official program document, a copy of which is attached hereto and is incorporated into this Agreement. Except as set forth under “Director Resignation” and “Obligations of Successors” below, your eligibility to participate in the Directors Travel Program will cease, and all travel must be completed, as of the date that you no longer are serving as a Director.

Director Resignation

Upon your separation from service from the Board while in good standing, you, your spouse or authorized domestic partner, and your dependent children will remain eligible to participate in the Directors Travel Program, as described above, (a) for a period of five years if you served as a Director for at least two years, or (b) for your lifetime if you served as a Director for at least seven years; provided that no tax gross up will be provided for program benefits. Your right to post-separation travel benefits, as set forth in this Agreement, is not subject to liquidation or exchange for another benefit. In addition, the amount of post-separation travel benefits provided to you, your spouse or authorized domestic partner, and your dependent children during a given taxable year may not affect the travel benefits to be provided, if any, during any other taxable year.

You, your spouse or authorized domestic partner, and your dependent children will become ineligible to participate in the Directors Travel Program, and you, your spouse or authorized domestic partner, and your dependent children will forfeit the right to all benefits thereunder, if any of you becomes an employee, director, 10 or more percent stockholder of, or partner in, or, without the written consent of the Company’s chief executive officer, a consultant to, any airline or company which intends to form an airline that operates or proposes to operate jet aircraft to carry passengers in United States domestic transportation (a “Prohibited Entity”). Eligibility to participate in the Directors Travel Program will be reinstated at such time as your, your spouse’s or domestic partner’s, or you dependent children’s employment or relationship with the Prohibited Entity is terminated.

Obligations of Successors

Upon the occurrence of any Transaction (as defined below), any successor to the Company or US Airways, Inc. (“US Airways”) or their assets shall be obligated to continue the benefits to be provided pursuant to the section “Director Resignation” above. Such benefits shall be provided across the successor’s combined airline system, and in the successor’s flight club(s) and at the highest status level of the successor’s frequent flyer program following the Transaction.

The Company shall not consummate any Transaction unless any successor to the Company or US Airways or their assets has entered into a written agreement for the benefit of the Directors pursuant to which it has expressly assumed the performance of the obligations described in the preceding paragraph.

For purposes of this letter agreement, a “Transaction” means the occurrence of any of the following:

	(a)		within any 12-month period, the individuals who constitute the Board at the beginning of such period (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the effective date of this Agreement whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board; or

	(b)		any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than the Company or US Airways, acquires (directly or indirectly) the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the combined voting power of the then outstanding voting securities of the

-2-

			Company or US Airways entitled to vote generally in the election of directors (“Voting Power”); or

	(c)		the Company or US Airways shall consummate a merger, consolidation or reorganization of the Company or US Airways or any other similar transaction or series of related transactions (collectively, a “Merger Transaction”) other than (A) a Merger Transaction in which the voting securities of the Company or US Airways outstanding immediately prior thereto become (by operation of law), or are converted into or exchanged for, voting securities of the surviving corporation or its parent corporation immediately after such Merger Transaction that are owned by the same person or entity or persons or entities as immediately prior thereto and possess at least 50% of the Voting Power held by the voting securities of the surviving corporation or its parent corporation, or (B) a Merger Transaction effected to implement a recapitalization of the Company or US Airways (or similar transaction) in which no person (excluding the Company or US Airways or any person who held more than 50% of the Voting Power immediately prior to such Transaction) acquires more than 50% of the Voting Power; or

	(d)		the Company or US Airways shall sell or otherwise dispose of, or consummate a transaction or series of related transactions providing for the sale or other disposition of, all or substantially all of the stock or assets of US Airways or shall enter into a plan for the complete liquidation of either the Company or US Airways.

Miscellaneous

This Agreement constitutes the entire agreement between you and the Company regarding travel benefits and is the complete, final, and exclusive embodiment of our agreement with regard to this subject matter, and it supersedes any other agreements or promises made to you by the Company, whether oral, written or implied, regarding travel benefits. The Agreement is entered into without reliance on any promise or representation other than those expressly contained herein.

This Agreement shall be governed by and construed under the laws of the State of Delaware in all respects as such laws are applied to agreements among Delaware residents entered into and performed entirely within Delaware.

This Agreement shall inure to the benefit of, and be binding upon the Company and its successors and assigns, including without limitation, any person or entity that may hereafter acquire or succeed to all or substantially all of the business or assets of the Company or US Airways by any means whether direct or indirect, by purchase, merger, consolidation or otherwise, other than in the vent of a liquidation of the Company or US

-3-

Airways. This Agreement and the benefits and obligations hereunder may not be assigned by you.

If you are in agreement with the terms of this Agreement, please execute the enclosed copy hereof and return it to the Company, whereupon this letter agreement will become a binding obligation of the parties hereto.

Sincerely,

US AIRWAYS GROUP, INC.


By:

Name:

Title:


ACKNOWLEDGED AND AGREED TO:


[Name of Director]

-4-

EXHIBIT 21.1

SUBSIDIARIES OF US AIRWAYS GROUP, INC.

100% owned by US Airways Group, Inc:

Airways Assurance Limited LLC
Organized under the laws of Bermuda

Material Services Company, Inc.
Incorporated under the laws of the State of Delaware

Piedmont Airlines, Inc. (operates under the trade name “US Airways Express”)
Incorporated under the laws of the State of Maryland

PSA Airlines, Inc. (operates under the trade name “US Airways Express”)
Incorporated under the laws of the State of Pennsylvania

US Airways, Inc.
Incorporated under the laws of the State of Delaware

AWHQ LLC (real estate holding company)*
Organized under the laws of the State of Arizona

100% owned by US Airways, Inc:

America West Holdings, LLC
Organized under the laws of the State of Delaware

100% owned by America West Holdings, LLC:

America West Airlines, LLC
Organized under the laws of the State of Delaware

FTCHP LLC (real estate holding company)
Organized under the laws of the State of Delaware

* Owned 99% by US Airways Group, Inc. and 1% by US Airways, Inc.

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
US Airways Group, Inc.:

We consent to the incorporation by reference in Registration Statement Nos. 333-137806, 333-129896, 333-129899 and 333-130063 on Form S-3 of US Airways Group, Inc. and to the incorporation by reference in Registration Statement No. 333-128766 on Form S-8 of US Airways Group, Inc. of our reports dated February 20, 2008, with respect to the consolidated balance sheets of US Airways Group, Inc. and subsidiaries as of December 31, 2007 and 2006, and related consolidated statements of operations, cash flows and stockholders’ equity for each of the years in the three-year period ended December 31, 2007, and the effectiveness of internal control over financial reporting as of December 31, 2007, which reports appear in the December 31, 2007 Annual Report of Form 10-K of US Airways Group, Inc.

Our report on the consolidated financial statements refers to the adoption by the Company of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109, effective January 1, 2007 , Statement of Financial Accounting Standards (“SFAS”) No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R), effective December 31, 2006 , and SFAS No. 123(R), Share Based Payment , effective January 1, 2006, and the change in the method of accounting for maintenance costs in 2005.

KPMG LLP

Phoenix, Arizona
February 20, 2008

Page 2

Consent of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
US Airways, Inc.:

We consent to the incorporation by reference in Registration Statement Nos. 333-137806 and 333-47348 on Form S-3 and 333-74734 on Form S-4 of US Airways, Inc. and subsidiaries (“US Airways”) of our reports dated February 20, 2008, with respect to the consolidated balance sheets of US Airways as of December 31, 2007 and 2006, and related consolidated statements of operations, stockholder’s equity (deficit), and cash flows for the years ended December 31, 2007 and 2006, and the three months ended December 31, 2005 for the Successor Company, and for the nine months ended September 30, 2005 for the Predecessor Company, and the effectiveness of internal control over financial reporting as of December 31, 2007, which reports appear in the December 31, 2007 Annual Report on Form 10-K of US Airways.

Our report dated February 20, 2008 also includes an explanatory paragraph that, as discussed in Notes 1 and 2(b) to the financial statements, on September 16, 2005, the Bankruptcy Court confirmed the Company’s Plan of Reorganization (the Plan), related to its Chapter 11 bankruptcy proceeding. The Plan became effective on September 27, 2005 and US Airways and its parent Company, US Airways Group, Inc. (US Airways Group), emerged from Chapter 11 bankruptcy proceeding. In connection with its emergence from Chapter 11 bankruptcy proceedings, US Airways adopted fresh-start reporting pursuant to Statement of Position 90-7, “Financial Reporting by Entities in Reorganization Under the Bankruptcy Code” as of September 27, 2005. As a result, the financial statements of the Successor Company are presented on a different basis than those of the Predecessor Company and, therefore, are not comparable in all respects.

KPMG LLP

Phoenix, Arizona
February 20, 2008

Exhibit 31.1

CEO CERTIFICATION

I, W. Douglas Parker, certify that:

1. I have reviewed this Annual Report on Form 10-K of US Airways Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 20, 2008



	/s/ W. Douglas Parker
	Name:	W. Douglas Parker
	Title:	Chief Executive Officer

Exhibit 31.2

CFO CERTIFICATION

I, Derek J. Kerr, certify that:

1. I have reviewed this Annual Report on Form 10-K of US Airways Group, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 20, 2008



	/s/ Derek J. Kerr
	Name:	Derek J. Kerr
	Title:	Chief Financial Officer

Exhibit 31.3

CEO CERTIFICATION

I, W. Douglas Parker, certify that:

1. I have reviewed this Annual Report on Form 10-K of US Airways, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 20, 2008



	/s/ W. Douglas Parker
	Name:	W. Douglas Parker
	Title:	Chief Executive Officer

Exhibit 31.4

CFO CERTIFICATION

I, Derek J. Kerr, certify that:

1. I have reviewed this Annual Report on Form 10-K of US Airways, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 20, 2008



	/s/ Derek J. Kerr
	Name:	Derek J. Kerr
	Title:	Chief Financial Officer

Exhibit 32.1

Certification of CEO and CFO Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of US Airways Group, Inc. (the Company) for the year ended December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the Report), W. Douglas Parker, as Chief Executive Officer of the Company, and Derek J. Kerr, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ W. Douglas Parker
Name: W. Douglas Parker
Title: Chief Executive Officer
Date: February 20, 2008

/s/ Derek J. Kerr
Name: Derek J. Kerr
Title: Chief Financial Officer
Date: February 20, 2008

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Exhibit 32.2

Certification of CEO and CFO Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of US Airways, Inc. (the Company) for the year ended December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the Report), W. Douglas Parker, as Chief Executive Officer of the Company, and Derek J. Kerr, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ W. Douglas Parker
Name: W. Douglas Parker
Title: Chief Executive Officer
Date: February 20, 2008

/s/ Derek J. Kerr
Name: Derek J. Kerr
Title: Chief Financial Officer
Date: February 20, 2008