FORM 10-Q-QUARTERLY REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
--------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------------- ----------------
US AIRWAYS GROUP, INC.
(Exact name of registrant as specified in its charter)
State of Incorporation: Delaware
2345 Crystal Drive, Arlington, Virginia 22227
(Address of principal executive offices)
(703) 872-5306
(Registrant's telephone number, including area code)
(Commission file number: 1-8444)
(I.R.S. Employer Identification No: 54-1194634)
US AIRWAYS, INC.
(Exact name of registrant as specified in its charter)
State of Incorporation: Delaware
2345 Crystal Drive, Arlington, Virginia 22227
(Address of principal executive offices)
(703) 872-7000
(Registrant's telephone number, including area code)
(Commission file number: 1-8442)
(I.R.S. Employer Identification No: 53-0218143)
Indicate by check mark whether the registrants (1) have filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrants were required to file such reports), and (2)
have been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
As of April 30, 1999 there were outstanding approximately 73,836,000
shares of common stock of US Airways Group, Inc. and 1,000 shares of common
stock of US Airways, Inc.
The registrant US Airways, Inc. meets the conditions set forth in
General Instructions H(1)(a) and (b) of Form 10-Q and is therefore
participating in the filing of this form in the reduced disclosure format
permitted by such Instructions.
US AIRWAYS GROUP, INC.
AND
US AIRWAYS, INC.
FORM 10-Q
QUARTERLY PERIOD ENDED MARCH 31, 1999
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page
----
Item 1A. Financial Statements-US Airways Group, Inc.
Condensed Consolidated Statements of Operations
- Three Months Ended March 31, 1999 and 1998 1
Condensed Consolidated Balance Sheets
- March 31, 1999 and December 31, 1998 2
Condensed Consolidated Statements of Cash Flows
- Three Months Ended March 31, 1999 and 1998 3
Notes to Condensed Consolidated Financial Statements 4
Item 1B. Financial Statements-US Airways, Inc.
Condensed Consolidated Statements of Operations
- Three Months Ended March 31, 1999 and 1998 7
Condensed Consolidated Balance Sheets
- March 31, 1999 and December 31, 1998 8
Condensed Consolidated Statements of Cash Flows
- Three Months Ended March 31, 1999 and 1998 9
Notes to Condensed Consolidated Financial Statements 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures about
Market Risk 18
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 18
Item 6. Exhibits and Reports on Form 8-K 18
SIGNATURES 19
US Airways Group, Inc.
Condensed Consolidated Statements of Operations
Three Months Ended March 31, 1999 and 1998 (unaudited)
(in millions, except share and per share amounts)
1999 1998
---- ----
Operating Revenues
Passenger transportation $1,856 $1,858
Cargo and freight 40 43
Other 176 162
----- -----
Total Operating Revenues 2,072 2,063
Operating Expenses
Personnel costs 801 749
Aviation fuel 129 167
Commissions 124 124
Aircraft rent 114 111
Other rent and landing fees 108 108
Aircraft maintenance 117 114
Other selling expenses 101 102
Depreciation and amortization 80 72
Other 409 324
----- -----
Total Operating Expenses 1,983 1,871
----- -----
Operating Income 89 192
Other Income (Expense)
Interest income 15 30
Interest expense (50) (63)
Interest capitalized 8 5
Other, net 13 1
----- -----
Other Income (Expense), Net (14) (27)
----- -----
Income Before Taxes 75 165
Provision for Income Taxes 29 67
----- -----
Net Income 46 98
Preferred Dividend Requirement - (6)
----- -----
Earnings Applicable to Common Stockholders $ 46 $ 92
===== =====
Earnings per Common Share
Basic $ 0.57 $ 0.98
Diluted $ 0.56 $ 0.96
Shares Used for Computation (000)
Basic 79,464 93,710
Diluted 80,953 102,781
See accompanying Notes to Condensed Consolidated Financial Statements.
1
US Airways Group, Inc.
Condensed Consolidated Balance Sheets
March 31, 1999 (unaudited) and December 31, 1998
(in millions)
March 31, December 31,
1999 1998
------------ ------------
ASSETS
Current Assets
Cash $ 32 $ 29
Cash equivalents 333 583
Short-term investments 606 598
Investment in marketable equity
securities 335 -
Receivables, net 408 355
Materials and supplies, net 222 228
Deferred income taxes 77 347
Prepaid expenses and other 200 224
----- -----
Total Current Assets 2,213 2,364
Property and Equipment
Flight equipment 5,243 5,188
Ground property and equipment 935 915
Less accumulated depreciation and
amortization (2,690) (2,641)
----- -----
3,488 3,462
Purchase deposits 216 198
----- -----
Total Property and Equipment, Net 3,704 3,660
Other Assets
Goodwill, net 588 593
Other intangibles, net 478 475
Investment in marketable equity
securities - 301
Deferred income taxes 129 -
Other assets, net 477 477
----- -----
Total Other Assets 1,672 1,846
----- -----
$ 7,589 $ 7,870
===== =====
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Current maturities of long-term debt $ 66 $ 71
Accounts payable 472 430
Traffic balances payable and unused
tickets 913 752
Accrued aircraft rent 115 166
Accrued salaries, wages and vacation 334 329
Other accrued expenses 479 521
----- -----
Total Current Liabilities 2,379 2,269
Noncurrent Liabilities
Long-term debt, net of current
maturities 1,893 1,955
Accrued aircraft rent 316 332
Deferred gains, net 351 337
Postretirement benefits other
than pensions 1,261 1,240
Employee benefit liabilities and
other 1,059 1,144
----- -----
Total Noncurrent Liabilities 4,880 5,008
Commitments and Contingencies
Stockholders' Equity
Common stock 101 101
Paid-in capital 2,280 2,283
Retained earnings (deficit) (702) (748)
Common stock held in treasury,
at cost (1,403) (1,069)
Deferred compensation (92) (99)
Accumulated other comprehensive income,
net of income tax effect 146 125
----- -----
Total Stockholders' Equity 330 593
----- -----
$ 7,589 $ 7,870
===== =====
See accompanying Notes to Condensed Consolidated Financial Statements.
2
US Airways Group, Inc.
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 1999 and 1998 (unaudited)
(in millions)
1999 1998
---- ----
Cash and Cash equivalents at beginning of period $612 $1,094
--- -----
Cash flows from operating activities
Net income 46 98
Adjustments to reconcile net income to net cash
provided by (used for) operating activities
Depreciation and amortization 80 72
Gain on dispositions of property (1) (3)
Amortization of deferred gains and credits (7) (6)
Other 21 11
Changes in certain assets and liabilities
Decrease (increase) in receivables (53) (126)
Decrease (increase) in materials
and supplies, prepaid expenses
and pension assets 27 (17)
Decrease (increase) in deferred
income taxes (3) 19
Increase (decrease) in traffic
balances payable and unused tickets 161 209
Increase (decrease) in accounts payable
and accrued expenses (16) 20
Increase (decrease) in postretirement
benefits other than pensions,
noncurrent 21 18
--- -----
Net cash provided by (used for)
operating activities 276 295
Cash flows from investing activities
Capital expenditures (241) (88)
Proceeds from the sale-leaseback of aircraft 132 -
Proceeds from dispositions of property 3 56
Decrease (increase) in short-term investments (14) 4
Decrease (increase) in restricted cash and
investments - (52)
Other 2 1
--- -----
Net cash provided by (used for)
investing activities (118) (79)
Cash flows from financing activities
Principal payments on long-term debt (67) (99)
Issuances of Common Stock - 7
Purchases of Common Stock (339) -
Sales of treasury stock 1 1
Dividends paid on preferred stock - (6)
--- -----
Net cash provided by (used for)
financing activities (405) (97)
--- -----
Net increase (decrease) in Cash and Cash equivalents (247) 119
--- -----
Cash and Cash equivalents at end of period $365 $1,213
=== =====
Noncash investing and financing activities
Conversion of preferred stock into Common Stock $ - $ 358
Net unrealized gain on available-for-sale
securities, net of income tax effect $ 22 $ 51
Supplemental Information
Cash paid during the period for interest,
net of amount capitalized $ 58 $ 80
Net cash paid during the period for income taxes $ 27 $ 2
See accompanying Notes to Condensed Consolidated Financial Statements.
3
US AIRWAYS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying Condensed Consolidated Financial Statements include
the accounts of US Airways Group, Inc. (US Airways Group or the Company) and
its wholly-owned subsidiaries. These interim period statements should be
read in conjunction with the Consolidated Financial Statements contained in
the Company's Annual Report on Form 10-K for the year ended December 31,
1998.
Management believes that all adjustments necessary for a fair statement
of results have been included in the Condensed Consolidated Financial
Statements for the interim periods presented, which are unaudited. All
significant intercompany accounts and transactions have been eliminated. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Certain 1998 amounts have been reclassified to conform with 1999
classifications.
2. EARNINGS PER COMMON SHARE
Earnings per Common Share (EPS) is presented on both a basic and
diluted basis in accordance with the provisions of Statement of Financial
Accounting Standards No. 128, "Earnings per Share." Basic EPS is computed by
dividing net income by the weighted average number of shares of common stock
outstanding during the period. Diluted EPS reflects the maximum dilution
that would result after giving effect to dilutive stock options.
The following table presents the computation of basic and diluted EPS
(in millions, except per share amounts):
Three Months Ended March 31,
----------------------------
1999 1998
---- ----
Earnings applicable to common stockholders:
Earnings applicable to common stockholders (basic) $ 46 $ 92
Preferred dividend requirement* - 6
---- ----
Earnings applicable to common stockholders
(diluted) $ 46 $ 98
==== ====
Common shares:
Weighted average common shares outstanding (basic) 79 94
Incremental shares related to outstanding
stock options 2 2
Incremental shares related to convertible
preferred stock* - 7
---- ----
Weighted average common shares outstanding
(diluted) 81 103
==== ====
EPS-Basic $0.57 $0.98
EPS-Diluted $0.56 $0.96
* Relates to the Company's Series H Preferred Stock, which was retired
in March 1998.
Note: EPS amounts may not recalculate due to rounding.
4
3. COMPREHENSIVE INCOME
During the quarters ended March 31, 1999 and 1998, comprehensive income
amounted to $68 million and $152 million, respectively. Comprehensive income
encompasses net income and "other comprehensive income," which includes all
other non-owner transactions and events that change stockholders' equity.
Other comprehensive income is composed primarily of changes in the fair
value of the Company's investment in common stock of Galileo International,
Inc. (Galileo).
4. OPERATING SEGMENTS AND RELATED DISCLOSURES
The Company has two reportable operating segments: US Airways, Inc. (US
Airways) and US Airways Express. The US Airways segment includes the
operations of US Airways (excluding US Airways' wholly-owned subsidiary USAM
Corp.) and Shuttle, Inc. The US Airways Express segment includes the
operations of the Company's three wholly-owned regional airlines and
activity resulting from a marketing agreement with a non-owned US Airways
Express air carrier. All Other (as presented in the table below) reflects
the activity of subsidiaries other than those included in the Company's two
reportable operating segments. Financial information for each reportable
operating segment is set forth below (in millions):
Three Months Ended March 31,
----------------------------
1999 1998
---- ----
Operating Revenues:
US Airways external $1,890 $1,908
US Airways intersegment 15 14
US Airways Express external 182 152
US Airways Express intersegment 8 7
All Other - 3
Intersegment elimination (23) (21)
----- -----
$2,072 $2,063
===== =====
Income Before Taxes:
US Airways $ 73 $ 147
US Airways Express 25 23
All Other* (23) (5)
----- -----
$ 75 $ 165
===== =====
* Primarily interest expense related to borrowings from the Company's
reportable operating segments.
5. TREASURY STOCK
The Company held 24.0 million shares and 17.4 million shares of Common
Stock in treasury as of March 31, 1999 and December 31, 1998, respectively.
The Company purchased $339 million of its common stock during the quarter
ended March 31, 1999.
During March 1999, the Company's Board of Directors authorized an
additional stock purchase program for up to $500 million of the Company's
common stock. The Company purchased $20 million of its common stock under
this program during the quarter ended March 31, 1999.
6. INVESTMENT IN MARKETABLE EQUITY SECURITIES
As of March 31, 1999, this investment, which represents 7,000,400
shares of Galileo common stock, was reclassified to Current Assets from
Other Assets (the related deferred income taxes
5
were reclassified to Current Assets from Noncurrent liabilities). The
reclassification was performed consistent with the Company's intent to sell
this investment within one year.
7. STOCKHOLDERS' EQUITY
As a Delaware corporation, the Company is subject to certain provisions
of the Delaware General Corporation Law (Delaware Law), including the
maintenance of a capital surplus, with respect to its ability to pay
dividends on or purchase shares of its common stock. There are a number of
methods for calculating capital surplus under Delaware Law. As of March 31,
1999, the Company's capital surplus under Delaware Law was $253 million
based on its balance sheets prepared in accordance with generally accepted
accounting principles (assets less liabilities less the par value of
outstanding capital stock).
(this space intentionally left blank)
6
US Airways, Inc.
Condensed Consolidated Statements of Operations
Three Months Ended March 31, 1999 and 1998 (unaudited)
(in millions)
1999 1998
---- ----
Operating Revenues
Passenger transportation $1,661 $1,677
US Airways Express transportation
revenues 177 149
Cargo and freight 39 42
Other 163 163
----- -----
Total Operating Revenues 2,040 2,031
Operating Expenses
Personnel costs 744 697
Aviation fuel 119 154
Commissions 113 113
Aircraft rent 98 96
Other rent and landing fees 99 99
Aircraft maintenance 88 92
Other selling expenses 91 93
Depreciation and amortization 73 65
US Airways Express capacity purchases 146 125
Other 376 308
----- -----
Total Operating Expenses 1,947 1,842
----- -----
Operating Income 93 189
Other Income (Expense)
Interest income 49 39
Interest expense (50) (63)
Interest capitalized 4 3
Other, net 13 1
----- -----
Other Income (Expense), Net 16 (20)
----- -----
Income Before Taxes 109 169
Provision for Income Taxes 42 68
----- -----
Net Income $ 67 $ 101
===== =====
See accompanying Notes to Condensed Consolidated Financial Statements.
7
US Airways, Inc.
Condensed Consolidated Balance Sheets
March 31, 1999 (unaudited) and December 31, 1998
(in millions)
March 31, December 31,
1999 1998
---- ----
ASSETS
Current Assets
Cash $ 29 $ 21
Cash equivalents 331 583
Short-term investments 606 598
Investment in marketable equity securities 335 -
Receivables, net 403 351
Receivables from related parties, net 134 169
Materials and supplies, net 199 202
Deferred income taxes 51 291
Prepaid expenses and other 187 174
----- -----
Total Current Assets 2,275 2,389
Property and Equipment
Flight equipment 4,979 4,924
Ground property and equipment 904 886
Less accumulated depreciation and amortization (2,573) (2,528)
----- -----
3,310 3,282
Purchase deposits 55 -
----- -----
Total Property and Equipment, Net 3,365 3,282
Other Assets
Goodwill, net 453 457
Other intangibles, net 395 391
Investment in marketable equity securities - 301
Receivable from parent company 304 306
Deferred income taxes 123 -
Other assets, net 563 572
----- -----
Total Other Assets 1,838 2,027
----- -----
$7,478 $7,698
===== =====
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Current maturities of long-term debt $ 66 $ 71
Accounts payable 411 379
Traffic balances payable and unused tickets 919 757
Accrued aircraft rent 110 155
Accrued salaries, wages and vacation 328 323
Other accrued expenses 484 470
----- -----
Total Current Liabilities 2,318 2,155
Noncurrent Liabilities
Long-term debt, net of current maturities 1,892 1,954
Accrued aircraft rent 316 330
Deferred gains, net 349 335
Postretirement benefits other than pensions 1,238 1,217
Employee benefit liabilities and other 1,038 1,105
----- -----
Total Noncurrent Liabilities 4,833 4,941
Commitments and Contingencies
Stockholder's Equity
Common stock - -
Paid-in capital 2,431 2,431
Retained earnings (deficit) (788) (855)
Receivable from parent company (1,462) (1,099)
Accumulated other comprehensive income,
net of income tax effect 146 125
----- -----
Total Stockholder's Equity 327 602
----- -----
$7,478 $7,698
===== =====
See accompanying Notes to Condensed Consolidated Financial Statements.
8
US Airways, Inc.
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 1999 and 1998 (unaudited)
(in millions)
1999 1998
---- ----
Cash and Cash equivalents at beginning of period $604 $1,092
--- -----
Cash flows from operating activities
Net income 67 101
Adjustments to reconcile net income to net
cash provided by (used for) operating activities
Depreciation and amortization 73 65
Losses (gains) on dispositions of property (1) (3)
Amortization of deferred gains and credits (7) (7)
Other (11) (14)
Changes in certain assets and liabilities
Decrease (increase) in receivables (50) (112)
Decrease (increase) in materials and
supplies, prepaid expenses and
pension assets (11) (20)
Decrease (increase) in deferred income
taxes (9) 21
Increase (decrease) in traffic balances
payable and unused tickets 161 210
Increase (decrease) in accounts payable
and accrued expenses 40 35
Increase (decrease) in postretirement
benefits other than pensions, noncurrent 21 17
--- -----
Net cash provided by (used for)
operating activities 273 293
Cash flows from investing activities
Capital expenditures (206) (66)
Proceeds from the sale-leaseback of aircraft 132 -
Proceeds from dispositions of property 3 56
Decrease (increase) in short-term investments (14) 4
Decrease (increase) in restricted cash and
investments - (52)
Funding of parent company's common stock purchases (339) -
Funding of parent company's aircraft purchase
deposits (27) (17)
Other 1 -
--- -----
Net cash provided by (used for)
investing activities (450) (75)
Cash flows from financing activities
Principal payments on long-term debt (67) (99)
--- -----
Net cash provided by (used for)
financing activities (67) (99)
--- -----
Net increase (decrease) in Cash and Cash equivalents (244) 119
--- -----
Cash and Cash equivalents at end of period $360 $1,211
=== =====
Noncash investing and financing activities
Net unrealized gain on available-for-sale
securities, net of income tax effect $ 22 $ 51
Reduction of parent company receivable-assignment
of aircraft purchase rights by parent company $ 70 $ -
Supplemental Information
Cash paid during the period for interest, net
of amount capitalized $ 58 $ 80
Net cash paid during the period for income taxes $ 27 $ 1
See accompanying Notes to Condensed Consolidated Financial Statements.
9
US AIRWAYS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying Condensed Consolidated Financial Statements include
the accounts of US Airways, Inc. (US Airways) and its wholly-owned
subsidiary USAM Corp. (USAM). US Airways is a wholly-owned subsidiary of US
Airways Group, Inc. (US Airways Group). These interim period statements
should be read in conjunction with the Consolidated Financial Statements
contained in US Airways' Annual Report on Form 10-K for the year ended
December 31, 1998.
Management believes that all adjustments necessary for a fair statement
of results have been included in the Condensed Consolidated Financial
Statements for the interim periods presented, which are unaudited. All
significant intercompany accounts and transactions have been eliminated. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Certain 1998 amounts have been reclassified to conform with 1999
classifications.
2. COMPREHENSIVE INCOME
During the quarters ended March 31, 1999 and 1998, comprehensive income
amounted to $89 million and $155 million, respectively. Comprehensive income
encompasses net income and "other comprehensive income," which includes all
other non-owner transactions and events that change stockholder's equity.
Other comprehensive income is composed primarily of changes in the fair
value of USAM's investment in common stock of Galileo International, Inc.
(Galileo).
3. OPERATING SEGMENTS AND RELATED DISCLOSURES
US Airways has two reportable operating segments: US Airways and US
Airways Express. The US Airways segment includes the operations of US
Airways (excluding USAM). The US Airways Express segment only includes
certain revenues and expenses related to US Airways Group's three wholly-
owned regional airlines and from a marketing agreement with a non-owned US
Airways Express air carrier.
Financial information for each reportable operating segment is set
forth below (in millions):
Three Months Ended March 31,
----------------------------
1999 1998
---- ----
Operating Revenues:
US Airways $1,863 $1,882
US Airways Express 177 149
----- -----
$2,040 $2,031
===== =====
Income Before Taxes:
US Airways $ 76 $ 142
US Airways Express 31 24
All Other 2 3
----- -----
$ 109 $ 169
===== =====
10
4. RELATED PARTY TRANSACTIONS
US Airways reflects the receivable from US Airways Group associated with
US Airways Group's common stock purchases as a reduction of Stockholder's
Equity. The receivable is adjusted periodically for accrued interest. See also
Note 5 in US Airways Group's Notes to Condensed Consolidated Financial
Statements on page 5 of this report.
5. INVESTMENTS IN MARKETABLE EQUITY SECURITIES
Please refer to Note 6 in US Airways Group's Notes to Condensed
Consolidated Financial Statements on page 5 of this report.
6. STOCKHOLDERS' EQUITY
As a Delaware corporation, US Airways is subject to certain provisions
of the Delaware General Corporation Law (Delaware Law), including the
maintenance of a capital surplus, with respect to its ability to pay
dividends on or purchase shares of its common stock. There are a number of
methods for calculating capital surplus under Delaware Law. As of March 31,
1999, US Airways' capital surplus under Delaware Law was $327 million based
on its balance sheets prepared in accordance with generally accepted
accounting principles (assets less liabilities less the par value of
outstanding capital stock).
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
GENERAL INFORMATION
Part I, Item 2 of this report should be read in conjunction with Part
II, Item 7 of US Airways Group, Inc.'s (US Airways Group or the Company) and
US Airways, Inc.'s (US Airways) Annual Report to the United States
Securities and Exchange Commission (SEC) on Form 10-K for the year ended
December 31, 1998. The information contained herein is not a comprehensive
discussion and analysis of the financial condition and results of operations
of the Company and US Airways, but rather updates disclosures made in the
aforementioned filing.
Certain information contained herein should be considered "forward-
looking information," which is subject to a number of risks and
uncertainties. The preparation of forward-looking information requires the
use of estimates of future revenues, expenses, activity levels and economic
and market conditions, many of which are outside the Company's control.
Specific factors that could cause actual results to differ materially from
those set forth in the forward-looking information include: economic
conditions, labor costs, aviation fuel costs, competitive pressures on
product pricing-particularly from lower-cost competitors, weather
conditions, government legislation, consumer perceptions of the Company's
products, demand for air transportation in the markets in which the Company
operates and other risks and uncertainties listed from time to time in the
Company's reports to the SEC. Other factors and assumptions not identified
above are also involved in the preparation of forward-looking information,
and the failure of such other factors and assumptions to be realized may
also cause actual results to differ materially from those discussed. The
Company assumes no obligation to update such estimates to reflect actual
results, changes in assumptions or in other factors affecting such
estimates.
FINANCIAL OVERVIEW
For the first quarter of 1999, the Company's operating revenues were
$2.1 billion, operating income was $89 million, net income was $46 million
and diluted earnings per common share
11
(EPS) was $0.56. For the comparative period in 1998, operating revenues
were $2.1 billion, operating income was $192 million, net income was $98
million and EPS was $0.96.
The major factors that influenced the Company's financial performance
for 1998 continued to affect the Company's financial performance in the
first quarter of 1999. These factors include relatively favorable domestic
economic and industry conditions, overall favorable pricing trends in
markets served by the Company's airline subsidiaries, recent marketing
efforts undertaken by the Company and the positive influence of certain
revenue-enhancement and cost-reduction initiatives. However, as discussed
in "Results of Operations," inclement weather and certain matters involving
information systems adversely affected the Company's financial performance
during the first quarter of 1999.
UPDATE ON US AIRWAYS' COMPETITIVE POSITION
US Airways, the Company's principal subsidiary, continues to add new
Airbus single-aisle A320-Family aircraft to its operating fleet. As of
December 31, 1998, US Airways operated six A320-Family aircraft, all A319s.
In 1999, as of the date of this report, May 6, 1999, US Airways had
acquired four additional A319s and its first A320. US Airways expects to
take delivery of 28 additional Airbus A320-Family aircraft during the
remainder of 1999. These new single-aisle aircraft are expected to replace
certain older aircraft operated by the Company's airline subsidiaries. The
new Airbus aircraft are more fuel-efficient, less costly to maintain, have
greater range capabilities and are expected to provide certain customer
service benefits over the aircraft they are intended to replace. US Airways
retired three Douglas DC-9-30 aircraft in the first quarter of 1999 and
expects to retire 13 additional DC-9-30 aircraft during the remainder of
1999. In addition, Shuttle, Inc. (Shuttle), a wholly-owned subsidiary of US
Airways Group which operates under the trade name "US Airways Shuttle,"
expects to retire eight of its 12 Boeing B727-200 aircraft in 1999 (these
aircraft will be replaced by another aircraft type). US Airways' first
widebody Airbus A330-300 aircraft is currently scheduled for delivery in
the first quarter of 2000. The new Airbus aircraft play an important part
in the Company's long-term strategy of establishing US Airways as a
competitive global airline. See "Liquidity and Capital Resources" for
additional information related to the Company's commitments to purchase
flight equipment.
MetroJet continues to expand its operations-MetroJet was introduced on
June 1, 1998 operating five aircraft and is expected to operate
approximately 50 aircraft by the end of 1999. MetroJet accounted for
approximately 7.4% of US Airways' capacity (available seat miles) during
the first quarter of 1999. MetroJet, US Airways' response to low-cost, low-
fare competition, continues to exceed management's expectations both
operationally and financially. MetroJet's route network is composed of two
primary elements: Florida routes (approx. 75%) and non-Florida business
markets (approx. 25%). During the month of March 1999, for example,
MetroJet's Florida flights had an average passenger load factor of 85.1%
and its non-Florida flights, which are relatively new routes, had an
average passenger load factor of 58.4%. MetroJet's overall average
passenger load factor for March 1999 was 78.1%, significantly higher than
US Airways' "mainline" service. MetroJet's on-time performance is also
typically higher than US Airways' mainline service.
US Airways recently announced that it would operate certain of its
routes under the US Airways Shuttle trade name. US Airways Shuttle
currently offers hourly service during certain times between New York
(LaGuardia Airport) and Washington (Reagan Washington National Airport) and
between New York and Boston (Logan International Airport). These routes are
operated exclusively by the Company's Shuttle subsidiary. The US Airways
routes that will become part of the US Airways Shuttle system include
US Airways' currently hourly service between Washington (Dulles
International Airport) and both New York (LaGuardia) and Boston (Logan) and
service between Washington (Reagan National) and Boston (Logan).
12
In March 1999, US Airways announced that it had obtained commercially
viable takeoff and landing slots at London's Gatwick Airport (Gatwick) that
will permit the initiation of the long-awaited service from Charlotte. US
Airways plans to begin operating the Charlotte-London service in June 1999.
US Airways has also filed with the Department of Transportation for
authority to serve London (Gatwick) from Pittsburgh and London's Heathrow
Airport (Heathrow) from Boston, Charlotte, Philadelphia and Pittsburgh.
US Airways anticipates moving its operations at Gatwick to Heathrow when
possible (the availability of operating rights at Heathrow is currently
constrained by the bilateral aviation treaty between the U.S. and the
United Kingdom). US Airways has announced that it will temporarily suspend
Philadelphia-Amsterdam service effective June 12, 1999.
In early May 1999, US Airways announced that it had reached an
agreement with Chautauqua Airlines, Inc. (Chautauqua) to operate ten
Embraer 145LR 50-seat regional jet aircraft as part of US Airways Express.
Chautauqua is currently one of nine airlines that make up the US Airways
Express system. The first two regional jets are scheduled to enter service
with US Airways Express in July 1999 with the remaining eight aircraft
entering service every other month between September 1999 and the end of
2000. The Company has also recently finalized an agreement with Bombardier
Aerospace for the purchase of nine new deHavilland Dash-8 turboprop
aircraft. These aircraft, all of which will be delivered in 1999, will be
operated by the Company's regional airline subsidiaries as part of
US Airways Express. In addition, the Company has extended the leases for
ten Dash-8 aircraft by three years (these leases were originally scheduled
to expire in 1999).
EFFECTS OF THE YEAR 2000
The Company's Year 2000 (Y2K) compliance efforts remain on schedule.
As of March 31, 1999, the Company had recognized expenses totaling $28
million related to these efforts for both information systems and non-
information technology systems (e.g., miscellaneous airport devices,
aircraft avionics, etc.), including expenses related to information systems
encompassed by the Company's long-term technology management agreement with
The SABRE Group, Inc. (TSG). The Company expects to incur additional
expenses of $14 million in order to become fully Y2K compliant, including
expenses related to information systems managed by TSG (excluding the cost
of any replacement equipment that may be necessary and has not been
identified). Most of the Company's primary information systems managed by
TSG, including reservations, flight operations and cargo systems, are
already Y2K compliant. The Company's remaining information systems are
expected to be Y2K compliant by August 1, 1999, including certain non-Y2K
compliant information systems that are scheduled to be replaced by Y2K
compliant information systems provided by TSG. The Company's remaining
mission critical information systems, including systems not managed by TSG,
and non-information technology systems are expected to be Y2K compliant by
August 31, 1999.
Besides work aimed at assuring the Company's internal systems are Y2K
compliant, the Company continues its efforts to determine the Y2K
compliance status of the Company's vendors (including TSG and TSG's third-
party vendors) and certain other third parties. The Company has contacted
its primary suppliers and plans to evaluate its long-term relationship with
these vendors based on their responses to these surveys. The Company is
also participating in Y2K compliance review efforts being coordinated on an
industry-wide basis by the Airline Transport Association and the
International Air Transport Association.
Despite the Company's Y2K compliance efforts, there can be no
assurance that the Company's own computer software and systems (including
those provided by TSG), those of its suppliers, the airports at which the
Company operates, or the air traffic control system managed by the Federal
Aviation Administration or foreign nations will be made Y2K compliant in a
timely manner. Any such failures could have a material adverse effect on
the business, financial
13
condition and results of operations of the Company and its subsidiaries.
The Company has established and continues to refine contingency plans in
the event that any mission critical system is not Y2K compliant by the date
required. In the event that the Company is required to implement a
contingency plan, it believes that the result may be significant delays in
operations and flight cancellations. In the event that such delays and
flight cancellations occur, it is possible, depending on the extent of the
delays and cancellations, that there could be a material adverse impact on
the Company's financial condition and results of operations.
Additional information related to the Company's Y2K compliance efforts
can be found in the Company's and US Airways' Annual Report to the SEC on
Form 10-K for the year ended December 31, 1998.
OTHER INFORMATION
On April 1, 1999, US Airways' fleet service employees, who are
represented by the International Association of Machinists and Aerospace
Workers, ratified an initial labor contract. The new contract, which covers
approximately 6,000 employees, is based on pay parity with other major
domestic airlines. In addition, on May 3, 1999, US Airways' flight crew
training instructors (approximately 125 employees) ratified a new collective
bargaining agreement. Also on May 3, 1999, US Airways and the Communications
Workers of America jointly filed for mediation of the passenger service
negotiations with the National Mediation Board.
RESULTS OF OPERATIONS
The following section pertains to activity included in the Company's
Condensed Consolidated Statements of Operations (which are contained in
Part I, Item 1A of this report) and in selected US Airways operating and
financial statistics. Except where noted, operating statistics referred to
below are for scheduled service only.
THREE MONTHS ENDED MARCH 31, 1999
COMPARED WITH THE
THREE MONTHS ENDED MARCH 31, 1998
Operating Revenues-Passenger transportation revenues attributable to the
Company's three wholly-owned regional airlines increased $12.4 million or
8.7% primarily due to a 5.7% increase in capacity (ASMs). See "Selected
US Airways Operating and Financial Statistics" below for additional
information related to US Airways' passenger transportation revenues, which
decreased marginally quarter-over-quarter. Cargo and freight revenues
decreased due primarily to less mail volume (competitive factors). Other
operating revenues increased 8.6% related primarily to increased sales of
capacity (ASMs) generated by a non-owned US Airways Express air carrier in
certain markets. The increase in revenues from these capacity sales is
partially offset by increases in expenses recognized in the Other operating
expenses category related to purchases of the capacity (see below).
Operating Expenses-The Company's Personnel costs increased 6.9% due
primarily to weather factors, certain matters related to information systems
(see Selected US Airways Operating and Financial Statistics) and the effects
of a lower discount rate used to calculate certain pension and benefit plan
liabilities in 1999. Aviation fuel decreased significantly due primarily to
lower average fuel prices. Depreciation and amortization increased due to an
increase in amortization of capitalized software costs (related primarily to
information systems provided by TSG) and higher depreciation expenses
associated with reducing the remaining depreciable life of certain DC-9-30
aircraft. Other operating expenses increased significantly due to expenses
associated with US Airways' information services management contract with
TSG (see also "Effects of the Year 2000"), expenses associated with
purchases of capacity from a non-owned US Airways Express air
14
carrier (see Other operating revenues above) and weather-related factors
(e.g., aircraft de-icing, interrupted trips expenses, etc.).
Other Income (Expense)-Interest income decreased as the average balance of
cash equivalents and short-term investments was substantially lower in the
first quarter of 1999 (see also "Liquidity and Capital Resources"). Interest
expense decreased due to less outstanding long-term debt. The Company's
outstanding long-term debt (including current maturities) has decreased $554
million since March 31, 1998. Interest capitalized increased due primarily
to an increase in equipment purchase deposits for new Airbus aircraft.
Other, net for the first quarter of 1999 includes a $9.9 million gain which
resulted from the sale of approximately 30% of US Airways' interest in
Equant n.v., an international data network service provider (the interest
was held through US Airways' interest in SOCIETE Internationale de
Telecommunications Aeronatiqies).
Provision for Income Taxes-A decrease in pre-tax income for the first
quarter of 1999 was the major contributor to the lower provision.
Preferred Dividend Requirement-The Series H Preferred Stock was retired
during March 1998.
Earnings per Common Share-Affected by lower earnings applicable to common
stockholders and less shares of common stock outstanding (see "Liquidity and
Capital Resources" related to the Company's retirement of its Series H
Preferred Stock and purchases of its common stock).
SELECTED US AIRWAYS OPERATING AND FINANCIAL STATISTICS (NOTE 1)
(UNAUDITED)
Three Months
Ended March 31,
--------------- Increase
1999 1998 (Decrease)
---- ---- ----------
Revenue passengers (thousands)* 12,998 13,308 (2.3) %
Total revenue passenger miles (RPMs)
(millions) (Note 2) 9,573 9,481 1.0 %
RPMs (millions)* 9,553 9,445 1.1 %
Total available seat miles (ASMs)
(millions) (Note 3) 14,134 13,734 2.9 %
ASMs (millions)* 14,107 13,692 3.0 %
Passenger load factor* (Note 4) 67.7 % 69.0 % (1.3) pts.
Break-even load factor (Note 5) 65.0 % 63.8 % 1.2 pts.
Yield* (Note 6) 17.39 c 17.75 c (2.0) %
Passenger revenue per ASM* (Note 7) 11.77 c 12.25 c (3.9) %
Revenue per ASM (Note 8) 13.19 c 13.70 c (3.7) %
Cost per ASM (Note 9) 12.75 c 12.50 c 2.0 %
Average passenger journey (miles)* 735 710 3.5 %
Average stage length (miles)* 614 591 3.9 %
Revenue aircraft miles (millions)* 105 102 2.9 %
Cost of aviation fuel per gallon (Note 10) 43.27 c 57.66 c (25.0) %
Cost of aviation fuel per gallon,
excluding fuel taxes (Note 11) 37.17 c 51.63 c (28.0) %
Gallons of aviation fuel consumed
(millions) 275 267 3.0 %
Number of aircraft in operating fleet at
period-end 377 371 1.6 %
Full-time equivalent employees at
period-end 38,832 38,625 0.5 %
* Scheduled service only (excludes charter service).
c Cents.
Note 1. Operating statistics include US Airways' "mainline" operations as
well as the operations of its low-fare product, MetroJet, which
commenced operations on June 1, 1998. Operating statistics include
free frequent travelers and the related miles they flew. Revenues
and expenses associated with US Airways' capacity purchase
arrangements with certain affiliated airlines have been excluded
from US Airways' financial results for purposes of financial
statistical calculations and better comparability between periods.
Note 2. RPMs-Revenue passengers multiplied by the number of miles they
flew.
Note 3. ASMs-Seats available multiplied by the number of miles flown (a
measure of capacity).
Note 4. Percentage of aircraft seating capacity that is actually utilized
(RPMs/ASMs).
(notes to the table are continued on the following page)
15
(notes relate to table on preceding page)
Note 5. Percentage of aircraft seating capacity utilized that equates to
US Airways breaking-even at the pre-tax income level.
Note 6. Passenger transportation revenue divided by RPMs.
Note 7. Passenger transportation revenue divided by ASMs (a measure of unit
revenue).
Note 8. Total Operating Revenues divided by ASMs (a measure of unit
revenue).
Note 9. Total Operating Expenses divided by ASMs (a measure of unit cost).
Note 10. Includes the base cost of aviation fuel, fuel taxes and
transportation charges.
Note 11. Includes the base cost of aviation fuel and transportation charges
(excludes fuel taxes).
As mentioned above, the Company's financial results for the first
quarter of 1999 were adversely affected by inclement weather (snow/ice
storms) in the eastern United States and the recent conversion of certain
information systems (including reservations, airport customer services and
flight tracking systems) to those provided by TSG. The effects on
US Airways' operations of the inclement weather were compounded by the
systems conversions. The new systems resulted in changes to many basic work
processes-temporarily affecting the efficiency at which certain processes
were performed (including increasing employee overtime). In the first
quarter of 1999, US Airways was forced to cancel approximately 5.6% of its
flights. In contrast, US Airways flight cancellation rate averaged 2.5% in
the first quarters of 1998 and 1997. The unusually large number of
cancellations of planned flights increased US Airways' unit cost (cost per
ASM) since it was geared to operate a larger schedule. As US Airways
cancelled flights its costs did not decrease proportionally-only expenses
such as aviation fuel, landing fees and commissions were avoided. At the
same time US Airways lost most of the revenue from the cancelled flights.
US Airways' unit revenue (revenue per ASM) fell 3.7% and its unit cost
increased 2.0% (see discussion in previous paragraph). See "Results of
Operations" for more specific information related to changes in certain
operating expenses. US Airways' unit cost is expected to be lower for full-
year 1999 compared to full-year 1998. This reduction will be driven by the
continued expansion of lower-cost MetroJet operations, additional capacity
(ASMs) resulting from deliveries of new Airbus aircraft, efficiencies
realized as a result of the implementation of the new TSG information
systems and spreading operating costs over a larger ASM base.
US Airways capacity (ASMs) increased 3.0% due to deliveries of new
aircraft outpacing both retirements of older aircraft and the effects of
inclement weather on US Airways' operations in the first quarter of 1999
(see above). US Airways' capacity is expected to increase 7.0% for 1999,
including increases of 5.5%, 9.5% and 10.0% in the second, third and fourth
quarter, respectively. The capacity increase will be largely driven by
MetroJet, which will contribute about 5 percentage points of the 7.0%
increase, with transatlantic operations making up the remainder of the
increase.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1999, the Company's Cash, Cash equivalents and Short-
term investments totaled $971 million and the ratio of the Company's current
assets to its current liabilities ("current ratio") was 0.93 (the Company's
Condensed Consolidated Balance Sheets are contained in Part I, Item 1A of
this report). As of December 31, 1998, the Company's Cash, Cash equivalents
and Short-term investments totaled $1.2 billion and the Company's current
ratio was 1.0. The Company's debt to equity ratio was 5.9 and 3.4 as of
March 31, 1999 and December 31, 1998, respectively. The decrease in the
current ratio can be attributed to a decrease in Cash equivalents and Short-
term investments linked to the Company's purchases of its common stock (see
below) partially offset by the reclassification of the Company's investment
in common stock of Galileo International, Inc. to current assets (the
effects of which on the current ratio were partially offset by the
reclassification of the related noncurrent deferred income tax liability
against current deferred income tax assets). The increase in the debt to
equity ratio primarily reflects the decrease in
16
Stockholder's Equity resulting from an increase in shares of common stock
held in treasury (see below) partially offset by net income for first
quarter 1999.
For the first three months of 1999, the Company's operating activities
provided net cash of $276 million (as presented in the Company's Condensed
Consolidated Statements of Cash Flows, which are contained in Part I, Item
1A of this report) compared to $295 million for the first three months of
1998. Operating cash flows during the first quarter of 1999 were adversely
affected by the same factors that adversely affected financial results
during that period (see discussion in "Result of Operations").
The net cash used for investing activities during the first three
months of 1999 was $118 million. The comparative amount for 1998 was $79
million. Investing activities during the first three months of 1999 included
cash outflows of $241 million related to capital expenditures and cash
inflows of $135 million related to asset dispositions. Capital expenditures
included $221 million for aircraft and aircraft-related assets, including
the purchase of five new Airbus A320-Family aircraft, the purchase of two
operating aircraft that were previously leased and purchase deposits related
to new Airbus aircraft scheduled for future delivery. US Airways completed
sale-leaseback transactions for four of the new Airbus aircraft prior to the
end of the quarter generating proceeds of $132 million (the other new Airbus
aircraft purchased during the first quarter of 1999 was sold and leased-back
in early April 1999). During the first three months of 1998, the Company's
capital expenditures included purchase deposits for new Airbus flight
equipment, the purchase of an aircraft at expiration of its lease and costs
associated with the purchase of other assets, most notably costs associated
with information systems provided by TSG. Asset dispositions during the
first quarter of 1998 included proceeds of $47 million from US Airways' sale
of substantially all of its information systems and related assets to TSG
and proceeds of $6 million from US Airways' sale of four nonoperating
aircraft.
Net cash used for financing activities during the first three months of
1999 was $405 million, including $339 million related to the Company's
purchase of 6.6 million shares of its common stock. From January 1998, when
the Company's first common stock purchase program was authorized, through
March 31, 1999, the Company had purchased a total of 24.6 million shares of
its common stock at a total cost of $1.4 billion. The Company' Board of
Directors authorized a fifth common stock purchase program in March 1999 for
the purchase of $500 million of the Company's common stock. As of March 31,
1999, the Company had purchased $20 million of its common stock under the
fifth program. As discussed in Note 7 to the Company's Notes to Condensed
Consolidated Financial Statements, the Company is subject to certain
provisions of Delaware General Corporate Law with respect to its ability to
pay dividends on or purchase shares of its common stock. Besides normal debt
repayments during the first quarter of 1999, US Airways retired early
certain debt with a principal amount of $46 million. As of March 31, 1999,
the Company's outstanding long-term debt had fallen below $2 billion for the
first time since 1988. Financing activity during the first three months of
1998 included the March 12, 1998 conversion of Company's Series H Preferred
Stock into 9.2 million shares of Common Stock (and the Series H Preferred
Stock was retired). The Company paid dividends of $6 million to holders of
its Series H Preferred Stock in 1998 prior to the retirement of that series.
The Company's agreements to acquire new Airbus aircraft, accompanying
jet engines and ancillary assets increase the Company's financing needs and
result in a significant increase in its financial obligations and debt
burden. As of the date of this report, May 6, 1999, the Company had orders
for 389 Airbus A320-Family aircraft, including 117 aircraft on firm order,
112 additional aircraft subject to reconfirmation prior to scheduled
delivery and options for another 160 aircraft. In addition, the Company also
had orders for 30 Airbus widebody aircraft, including seven on firm order,
an additional seven aircraft subject to reconfirmation prior to delivery and
options for 16 additional widebody aircraft. Adverse changes in certain
factors that are generally outside the Company's control, such as an
economic downturn, additional government regulation, intensified
17
competition from lower-cost competitors or increases in the cost of aviation
fuel, could have a material adverse effect on the Company's results of
operations, financial condition and future prospects. The Company's results
of operations and financial condition are particularly susceptible to
adverse changes in general economic and market conditions due to US Airways'
high cost structure relative to its major competitors. US Airways continues
to address its cost structure, primarily by replacing certain older aircraft
with new Airbus aircraft and expanding its MetroJet product.
The Company expects to satisfy its short-term liquidity requirements,
including obligations related to the acquisition of new aircraft and related
equipment, through a combination of third-party financing, cash on hand and
cash generated from operations. The Company expects to finance a substantial
portion of the cost of new aircraft with a combination of enhanced equipment
trust certificates, or similar debt and/or leveraged leases. US Airways has
used cash to purchase all of its new Airbus aircraft and continues to complete
sale-leaseback transactions for each aircraft soon after delivery. The Company
has commitments or letters of intent that it believes will provide financing
for at least 25% of the anticipated purchase price of all of its firm-order
Airbus aircraft. However, further financing or internally-generated funds will
be needed to satisfy the Company's capital commitments for the balance of the
aircraft purchase price and for other aircraft-related expenditures. Other
capital expenditures, such as for training simulators, rotables and other
aircraft components, are also expected to increase in conjunction with the
acquisition of the new aircraft and jet engines. There can be no assurance
that sufficient financing will be available for all aircraft and other capital
expenditures not covered by committed financing.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes to the Company's disclosures related
to certain market risks as reported under Item 7A, "Quantitative and
Qualitative Disclosures About Market Risk," in the Annual Report of US Airways
Group, Inc. and US Airways, Inc. to the U.S. Securities and Exchange
Commission on Form 10-K for the year ended December 31, 1998.
Part II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
No new material legal proceedings have commenced during the time period
covered by this interim report. In addition, there have been no significant
developments in the pending legal proceedings as previously reported on the
Annual Report of US Airways Group, Inc. and US Airways, Inc. to the U.S.
Securities and Exchange Commission on Form 10-K for the year ended December
31, 1998.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS
DESIGNATION DESCRIPTION
27.1 Financial Data Schedule-US Airways Group, Inc.
27.2 Financial Data Schedule-US Airways, Inc.
(this space intentionally left blank)
18
B. REPORTS ON FORM 8-K
DATE OF REPORT SUBJECT OF REPORT
April 21, 1999 News release disclosing the results of operations for
both US Airways Group, Inc. and US Airways, Inc. for the
three months ended March 31, 1999, and selected operating
and financial statistics for US Airways for the same
period. In addition, the Company commented on its
earnings per share expectations versus that of the First
Call consensus for the quarter ended June 30, 1999 and
for full-year 1999.
April 9, 1999 Certain forward-looking information was provided by US
Airways, Inc. to the investment community related to
aircraft fleet and selected operating and financial
statistics.
March 30, 1999 News release announcing US Airways Group, Inc.'s board of
directors authorization for the purchase from time to
time in the open market or in privately negotiated
transactions of up to an additional $500 million of the
Company's outstanding common stock. In addition, the
Company commented on its earnings per share expectations
versus that of the First Call consensus for the quarter
ended March 31, 1999 and for full-year 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrants have duly caused this report to be signed on their behalf by
the undersigned thereunto duly authorized.
US Airways Group, Inc. (Registrant)
Date: May 6, 1999 By: /s/ Thomas A. Mutryn
------------------------------------
Thomas A. Mutryn
Senior Vice President-Finance and
Chief Financial Officer
US Airways, Inc. (Registrant)
Date: May 6, 1999 By: /s/ Thomas A. Mutryn
------------------------------------
Thomas A. Mutryn
Senior Vice President-Finance and
Chief Financial Officer
(this space intentionally left blank)
19
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