FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported)
May 17, 1999
US Airways Group, Inc.
(Commission file number: 1-8444)
and
US Airways, Inc.
(Commission file number: 1-8442)
(Exact names of registrants as specified in their charters)
Delaware US Airways Group, Inc. 54-1194634
(State of incorporation US Airways, Inc. 53-0218143
of both registrants) (I.R.S. Employer Identification Nos.)
US Airways Group, Inc.
2345 Crystal Drive, Arlington, VA 22227
(Address of principal executive offices)
(703) 872-5306
(Registrant's telephone number, including area code)
US Airways, Inc.
2345 Crystal Drive, Arlington, VA 22227
(Address of principal executive offices)
(703) 872-7000
(Registrant's telephone number, including area code)
Item 5. Other Events
On May 17, 1999, US Airways, Inc. (US Airways)(a wholly-owned
subsidiary of US Airways Group, Inc.) provided certain forward-
looking information to the investment community related to its
aircraft fleet and selected operating and financial statistics
(see Exhibit 99).
Certain of the information contained in the letter to the
investment community 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 of US Airways' 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
pricing--particularly from lower-cost competitors, weather
conditions, government legislation, consumer perceptions of US
Airways' products, demand for air transportation in the markets in
which US Airways operates and other risks and uncertainties listed
from time to time in US Airways' reports to the United States
Securities and Exchange Commission. 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. US Airways assumes no
obligation to update such estimates to reflect actual results,
changes in assumptions or changes in other factors affecting such
estimates.
Item 7. Financial Statements and Exhibits
(c) Exhibit
Designation Description
- ----------- -----------
99 Letter to investment community
dated May 17, 1999
(this space intentionally left blank)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrants have duly caused this report to be signed
on their behalf by the undersigned hereunto duly authorized.
US Airways Group, Inc. (REGISTRANT)
/s/ Thomas A. Mutryn
Date: May 17, 1999 By: --------------------------------
Thomas A. Mutryn
Senior Vice President, Finance
Chief Financial Officer
US Airways, Inc. (REGISTRANT)
/s/ Thomas A. Mutryn
Date: May 17, 1999 By: --------------------------------
Thomas A. Mutryn
Senior Vice President, Finance
Chief Financial Officer
(this space intentionally left blank)
Exhibit 99
US Airways, Inc.
May 17, 1999
Dear Analysts and Investors:
Attached please find the US Airways Investor Update for the
month of April and the Company's Fleet Plan forecast for fiscal
year 1999. Of particular importance, please note that
US Airways' year-over-year capacity growth forecast for fiscal
year 1999 is 7%, which includes a 21% increase in transatlantic
capacity, a 5% reduction in mainline capacity and a 445% increase
in MetroJet capacity. The rapid growth in MetroJet is coming,
primarily, from a reduction of mainline flying. As we look into
the year 2000, continued rapid expansion of MetroJet would come
from additional pulldowns of mainline domestic flying. At this
time we are not comfortable with the prospect of a continued
pulldown of mainline capacity in the year 2000.
Going into this year, we had hoped to be able to accelerate
new Airbus aircraft deliveries which would have helped ease the
mainline shrinkage for 2000. Additionally, we have decided to
retire our B727 Shuttle aircraft, putting additional pressure on
the mainline fleet. In reviewing our capacity projections for
September 1999 through May 2000, we find ourselves at a stage
where continued shrinkage of mainline operations could result in
an adverse impact on US Airways' hub and spoke network and also
limit the Company's ability to exploit attractive long-haul
opportunities. Mainline, long-haul opportunities are a natural
extension of our flying and capitalize on the enormous short-haul
feed that we currently have.
Additionally, there are several events which are stretching
our pilot training capability. Pilot training can be categorized
as "growth related" training, that which allows us to expand
capacity, and "non-growth related" training, that which results
in no incremental capacity but adds expense.
"Growth related" Training Activities
--------------------------------
* Training associated with narrowbody fleet growth
associated with our A320/A319 deliveries.
* Training associated with the deliveries of A330
international aircraft starting in early 2000.
"Non-growth related" Training Activities
------------------------------------
* Conversion of mainline B737 aircraft to MetroJet.
Due to the lower rates of pay for MetroJet, these
conversions result in incumbent mainline B737 pilots
bidding out for (and being trained for) higher pay
equipment. That in turn causes a series of pilots
being trained for a number of different equipment
types and positions.
* Replacement of our B727 Shuttle aircraft which adds
a training burden without any corresponding increase
in capacity.
* Replacement of approximately 325 senior pilots for
whom we offered early retirement as part of our
pilot agreement.
In addition, we have experienced a small erosion of pilots and
check airmen as a result of their obligations to the military
reserves. All of these factors while driving significant
training costs are putting limitations on our capacity growth.
As a result of the impact of MetroJet on mainline flying and
of our training requirements, we are looking at our options for
the latter part of 1999 and 2000. It appears that we will be
shaving off some of our planned growth for the later part of 1999
and slowing down MetroJet conversions. This will help both in
terms of reducing our training requirements and protecting
mainline flying. It will also insure we have sufficient
resources to fly our schedule without any crew shortage
cancellations.
While we work to address the issues outlined above, one
principal remains clear; the Company is committed to the
continued growth of its successful MetroJet product.
We will be firming up our plans shortly and will be
providing you with revised capacity forecasts.
I am hopeful that the information contained in the update
and forecast will assist you in your analysis of the Company. If
you have any questions with respect to the foregoing, please do
not hesitate to call me at 703-872-5009.
Very truly yours,
Kimberly A. Holland
Director, Investor Relations
Enclosures
Certain of the information discussed above or enclosed herewith
may be considered forward-looking information. A number of risks
and uncertainties exist, which could cause the actual results to
differ materially from the results projected in such forward-
looking information. Additional information concerning the
factors, which could cause actual results to differ materially
from the forward-looking information, will be contained in a Form
8K to be filed with the Securities and Exchange Commission as
soon as practical following the release of this information.
<TABLE>
US AIRWAYS INVESTOR UPDATE
US Airways, Inc. (A Wholly-Owned Subsidiary of US Airways Group, Inc.)
May 1999
<CAPTION>
Year-over-Year Percentage Change
-------------------------------------------------------------------
Selected Operating and Financial Statistics April (Actual) May June July FY 1999
- ------------------------------------------- -------------- ----- ------ ------ ---------
<S> <C> <C> <C> <C> <C>
Available Seat Miles - Scheduled Service
-Domestic 2.0 % 4.9 % 7.5 % 6.4 % 5.8 %
-International 16.9 8.8 13.3 18.1 17.6
---- --- ---- ---- ----
Total 3.5 % 5.4 % 8.1 % 7.6 % 7.0 %
Revenue Passenger Miles - Scheduled Service
-Domestic (2.4)% (2.2)% 1.9 % 3.0 % 2.6 %
-International 14.4 15.0 13.0 22.6 18.8
---- ---- ---- ---- ----
Total (0.5)% (0.1)% 3.2 % 5.2 % 4.4 %
Passenger Load Factor (3.0) points (3.9) points (3.5) points (1.8) points (1.8) points
Aviation Fuel
-Cost of Aviation Fuel Per Gallon
- Excluding Taxes (4.1)% 1.6 % 8.0 % 14.8 % 3.4 %
-Gallons of Aviation Fuel Consumed 3.1 6.9 8.2 8.1 6.2
Fleet Additions
-A319 1 1 1 5 22
-A320 0 1 1 3 11
-- -- -- -- --
Total 1 2 2 8 33
Fleet Retirements
-B727-200 - Shuttle* 0 0 0 0 8
-DC9-30** 0 0 0 2 16
-- -- -- -- --
Total 0 0 0 2 24
* Shuttle, Inc. operations are currently performed by a wholly-owned subsidiary of US Airways Group, Inc.
** Three of these DC9-30 aircraft will be retired on January 1, 2000.
Certain of the information discussed above may be considered forward-looking information. A number of risks and uncertainties
exist, which could cause the actual results to differ materially from the results projected in such forward-looking information.
Additional information concerning the factors, which could cause actual results to differ materially from the forward-looking
information, will be contained in a Form 8K to be filed with the SEC as soon as practical following the release of this
information.
</TABLE>
<TABLE>
US AIRWAYS FLEET PLAN
US Airways, Inc. (A Wholly-Owned Subsidiary of US Airways Group, Inc.)
May 1999
<CAPTION>
Number of Aircraft: 1999 Year End
Fleet Plan ------------------------------------------------------------
Fleet Type 04/30/1999 Average Seats Average Age (yrs.) Owned Leased Total
- ---------- ---------- ------------- ------------------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
B767-200 12 203 10.5 8 4 12
B757-200 34 182 9.2 23 11 34
MD-80 31 141 17.8 15 16 31
B737-400 54 144 10.0 19 35 54
B737-300 85 126 12.7 11 74 85
B737-200 - MetroJet 34 118 17.2 51 3 54
B737-200 30 108 20.0 6 4 10
B727-200 - Shuttle* 12 163 29.6 4 0 4
DC9-30** 47 100 22.9 30 7 37
F-100 40 97 9.1 36 4 40
A319 10 120 0.6 0 28 28
A320 1 142 0.5 0 11 11
--- --- ---- --- --- ---
Average Total Aircraft 390 134 12.7 203 197 400
1999
Hushkit Program Stage 2 Compliance
- --------------- ------- ----------
B737-200 28 Stage 3
B727-200 - Shuttle* 8 Retire
DC9-30** 16 Retire
Firm Order/Options
as of 4/30/99 Firm Reconfirmable Options
- ------------------ ---- ------------- -------
A319/320 117 112 160
A330 7 7 16
* Shuttle, Inc. operations are currently performed by a wholly-owned subsidiary of US Airways Group, Inc.
** Three of these DC9-30 aircraft will be retired on January 1, 2000.
Certain of the information discussed above may be considered forward-looking information. A number
of risks and uncertainties exist, which could cause the actual results to differ materially from the
results projected in such forward-looking information. Additional information concerning the
factors, which could cause actual results to differ materially from the forward-looking information,
will be contained in a Form 8K to be filed with the SEC as soon as practical following the release
of this information.
</TABLE>
