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Registration No. 333 -79825
Filed with the Securities and Exchange Commission on August 19, 1999
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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US AIRWAYS, INC.
(Exact name of registrant as specified in its charter)
Delaware 53-0218143
(State of Incorporation) (I.R.S. Employer Identification No.)
2345 Crystal Drive, Arlington, Virginia 22227
(Address of principal executive offices)
(703) 872-7000
(Registrant's telephone number, including area code)
US AIRWAYS GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 54-1194634
(State of Incorporation) (I.R.S. Employer Identification No.)
2345 Crystal Drive, Arlington, Virginia 22227
(Address of principal executive offices)
(703) 872-5306
(Registrant's telephone number, including area code)
Thomas A. Mutryn
Senior Vice President--Finance and Chief Financial Officer
US Airways, Inc.
US Airways Group, Inc.
2345 Crystal Drive
Arlington, Virginia 22227
(703) 872-7000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Lawrence M. Nagin Seth E. Jacobson
Executive Vice President--Corporate Skadden, Arps, Slate, Meagher & Flom
Affairs (Illinois)
and General Counsel 333 W. Wacker Dr.
US Airways, Inc. Chicago, Illinois 60606
2345 Crystal Drive (312) 407-0700
Arlington, Virginia 22227
(703) 872-7000 --------------
Approximate date of commencement of proposed sale to public: From time to
time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. [_]
Pursuant to Rule 429 under the Securities Act of 1933, the prospectus set
forth herein also relates to securities registered pursuant to the prior
registration statement.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
WILL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT WILL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
WILL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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PROSPECTUS
$1,500,000,000
US AIRWAYS, INC.
US AIRWAYS GROUP, INC.
PASS THROUGH CERTIFICATES
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This prospectus relates to pass through certificates to be issued by one or
more trusts that we will form, as creator of each pass through trust, and a
national or state bank or trust company, as trustee. The trustee will hold all
property owned by a trust in trust for the benefit of holders of pass through
certificates issued by that trust. Each pass through certificate issued by a
trust will represent a beneficial interest in all property held by that trust.
We will describe the specific terms of any offering of pass through
certificates in a prospectus supplement to this prospectus. You should read
this prospectus and the applicable prospectus supplement carefully before you
invest.
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This prospectus may not be used to consummate sales of pass through
certificates unless accompanied by a prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
The date of this prospectus is July 30, 1999.
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TABLE OF CONTENTS
<TABLE>
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Forward-Looking Statements.................................................. 1
Summary..................................................................... 2
US Airways.................................................................. 8
Ratio of Earnings to Fixed Charges.......................................... 8
Use of Proceeds............................................................. 9
Description of the Certificates............................................. 9
Description of the Secured Promissory Notes................................. 24
U.S. Income Tax Matters..................................................... 30
ERISA Considerations........................................................ 33
Plan of Distribution........................................................ 33
Selling Certificateholders.................................................. 35
Legal Opinions.............................................................. 35
Experts..................................................................... 35
Where You Can Find More Information......................................... 36
Incorporation of Certain Documents by Reference............................. 37
</TABLE>
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FORWARD-LOOKING STATEMENTS
This prospectus, any prospectus supplement delivered with this prospectus and
the information incorporated by reference include forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. We
prepare forward-looking statements using estimates of future revenues,
expenses, activity levels and economic and market conditions, many of which are
outside of our control. These forward-looking statements involve risks,
uncertainties and other factors that may cause our actual results to differ
materially from the results we discuss in the forward-looking statements. These
risks, uncertainties and other factors include, but are not limited to:
. general economic and business conditions;
. labor costs;
. aviation fuel costs;
. competitive pressures on pricing--particularly from lower-cost
competitors;
. weather conditions;
. governmental legislation;
. consumer perceptions of our products; and
. demand for air transportation in the markets in which we operate.
The preparation of forward-looking statements also involves other factors and
assumptions not identified above. If the assumptions used to prepare the
forward-looking statements prove incorrect, the actual results may differ
materially from the results discussed.
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SUMMARY
The Offering
This prospectus and each supplement to this prospectus describe US Airways'
offering of pass through trust certificates to help finance or refinance
aircraft that we own or lease. Our parent, US Airways Group may guarantee some
of our obligations relating to the certificates. For convenience, throughout
this prospectus, the words we, us, ours or similar words refer to US Airways
and the words parent, parent guarantor or other similar words refer to US
Airways Group.
The remainder of this prospectus and the related prospectus supplement will
describe the offering of the pass through certificates in more detail. We will
begin by describing the pass through certificates and the pass through trusts
that issue the pass through certificates. We will also describe the various
agreements relating to the certificates. This prospectus then describes the
secured promissory notes that the pass through trusts will acquire and, in the
case of promissory notes secured by aircraft leased to us, the owner trusts
that issue those secured promissory notes.
Certificates
We may offer and sell pass through certificates from time to time by this
prospectus. For convenience, we may:
.refer to "pass through certificates" as "certificates;" and
.refer to the holder of a "pass through certificate" as a
"certificateholder."
Pass through certificates are securities that evidence an ownership interest
in a pass through trust. The holders of the certificates issued by a pass
through trust will be the beneficiaries of that trust. A certificateholder's
beneficial interest in a pass through trust will be a pro rata interest in the
property of that trust equal to the ratio of the value of all of the
certificates owned by the holder to the value of all of the certificates issued
by that trust. Each certificate will represent a beneficial interest only in
the property of the pass through trust that issued the certificate. A
certificate will not represent an interest in, or rights to, the property of
any pass through trust other than the pass through trust that issued the
certificate.
Multiple series of certificates may be issued. If more than one series of
certificates is issued, each series of certificates will be issued by a
separate pass through trust. The economic terms of any series of certificates
will be described in the prospectus supplement relating to that series of
certificates.
The prospectus supplement relating to a series of certificates will be
delivered with this prospectus. The prospectus supplement will describe, among
other things, the property that will be held by each pass through trust. This
property will include promissory notes secured by aircraft we own or lease.
Payments of principal and interest on the secured promissory notes owned by a
pass through trust will be passed through to holders of certificates issued by
that trust in accordance with the terms of the pass through trust agreement
pursuant to which the trust was formed.
If certificates of any series are entitled to the benefits of a liquidity
facility or other form of credit enhancement, the prospectus supplement
relating to that series will describe the terms of the liquidity facility or
other form of credit enhancement. A liquidity facility is a revolving credit
agreement, letter of credit, bank guarantee, insurance policy or other
instrument or agreement that will increase the likelihood that the
certificateholders will receive timely payments of interest in respect of the
certificates. While a liquidity facility is designed to increase the likelihood
of the timely payment of interest, it is not a guarantee of the timely or
ultimate payment of principal.
We may offer and sell up to $1,500,000,000 of aggregate initial offering
price of certificates pursuant to this prospectus and related prospectus
supplements. The initial offering price may be denominated in United States
dollars or foreign currencies based on the applicable exchange rate at the time
of sale.
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Pass Through Trusts
We will form a separate pass through trust to issue each series of
certificates. Each pass through trust will be formed by us, as creator of each
pass through trust, and a national or state bank or trust company, as trustee.
Each pass through trust will be governed by a trust instrument that creates the
trust and sets forth the powers of the trustee and the rights of the
beneficiaries. The trust instrument for each pass through trust will consist of
a basic pass through trust agreement among us, our parent and the pass through
trustee and a supplement to the basic pass through trust agreement. In the
event our parent does not guarantee any certificates, it may be released from
the basic pass through trust agreement.
Unless otherwise stated in a prospectus supplement, State Street Bank and
Trust Company of Connecticut, National Association will be the trustee of each
pass through trust. The performance and obligations of State Street Bank and
Trust Company of Connecticut, N.A., under the pass through trust agreement will
be guaranteed by its parent, State Street Bank and Trust Company.
Each pass through trust will pass through to holders of its certificates
payments that it receives on the property that it owns. The property of each
pass through trust may consist of:
. secured promissory notes of one or more series; and
. other property described in the applicable prospectus supplement.
Secured Promissory Notes
The secured promissory notes owned by a pass through trust may consist of any
combination of:
. Promissory notes issued by an owner trust and secured by an aircraft
owned by that trust and leased to us. We refer to these types of secured
promissory notes as leased aircraft notes.
. Promissory notes issued by us and secured by an aircraft owned by us. We
refer to these types of secured promissory notes as owned aircraft
notes.
Leased Aircraft Notes. Except as specified in a prospectus supplement, leased
aircraft notes will be issued by a bank, trust company, financial institution
or other entity solely in its capacity as owner trustee in a leveraged lease
transaction. In a leveraged lease transaction, one or more persons will form an
owner trust to acquire an aircraft and then that owner trust will lease the
aircraft to us. In the leasing industry, the person that is the beneficiary of
the owner trust is referred to as an owner participant. The owner participant
will contribute a portion of the purchase price of the aircraft to the owner
trust. The transaction is called a "leveraged" lease because the remainder of
the owner trust's purchase price of the aircraft is financed through the
issuance of indebtedness in the form of leased aircraft notes. Leased aircraft
notes may also be issued to refinance an aircraft previously financed in a
leveraged lease transaction or otherwise.
These leased aircraft notes are issued pursuant to a separate indenture and
security agreement between the owner trustee and a bank, trust company,
financial institution or other entity, as loan trustee. The loan trustee under
a leased aircraft indenture will act as a trustee for the holders of the leased
aircraft notes issued under that leased aircraft indenture.
In a leveraged lease transaction, we will pay or advance rent and other
amounts to the owner trustee in its capacity as lessor under the lease. The
owner trustee will use the payments and certain other amounts received by it to
make payments of principal and interest on the leased aircraft notes. The owner
trustee also will assign its rights to receive basic rent and certain other
payments to the loan trustee as security for its obligations to pay principal
of, premium, if any, and interest on the secured promissory notes. Payments or
advances made under a lease and related agreements will at all times be
sufficient to make scheduled payments of principal of, and interest on, the
leased aircraft notes issued to finance the aircraft subject to that lease. Our
obligations under a lease and related agreements may be guaranteed by our
parent. If our parent guarantees our obligations under a lease or any related
agreement, the terms of the guarantee will be described in the applicable
prospectus supplement.
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We will not have any obligation to pay principal of, or interest on, the
leased aircraft notes. Holders of leased aircraft notes will not have recourse
against us or our parent if it guarantees the related lease or any other
agreement, for the payment of principal of, or interest on, the leased aircraft
notes.
Owned Aircraft Notes. We may finance or refinance aircraft that we own
through the issuance of owned aircraft notes. Owned aircraft notes relating to
an owned aircraft will be issued under a separate indenture and security
agreement relating to that owned aircraft. Each separate indenture and security
agreement relating to owned aircraft notes will be between us and a bank, trust
company, financial institution or other entity, as loan trustee. The indenture
and security agreement entered into in connection with the issuance of owned
aircraft notes will be referred to as an owned aircraft indenture. The loan
trustee under an owned aircraft indenture will act as a trustee for the holders
of the owned aircraft notes issued under that owned aircraft indenture. Our
obligation to pay principal of, and interest on, the owned aircraft notes may
be guaranteed by our parent. If our parent guarantees the payment of principal
of, and interest on, the owned aircraft notes, we will describe the terms of
the guarantee in the applicable prospectus supplement.
Holders of owned aircraft notes will have recourse against us and, if it
guarantees the lease, our parent, for payment of principal of, and interest on,
the owned aircraft notes.
Because we often refer to owned aircraft indentures and leased aircraft
indentures together, we sometimes refer to them collectively as the indentures.
Delayed Financing
If any portion of the proceeds of an offering of a series of certificates is
not used to purchase secured promissory notes on the date the certificates are
issued, those proceeds will be temporarily invested in other property such as
short-term securities or will be invested with a depositary or held in an
escrow arrangement pending the purchase of secured promissory notes. These
arrangements and this additional property will be described in the prospectus
supplement.
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Cash Flow Structure
Set forth below is a diagram illustrating the cash flows relating to the
certificates. This diagram assumes that the pass through trustees enter into an
intercreditor agreement, but does not include the effect of any liquidity
facility or similar credit enhancements or prefunding arrangements, each of
which will be described in the prospectus supplement if they are applicable.
[Diagram omitted, which shows that we will pay to the loan trustee for
leased aircraft and owned aircraft (a) the lease rental payments, which are
assigned by the loan trustee, on leased aircraft and (b) the mortgage payments
on owned aircraft. From those lease rental payments and mortgage payments, the
loan trustee will make secured promissory note payments on the Series A, the
Series B and the Series C secured promissory notes with respect to all aircraft
to the subordination agent. Excess rental payments will be paid by the loan
trustee to the lessors for leased aircraft. From those secured promissory note
payments, the subordination agent will pay principal, premium, if any, and
interest to the pass through trustee for the Class A trust, the pass through
trustee for the Class B trust and the pass through trustee for the Class C
trust, which in turn will pay this principal, premium, if any, and interest to
the holders of Class A certificates, the holders of Class B certificates and the
holders of Class C certificates, respectively. The diagram also shows that, in
the case of leased aircraft, our parent may guarantee our lease rental payments
and that, in the case of owned aircraft, our parent may guarantee our owned
aircraft payments.]
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Transaction Structure for Leased Aircraft
Set forth below is a diagram illustrating cash flows that we expect to occur
on the closing date for a leveraged lease financing. We anticipate that
separate transactions similar to the transaction illustrated in the diagram
will occur for each leased aircraft financed with the proceeds of the offering
of the certificates. The structure illustrated below may change, in which case
a revised diagram will be included in the prospectus supplement.
[Diagram omitted, which shows leased aircraft notes will be issued by an
owner trustee in a leveraged lease transaction. The diagram shows that our
parent may guarantee our obligation to make lease rental payments. The diagram
shows that we will sell the leased aircraft to an owner trust that will, in
turn, lease the aircraft back to us. The owner participant is the beneficial
owner of the owner trust and contributes a portion of the purchase price of the
aircraft. The owner trust will enter into an indenture with the loan trustee
providing for a security interest in the leased aircraft, the assignment of the
lease and the issuance of secured promissory notes to finance the remaining
portion of the purchase price of the aircraft. The owner trustee will sell the
Class A, Class B and Class C secured promissory notes to the Class A, Class B
and Class C pass through trusts, respectively. The Class A, Class B and Class C
pass through trusts will sell certificates to Series A, Series B and Series C
certificateholders, respectively, for cash. The proceeds from the sale of the
certificates will be passed through from the Class A, Class B and Class C pass
through trusts to the loan trustee who in turn will forward the proceeds to the
owner trust as payment for the secured promissory notes.]
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Transaction Structure for Owned Aircraft
Set forth below is a diagram illustrating cash flows that we expect to occur
on the closing date for an owned aircraft financing. We anticipate that
separate transactions similar to the transaction illustrated in the diagram
will occur for each owned aircraft financed with the proceeds of the offering
of the certificates. The structure illustrated below may change, in which case
a revised diagram will be included in the prospectus supplement.
[Diagram omitted, which shows that we may finance or refinance aircraft
that we own through the issuance of owned aircraft notes. The diagram shows that
our parent may guarantee our obligation to make owned aircraft payments. The
diagram also shows that we will enter into an indenture with the loan trustee
providing for a security interest in the owned aircraft and the issuance of
secured promissory notes. We will sell the Class A, Class B and Class C secured
promissory notes to the Class A, Class B and Class C pass through trusts,
respectively. The Class A, Class B and Class C pass through trusts will sell
certificates to Series A, Series B and Series C certificateholders,
respectively, for cash. The proceeds from the sale of the certificates will be
passed through from the Class A, Class B and Class C pass through trusts to the
loan trustee who will in turn forward the proceeds to us as payment for the
secured promissory notes. We will then purchase owned aircraft from those
proceeds.]
Additional Information
We will describe the specific terms of each series of certificates that we
may offer and sell from time to time in a prospectus supplement.
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US AIRWAYS
We are a certificated air carrier engaged primarily in the business of
transporting passengers, property and mail. We are the principal operating
subsidiary of US Airways Group, accounting for approximately 90% of US Airways
Group's consolidated operating revenues for the first three months of 1999.
We carried approximately 58 million passengers in 1998 and currently rank as
the sixth largest domestic air carrier, as ranked by total revenue passenger
miles, based on our review and analysis of our and other airline press
releases. Our mainline service includes our domestic and international jet
aircraft operations, exclusive of low-cost product MetroJet. Outside of our
mainline service, our system includes our code share partners US Airways
Express and Shuttle, Inc. Under a code share arrangement, one carrier places
its designator code and sells tickets on flights of another carrier. The
combined US Airways system served 202 destinations worldwide as of March 1999.
As of March 31, 1999, US Airways had more than 38,000 full-time equivalent
employees.
Our major connecting hubs are located at airports in Charlotte, Philadelphia
and Pittsburgh. We also have substantial operations at the Baltimore-Washington
International Airport, Boston's Logan International Airport, New York's
LaGuardia Airport and Washington's Ronald Reagan Washington National Airport.
As of March 1999, measured by departures, we were the largest airline at each
of these airports and are the largest air carrier in many other smaller eastern
cities such as Albany, Buffalo, Hartford, Providence, Richmond, Rochester and
Syracuse, based on information provided by OAG Worldwide, a division of Reed
Business Information. We also are the leading airline from the Northeast United
States to Florida, based on information provided by OAG Worldwide. As of March
1999, approximately 84% of our departures and approximately 56% of our
capacity, as determined by available seat miles, were deployed within the
United States east of the Mississippi River.
US Airways and US Airways Group both are Delaware corporations, with
executive offices located at 2345 Crystal Drive, Arlington, Virginia 22227. Our
telephone number is (703) 872-7000 and our parent's telephone number is (703)
872-5306.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges for US
Airways and US Airways Group and their consolidated subsidiaries for the
periods indicated:
<TABLE>
<CAPTION>
Three months
ended
March 31, Year ended December 31,
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1999 1998 1998 1997 1996 1995 1994
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<S> <C> <C> <C> <C> <C> <C> <C>
US Airways............................... 1.8 2.2 2.7 2.2 1.3 1.1 *
US Airways Group......................... 1.5 2.1 2.5 2.1 1.5 1.2 **
</TABLE>
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* For the year ended December 31, 1994, US Airways' earnings were not
sufficient to cover its fixed charges. Additional earnings of $721 million
would have been required to achieve a ratio of earnings to fixed charges of
1.0.
** For the year ended December 31, 1994, US Airways Group's earnings were not
sufficient to cover its fixed charges. Additional earnings of $690 million
would have been required to achieve a ratio of earnings to fixed charges of
1.0.
For purposes of calculating the ratios of earnings to fixed charges, earnings
consist of pretax income, fixed charges, capitalized interest and amortization
of previously capitalized interest. Fixed charges consist of interest expense,
amortization of debt issue expense and the portion of rental expense
representative of interest expense.
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USE OF PROCEEDS
Except as set forth in the applicable prospectus supplement, each pass
through trustee will use the proceeds from the sale of certificates issued by
its pass through trust to purchase one or more secured promissory notes.
If an owner trustee issues the secured promissory notes, the owner trustee
will use the proceeds of the sale of the secured promissory notes to finance a
portion of the purchase price of an aircraft or to refinance indebtedness or
equity interests previously issued in respect of an aircraft. Upon the purchase
of an aircraft by an owner trustee, the aircraft will be leased by the owner
trustee to us.
If we issue the secured promissory notes, we will use the proceeds from the
sale of the secured promissory notes to finance the purchase of an aircraft
which we will own or to refinance indebtedness or equity interests previously
issued in respect of an aircraft.
If a pass through trustee does not use all of the proceeds of any offering of
certificates to purchase secured promissory notes on the date those
certificates are issued, the proceeds of the offering not used to purchase
secured promissory notes will be held for the benefit of the certificateholders
under arrangements that we will describe in the applicable prospectus
supplement. If the pass through trustee does not use a portion of the proceeds
to purchase secured promissory notes by the date specified in the applicable
prospectus supplement, it will return the unused portion of the proceeds to the
certificateholders.
In addition, we may offer certificates subject to delayed aircraft financing
arrangements. For example, we may cause the proceeds from the sale of
certificates to be invested with a depositary or cause the proceeds to be held
in an escrow arrangement until they are used to purchase secured promissory
notes. In these circumstances, we will describe in the applicable prospectus
supplement how the proceeds of the certificates will be held or applied during
any delayed aircraft financing period, including any depositary or escrow
arrangement.
DESCRIPTION OF THE CERTIFICATES
The following description is a summary of the terms of the certificates that
we expect will be common to all series of certificates. We will describe the
financial terms and other specific terms of any series of certificates in a
prospectus supplement. Since the terms of a specific series of certificates may
differ from the general information provided below, you should rely on the
information in the prospectus supplement instead of the information in this
prospectus if the information in the prospectus supplement is different from
the information below. To the extent that any provision in any prospectus
supplement is inconsistent with any provision in this summary, the provision of
the prospectus supplement will control.
Because the following description is a summary, it does not describe every
aspect of the certificates, and it is subject to and qualified in its entirety
by reference to all the provisions of the pass through trust agreement and the
applicable supplements to the pass through trust agreement. For convenience, we
will refer to the pass through trust agreement among the pass through trustee,
our parent guarantor and us as the "Basic Agreement," and to the Basic
Agreement as supplemented by the applicable supplements as the pass through
trust agreement. The form of Basic Agreement has been filed as an exhibit to
the registration statement of which this prospectus is a part. The supplement
to the Basic Agreement relating to each series of certificates and the forms of
the other agreements described in this prospectus and the applicable prospectus
supplement will be filed as exhibits to a post-effective amendment to the
registration statement of which this prospectus is a part, a Current Report on
Form 8-K, a Quarterly Report on Form 10-Q or an Annual Report on Form 10-K, as
applicable, filed by us or our parent guarantor with the SEC.
General
Except as amended by a supplement to the Basic Agreement, the terms of the
Basic Agreement generally will apply to all of the pass through trusts that we
form to issue certificates by this prospectus. We will create a
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separate pass through trust for each series of certificates by entering into a
separate supplement to the Basic Agreement. Each supplement to the Basic
Agreement will contain the additional terms governing the specific pass through
trust to which it relates and, to the extent inconsistent with the Basic
Agreement, will supersede the Basic Agreement.
Certificates will be issued pursuant to the pass through trust agreement.
Unless otherwise stated in the applicable prospectus supplement, each pass
through certificate will be issued in minimum denominations of $1,000 or a
multiple of $1,000.
Each certificate will represent a fractional undivided interest in the
property of the pass through trust that issued the pass through certificate.
All payments and distributions made on or with respect to a pass through
certificate will be made only from the property owned by the pass through trust
that issued the pass through certificate. The certificates do not represent an
interest in or obligation of US Airways, US Airways Group, the pass through
trustee, any of the owner trustees or loan trustees, in their individual
capacities, or any owner participant. Each holder of a pass through certificate
will be deemed to agree to look solely to the income and proceeds from the
property of the pass through trust as provided in the pass through trust
agreement.
The property of each pass through trust for which a series of certificates
will be issued will include:
. the secured promissory notes held in the pass through trust;
. all monies at any time paid on or with respect to secured promissory
notes held by the pass through trust;
. all monies due and to become due under the secured promissory notes held
by the pass through trust;
. if so specified in the relevant prospectus supplement, rights under any
escrow arrangement to withdraw the proceeds from escrow either to
purchase secured promissory notes or to return unused proceeds to the
holders of that series of certificates;
. funds from time to time deposited with the pass through trustee in
accounts relating to that pass through trust; and
. if so specified in the relevant prospectus supplement, rights under
intercreditor agreements relating to cross-subordination arrangements
and monies receivable under a liquidity facility.
As described in more detail below, the rights of a pass through trust to
receive monies due or to become due under secured promissory notes held by that
pass through trust may be subject to the effect of any cross-subordination
provisions contained in an intercreditor agreement described in the prospectus
supplement for a series of certificates.
An intercreditor agreement refers to an agreement among the pass through
trusts and, if applicable, a liquidity provider under a liquidity facility, as
creditors of the issuers of the secured promissory notes owned by the pass
through trusts. An intercreditor agreement will set forth the terms and
conditions upon which payments made on or in respect of the secured promissory
notes and payments made under any liquidity facility will be received, shared
and distributed among the several pass through trusts and the liquidity
provider. In addition, the intercreditor agreement will set forth agreements
among the pass through trusts and the liquidity provider relating to the
exercise of remedies under the secured promissory notes and the indentures.
Cross-subordination refers to a concept where payments on a junior class of
secured promissory notes issued under one indenture are distributed to a pass
through trust that holds a senior class of promissory notes issued under a
different indenture. The effect of this distribution mechanism is that holders
of a junior class of promissory notes issued under one indenture will not
actually receive payments made on or with respect to that junior class of
promissory notes until the holders of senior classes of promissory notes issued
under other indentures have received all scheduled payments on their notes.
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Secured promissory notes owned by a pass through trust may be leased
aircraft notes, owned aircraft notes or a combination of leased aircraft notes
and owned aircraft notes.
Leased aircraft notes will be issued in connection with the leveraged lease
of an aircraft to us. Except as set forth in the applicable prospectus
supplement, each leased aircraft will be leased to us under a lease between
us, as lessee, and an owner trustee, as lessor. Each owner trustee will issue
leased aircraft notes on a non-recourse basis under a separate leased aircraft
indenture between it and the applicable loan trustee. The owner trustee will
use the proceeds of the sale of the leased aircraft notes to finance or
refinance a portion of the purchase price paid or to be paid by the owner
trustee for the applicable leased aircraft. The owner trustee will obtain the
remainder of the funding for the leased aircraft from an equity contribution
from the owner participant that is the beneficiary of the owner trust and, to
the extent set forth in the applicable prospectus supplement, additional debt
secured by the applicable leased aircraft or other sources. A leased aircraft
also may be subject to other financing arrangements. Generally, neither the
owner trustee nor the owner participant will be personally liable for any
principal or interest payable under any leased aircraft indenture or any
leased aircraft notes. In some cases, an owner participant may be required to
make payments to an owner trustee that are to be used by the owner trustee to
pay principal of, and interest on, the secured promissory notes. If an owner
participant is required to make payments to be used by an owner trustee to pay
principal of, and interest on, the secured promissory notes and the owner
participant fails to make the payment, we will be required to provide the
owner trustee with funds sufficient to make the payment. We will make payments
or advances under a lease and the related documents sufficient to pay when due
all scheduled principal and interest payments on the leased aircraft notes
issued to finance the aircraft subject to that lease. Our parent may guarantee
our obligations under the leases and related agreements.
We will issue owned aircraft notes under separate owned aircraft indentures.
Owned aircraft notes will be issued in connection with the financing or
refinancing of an aircraft that we own. Owned aircraft notes will be
obligations that have recourse to us and the related aircraft. Our parent may
guarantee payments of principal of, and interest on, owned aircraft notes. Any
owned aircraft may secure additional debt or be subject to other financing
arrangements.
An indenture may provide for the issuance of multiple series of secured
promissory notes. If an indenture provides for multiple series of secured
promissory notes, it may also provide for differing priority of payments among
the different series. All secured promissory notes issued under an indenture
that are entitled to the same priority of payment will be referred to as a
"class." Secured promissory notes issued under an indenture may be held in
more than one pass through trust, and one pass through trust may hold secured
promissory notes issued under more than one indenture. Unless otherwise
provided in a prospectus supplement, only secured promissory notes of a single
class may be held in the same pass through trust.
Except as set forth in the prospectus supplement for any series of
certificates, interest payments on the secured promissory notes held by a pass
through trust will be passed through to the registered holders of certificates
of that pass through trust at the annual rate shown on the cover page of the
prospectus supplement for the certificates issued by that pass through trust.
The certificateholders' right to receive payments made in respect of the
secured promissory notes is subject to the effect of any cross- subordination
provisions described in the prospectus supplement for a series of
certificates.
We refer you to the prospectus supplement that accompanies this prospectus
for a description of the specific series of certificates being offered by this
prospectus and the applicable prospectus supplement, including:
. the specific designation, title and amount of the certificates;
. the initial public offering price, amounts payable on and distribution
dates for the certificates;
. the currency or currencies (including currency units) in which the
certificates may be denominated;
. the specific form of the certificates, including whether or not the
certificates are to be issued in accordance with a book-entry system;
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. a description of the secured promissory notes to be purchased by the
pass through trust issuing that series of certificates, including (a)
the period or periods within which, the price or prices at which, and
the terms and conditions upon which the secured promissory notes may or
must be redeemed or defeased in whole or in part, by us or an owner
trustee, (b) the payment priority of the secured promissory notes in
relation to any other secured promissory notes issued with respect to
the related aircraft and (c) any intercreditor or other rights or
limitations between or among the holders of secured promissory notes of
different priorities issued with respect to the same aircraft;
. a description of the aircraft to be financed with the proceeds of the
issuance of the secured promissory notes;
. a description of the note purchase agreement setting forth the terms and
conditions upon which that pass through trust will purchase secured
promissory notes;
. a description of the indentures under which the secured promissory notes
to be purchased by that pass through trust will be issued;
. a description of the events of default, the remedies exercisable upon
the occurrence of such events of default and any limitations on the
exercise of such remedies under the indentures pursuant to which the
secured promissory notes to be purchased by that pass through trust will
be issued;
. if the certificates relate to leased aircraft, a description of the
leases to be entered into by the owner trustees and us, including (a)
the names of the owner trustees that will own the leased aircraft and
lease the leased aircraft to us and (b) a description of the events of
default under the leases and, the remedies exercisable upon an event of
default;
. if the certificates relate to leased aircraft, a description of the
provisions of the leased aircraft indentures governing (a) the rights of
the related owner trustee and/or owner participant to cure our failure
to pay rent under the leases and (b) any limitations on the exercise of
remedies with respect to the leased aircraft notes;
. if the certificates relate to leased aircraft, a description of the
participation agreements that will set forth the terms and conditions
upon which the owner participant, the owner trustee, the pass through
trustees, the loan trustee and we agree to enter into a leveraged lease
transaction;
. if the certificates relate to an owned aircraft, a description of the
participation agreements that will set forth the terms and conditions
upon which the applicable pass through trustees, the loan trustee and we
agree to enter into a financing transaction for the owned aircraft;
. a description of the limitations, if any, on amendments to leases,
indentures, pass through trust agreements, participation agreements and
other material agreements entered into in connection with the issuance
of secured promissory notes;
. a description of any cross-default provisions in the indentures;
. a description of any agreement among the holders of secured promissory
notes and any liquidity provider governing the receipt and distribution
of monies with respect to the secured promissory notes and the
enforcement of remedies under the indentures, including a description of
any applicable intercreditor and cross-subordination arrangements;
. a description of any cross-collateralization provisions in the
indentures;
. a description of any liquidity facility or other credit enhancement
relating to the certificates;
. if the certificates relate to aircraft that have not yet been delivered
or financed, a description of any deposit or escrow agreement or other
arrangement providing for the deposit and investment of funds pending
the purchase of secured promissory notes and the financing of an owned
aircraft or leased aircraft;
. a description of any guarantee of our obligation to make payments with
respect to a leased aircraft or to make principal and interest payments
with respect to owned aircraft notes;
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. the names of the underwriters, dealers or agents, if any, through or to
which we will sell the certificates, the compensation, if any, of
underwriters, dealers or agents and the net proceeds from the offering
of the certificates;
. the material United States federal income tax considerations applicable
to the certificates; and
. any other special terms pertaining to the certificates.
The concept of cross-default mentioned above refers to a situation where a
default under one indenture or lease automatically triggers a default under
other indentures or leases. We currently do not expect any indentures or leases
to contain cross-default provisions. The concept of cross-collateralization
mentioned above refers to the situation where an aircraft mortgaged to secure
obligations incurred under one indenture also serves as collateral for
obligations under one or more other indentures. If the indentures that are
cross-collateralized relate to aircraft that we lease, the lease assigned to a
loan trustee to secure obligations under one indenture may also serve as
collateral under one or more other indentures. We currently do not expect any
indentures to be cross-collateralized.
If any certificates are denominated in one or more foreign currencies or
currency units, the restrictions, certain United States federal income tax
considerations, specific terms and other information with respect to the
certificates and the foreign currency or currency units will be set forth in
the applicable prospectus supplement.
Payments and Distributions
We will make rental and other payments and advances for a leased aircraft
under the lease and other documents relating to that leased aircraft. In order
to secure its obligations to pay the principal of, and interest on, the leased
aircraft notes issued to finance or refinance a portion of the purchase price
of a leased aircraft, the applicable owner trustee will assign the scheduled
rental payments under the lease and may assign certain other payments or
advances under other related documents to the applicable loan trustee. As is
customary in the leveraged leasing industry, indemnities, insurance and similar
payments due under a lease and other documents may be excluded from any
assignment. Pursuant to the terms of the applicable indenture, the loan trustee
will, on behalf of the applicable owner trustee, apply the proceeds of the
payments and advances assigned to the loan trustee to make the corresponding
scheduled payments of principal of, and interest on, the leased aircraft notes
issued under that indenture. The loan trustee will distribute payments of
principal of, and interest on, the leased aircraft notes to the pass through
trustee for each pass through trust that holds those leased aircraft notes.
After the loan trustee has made all scheduled payments of principal of, and
interest on, the leased aircraft notes issued under the applicable indenture,
the loan trustee will, except under certain circumstances, pay the remaining
balance, if any, to the owner trustee for the benefit of the owner participant.
Distribution of payments by a loan trustee to a pass through trustee may be
affected by the terms of an intercreditor agreement.
We will make scheduled payments of principal of, and interest on, the unpaid
amount of the owned aircraft notes to the loan trustee under the indenture
pursuant to which those owned aircraft notes were issued. The loan trustee will
distribute payments of principal of, and interest on, the owned aircraft notes
to the pass through trustee for each pass through trust that holds those owned
aircraft notes.
Each certificateholder will be entitled to receive a pro rata share of any
distribution in respect of payments of principal of, and interest on, the
secured promissory notes held in the pass through trust that issued its
certificate. A pass through trustee's right to receive payments distributed by
a loan trustee may be affected by the terms of an intercreditor agreement. The
terms of any intercreditor agreement and any cross-subordination will be in the
prospectus supplement relating to a series of certificates.
Each pass through trust will receive scheduled payments of principal of, and
interest on, the secured promissory notes held by it and will, in turn,
distribute those scheduled payments to its certificateholders on the
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regular distribution dates and in the currencies specified in the prospectus
supplement relating to its certificates. However, a pass through trust may not
be able to distribute scheduled payments of principal and interest to its
certificateholders as scheduled in the prospectus supplement if the secured
promissory notes held by the pass through trust are in default or if payments
are diverted to other pass through trusts in accordance with an intercreditor
agreement. In addition to distributions of scheduled payments of principal and
interest on regular distribution dates, if the applicable series of
certificates is entitled to the benefits of a liquidity facility, the pass
through trustee will also distribute on a regular distribution date payments
received as a result of a drawing or other payments made under a liquidity
facility. The prospectus supplement relating to the certificates will describe
the terms of any liquidity facility or other form of credit enhancement.
A pass through trustee may from time to time receive payments of principal
of, and interest on, secured promissory notes on dates other than scheduled
payment dates. These special payments may occur if the secured promissory notes
owned by the pass through trust are sold or redeemed early, or if a scheduled
payment is paid more than five days late. Each pass through trustee will
distribute special payments to its certificateholders on dates determined as
described in the applicable prospectus supplement. In the event a special
payment is received by a pass through trustee, the pass through trustee will
mail a notice to its certificateholders of record stating the anticipated
distribution date for the payment. Scheduled payments that are not more than
five days late will be treated as regular payments and paid to
certificateholders of record on the regular distribution dates.
If any regular distribution date or special distribution date is not a
business day, distributions scheduled to be made on that date may be made on
the next succeeding business day without additional interest.
Pool Factors
Unless otherwise described in the applicable prospectus supplement, the "pool
balance" for each pass through trust or for the certificates issued by any pass
through trust indicates, as of any date, the portion of the original aggregate
face amount of the certificates issued by that pass through trust that has not
been distributed to certificateholders. The pool balance for each pass through
trust as of any distribution date will be computed after giving effect to any
distribution to certificateholders to be made on that date.
Unless otherwise described in the applicable prospectus supplement, the "pool
factor" for a pass through trust as of any distribution date for that trust is
the quotient (rounded to the seventh decimal place) computed by dividing (a)
the pool balance by (b) the aggregate original face amount of the certificates
issued by that pass through trust. The pool factor for a pass through trust as
of any distribution date will be computed after giving effect to the payment of
principal, if any, on the secured promissory notes or other property of that
pass through trust and distribution to certificateholders of the payment of
principal to be made on that date. The pool factor for a pass through trust
initially will be 1.0000000. The pool factor for a pass through trust will
decline as described in this prospectus and the related prospectus supplement
to reflect reductions in the pool balance of that pass through trust. As of any
distribution date for a pass through trust, certificateholder will have a pro
rata share of the pool balance of that pass through trust equal to the product
obtained by multiplying the original denomination of the holder's pass through
certificate by the pool factor for the pass through trust that issued that pass
through certificate.
Each pass through trust will have a separate pool factor. We expect the pool
factor for each pass through trust to decline in proportion to the scheduled
repayments of principal on the secured promissory notes held by that pass
through trust. However, the pool factor for a pass through trust will not
decline in proportion to scheduled repayments of principal if there is an early
redemption or purchase of secured promissory notes held by a pass through trust
or if a default occurs in the repayment of secured promissory notes held by a
pass through trust. In the event of a redemption, purchase or default, the pool
factor and the pool balance of each pass through trust affected by the
redemption, purchase or default will be recomputed.
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Reports to Certificateholders
The pass through trustee will include with each distribution to
certificateholders a statement setting forth the following information:
. the amount of the distribution allocable to principal and the amount
allocable to premium, if any;
. the amount of the distribution allocable to interest;
. the pool balance and the pool factor for the pass through trust after
giving effect to the distribution; and
. any additional or different information as may be described in the
applicable prospectus supplement.
As long as the certificates are registered in the name of DTC or its
nominee, on the record date prior to each distribution to certificateholders,
the pass through trustee will request from DTC a securities position listing
containing the names of all DTC participants reflected on DTC's books as
holding interests in the certificates on that record date. On each
distribution date, the applicable pass through trustee will mail to each DTC
participant holding certificates the statement described above and will make
available additional copies as requested by the DTC participants for
forwarding to certificateholders.
After the end of each calendar year, each pass through trustee will prepare
for each person that was a holder of one or more of its pass through
certificates at any time during the preceding calendar year a report
containing the sum of the amount of distributions allocable to principal,
premium and interest with respect to that pass through trust for the preceding
calendar year or, in the event the person was a holder of a pass through
certificate during only a portion of the preceding calendar year, for the
applicable portion of the preceding calendar year. In addition, each pass
through trustee will prepare for each person that was a holder of one or more
of its pass through certificates at any time during the preceding calendar
year any other items that are readily available to the pass through trustee
and which a certificateholder reasonably requests as necessary for the purpose
of preparing its federal income tax returns. The reports and other items
described in this section will be prepared on the basis of information
supplied to the pass through trustee by DTC participants and will be delivered
by the pass through trustee to DTC participants to be available for forwarding
by DTC participants to certificateholders in the manner described above.
If the certificates are issued in the form of physical certificates, the
pass through trustee of that pass through trust will prepare and deliver the
information described above to each record holder of a pass through
certificate issued by that pass through trust as the name and period of
ownership of the holder appears on the records of the registrar of the
certificates.
Voting of Secured Promissory Notes
A pass through trustee has the right to vote and give consents and waivers
with respect to the secured promissory notes held by that pass through trust.
However, the pass through trustee's right to vote and give consents or waivers
may be restricted or may be exercisable by another person in accordance with
the terms of an intercreditor agreement, as described in the applicable
prospectus supplement. The pass through trust agreement will set forth:
. the circumstances in which a pass through trustee may direct any action
or cast any vote with respect to the secured promissory notes held in
its pass through trust at its own discretion;
. the circumstances in which a pass through trustee will seek instructions
from its certificateholders; and
. if applicable, the percentage of certificateholders required to direct
the pass through trustee to take action.
If the holders of certificates are entitled to the benefits of a liquidity
facility, and the liquidity facility is used to make any payments to
certificateholders, the provider of the liquidity facility may be entitled to
exercise rights to vote or give consents and waivers with respect to the
secured promissory notes held by the pass through trust that issued the
certificates, as described in the applicable prospectus supplement.
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Events of Default and Certain Rights upon an Event of Default
The prospectus supplement will describe the events of default that can occur
under the pass through trust agreement and under the indentures relating to the
secured promissory notes held by the related pass through trust.
Defaults under a leased aircraft indenture will include events of default
under the lease that we are a party to that is assigned as security under that
leased aircraft indenture. The owner trustee and the owner participant may have
rights to cure the defaults under a leased aircraft indenture that result from
a default under the lease. The applicable prospectus supplement will describe
these cure rights. Unless otherwise provided in a prospectus supplement, with
respect to any certificates entitled to the benefits of a liquidity facility, a
drawing under that liquidity facility for the purpose of making a payment of
interest as a result of our failure to have made a corresponding payment under
the lease will not cure a default related to our failure to make the payment.
Unless otherwise provided in a prospectus supplement, all of the secured
promissory notes issued under the same indenture will relate to a specific
aircraft and there will be no cross-collateralization or cross-default
provisions in the indentures. This means that events resulting in a default
under a particular indenture will not necessarily result in a default under any
other indenture. If a default occurs in fewer than all of the indentures,
payments of principal of, and interest on, the secured promissory notes issued
under indentures with respect to which a default has not occurred will continue
to be made as originally scheduled.
The pass through trustees, as holders of the secured promissory notes, may
enter into an intercreditor agreement that may have the practical effect of
subordinating a junior class of secured promissory notes issued under one
indenture to senior classes of secured promissory notes under other indentures.
This concept, referred to as cross-subordination, is described above under
"Description of the Certificates--General" and, if applicable, will be
described in the applicable prospectus supplement.
If the secured promissory notes outstanding under an indenture are held by
more than one pass through trust, then the ability of the holders of
certificates issued by any one pass through trust to cause the loan trustee to
take actions under an indenture may be limited. In particular, a pass through
trustee's ability to direct a loan trustee to take action under an indenture
will depend, in part, on the proportion of (a) the aggregate principal amount
of the secured promissory notes outstanding under the indenture that are held
in that pass through trust to (b) the aggregate principal amount of all secured
promissory notes outstanding under the indenture. This means that a pass
through trustee may not have the ability to direct a loan trustee to accelerate
secured promissory notes or exercise remedies under an indenture without the
concurrence of the other pass through trustees. In addition, the ability of a
pass through trustee to exercise remedies under an indenture may be limited by
the terms of an intercreditor agreement.
If the secured promissory notes outstanding under an indenture are held by
more than one pass through trust, then each pass through trust will hold
secured promissory notes with different terms than the secured promissory notes
held in the other pass through trusts. In these circumstances, the holders of
certificates issued by different pass through trusts may have divergent or
conflicting interests. As long as the same institution acts as the pass through
trustee of each pass through trust, in the absence of instructions from the
holders of certificates issued by each pass through trust, the pass through
trustee could for the same reason be faced with a potential conflict of
interest upon a default under an indenture. If the pass through trustee is
faced with a conflict of interest because that pass through trustee acts as
pass through trustee for multiple trusts, the pass through trustee faced with
the conflict will resign as trustee of one or all the pass through trusts, and
one or more successor pass through trustees will be appointed in accordance
with the terms of each pass through trust agreement.
The prospectus supplement for a series of certificates will describe whether
and under what circumstances a pass through trustee may or will sell all or
part of the secured promissory notes held in the pass through trust. A pass
through trustee's right to sell secured promissory notes may be restricted or
may be exercisable by another person, if the applicable series of certificates
are subject to any intercreditor, subordination or similar
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arrangements. If the certificates of any series are subject to any
intercreditor, subordination or similar arrangement, the proceeds from the sale
of the related secured promissory notes will be distributed as contemplated by
those arrangements. To the extent received by any pass through trustee,
proceeds from the sale of secured promissory notes will be treated as special
payments, deposited in a special payments accounts and distributed to the
certificateholders of the pass through trust on a special distribution date.
The market for secured promissory notes in default may be very limited, and
neither we nor the pass through trustee can assure you that they could be sold
for a reasonable price. In addition, as long as the same institution acts as
pass through trustee of multiple pass through trusts, it may be faced with a
conflict in deciding which secured promissory notes to sell to available
buyers. If the pass through trustee sells any secured promissory notes with
respect to which a default under an indenture exists for less than their
outstanding principal amount, the certificateholders of that pass through trust
will receive a smaller amount of principal distributions than anticipated and
will not have any claim for the shortfall against us, our parent, any owner
trustee, any owner participant or any pass through trustee. Neither a pass
through trustee nor the holders of certificates will be able to take any action
with respect to any secured promissory notes unless a default has occurred
under the indenture relating to those secured promissory notes.
Following a default under an indenture, all payments received by a pass
through trustee or with respect to secured promissory notes issued under the
indenture, other than scheduled payments received on or within five days of the
date the scheduled payments are due, will be treated as special payments and
deposited in a special payments account. All amounts deposited in the special
payments account will be distributed to the certificateholders on a special
distribution date. The rights of any pass through trustee to receive payments
made on or with respect to any secured promissory note following a default
under any indenture may be limited by intercreditor, subordination or similar
arrangements.
Any funds held in the special payments account for a pass through trust will,
to the extent practicable, be invested and reinvested by the pass through
trustee in permitted short-term investments pending the distribution of those
funds on a special distribution date. Permitted investments will be specified
in the related prospectus supplement.
The Basic Agreement provides that the pass through trustee of each pass
through trust will give to the certificateholders of that pass through trust
notice of all uncured or unwaived defaults known to it with respect to that
pass through trust. The Basic Agreement requires each pass through trustee to
provide the notice of default within 90 days after the occurrence of the
default. However, except in the case of default in the payment of principal,
premium, if any, or interest on any of the secured promissory notes held in a
pass through trust, the pass through trustee will be protected in withholding a
notice of default if it in good faith determines that withholding the notice is
in the interest of the certificateholders. The term "default" as used in this
paragraph means only the occurrence of a default under an indenture with
respect to secured promissory notes held in a pass through trust as described
above, except that in determining whether any default under an indenture has
occurred, any related grace period or notice will be disregarded.
The Basic Agreement requires the pass through trustee to act with a specified
standard of care while a default is continuing under an indenture. In addition,
the Basic Agreement contains a provision entitling the pass through trustee to
be offered reasonable security or indemnification by the certificateholders of
the pass through trust before proceeding to exercise any right or power under
the Basic Agreement at the request of those certificateholders.
The prospectus supplement for a series of certificates will specify the
percentage of certificateholders entitled to waive, or to instruct the pass
through trustee to waive, any past default with respect to the related pass
through trust. The prospectus supplement for a series of certificates also will
specify the percentage of certificateholders entitled to waive, or to instruct
the pass through trustee or the loan trustee to waive, any past default, or
rescind or annul any direction given under any indenture.
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Merger, Consolidation and Transfer of Assets
We will be prohibited from consolidating with or merging into any other
corporation or transferring substantially all of our assets as an entirety to
any other corporation unless:
. the surviving, successor or transferee corporation:
. is validly existing under the laws of the United States or any of
its states;
. is a citizen of the United States (as defined in Title 49 of the
United States Code relating to aviation (the "Transportation Code"))
holding an air carrier operating certificate issued by the Secretary
of Transportation pursuant to Chapter 447 of Title 49, United States
Code, if, and so long as, such status is a condition of entitlement
to the benefits of Section 1110 of the Bankruptcy Code relating to
the rights of creditors of an airline in the event of the airline's
bankruptcy; and
. expressly assumes all of our obligations contained in the Basic
Agreement and any supplement to the Basic Agreement, the note
purchase agreement, any indentures, any participation agreements
and, with respect to aircraft leased by us, the applicable leases;
and
. we have delivered a certificate and an opinion or opinions of counsel
indicating that the transaction, in effect, complies with these
conditions.
Modifications of the Basic Agreement
The Basic Agreement contains provisions permitting us, our parent and the
pass through trustee of each pass through trust to enter into a supplement to
the pass through trust agreement, without the consent of the holders of any of
the certificates issued by a pass through trust in order to do the following,
among others:
. to provide for the formation of a pass through trust and the issuance of
a series of certificates and to set forth the terms of the certificates;
. to evidence the succession of another corporation or entity to us or our
parent and the assumption by that corporation or entity of our or our
parent's obligations under the pass through trust agreement;
. to add to our or our parent's covenants for the benefit of holders of
certificates, or to surrender any right or power in the pass through
trust agreement conferred upon us or our parent;
. to cure any ambiguity or correct or supplement any defective or
inconsistent provision of the pass through trust agreement, so long as
those changes will not materially adversely affect the interests of the
holders of the certificates, or to cure any ambiguity or correct any
mistake or, to give effect to or provide for replacement liquidity
facilities, if applicable, to the certificates;
. to comply with any requirement of the SEC, any applicable law, rules or
regulations of any exchange or quotation system on which any
certificates may be listed or of any regulatory body;
. to modify, eliminate or add to the provisions of the pass through trust
agreement to the extent necessary to continue the qualification of the
pass through trust agreement under the Trust Indenture Act of 1939, and
to add to the pass through trust agreement other provisions as may be
expressly permitted by the Trust Indenture Act excluding, however, the
provisions referred to in section 316(a)(2) of the Trust Indenture Act
as in effect at the date of the Basic Agreement or any corresponding
provision in any similar Federal statute enacted after that date;
. to provide for a successor pass through trustee or to add to or change
any provision of the pass through trust agreement as necessary to
facilitate the administration of the pass through trusts created under
the pass through trust agreement by more than one pass through trustee;
. to provide certain information to the pass through trustee as required
in the pass through trust agreement;
. to release our parent from the Basic Agreement, but only if our parent
has not executed a guarantee in respect of any lease or secured
promissory note; and
. to make any other amendments or modifications to the Basic Agreement so
long as those amendments or modifications apply only to certificates of
a series issued after the date of the amendment or modification.
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No supplement to the pass through trust agreement may be made that will
adversely affect the status of any pass through trust as a grantor trust for
United States federal income tax purposes, without the consent of the
certificateholders.
The Basic Agreement also contains provisions permitting us, our parent and
the pass through trustee of each pass through trust, with the consent of a
majority in interest of the certificateholders of the pass through trust and,
with respect to any aircraft leased by us, with the consent of the applicable
owner trustee, which cannot be unreasonably withheld, to execute a supplement
to the pass through trust agreements adding any provisions to or changing or
eliminating any of the provisions of the Basic Agreement, to the extent
relating to that pass through trust, and the applicable pass through trust
supplement, or modifying the rights of the certificateholders, except that no
supplement may, without the consent of each affected certificateholder:
. reduce in any manner the amount of, or delay the timing of, any receipt
by the pass through trustee of payments on the secured promissory notes
held in the pass through trust or distributions in respect of any pass
through certificate issued by the pass through trust, or change the date
or place of any payment in respect of any pass through certificate, or
make distributions payable in currency other than that provided for in
the certificates, or impair the right of any certificateholder to
institute suit for the enforcement of any payment when due;
. permit the disposition of any secured promissory note held in the pass
through trust, except as provided in the pass through trust agreement,
or otherwise deprive any certificateholder of the benefit of the
ownership of the applicable secured promissory notes;
. reduce the percentage of the aggregate fractional undivided interests of
the pass through trust provided for in the applicable supplement to the
Basic Agreement that is required in order to obtain the consent of the
holders for that supplement or for any waiver provided for in the Basic
Agreement or the supplement;
. modify any of the provisions relating to the rights of the
certificateholders in respect of the waiver of events of default or
receipt of payment except to increase any such percentage or to provide
that certain other provisions of the Basic Agreement and any applicable
supplement cannot be waived or modified without the consent of all
applicable certificateholders;
. alter the priority of distributions described in any applicable
intercreditor agreement, in a manner materially adverse to the interests
of the certificateholders of the pass through trust; or
. adversely affect the status of any pass through trust as a grantor trust
for United States federal income tax purposes.
Modification of Indenture and Related Agreements
The prospectus supplement will specify the pass through trustee's obligations
in the event that a pass through trustee, as the holder of any secured
promissory notes held in a pass through trust, receives a request for its
consent to any amendment, modification or waiver under the indenture under
which the secured promissory notes were issued, under the lease relating to the
aircraft leased by us that was financed with the proceeds of the secured
promissory notes, under any liquidity facility or under other documents
relating to the secured promissory notes.
Cross-Subordination Issues
The secured promissory notes issued under an indenture may be held in more
than one pass through trust, and one pass through trust may hold secured
promissory notes issued under more than one indenture. Unless otherwise
provided in a prospectus supplement, only secured promissory notes of the same
class may be held in the same pass through trust. In this event, payments made
on account of a junior class of certificates issued under a prospectus
supplement may, under circumstances described in the prospectus supplement, be
subordinated to the prior payment of all amounts owing to certificateholders of
a pass through trust that holds a senior class of secured promissory notes
issued under any indenture. The prospectus supplement related to an
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issuance of certificates will describe any cross-subordination provisions and
any related terms, including the percentage of certificateholders under any
pass through trust that is permitted to:
. grant waivers of defaults under any indenture under which secured
promissory notes held by that pass through trust were issued;
. consent to the amendment or modification of any indenture under which
secured promissory notes held by that pass through trust were issued; or
. direct the exercise of remedial actions under any indenture under which
secured promissory notes held by that pass through trust were issued.
Termination of the Pass Through Trusts
The obligations of the parties to each pass through trust agreement will
terminate upon the distribution to certificateholders of that pass through
trust of all amounts required to be distributed to them under the pass through
trust agreement. The pass through trustee will send to each certificateholder
of record of the pass through trust notice of the termination of that pass
through trust, the amount of the proposed final payment and the proposed date
for the distribution of the final payment for that pass through trust. The
final distribution to any certificateholder will be made only upon surrender of
the certificateholder's certificates at the office or agency of the pass
through trustee, paying agent or transfer agent, as specified in the notice of
termination.
Delayed Purchase of Secured Promissory Notes
If all of the proceeds from the sale of the certificates are not used on the
date the certificates are issued to purchase the secured promissory notes
contemplated to be held in the pass through trust that issued those
certificates, the secured promissory notes may be purchased by the pass through
trustee at any time on or prior to the date specified in the applicable
prospectus supplement. In this event, the portion of the proceeds from the sale
of the certificates that are not used to purchase secured promissory notes on
the date the certificates are issued will be held under an arrangement
described in the applicable prospectus supplement pending the purchase of the
secured promissory notes. The arrangements with respect to the payment of
interest on funds held pending purchase of secured promissory notes will also
be described in the applicable prospectus supplement. If any proceeds are not
subsequently used to purchase secured promissory notes by the final date for
purchase of secured promissory notes specified in the applicable prospectus
supplement, the proceeds will be returned to the holders of the certificates.
Liquidity Facility and Other Credit Enhancements
A prospectus supplement may provide that one or more payments of interest to
be paid with respect to the certificates of one or more series will be
supported by a liquidity facility issued by an institution identified in the
related prospectus supplement. The provider of a liquidity facility for the
holders of a series of certificates may have a claim on property of the pass
through trust senior to the claims of the holders of the certificates of that
series as described in the related prospectus supplement. The prospectus
supplement will also specify the circumstances under which a liquidity provider
will be entitled to direct the exercise of remedies under any indenture. The
prospectus supplement will also describe any other credit enhancements, if any,
that may apply to the certificates.
The Pass Through Trustee
Unless otherwise provided in the prospectus supplement for any series of
certificates, the pass through trustee for each series of certificates will be
State Street Bank and Trust Company of Connecticut, National Association. With
certain exceptions as to itself in its individual capacity, the pass through
trustee makes no representations as to the validity or sufficiency of the Basic
Agreement, the pass through trust supplements, the
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certificates, the secured promissory notes, the indentures, the leases or other
related documents. The pass through trustee will not be liable with respect to
any series of certificates for any action taken or omitted to be taken by it in
good faith in accordance with the direction of the holders of a majority in
face amount of outstanding certificates of that series issued under the Basic
Agreement. Subject to those provisions, the pass through trustee will be under
no obligation to exercise any of its rights or powers under the Basic Agreement
at the request of any holders of certificates issued under the Basic Agreement
unless they have offered to the pass through trustee indemnity satisfactory to
it. The Basic Agreement provides that the pass through trustee in its
individual or any other capacity may acquire and hold certificates issued under
the Basic Agreement and may, in accordance with the Basic Agreement, otherwise
deal with us and, with respect to the aircraft leased by us, any owner trustee
with the same rights it would have if it were not the pass through trustee.
The pass through trustee may resign with respect to any or all of the pass
through trusts at any time, in which event we will be obligated to appoint a
successor pass through trustee. If the pass through trustee ceases to be
eligible to continue as pass through trustee with respect to a pass through
trust or becomes incapable of acting as pass through trustee or becomes
insolvent, we may remove that pass through trustee, or any certificateholder of
the applicable pass through trust for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the pass through trustee and the appointment of
a successor pass through trustee. Any resignation or removal of the pass
through trustee with respect to a pass through trust and appointment of a
successor pass through trustee for the pass through trust does not become
effective until acceptance of the appointment by the successor pass through
trustee. Under these resignation and successor pass through trustee provisions,
it is possible that a different pass through trustee could be appointed to act
as the successor pass through trustee with respect to each pass through trust.
All references in this prospectus to the pass through trustee should be read to
take into account the possibility that the pass through trusts could have
different successor pass through trustees in the event of a resignation or
removal.
The Basic Agreement provides that we will pay the pass through trustee's fees
and expenses and indemnify the pass through trustee against certain
liabilities.
Book-Entry Registration
General
Unless otherwise specified in the applicable prospectus supplement, the
certificates will be subject to the procedures and provisions described below.
Upon issuance, each series of certificates will be represented by one or more
fully registered global certificates. This means that one physical certificate
or a number of physical certificates representing all of the certificates will
be registered with the Depository Trust Company ("DTC"). Each global
certificate will be deposited with, or on behalf of, DTC and registered in the
name of Cede & Co. ("Cede"), the nominee of DTC. Certificateholders will not be
entitled to receive a physical certificate representing an interest in its
certificates, except as set forth below under "--Physical Certificates". Unless
and until physical certificates are issued under the limited circumstances
described below, all references in this prospectus and any prospectus
supplement to actions by certificateholders will refer to actions taken by DTC
upon instructions from DTC participants, and all references to distributions,
notices, reports and statements to certificateholders will refer, as the case
may be, to distributions, notices, reports and statements to DTC or Cede, as
the registered holder of the certificates, or to DTC participants for
distribution to certificateholders in accordance with DTC procedures.
DTC has advised us that DTC is a limited purpose trust company organized
under the laws of the State of New York, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New
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York Uniform Commercial Code and "clearing agency" registered pursuant to
Section 17A of the Securities Exchange Act of 1934.
Under the New York Uniform Commercial Code, a "clearing corporation" is
defined as:
. a person that is registered as a "clearing agency" under the federal
securities laws;
. a federal reserve bank; or
. any other person that provides clearance or settlement services with
respect to financial assets that would require it to register as a
clearing agency under the federal securities laws but for an exclusion
or exemption from the registration requirement, if its activities as a
clearing corporation, including promulgation of rules, are subject to
regulation by a federal or state governmental authority.
A "clearing agency" is an organization established for the execution of
trades by transferring funds, assigning deliveries and guaranteeing the
performance of the obligations of parties to trades.
DTC was created to hold securities for its participants and to facilitate the
clearance and settlement of securities transactions between DTC participants
through electronic book-entry changes in the accounts of DTC participants. The
ability to execute transactions through book-entry changes in accounts
eliminates the need for transfer of physical certificates. DTC participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of DTC
participants and by the New York Stock Exchange, the American Stock Exchange,
and the National Association of Securities Dealers. Banks, brokers, dealers,
trust companies and other entities that clear through or maintain a custodial
relationship with a DTC participant either directly or indirectly have indirect
access to the DTC system.
Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers of the
certificates among DTC participants on whose behalf it acts with respect to the
certificates and to receive and transmit distributions of principal, premium,
if any, and interest with respect to the certificates. DTC participants and
indirect DTC participants with which certificateholders have accounts similarly
are required to make book-entry transfers and receive and transmit such
payments on behalf of their respective customers. Certificateholders that are
not DTC participants or indirect DTC participants but desire to purchase, sell
or otherwise transfer ownership of, or other interests in, the certificates may
do so only through DTC participants and indirect DTC participants. In addition,
certificateholders will receive all distributions of principal, premium, if
any, and interest from the pass through trustee through DTC participants or
indirect DTC participants, as the case may be. Under a book-entry format,
certificateholders may experience some delay in their receipt of payments
because payments with respect to the certificates will be forwarded by the pass
through trustee to Cede, as nominee for DTC. We expect DTC to forward payments
in same-day funds to each DTC participant who is credited with ownership of the
certificates in an amount proportionate to the principal amount of that DTC
participant's holdings of beneficial interests in the certificates, as shown on
the records of DTC or its nominee. We also expect that DTC participants will
forward payments to indirect DTC participants or certificateholders, as the
case may be, in accordance with standing instructions and customary industry
practices. DTC participants will be responsible for forwarding distributions to
certificateholders. Accordingly, although certificateholders will not possess
physical certificates, DTC's rules provide a mechanism by which
certificateholders will receive payments on the certificates and will be able
to transfer their interests.
Unless and until physical certificates are issued under the limited
circumstances described below, the only physical certificateholder will be
Cede, as nominee of DTC. Certificateholders will not be recognized by the pass
through trustee as registered owners of certificates under the pass through
trust agreement. Certificateholders will be permitted to exercise the rights
under the pass through trust agreement only indirectly through DTC and DTC
participants. DTC has advised us that it will take any action permitted to be
taken by a certificateholder under the pass through trust agreement only at the
direction of one or more DTC participants to whose accounts with DTC the
certificates are credited. Additionally, DTC has advised us that in the event
any action requires approval by certificateholders of a certain percentage of
the beneficial interests in a pass through trust, DTC will take such action
only at the direction of and on behalf of DTC participants whose
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holdings include undivided interests that satisfy any such percentage. DTC may
take conflicting actions with respect to other undivided interests to the
extent that such actions are taken on behalf of DTC participants whose holdings
include those undivided interests. DTC will convey notices and other
communications to DTC participants, and DTC participants will convey notices
and other communications to indirect DTC participants and to certificateholders
in accordance with arrangements among them. Arrangements among DTC and its
direct and indirect participants are subject to any statutory or regulatory
requirements as may be in effect from time to time. DTC's rules applicable to
itself and DTC participants are on file with the SEC.
A certificateholder's ability to pledge the certificates to persons or
entities that do not participate in the DTC system, or otherwise to act with
respect to such certificates may be limited due to the lack of a physical
certificate to evidence ownership of the certificates and because DTC can only
act on behalf of DTC participants, who in turn act on behalf of indirect DTC
participants.
None of us, our parent or the pass through trustees will have any liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests in the certificates held by Cede, as nominee for
DTC, for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests or for the performance by DTC, any DTC
participant or any indirect DTC participant of their respective obligations
under the rules and procedures governing their obligations.
The applicable prospectus supplement will specify any additional book-entry
registration procedures applicable to certificates denominated in a currency
other than United States dollars.
The information contained in this prospectus concerning DTC and its book
entry system has been obtained from sources we believe to be reliable, but we
take no responsibility for the accuracy thereof.
Same-Day Settlement and Payment
As long as the certificates are registered in the name of DTC or its nominee,
we will make all payments under any lease or any owned aircraft indenture in
immediately available funds. The pass through trustees will pass through to DTC
all payments received from us, including the final distribution of principal
with respect to the certificates of any pass through trust in immediately
available funds.
Any certificates registered in the name of DTC or its nominee will trade in
DTC's Same-Day Funds Settlement System until maturity. DTC will require
secondary market trading activity in the certificates to settle in immediately
available funds. We cannot give any assurance as to the effect, if any, of
settlement in same-day funds on trading activity in the certificates.
Physical Certificates
Physical certificates will be issued in paper form to certificateholders or
their nominees, rather than to DTC or its nominee, only if:
. we advise a pass through trustee in writing that DTC is no longer
willing or able to discharge properly its responsibilities as depository
with respect to the certificates and we or the pass through trustee is
unable to locate a qualified successor;
. we elect to terminate the book-entry system through DTC; or
. after the occurrence of certain events of default or other events
specified in the related prospectus supplement, certificateholders
owning at least a majority in interest in a pass through trust advise
the applicable pass through trustee, us and DTC through DTC participants
that the continuation of a book-entry system through DTC participants is
no longer in the certificateholders' best interest.
If physical certificates are to be issued by a pass through trust, the
applicable pass through trustee will notify all certificateholders through DTC
of the availability of physical certificates. Upon surrender by DTC of
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certificates representing the global physical certificates and receipt of
instructions for re-registration, the pass through trustee will reissue the
certificates as physical certificates to certificateholders.
After physical certificates are issued, the pass through trustee or a paying
agent will make distributions of principal, premium, if any, and interest with
respect to certificates directly to holders in whose names the physical
certificates were registered at the close of business on the applicable record
date. Except for the final payment to be made with respect to a certificate,
the pass through trustee or a paying agent will make distributions by check
mailed to the addresses of the registered holders as they appear on the
register maintained by the pass through trustee. The pass through trustee or a
paying agent will make the final payment with respect to any pass through
certificate only upon presentation and surrender of the applicable pass through
certificate at the office or agency specified in the notice of final
distribution to certificateholders.
Physical certificates will be freely transferable and exchangeable at the
office of the pass through trustee upon compliance with the requirements set
forth in the pass through trust agreement. Neither the pass through trustee nor
any transfer or exchange agent will impose a service charge for any
registration of transfer or exchange. However, the pass through trustee or
transfer or exchange agent will require payment of a sum sufficient to cover
any tax or other governmental charge.
DESCRIPTION OF THE SECURED PROMISSORY NOTES
The statements made under this caption are summaries of terms that we expect
will be common to all secured promissory notes. Where no distinction is made
between the leased aircraft notes and the owned aircraft notes or between their
respective indentures, the statements refer to all secured promissory notes and
all indentures. Most of the financial and other specific terms of any series of
secured promissory notes will be described in a prospectus supplement to be
attached to this prospectus. Since the terms of the secured promissory notes
may differ from the general information provided below, you should rely on the
information in the prospectus supplement instead of the information in this
prospectus if the information in the prospectus supplement is different from
the information below.
The following information is a summary and does not describe every aspect of
the secured promissory notes. The summary is subject to all the provisions of
the applicable secured promissory notes, indentures, leases, note purchase
agreements, pass through trust agreements, participation agreements,
intercreditor and subordination agreements, liquidity facilities and other
agreements and arrangements relating to any series of secured promissory notes.
Additional provisions with respect to the secured promissory notes and the
associated aircraft financing transactions will be described in the applicable
prospectus supplement. To the extent that any provision in any prospectus
supplement is inconsistent with any provisions in this summary, the provision
of the prospectus supplement will control.
General
The secured promissory notes will be issued under indentures. Promissory
notes secured by an aircraft that is leased to us will be non-recourse and will
be issued under an indenture between an owner trustee and a loan trustee.
Promissory notes secured by an aircraft that is owned by us will be recourse to
us and will be issued under an indenture between a loan trustee and us.
The leased aircraft notes will be non-recourse obligations of the applicable
owner trustee. All of the leased aircraft notes issued under the same indenture
will relate to and will be secured by one or more specific aircraft leased to
us. Unless otherwise specified in the applicable prospectus supplement, leased
aircraft notes will not be secured by any other aircraft.
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We will be the issuer of owned aircraft notes. The owned aircraft notes will
be our direct recourse obligations. All of the owned aircraft notes issued
under the same indenture will relate to, and will be secured by, one or more
specific aircraft that we own. Unless otherwise specified in the applicable
prospectus supplement, the owned aircraft notes will not be secured by any
other aircraft.
If specified in a prospectus supplement, we will have the right (a) to
arrange a sale and leaseback of one or more aircraft that we own referred to in
the prospectus supplement and the assumption, on a non-recourse basis, of the
related owned aircraft notes by an owner trustee or (b) to substitute other
aircraft, cash or U.S. government securities or a combination thereof in place
of the aircraft that we own securing the related owned aircraft notes. The
terms and conditions of any sale and leaseback or aircraft substitution will be
described in the applicable prospectus supplement.
If specified in a prospectus supplement, one of our affiliates may act as an
owner participant in a leveraged lease transaction. If one of our affiliates
acts as owner participant, it may transfer its interest in the owner trust to a
third party at any time during the term of the lease. In connection with that
transfer, the lease and other documents may be amended and the secured
promissory notes issued under the applicable indenture may be amended or
refinanced.
Principal and Interest Payments
The secured promissory notes will bear interest at the rates set forth in the
applicable indenture. We expect that the rates set forth in the applicable
indenture for each series of secured promissory notes will be the same rate as
the annual rate for the certificates issued by the pass through trust that
purchases that series of secured promissory notes. Interest on the secured
promissory notes will be payable by the issuer of those secured promissory
notes on each day that is a regular distribution date for the certificates
issued by the pass through trust that purchases those secured promissory notes.
The issuer of any series of secured promissory notes will repay principal in
accordance with the schedule set forth in the applicable prospectus supplement.
The principal amortization schedule for each individual aircraft financing will
vary to reflect the economic terms of the individual financing.
If any date scheduled for any payment of principal, premium, if any, or
interest with respect to a secured promissory note is not a business day, the
payment will be made on the next succeeding business day without any additional
interest, unless otherwise provided in the applicable prospectus supplement.
Redemption
The applicable prospectus supplement will describe the circumstances under
which the secured promissory notes may be redeemed or purchased prior to their
stated maturity date, in whole or in part. In addition, the prospectus
supplement will describe the premium, if any, applicable upon redemptions or
purchases and other terms applying to the redemptions or purchases of the
secured promissory notes.
Security
The leased aircraft notes will be secured by:
. an assignment by the related owner trustee to the related loan trustee
of that owner trustee's rights, except for certain rights described
below, under the lease or leases or other agreements with respect to the
related aircraft leased by us, including the right to receive payments
of rent under the applicable lease; and
. a mortgage granted to the related loan trustee in the aircraft financed
by the issue of those leased aircraft notes, subject to our rights under
the lease or leases relating to that aircraft and other property rights,
if any, described in the applicable prospectus supplement.
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With respect to the leased aircraft, the assignment by the related owner
trustee to the related loan trustee of its rights under the related lease will
exclude, among other things:
. rights of the owner trustee and the related owner participant to
indemnification by us for certain matters;
. insurance proceeds payable to the owner trustee in its individual
capacity and to the owner participant under liability insurance that we
maintain pursuant to the lease or that the owner trustee or the owner
participant maintains;
. insurance proceeds payable to the owner trustee or to the owner
participant under certain casualty insurance maintained by the owner
trustee or the owner participant pursuant to the lease; and
. any rights of the owner participant or the owner trustee to enforce
payment of the foregoing amounts and their respective rights to the
proceeds of the foregoing indemnification and insurance.
In addition, the assignment will be limited to provide that, unless and until
a default occurs and is continuing under an indenture with respect to a leased
aircraft, the related loan trustee may exercise only limited rights of the
related owner trustee under the related lease.
All of the leases will be net leases. Under a net lease, we are obligated,
among other things and at our expense, to cause each aircraft leased by us to
be duly registered, to pay all costs of operating the aircraft and to maintain,
service, repair and overhaul, or cause to be maintained, serviced, repaired and
overhauled, the aircraft.
Unless otherwise specified in the applicable prospectus supplement, the
secured promissory notes will not be cross-collateralized and consequently the
secured promissory notes issued in respect of any one aircraft will not be
secured by any other aircraft or, in the case of leased aircraft notes, the
lease related to any other aircraft.
The owned aircraft notes will be secured by a mortgage granted to the related
loan trustee of all of our right, title and interest in and to the applicable
aircraft owned by us. Under the terms of each owned aircraft indenture, we will
be obligated, among other things and at our expense, to cause each owned
aircraft to be duly registered, to pay all costs of operating the aircraft and
to maintain, service, repair and overhaul, or cause to be maintained, serviced,
repaired or overhaul, the aircraft.
The prospectus supplement will describe the required insurance coverage with
respect to the aircraft financed with the proceeds from the pass through
certificates issued.
Except in certain circumstances, we will keep each aircraft registered under
the Transportation Code. In addition, we will record the indentures, the leases
and other documents necessary for a valid conveyance of an interest in the
aircraft under the Transportation Code. Each indenture will be effective to
create a valid security interest in the aircraft that is subject to that
indenture. When that indenture and other appropriate documents are filed with
the FAA in accordance with the Transportation Code and uniform commercial code
financing statements are filed in all appropriate jurisdictions, the loan
trustee will have a perfected security interest in the related aircraft
whenever it is located in the United States or any of its territories and
possessions.
The Convention on the International Recognition of Rights in aircraft (the
"Convention") provides that this security interest will also be recognized,
with certain limited exceptions, in those jurisdictions that have ratified or
adhere to the Convention. We will have the right, subject to certain
conditions, at our own expense to register each aircraft in countries other
than the United States. Each aircraft may also be operated by us or under
lease, sublease or interchange arrangements in countries that are not parties
to the Convention. The extent to which the related loan trustee's security
interest would be recognized in an aircraft located in a country that is not a
party to the Convention, and the extent to which such security interest would
be recognized in a jurisdiction adhering to the Convention if the aircraft is
registered in a jurisdiction not a party to the Convention, is uncertain.
Moreover, in the case of a default under an indenture, the ability of the
related loan trustee to realize upon its security interest in an aircraft could
be adversely affected as a legal or practical matter if such aircraft is
registered or located outside the United States.
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The loan trustee will invest and reinvest funds, if any, held by it from time
to time under an indenture. The loan trustee will, at our direction, invest and
reinvest funds, in certain investments described in the applicable indenture.
We will not be entitled to direct the loan trustee to invest and reinvest funds
with respect to a leased aircraft, in the case of a default under the
applicable lease or, with respect to an owned aircraft, in the case of a
default under the applicable indenture. We will pay the net amount of any loss
resulting from these investments.
Section 1110 of the U.S. Bankruptcy Code provides in relevant part that,
unless certain events occur after the commencement of a Chapter 11 case, the
right of lessors, conditional vendors and holders of security interests with
respect to equipment (as defined in Section 1110 of the U.S. Bankruptcy Code
and described below) to take possession of such equipment in compliance with
the provisions of a lease, conditional sale contract or security agreement, as
the case may be, is not affected by:
. the automatic stay provision of the U.S. Bankruptcy Code, which
provision prevents repossessions by creditors for the duration of the
reorganization period;
. the provision of the U.S. Bankruptcy Code allowing the trustee in
reorganization to use property of the debtor during the reorganization
period;
. Section 1129 of the U.S. Bankruptcy Code (which governs the confirmation
of plans of reorganization in Chapter 11 cases); or
. any power of the bankruptcy court to prevent a repossession.
Specifically, Section 1110 provides in relevant part that the right of a
lessor, conditional vendor or holder of a security interest to take possession
of an aircraft upon an event of default may not be exercised for 60 days
following the date of commencement of the reorganization proceedings (unless
specifically permitted by the bankruptcy court) and may not be exercised at all
if, within such 60-day period (or such longer period consented to by the
lessor, conditional vendor or holder of a security interest), the trustee in
reorganization agrees to perform the debtor's obligations that become due on or
after such date and cures all existing defaults (other than defaults resulting
solely from the financial condition, bankruptcy, insolvency or reorganization
of the debtor). "Equipment" is defined in Section 1110 of the U.S. Bankruptcy
Code, in part, as an aircraft, aircraft engine, propeller, appliance, or spare
part (as defined in Section 40102 of Title 49 of the U.S. Code) that is subject
to a security interest granted by, leased to, or conditionally sold to a debtor
that is a citizen of the United States (as defined in Section 40102 of Title 49
of the U.S. Code) holding an air carrier operating certificate issued by the
Secretary of Transportation pursuant to chapter 447 of Title 49 of the U.S.
Code for aircraft capable of carrying 10 or more individuals or 6,000 pounds or
more of cargo (subject to certain limitations in the case of equipment first
placed in service on or prior to October 22, 1994).
It will be a condition to the pass through trustee's obligation to purchase
secured promissory notes with respect to each aircraft that our outside counsel
provide its opinion to the pass through trustee that (a) if the aircraft is a
leased aircraft, the owner trustee, as lessor under the lease for that
aircraft, and the loan trustee, as assignee of such owner trustee's rights
under the lease pursuant to the applicable indenture, will be entitled to the
benefits of Section 1110 of the U.S. Bankruptcy Code with respect to the
airframe and engines comprising that aircraft or (b) if that aircraft is an
owned aircraft, the loan trustee will be entitled to the benefits of Section
1110 with respect to the airframe and engines comprising such owned aircraft,
in each case as long as we continue to be a citizen of the United States as
defined in Section 40102 of Title 49 of the U.S. Code holding an air carrier
operating certificate issued by the Secretary of Transportation pursuant to
Chapter 447 of Title 49 of the U.S. Code for aircraft capable of carrying 10 or
more individuals or 6,000 pounds or more of cargo. This Section 1110 opinion
will not address the possible replacement of an aircraft after an "Event of
Loss", as defined in the applicable indenture, in the future.
Ranking of Secured Promissory Notes
Some of the secured promissory notes related to one or more aircraft may be
subordinated and junior in right of payment to other secured promissory notes
related to the same aircraft. The terms of any subordination will be described
in the related prospectus supplement.
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Payments Under Leases and Limitation of Liability
We will lease each leased aircraft from an owner trustee for a term
commencing on the delivery date of the aircraft to the owner trustee and
expiring no earlier than the latest maturity date of the related leased
aircraft notes, unless previously terminated as permitted by the terms of the
related lease. We will make basic rent and other payments under each lease and
the related documents to an owner trustee, as lessor. The owner trustee will
assign all payments of basic rent and certain other payments to the related
loan trustee. The loan trustee will, on behalf of the owner trustee, apply the
funds assigned to it under the related indenture to pay scheduled principal of,
premium, if any, and interest due from such owner trustee on the leased
aircraft notes issued under the related indenture. The balance of any basic
rent or other assigned amount under each lease and related documents, after
payment of amounts due on the leased aircraft notes issued under the related
indenture, will be paid over to the applicable owner trustee. In certain cases,
the basic rent and other payments under a lease may be adjusted, but each lease
will provide that under no circumstances will total payments by us be less than
the scheduled payments on the related leased aircraft notes. In some cases, an
owner participant may be required to make payments to an owner trustee that are
to be used by the owner trustee to pay principal of, and interest on, the
secured promissory notes. If an owner participant is required to make payments
to be used by an owner trustee to pay principal of, and interest on, the
secured promissory notes and the owner participant fails to make the payment,
we will be required to provide the owner trustee with funds sufficient to make
the payment. Our obligations to pay rent and to cause other payments to be made
under each lease and related documents will be general unsecured obligations.
Except in circumstances in which we purchase a leased aircraft and assume the
related leased aircraft notes, the leased aircraft notes will not be
obligations of, or guaranteed by, us or our parent. None of the owner trustees,
the owner participants or the loan trustees will be personally liable to any
holder of leased aircraft notes for amounts payable under the leased aircraft
notes. Except as provided in the indentures relating to the leased aircraft
notes, no owner trustee or loan trustee will be liable or incur any liability
under the indentures. Except when we have assumed any leased aircraft notes and
except when an owner participant provides funds to be used by an owner trustee
to pay principal of, or interest on, the secured promissory notes, all amounts
payable under any leased aircraft notes will be made only from:
. the assets subject to the lien of the applicable indenture with respect
to the aircraft or the income and proceeds received by the related loan
trustee from that aircraft (including assigned rent payable by us under
the related lease);
. if so provided in the related prospectus supplement, the applicable
liquidity facility; or
. payments made in connection with optional redemptions or purchases by
the related owner trustee or the related owner participant.
If an owner participant is required to make payments to be used by an owner
trustee to pay principal of, and interest on, the secured promissory notes and
the owner participant fails to make the payment, we will be required to provide
the owner trustee with funds sufficient to make the payment.
Except as otherwise provided in the applicable indenture, no owner trustee
will be personally liable for any amount payable or for any statements,
representations, warranties, agreements or obligations under any indenture or
under any leased aircraft notes except for its own willful misconduct or gross
negligence. In general, none of the owner participants will have any duty or
responsibility under the leased aircraft indentures or under the leased
aircraft notes.
Our obligations under each owned aircraft indenture and under the owned
aircraft notes will be secured obligations.
Defeasance of the Indentures and the Secured Promissory Notes in Certain
Circumstances
Unless otherwise specified in the applicable prospectus supplement, an
indenture may provide that the obligations of the related loan trustee, the
related owner trustee or us, as the case may be, under that indenture
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will be deemed to have been discharged and paid in full on the 91st day after
the date that money or certain United States government securities, in an
aggregate amount sufficient to pay when due (including as a consequence of
redemption in respect of which notice is given on or prior to the date of such
deposit) principal, premium and interest with respect to all secured promissory
notes issued under that indenture, are irrevocably deposited with the related
loan trustee. The discharge may occur only if, among other things, there has
been published by the IRS a ruling or regulation to the effect that holders of
the secured promissory notes will not recognize income, gain or loss for
federal income tax purposes as a result of the deposit, defeasance and
discharge and will be subject to federal income tax on the same amount and in
the same manner and at the same time as would have been the case if the
deposit, defeasance and discharge had not occurred. Certain obligations,
including the obligations to register the transfer or exchange of secured
promissory notes, to replace stolen, lost, destroyed or mutilated secured
promissory notes and to maintain paying agencies and hold money for payment in
trust may not be defeased.
Upon defeasance of the secured promissory notes, or upon payment in full of
the principal of, premium, if any, and interest on all secured promissory notes
issued under any indenture on the applicable maturity date, or upon deposit
with the applicable loan trustee of sufficient money no earlier than one year
prior to the date of such maturity, the holders of the secured promissory notes
will have no beneficial interest in or other rights with respect to the related
aircraft or other assets subject to this lien of the indenture and the lien
will terminate.
Assumption of Obligations by US Airways
Unless otherwise specified in the applicable prospectus supplement, upon our
purchase of any leased aircraft prior to the end of the applicable term, we may
assume on a full recourse basis all of the obligations of the owner trustee,
other than its obligations in its individual capacity, under the indenture and
the leased aircraft notes relating to that lease. If we assume leased aircraft
notes, provisions relating to maintenance, possession and use of the related
aircraft, liens and insurance will be incorporated into the indenture. If we
assume leased aircraft notes in connection with our purchase of a leased
aircraft, leased aircraft notes issued under the indenture will not be redeemed
and will continue to be secured by the aircraft. We may not assume leased
aircraft notes unless, among other things, we have provided an opinion of
counsel to the effect that:
. the loan trustee will be entitled to the benefits of Section 1110 of the
U.S. Bankruptcy Code, except that the opinion need only be given if,
immediately prior to the assumption, the owner trustee would have been
entitled to the benefits of Section 1110; and
. holders of the secured promissory notes being assumed will not recognize
income, gain or loss for federal income tax purposes as a result of the
assumption and will be subject to federal income tax on the same amount
and in the same manner and at the same time as would have been the case
if the assumption had not occurred.
Parent Guarantee
Our parent may guarantee the full and prompt payment of any or all amounts
payable or provided by us under the leases and other agreements related to a
series of certificates and the full and prompt payment by us of principal of,
premium, if any, and interest on owned aircraft notes related to a series of
certificates. Any guarantee will be described in the prospectus supplement
relating to the series of certificates issued by a pass through trust that owns
the leased aircraft notes or owned aircraft notes and will indirectly or
directly benefit from this guarantee. Unless otherwise stated in the applicable
prospectus supplement, we anticipate that this guarantee:
. will be unconditional;
. will be enforceable without any need first to enforce any lease or owned
aircraft note against us; and
. will be an unsecured obligation of our parent.
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Intercreditor Issues
Secured promissory notes may be issued in different classes, which means that
the secured promissory notes may have different payment priorities even though
they are issued by the same borrower, relate to the same aircraft and are
issued under the same indenture. If multiple classes of secured promissory
notes are issued, the related prospectus supplement will describe the priority
of distributions among the secured promissory notes, the ability of any class
to exercise and/or enforce any or all remedies with respect to the related
aircraft, and, if the secured promissory notes are leased aircraft notes, the
related lease, and other intercreditor terms and provisions.
Owner Participant; Revisions to Agreements
If specified in the applicable prospectus supplement, at the time
certificates are issued, we may still be seeking owner participants to invest
in certain leveraged lease transactions for the aircraft. The prospective owner
participants may request revisions to the forms of participation agreement,
lease, trust agreement and indenture so that the terms of the agreements
applicable to these aircraft may differ from the description of the agreements
contained in the applicable prospectus supplement.
The terms of those agreements, however, will be required to:
. contain certain mandatory document terms; or
. not vary certain mandatory economic terms.
In addition, we will be obligated:
. to certify to the pass through trustee that the modifications will not
materially and adversely affect the certificateholders; and
. if the forms of documents are modified in any material respect that is
adverse to the certificateholders, to obtain written confirmation from
each rating agency that the use of modified versions of such agreements
will not result in a withdrawal, suspension or downgrading of the rating
of any class of certificates.
U.S. INCOME TAX MATTERS
General
The following summary describes the material U.S. federal income tax
consequences to certificateholders of the purchase, ownership and disposition
of the certificates offered by this prospectus and in the opinion of Skadden,
Arps, Slate, Meagher & Flom LLP, tax counsel to US Airways, is accurate in all
material respects with respect to the matters discussed in this prospectus.
Except as otherwise specified, the summary is addressed to the initial
beneficial owners of certificates that are citizens or residents of the United
States, corporations, partnerships or other entities created or organized in or
under the laws of the United States or any state therein, or estates, the
income of which is subject to U.S. federal income taxation regardless of its
source, or trusts if a court within the U.S. is able to exercise primary
jurisdiction over the administration of the trust and one or more U.S. persons
have the authority to control all substantial decisions of the trust that will
hold the certificates as capital assets. This summary does not address the tax
treatment of U.S. certificateholders that may be subject to special tax rules,
for example, banks or insurance companies, nor does it address the tax
treatment of U.S. certificateholders that do not acquire certificates at the
initial offering price as part of the initial offering. This summary is not a
comprehensive description of all of the tax considerations that may be relevant
to a decision to purchase certificates. It does not describe any tax
consequences arising under the laws of any state, locality or taxing
jurisdiction other than the United States.
The summary is based on laws, regulations, rulings and decisions in effect on
the date of this prospectus. Changes to existing law could have a retroactive
effect and could alter the tax consequences discussed below. No rulings have
been sought from the IRS with respect to the federal income tax consequences,
discussed
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below, and no assurances can be given that the IRS will not take contrary
positions. The pass through trusts are not indemnified for any federal income
taxes that may be imposed upon them, and the imposition of those taxes on a
pass through trust could result in a reduction in the amounts available for
distribution to the certificateholders of that pass through trust. Prospective
investors should consult their own tax advisors with respect to the federal,
state, local and foreign tax consequences to them of the purchase, ownership
and disposition of the certificates.
Tax Treatment of the Pass Through Trusts and Certificateholders
Each pass through trust will not itself be subject to U.S. federal income
taxation. Each U.S. certificateholder will be required to report on its federal
income tax return its pro rata share of the entire income from the secured
promissory notes and any other property held in the related pass through trust,
in accordance with the U.S. certificateholder's method of accounting.
Accordingly, each U.S. certificateholder's share of interest paid on the
secured promissory notes will be taxable as ordinary income, as it is paid or
accrued, and a U.S. certificateholder's share of any premium paid on redemption
of a secured promissory note will be treated as capital gain. If the proceeds
from the sale of certificates are invested with a depositary or held pursuant
to an escrow arrangement prior to the purchase of secured promissory notes by a
pass through trust, the resulting deposits may be subject to the original issue
discount rules, with the result that a U.S. certificateholder may be required
to include interest income from that deposit under the accrual method of
accounting regardless of its normal method. If certificates issued by a pass
through trust are supported by a liquidity facility, any amounts received by
the pass through trust under the liquidity facility for unpaid interest will be
treated for U.S. federal income tax purposes as having the same characteristics
as the payments they replace.
Each U.S. certificateholder will be entitled to deduct, consistent with its
method of accounting, its pro rata share of fees and expenses paid or incurred
by the corresponding pass through trust as provided in Section 162 or 212 of
the Internal Revenue Code of 1986, referred to as the Code. Certain fees and
expenses, including fees paid to the pass through trustee and the provider of
the liquidity facility, if applicable, will be paid by parties other than the
certificateholders. These fees and expenses could be treated as constructively
received by the pass through trust, in which event a U.S. certificateholder
could be required to include in income and entitled to deduct its pro rata
share of the fees and expenses. If a U.S. certificateholder is an individual,
estate or trust, the deduction for the certificateholder's share of fees or
expenses will be allowed only to the extent that all of the certificateholder's
miscellaneous itemized deductions, including the certificateholder's share of
fees and expenses, exceed 2% of the certificateholder's adjusted gross income.
In addition, in the case of U.S. certificateholders who are individuals,
certain otherwise allowable itemized deductions will be subject generally to
additional limitations on itemized deductions under applicable provisions of
the Code.
Effect of Subordination on Certificateholders of Subordinated Trusts
In the event that any pass through trust is subordinated in right of payment
to any other pass through trust and the subordinated trust receives less than
the full amount of the interest, principal or premium paid with respect to the
secured promissory notes held by it because of the subordination of the pass
through trust, the certificateholders of the subordinated trust would probably
be treated for federal income tax purposes as if they had (a) received as
distributions their full share of principal, interest, or premium, (b) paid
over to a preferred class of certificateholders an amount equal to their share
of the amount of the shortfall, and (c) retained the right to reimbursement of
the amount of the shortfall to the extent of future amounts payable to the
certificateholders of the subordinated trust on account of the shortfall.
Under this analysis, (a) subordinated certificateholders incurring a
shortfall would be required to include as current income any interest or other
income of the subordinated trust that was a component of the shortfall, even
though such amount was in fact paid to a preferred class of certificateholders,
(b) a loss would only be allowed to subordinated certificateholders when their
right to receive reimbursement of the shortfall becomes worthless (i.e., when
it becomes clear that funds will not be available from any source to reimburse
the shortfall), and (c) reimbursement of the shortfall prior to a claim of
worthlessness would not be taxable income to certificateholders because the
amount reimbursed would have been included in income. These results should
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not significantly affect the inclusion of income for certificateholders on the
accrual method of accounting, but could accelerate inclusion of income to
certificateholders on the cash method of accounting by, in effect, placing them
on the accrual method.
Original Issue Discount
The secured promissory notes may be issued with original issue discount
("OID"). The prospectus supplement will state whether any secured promissory
notes to be held by the related pass through trust will be issued with OID.
Generally, a holder of a debt instrument issued with OID that is not negligible
must include such OID in income for federal income tax purposes as it accrues,
in advance of the receipt of the cash attributable to this income, under a
method that takes into account the compounding of interest.
Sale or Other Disposition of the Certificates
Upon the sale, exchange or other disposition of a certificate, a U.S.
certificateholder generally will recognize capital gain or loss equal to the
difference between the amount realized on the sale or exchange (other than any
amount attributable to accrued interest which will be taxable as ordinary
income) and the U.S. certificateholder's adjusted tax basis in the secured
promissory notes and other property held by the corresponding pass through
trust. Any gain or loss will be long-term capital gain or loss to the extent
attributable to property held by the pass through trust for more than one year.
In the case of individuals, estates, and trusts, the maximum U.S. federal
income tax rate on long-term capital gains generally is 20%. In the event that
the proceeds from the sale of certificates are invested with a depositary or
held pursuant to an escrow arrangement prior to the purchase of secured
promissory notes by a pass through trust, any gain with respect to an interest
in the resulting deposits likely will be treated as ordinary income.
Foreign Certificateholders
Under present U.S. federal income tax law, assuming certain certification
requirements are satisfied (which include identification of the beneficial
owner of a certificate), and subject to the discussion of backup withholding
below:
. interest paid (including any OID) on a certificate to, or on behalf of,
any beneficial owner of a certificate that is not a U.S. person will not
be subject to U.S. federal income tax or withholding tax provided that
(a) the non-U.S. certificateholder does not actually or constructively
own 10% or more of the total combined voting power of all classes of
stock of an owner participant or us, (b) the non-U.S. certificateholder
is not (A) a bank receiving interest pursuant to a loan agreement
entered into in the ordinary course of its trade or business, or (B) a
controlled foreign corporation for U.S. tax purposes that is related to
an owner participant or us, and (c) the interest payments are not
effectively connected with the non-U.S. certficateholder's conduct of a
U.S. trade or business; and
. a non-U.S. certificateholder will not be subject to U.S. federal income
tax on any capital gain realized on the sale, exchange or other
disposition of a certificate, unless (a) the non-U.S. certificateholder
is an individual who is present in the United States for 183 days or
more during the taxable year of the sale or exchange and certain other
requirements are met or (b) the gain is effectively connected with the
non-U.S. certificateholder's conduct of a U.S. trade or business.
The certification referred to above may be made on an IRS Form W-8 or
substantially similar substitute form.
Information Reporting and Backup Withholding
In general, information reporting requirements will apply to certain payments
within the United States of principal, interest, OID and premium on the
certificates, and to payments of the proceeds of certain sales of
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certificates made to U.S. certificateholders other than certain exempt
recipients (such as corporations). A 31% backup withholding tax may apply to
the payments if the holder fails or has failed to provide an accurate taxpayer
identification number or otherwise establish an exemption or fails to report in
full interest income. With respect to non-U.S. certificateholders, payments
made on a certificate and proceeds from the sale of a certificate owned by a
non-U.S. certificateholder will generally not be subject to information
reporting requirements or the backup withholding tax if the non-U.S.
certificateholder provides the required certification of its non-U.S. status or
otherwise establishes an exemption.
Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules will be allowed as a refund or credit against the
certificateholder's U.S. federal income tax liability, if any, provided the
required information is furnished to the IRS.
The Treasury Department recently issued final regulations governing backup
withholding and information reporting requirements. The regulations do not
significantly alter the substantive withholding and information reporting
requirements discussed above; they unify current certification procedures and
forms and clarify reliance standards. The regulations will generally become
effective for payments made after December 31, 2000.
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable prospectus supplement, the
certificates may, subject to certain legal restrictions, be purchased and held
by an employee benefit plan subject to Title I of the Employee Retirement
Income Security Act of 1974, referred to as ERISA, or an individual retirement
account or an employee benefit plan subject to section 4975 of the Code. A
fiduciary of an employee benefit plan must determine that the purchase and
holding of a certificate is consistent with its fiduciary duties under ERISA
and does not result in a non-exempt prohibited transaction as defined in
section 406 of ERISA or section 4975 of the Code. Employee benefit plans which
are governmental plans, as defined in section 3(32) of ERISA, and certain
church plans, as defined in section 3(33) of ERISA, are not subject to Title I
of ERISA or section 4975 of the Code. The certificates may, subject to certain
legal restrictions, be purchased and held by such plans.
PLAN OF DISTRIBUTION
Certificates may be sold to one or more underwriters for public offering and
sale by them to investors or other persons directly or through one or more
dealers or agents. Any underwriter, dealer or agent involved in the offer and
sale of the certificates will be named in an applicable prospectus supplement.
The certificates may be sold from time to time in one or more transactions at
a fixed price or prices, which may be changed, at market prices prevailing at
the time of sale, at prices based on the prevailing market prices or at
negotiated prices. Dealer trading may take place in certain of the
certificates, including certificates not listed on any securities exchange. We
do not intend to apply for listing of the certificates on a national securities
exchange. We also may, from time to time, authorize underwriters acting as our
agents to offer and sell the certificates upon the terms and conditions as will
be set forth in any prospectus supplement. In connection with the sale of
certificates, underwriters may be deemed to have received compensation from us
in the form of underwriting discounts or commissions and may also receive
commissions from purchasers of certificates for whom they may act as agent.
Underwriters may sell certificates to or through dealers, and dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or commissions (which may be changed from time to time)
from the purchasers for whom they may act as agent.
If a dealer is used directly by us in the sale of certificates in respect of
which this prospectus is delivered, the certificates will be sold to the
dealer, as principal. The dealer may then resell the certificates to the public
at varying prices to be determined by the dealer at the time of resale. Any
dealer used directly by us and the terms of any sale to that dealer will be set
forth in the related prospectus supplement.
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Certificates may be offered and sold through agents designated by us from
time to time. Any agent involved in the offer or sale of the certificates in
respect of which this prospectus is delivered will be named in, and any
commissions payable by us to that agent will be set forth in, the applicable
prospectus supplement. Unless otherwise indicated in the applicable prospectus
supplement, that agent will be acting on a best efforts basis for the period of
its appointment.
We may directly solicit offers to purchase certificates and sales under those
offerings may be made by us directly to institutional investors or others who
may be deemed to be underwriters within the meaning of the Securities Act of
1933 with respect to any resale of the certificates. We will describe the terms
of these sales will be described in the prospectus supplement. Except as set
forth in the applicable prospectus supplement, none of our directors, officers
or employees will solicit or receive a commission in connection with our direct
sales of the certificates, although those persons may respond to inquiries by
potential purchasers and perform ministerial and clerical work in connection
with any direct sales.
Any underwriting compensation that we pay to underwriters, dealers or agents
in connection with the offering of certificates, and any discounts, concessions
or commissions that underwriters allow to participating dealers, will be set
forth in an applicable prospectus supplement. Underwriters, dealers and agents
participating in the distribution of the certificates may be deemed to be
underwriters, and any discounts and commissions received by them and any profit
realized by them on resale of the certificates may be deemed to be underwriting
discounts and commissions under the Securities Act. We may indemnify
underwriters, dealers and agents against certain civil liabilities, including
liabilities under the Securities Act. We may reimburse underwriters, dealers
and agents for expenses incurred in connection with the offer or sale of
certificates.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, us, our parent and our subsidiaries and affiliates in the
ordinary course of business.
If so indicated in an applicable prospectus supplement and subject to
existing market conditions, we will authorize dealers acting as our agents to
solicit offers by certain institutions to purchase certificates at the public
offering price set forth in the prospectus supplement pursuant to delayed
delivery contracts providing for payment and delivery on the date or dates
stated in that prospectus supplement. Each contract will be for an amount not
less than, and the aggregate principal amount of certificates sold pursuant to
contracts will be equal to, the respective amounts stated in that prospectus
supplement. Institutions with whom contracts, when authorized, may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and other
institutions, in all cases be subject to our approval. Contracts will not be
subject to any conditions except that the purchase by an institution of the
certificates covered by its contracts will not at the time of delivery be
prohibited under the laws of any jurisdiction in the United States to which
that institution is subject. A commission indicated in the applicable
prospectus supplement will be granted to underwriters and agents soliciting
purchases of certificates pursuant to contracts accepted by us. Agents and
underwriters will have no responsibility in respect of the delivery or
performance of contracts.
If any underwriter is utilized in the sale of any certificates, the
applicable prospectus supplement will contain a statement as to the intention,
if any, of the underwriter at the date of the prospectus supplement to make a
market in the certificates. No assurances can be given that there will be a
market for the certificates.
The place and time of delivery for the certificates in respect of which this
prospectus is delivered will be set forth in the applicable prospectus
supplement.
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SELLING CERTIFICATEHOLDERS
Certificates issued pursuant to this prospectus may be reoffered pursuant to
this prospectus by the holders of certificates, from time to time, in
transactions on the open market, in negotiated transactions, through the
writing of options on the certificates or through a combination of these
methods of sale, at negotiated prices, fixed prices that may be changed, market
prices prevailing at the time of sale or prices relating to the prevailing
market prices. The selling certificateholders may effect these transactions by
selling the certificates to or through broker-dealers, and the broker-dealers
may receive compensation in the form of discounts, concessions or commissions
from the selling certificateholders, the purchasers of certificates for whom
the broker-dealer may act as agent or to whom they may sell as principal or
both. We will not receive any part of the proceeds from the resale by the
selling certificateholders of any certificates pursuant to this prospectus.
Unless otherwise provided in the applicable prospectus supplement, we will bear
all expenses, other than selling discounts and commissions and fees and
expenses of the selling certificateholders, in connection with the registration
of the certificates being reoffered by the selling certificateholders.
The identity of the selling certificateholders, the number of certificates
sold by the selling certificateholders and the price per certificate will be
determined at the time of the consummation of the particular transaction.
Specific information regarding the transaction, the identity of the selling
certificateholders and the number of certificates to be resold may be provided
at the time of the applicable transaction by means of a supplement or a post-
effective amendment to this prospectus, as applicable.
The selling certificateholders and any broker-dealers who act in connection
with the sale of those certificates may be deemed to be an "underwriter" within
the meaning of Section 2(11) of the Securities Act, and any commissions
received by them and profit on any resale of those certificates as principal
may be deemed to be underwriting discounts and commissions under the Securities
Act. We intend to make available public information concerning ourself in
compliance with the Securities Act and the related regulations and,
accordingly, Rule 144 or Rule 145 under the Securities Act may be available for
use by holders of certificates to effect transfers of those securities, subject
to compliance with the remaining provisions of those rules.
LEGAL OPINIONS
Unless otherwise indicated in the applicable prospectus supplement, Skadden,
Arps, Slate, Meagher & Flom (Illinois) and its affiliates will render an
opinion with respect to the validity of the securities being offered by this
prospectus. Unless otherwise indicated in the applicable prospectus supplement,
Skadden, Arps, Slate, Meagher & Flom (Illinois) and its affiliates will rely on
the opinion of counsel for the pass through trustee as to certain matters
relating to the authorization, execution and delivery of the certificates by,
and the valid and binding effect on, the pass through trustee.
EXPERTS
The consolidated financial statements of US Airways and its subsidiary and US
Airways Group and its subsidiaries as of December 31, 1998 and 1997, and for
each of the years in the three-year period ended December 31, 1998 that are
included in US Airways' and US Airways Group's combined Annual Report on Form
10-K for the year ended December 31, 1998, have been incorporated by reference
in the registration statement in reliance upon the reports of KPMG LLP,
independent certified public accountants, incorporated by reference, and upon
the authority of KPMG LLP as experts in accounting and auditing.
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WHERE YOU CAN FIND MORE INFORMATION
We and our parent file annual, quarterly and special reports, proxy
statements and other information with the SEC under the Securities Exchange Act
of 1934. You may read and copy this information at the following locations of
the SEC:
Judiciary Plaza, Seven World Trade Center, Citicorp Center
450 Fifth Street, N.W. Suite 1300 500 West Madison Street,
Washington, D.C. 20549 New York, NY 10048 Suite 1400
Chicago, IL 60661
You may also obtain copies of this information by mail from the Public
Reference Room of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. You may obtain information on the operation of the Public
Reference Room by calling the SEC at (800) SEC-0330.
The SEC also maintains an internet world wide web site that contains reports,
proxy statements and other information about issuers, like us, who file
electronically with the SEC. The address of that site is http://www.sec.gov.
You may also inspect reports, proxy statements and other information about us
at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York,
New York 10005.
We and our parent have filed jointly with the SEC a registration statement on
Form S-3 that registers the securities and guarantees we are offering. The
registration statement, including the attached exhibits and schedules, contains
additional relevant information about us, our parent and the securities
offered. The rules and regulations of the SEC allow us to omit certain
information included in the registration statement from this prospectus.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference information into this
prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The
information incorporated by reference is considered to be part of this
prospectus, except for any information that is superseded by information that
is included directly in this document.
This prospectus includes by reference the documents listed below that we and
our parent previously have filed with the SEC and that are not included in or
delivered with this document. They contain important information about our
company and its financial condition.
<TABLE>
<CAPTION>
Filing Period
- ------ ------
<S> <C>
Annual Report on Form 10-K Year ended December 31, 1998
Quarterly Report on Form 10-Q Quarter ended March 31, 1999
Current Reports on Form 8-K Filed January 21, 1999
Filed March 5, 1999
Filed March 30, 1999
Filed April 9, 1999
Filed April 21, 1999
Filed May 18, 1999
Filed June 4, 1999
Filed June 8, 1999
Filed July 14, 1999
Filed July 21, 1999
</TABLE>
We incorporate by reference additional documents that we and our parent may
file with the SEC between the date of this prospectus and the date of the
closing of each offering. These documents include periodic reports, such as
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K, as well as proxy statements.
You may obtain any of these documents from us without charge, excluding any
exhibits to those documents unless the exhibit is specifically incorporated by
reference as an exhibit to this prospectus. You may obtain documents
incorporated by reference in this prospectus by requesting them in writing or
by telephone from us at the following address:
Secretary
US Airways, Inc.
2345 Crystal Drive
Arlington, Virginia 22227
(703) 872-7000.
37
<PAGE>
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses in connection with this offering, other than
underwriting discounts and commissions, are:
<TABLE>
<S> <C>
Securities and Exchange Commission registration filing fee....... $ 263,480
Printing and engraving expenses.................................. 600,000*
Pass through trustee fees and expenses........................... 60,000*
Accounting fees and expenses..................................... 225,000*
Rating Agency fees............................................... 750,000*
Legal fees and expenses.......................................... 750,000*
----------
Total.......................................................... $2,648,480
==========
</TABLE>
- --------
* Estimates
Item 15. Indemnification of Directors and Officers
The Company's and US Airways Group's respective Restated Certificate of
Incorporation and By-laws provide that the Company and US Airways Group, will
indemnify their respective directors, officers and employees, and will have the
power to indemnify their respective other agents, to the full extent permitted
by the General Corporation Law of the State of Delaware (the "GCL"), as amended
from time to time (but, in the case of any such amendment, only to the extent
that such amendment permitted the Company and US Airways Group, respectively,
to provide on June 29, 1989). As of the date of the Prospectus, Section 145 of
the GCL, forming a part of this Registration Statement, provides as follows:
(a) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation)
by reason of the fact that the person is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by the person in connection with such action,
suit or proceeding if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe the person's conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a manner
which the person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that the person's conduct was
unlawful.
(b) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred
by the person in connection with the defense or settlement of such action or
suit if the person acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the corporation and
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation
II-1
<PAGE>
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, such person shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section (unless
ordered by a court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the present or
former director, officer, employee or agent is proper in the circumstances
because the person has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made, with
respect to a person who is a director or officer at the time of such
determination, (1) by a majority vote of the directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or (2) by a
committee or such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion, or (4)
by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative, or investigative action, suit
or proceeding may be paid by the corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking
by or on behalf of such director or officer to repay such amount if it shall
ultimately be determined that such person is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses (including
attorneys' fees) incurred by former directors and officers or other employees
and agents may be so paid upon such terms and conditions, if any, as the
corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other subsections of this section will not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against such
person and incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the corporation would have the power to
indemnify such person against such liability under this section.
(h) For purposes of this section, references to the corporation shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so
that any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, will stand
in the same position under this section with respect to the resulting or
surviving corporation as such person would have with respect to such
constituent corporation if its separate existence had continued.
(i) For purposes of this section, references to other enterprises shall
include employee benefit plans; references to fines shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to serving at the request of the corporation shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee,
or agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who
II-2
<PAGE>
acted in good faith and in a manner such person reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner not opposed to the best interests of
the corporation as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or granted
pursuant to, this section shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to
hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligation to advance expenses (including attorneys'
fees).
The Company maintains directors' and officers' liability insurance.
Item 16. Exhibits
Reference is made to the Exhibit Index which immediately precedes the
exhibits filed with this Registration Statement, which is incorporated herein
by reference.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the Calculation of Registration Fee table in
the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that the undertakings made in paragraphs (i) and (ii)
above do not apply if the information required by those paragraphs to be
included in a post-effective amendment is contained in periodic reports
filed with or furnished to the Securities and Exchange Commission by the
registrants pursuant to Section 13 or Section 15 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933 each such post-effective amendment will be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
II-3
<PAGE>
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement will be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time will be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Arlington, State of Virginia, on August 19, 1999.
US AIRWAYS GROUP, INC.
/s/ Rakesh Gangwal
By: _________________________________
Rakesh Gangwal, Director,
President and Chief Executive
Officer (Principal Executive
Officer)
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities indicated,
on August 19, 1999.
/s/ Rakesh Gangwal
By: ______________________________________
Rakesh Gangwal, Director, President and
Chief Executive Officer
(Principal Executive Officer)
/s/ Thomas A. Mutryn
By: ______________________________________
Thomas A. Mutryn
Senior Vice President--Finance and Chief
Financial Officer (Principal Financial
Officer)
/s/ Anita P. Beier
By: ______________________________________
Anita P. Beier
Vice President and Controller (Principal
Accounting Officer)
/s/ Stephen M. Wolf
By: ______________________________________
Stephen M. Wolf,
Director and Chairman
*
By: ______________________________________
Mathias J. DeVito, Director
*
By: ______________________________________
Peter M. George, Director
*
By: ______________________________________
Robert L. Johnson, Director
*
By: ______________________________________
Robert LeBuhn, Director
*
By: ______________________________________
John G. Medlin, Jr., Director
II-5
<PAGE>
*
By: ______________________________________
Hanne M. Merriman, Director
*
By: ______________________________________
Thomas H. O'Brien, Director
*
By: ______________________________________
Hilda Ochoa-Brillembourg, Director
*
By: ______________________________________
Richard B. Priory, Director
*
By: ______________________________________
Raymond W. Smith, Director
- --------
/s/ Thomas A. Mutryn
By: ______________________________________
Thomas A. Mutryn, Attorney-In-Fact
* Signed pursuant to power of attorney filed on June 2, 1999.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Arlington, State of Virginia, on August 19, 1999.
US AIRWAYS, INC.
/s/ Rakesh Gangwal
By: _________________________________
Rakesh Gangwal, Director,
President and Chief Executive
Officer (Principal Executive
Officer)
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities indicated,
on August 19, 1999.
/s/ Rakesh Gangwal
By: ______________________________________
Rakesh Gangwal, Director, President and
Chief Executive Officer (Principal
Executive Officer)
/s/ Thomas A. Mutryn
By: ______________________________________
Thomas A. Mutryn
Senior Vice President--Finance and Chief
Financial Officer (Principal Financial
Officer)
/s/ Anita P. Beier
By: ______________________________________
Anita P. Beier
Vice President and Controller (Principal
Accounting Officer)
/s/ Stephen M. Wolf
By: ______________________________________
Stephen M. Wolf,
Director and Chairman
*
By: ______________________________________
Mathias J. DeVito, Director
*
By: ______________________________________
Peter M. George, Director
*
By: ______________________________________
Robert L. Johnson, Director
*
By: ______________________________________
Robert LeBuhn, Director
*
By: ______________________________________
John G. Medlin, Jr., Director
II-7
<PAGE>
*
By: ______________________________________
Hanne M. Merriman, Director
*
By: ______________________________________
Thomas H. O'Brien, Director
*
By: ______________________________________
Hilda Ochoa-Brillembourg, Director
*
By: ______________________________________
Richard B. Priory, Director
*
By: ______________________________________
Raymond W. Smith, Director
- --------
/s/ Thomas A. Mutryn
By: ______________________________________
Thomas A. Mutryn, Attorney-In-Fact
* Signed pursuant to power of attorney filed on June 2, 1999.
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
----------- ----------------------
<C> <S>
4.1 Form of Pass Through Trust Agreement*
4.2 Form of Pass Through Certificate (included as part of Exhibit
4.1)*
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom (Illinois)*
5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP*
12 Statements re: computations of ratios*
23.1 Consent of KPMG LLP**
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom (Illinois)
(included in its opinion filed as
Exhibit 5.1)*
23.3 Consent of Skadden, Arps, Slate, Meagher & Flom LLP*
23.4 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in
its opinion filed as
Exhibit 5.2)*
24 Powers of Attorney*
25 Form T-1 Statement of Eligibility of Trustee under the Trust
Indenture Act of Trustee*
</TABLE>
- --------
*Previously filed.
**Filed herewith.
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
The Board of Directors
US Airways Group, Inc.
US Airways, Inc.:
We consent to the use of our report dated February 24, 1999 incorporated herein
by reference and to the reference to our firm under the heading "Experts" in the
prospectus.
/s/ KPMG LLP
Washington, DC
August 19, 1999
