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United - US Airways Cooperation

Fri Jul 26, 2002 12:53 am

US Airways Continues Restructuring Efforts; Announces Marketing Agreement
With United Airlines
ARLINGTON, Va., July 24 /PRNewswire-FirstCall/ -- US Airways President and
CEO David Siegel today announced that US Airways has reached an agreement on
a marketing alliance with United Airlines. Since receiving conditional
approval for a federal loan guarantee and reaching tentative agreements with
several employee groups, the code sharing agreement is the latest of several
steps the airline has taken to implement a financial restructuring and new
business plan.

"A marketing agreement has always been a vital piece of our plan, and it was
a key component of the loan guarantee application conditionally approved by
the Air Transportation Stabilization Board," said Siegel. "Finalizing labor
agreements and negotiating with lenders and lessors remain the critical
elements of our restructuring, while this alliance will provide our airline
with the revenue and marketing enhancements that are already enjoyed by our

Siegel said that he could not predict when US Airways' restructuring efforts
would be concluded, but that the agreement takes into account either a
negotiated restructuring of US Airways or one supervised under a Chapter 11

The agreement will be submitted to the U.S. Department of Transportation.
Once implemented, US Airways and United passengers will be able to:

* Access US Airways' network in the Eastern U.S. and the Caribbean, but
also now enjoy significantly easier access to cities in the West,
Europe and Asia served by United

* Make connections between both airlines on a single reservation
new streamlined ticketing, baggage handling, and check-in procedures

* Earn and redeem frequent flyer miles on each other's airline

* Use each airline's airport lounges if they are already a member of

"We have repeatedly said a marketing agreement should significantly boost
our revenues by giving us reach to more markets and enabling us to offer our
customers more choices and greater convenience," said Siegel. "As
demonstrated by similar agreements between other airlines, an expanded
network and the traffic feed from United will provide us with more
passengers, higher load factors and more revenue. Since our restructuring
plan involves strategic steps to increase revenues to allow us to become
profitable and to repay the federal loan guarantee, we believe it is
critical that we implement proven business initiatives like this one in
order to accomplish those objectives."

Siegel noted that marketing alliances have been a proven means to boosting
revenue in the industry. "The industry trend has been to broaden competition
to include not just airline-versus-airline competition, but broader
alliance- versus-alliance competition as well. In the past, US Airways lost
business to competitors because we lacked domestic and international scope
and marketing partners who can feed traffic onto our network."

US Airways and United will remain separate competing companies with separate
schedules, pricing, and sales functions. In addition, unlike some existing
airline alliances, there is no equity ownership element between US Airways
and United. The two airlines will independently set prices and establish
schedules, and they will continue to compete on all routes served by one

Posts: 7108
Joined: Tue Oct 09, 2001 12:22 am

RE: United - US Airways Cooperation

Fri Jul 26, 2002 1:24 am

Delta will not like this!
"We must accept finite disappointment, but never lose infinite hope." - Martin Luther King, Jr.

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