US Airways 8-K Results of Operations and Financial Condition

EXHIBIT 99.1

INVESTOR RELATIONS UPDATE
January 6, 2010

General Comments

•

Fleet \ Liquidity Changes — On November 24, 2009 the Company announced that it had restructured its existing aircraft delivery schedule. The Company’s actions included the deferral of 54 Airbus aircraft previously scheduled for delivery between 2010 and 2012 that are now to be delivered in 2013 and beyond. The Company will take delivery of two A320 and two A330 aircraft in 2010 and an additional 24 A320 family aircraft in 2011 and 2012 (12 in the second half of 2011 and 12 in the second half of 2012). These deferrals will not significantly alter the airline’s capacity plans as aircraft originally scheduled to be replaced will be retained until the rescheduled new aircraft delivery dates.

These deferral arrangements will reduce the Company’s aircraft capital expenditures over the next three years by approximately $2.5 billion, and reduce near- and medium-term obligations to Airbus and others by approximately $132 million.

•

2009 Capacity Guidance —For 2009, domestic mainline capacity was down approximately eight percent while total mainline capacity was down approximately five percent. Express capacity was down approximately four percent.

US Airways entered into a term sheet to sell 10 of its Embraer 190 aircraft to Republic Airline Inc. As of November 24, 2009, all of the 10 aircraft sales have been completed. US Airways will lease back eight of the 10 aircraft from Republic for periods ranging from one to seven months. The impact to mainline capacity was immaterial for 2009. The Company continues to evaluate other options for the remaining 15 Embraer 190 aircraft. In addition, the Company expects to incur a non-operating special charge (non-cash) of approximately $49 million related to this transaction.

• Cash —As of September 30, 2009, the Company had approximately $2.0 billion in total cash and investments, of which $0.5 billion was restricted. In addition, as of September 30, 2009, the Company’s Auction Rate Securities had a book value of $228 million ($411 million par value). While these securities are held as investments in non-current marketable securities on our balance sheet, they are included in our unrestricted cash calculation. During the third quarter, the Company completed an underwritten public stock offering, which included the sale of 29 million shares of common stock at a price of $4.75 per share. The net proceeds from this transaction after transaction costs, were approximately $137 million and are included in the total cash and investments balance reported above. The Company expects to end the fourth quarter with approximately $2.0 billion in total cash and investments, of which $0.5 billion is restricted.

• Fuel —The Company’s legacy fuel hedge positions are now closed and the Company has not entered into any new hedge contracts since the third quarter, 2008. For the fourth quarter 2009, the Company anticipates paying between $2.03 and $2.08 per gallon of jet fuel (including taxes). Forecasted volume and fuel prices are provided in the table below.

• Profit Sharing / CASM —Profit sharing equals 10% of pre-tax earnings excluding special items up to a 10% pre-tax margin and 15% above the 10% margin. Profit sharing is excluded in the CASM guidance given below.

• Cargo / Other Revenue — cargo revenue, ticket change fees, excess / overweight baggage fees, first and second bag fees, contract services, simulator rental, airport clubs, Materials Services Company (MSC), and inflight service revenues. The Company’s a la carte revenue initiatives are expected to generate in excess of $400 million in revenue in 2009.

• Taxes / NOL —As of December 31, 2008, the Company had approximately $1.4 billion of gross net operating loss carryforwards to reduce federal taxable income, substantially all of which are available to reduce taxable income in 2009. In the first nine months of 2009, the Company recognized a tax loss, which increased Federal NOL available to approximately $2.2 billion as of September 30, 2009.

The Company’s net deferred tax asset, which includes the NOL, is subject to a full valuation allowance. As a result, income tax benefits are not recognized in the Company’s statement of operations. Future utilization of the NOL will result in a corresponding decrease in the valuation allowance and offset the Company’s tax provision dollar for dollar. As of September 30, 2009 the Company’s federal valuation allowance is $595 million and the state valuation allowance is $88 million.

The Company reported a loss in the nine months ended September 30, 2009 and did not recognize a tax provision in this period. To the extent profitable for the full year 2009, the Company will use NOL to reduce federal and state taxable income. The Company does not expect to be subject to AMT liability in 2009; however, it could be obligated to record and pay state income tax related to certain states where NOL may be limited or not available to be used.

Please refer to the footnotes and the forward looking statements page of this document for additional information

MAINLINE UPDATE
January 6, 2010

Mainline Comments

• Mainline data includes US Airways operated flights and all operating expenses are for mainline operated flights only. Please refer to the following page for information pertaining to Express.

	1Q09A			2Q09A			3Q09A			4Q09E	FY09E
Mainline Guidance
Available Seat Miles (ASMs) (bil)		17.0			18.3			18.7		~16.7	~70.7
CASM ex fuel, special items & profit sharing (YOY % change)1		8.63			8.14			8.06		+1% to +3%	-1% to +1%
Cargo Revenues ($ mil)		24			20			23		~25	~90
Other Revenues		269			272			277		~280	~1,095
Fuel Price (incl hedges and taxes) ($/gal) (as of 12/30/09)		2.23			2.07			2.07		2.03 to 2.08	2.08 to 2.13
Fuel Gallons Consumed (mil)		258			278			282		~254	~1,072
Percent Hedged										—	18%
Weighted Avg. Heating Oil Collar Range ($/gal)										—	3.41 to 3.61
Weighted Avg. Jet Fuel Equivalent (incl, transport, and refining margin) ($/gal)										—	3.46 to 3.66
Weighted Avg. Estimated Crude Oil Equivalent ($/bbl)										—	134 to 142
Estimated Jet Fuel Price Assumption (unhedged, incl transport) ($/gal)										~1.97	~1.67
Impact of Fuel Hedges (Gains)/Losses ($/gal)		0.76			0.49			0.18		—	~0.36
Interest Expense ($ mil)		71			77			81		~84	~313
Interest Income ($ mil)		(6	)		(6	)		(5	)	~(7)	~(24)
Other Non-Operating (Income) / Expense ex special items ($ mil)2		6			(9	)		7		~7	~12

	1Q09A			2Q09A			3Q09A			4Q09E	FY09E
Cash Flow / Capital Update ($ mil) Inflow/(Outflow)
Cash Capex (non-aircraft)		(35	)		(43	)		(24	)	~(23)	~(125)
Net aircraft Capex (A320/A321/A330 Acquisition)		(11	)		(73	)		(37	)	~(72)	~(193)
Net Other Cash Flow Adjustments3		60			217			82		~69	~428

Notes:
1.	CASM ex fuel, special items & profit sharing is a non-GAAP financial measure. Please see the GAAP to non-GAAP reconciliation at the end of this document.
2.	Other Non-Operating (Income) / Expense ex special items include primarily gains and losses from foreign currency and the disposition of assets.
3.	Includes equity issuance, debt issuance, debt principal repayment, and non-cash bond discount amortization / interest deferrals (included in interest expense).

Please refer to the footnotes and the forward looking statements page of this document for additional information

EXPRESS UPDATE
January 6, 2010

Express Comments

• US Airways Express is a network of eight regional airlines (2 wholly owned) operating under code share and service agreements with US Airways. All operating expenses (including purchase agreements) associated with US Airways Express are included within the Express Non-Fuel Operating Expense line item on our income statement.

	1Q09A		2Q09A		3Q09A		4Q09E	FY09E
Express Guidance
Available Seat Miles (ASMs) (bil)		3.5		3.7		3.8	~3.4	~14.4
CASM ex fuel (YOY % change)1		13.93		13.05		12.76	+4% to +6%	+3% to +5%
Fuel Price (incl taxes) ($/gal)		1.51		1.67		1.93	2.08 to 2.13	1.78 to 1.83
Fuel Gallons Consumed (mil)		81		87		89	~83	~339
Express Carriers
Air Wisconsin Airlines Corporation	Piedmont Airlines, Inc.2
Chautauqua Airlines, Inc.	PSA Airlines, Inc.2
Colgan Air, Inc.4	Republic Airways
Mesa Airlines3	Trans States Airlines, Inc. 4

Notes:

1.	CASM ex fuel expense is a non-GAAP financial measure. Please see the GAAP to non-GAAP reconciliation at the end of this document.
2.	Wholly owned subsidiary of US Airways Group, Inc.
3.	Subsidiary of Mesa Air Group, Inc.
4.	Pro-rate agreement.

Please refer to the footnotes and the forward looking statements page of this document for additional information

FLEET UPDATE
January 6, 2010

Fleet Comments

• On November 24, 2009 the Company announced that it had restructured its existing aircraft delivery schedule. The Company’s actions included the deferral of 54 Airbus aircraft previously scheduled for delivery between 2010 and 2012 that are now to be delivered in 2013 and beyond. The Company will take delivery of two A320 and two A330 aircraft in 2010 and an additional 24 A320 family aircraft in 2011 and 2012 (12 in the second half of 2011 and 12 in the second half of 2012). These deferrals will not significantly alter the airline’s capacity plans as aircraft originally scheduled to be replaced will be retained until the rescheduled new aircraft delivery dates.

• US Airways entered into a term sheet to sell 10 of its Embraer 190 aircraft to Republic Airline Inc. As of November 24, 2009, all of the 10 aircraft sales have been completed. US Airways will lease back eight of the 10 aircraft from Republic for periods ranging from one to seven months. The impact to mainline capacity was immaterial for 2009. The Company continues to evaluate other options for the remaining 15 Embraer 190 aircraft.

Mainline Fleet Update (End of Period)

	YE08A		YE09A		1Q10E		2Q10E		3Q10E		4Q10E
Mainline
EMB-190		25		19		17		15		15		15
737-300		30		24		24		24		20		20
737-400		40		40		40		40		40		40
A319		93		93		93		93		93		93
A320		75		70		72		72		72		72
A321		33		51		51		51		51		51
A330		9		14		16		16		16		16
B757		39		28		24		24		23		23
B767		10		10		10		10		10		10
Total		354		349		347		345		340		340

Express Fleet Update (End of Period)

	YE08A		YE09A		1Q10E		2Q10E		3Q10E		4Q10E
Express
DH8		61		50		50		50		50		50
CRJ-200		116		114		113		113		112		112
CRJ-700		14		14		14		14		14		14
CRJ-900		38		38		38		38		38		38
EMB-170		20		20		20		20		20		20
ERJ-145		9		9		9		9		9		9
EMB-175		38		38		38		38		38		38
Total		296		283		282		282		281		281

Please refer to the footnotes and the forward looking statements page of this document for additional information

SHARES OUTSTANDING
January 6, 2010

• The weighted average shares outstanding for fourth quarter and full year 2009 are listed in the table below.

Shares Outstanding ($ and shares mil)	Basic		Diluted		Interest Addback
For Q4
Earnings above $180 million		161.1		201.9	$	8.6
Earnings between $24 million and $180 million		161.1		198.9	$	5.7
Earnings up to $24 million		161.1		161.1		—
Net Loss		161.1		161.1		—
Full Year 2009
Earnings above $548 million		133.0		160.0	$	25.0
Earnings between $78 million and $548 million		133.0		157.0	$	14.1
Earnings up to $78		133.0		133.0		—
Net Loss		133.0		133.0		—

Shares outstanding are based upon several estimates and assumptions, including average per share stock price, stock options, stock appreciation rights, restricted stock unit award activity, and conversion of outstanding senior convertible notes. The number of shares in the actual calculation of earnings per share will likely be different from those set forth above.

Please refer to the footnotes and the forward looking statements page of this document for additional information

GAAP to Non-GAAP RECONCILIATION
January 6, 2010

Reconciliation of GAAP to Non-GAAP Financial Information

US Airways Group, Inc. (the “Company”) is providing disclosure of the reconciliation of reported non-GAAP financial measures to their comparable financial measures on a GAAP basis. The Company believes that the non-GAAP financial measures provide investors the ability to measure financial performance excluding special items, which is more indicative of the Company’s ongoing performance and is more comparable to measures reported by other major airlines. The Company believes that the presentation of mainline CASM excluding fuel, special items & profit sharing and Express CASM excluding fuel is useful to investors as both the cost and availability of fuel are subject to many economic and political factors beyond the Company’s control.

This update contains forward-looking statements that are not limited to historical facts, but reflect the Company’s current beliefs, expectations or intentions regarding future events. All forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. For examples of such risks and uncertainties, please see the risk factors set forth in the Company’s Form 10-Q for the quarter ended September 30, 2009, and its other securities filings, including any amendments thereto, which identify important matters such as the consequences of fuel costs, labor costs, competition, and industry conditions, including the demand for air travel, the airline pricing environment and industry capacity decisions, regulatory matters and the seasonal nature of the airline business. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this update.

	GAAP to Non-GAAP Reconciliation ($mil except ASM and CASM data)
	1Q09		2Q09			3Q09		4Q09 Range				FY09 Range
	Actual		Actual			Actual		Low		High		Low		High
Mainline
Mainline Operating Expenses	$	1,876	$	1,911		$	2,059	$	1,948	$	1,989	$	7,749	$	7,880
Less Mainline Fuel (net of (gains)/losses from fuel hedges)		405		419			536		516		528		1,876		1,888
Less Special Charges		6		1			15		—		—		22		22
Mainline Operating Expense excluding fuel, special items, and profit sharing		1,465		1,491			1,508		1,432		1,460		5,851		5,970
Mainline CASM (GAAP) (cts)		11.05		10.44			11.00		11.66		11.91		10.96		11.15
Mainline CASM excluding fuel, special items, and profit sharing (Non-GAAP) (cts)		8.63		8.14			8.06		8.57		8.74		8.28		8.44
Mainline ASMs (bil)		17.0		18.3			18.7		16.7		16.7		70.7		70.7
Express
Express Operating Expenses	$	604	$	625		$	654	$	625	$	638	$	2,507	$	2,548
Less Express Fuel Expense		123		145			171		173		177		612		616
Express Operating Expenses excluding Fuel		481		480			483		452		461		1,896		1,932
Express CASM (GAAP) (cts)		17.48		16.99			17.27		18.38		18.76		17.41		17.69
Express CASM Excluding Fuel(Non-GAAP) (cts)		13.93		13.05			12.76		13.30		13.56		13.16		13.42
Express ASMs (bil)		3.5		3.7			3.8		3.4		3.4		14.4		14.4
Other Non Operating (Income)/Expense
Reported Other Non-Operating (Income)/Expense	$	13	$	(7	)	$	10	$	—	$	—	$	16	$	16
Less Special Charges		7		2			3		—		—		12		12
Other Non-Operating (Income)/Expense excluding special items		6		(9	)		7		—		—		4		4

Note: Amounts may not recalculate due to rounding

Please refer to the footnotes and the forward looking statements page of this document for additional information

FORWARD LOOKING STATEMENTS
January 6, 2010

FORWARD-LOOKING STATEMENTS

Certain of the statements contained herein should be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” “could,” “should,” and “continue” and similar terms used in connection with statements regarding the outlook, expected fuel costs, revenue and pricing environment, and expected financial performance of US Airways Group (the “Company”). Such statements regarding future financial and operating results, the Company’s plans, objectives, expectations and intentions, and other statements that are not historical facts. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties that could cause the Company’s actual results and financial position to differ materially from these statements. Such risks and uncertainties include, but are not limited to, the following: the impact of future significant operating losses; the impact of economic conditions and their impact on passenger demand and related revenues; a reduction in the availability of financing, changes in prevailing interest rates and increased costs of financing; the Company’s high level of fixed obligations and the ability of the Company to obtain and maintain any necessary financing for operations and other purposes and operate pursuant to the terms of its financing facilities (particularly the financial covenants); the impact of fuel price volatility, significant disruptions in fuel supply and further significant increases to fuel prices; the ability of the Company to maintain adequate liquidity; labor costs, relations with unionized employees generally and the impact and outcome of the labor negotiations, including the ability of the Company to complete the integration of the labor groups of the Company and America West Holdings; reliance on vendors and service providers and the ability of the Company to obtain and maintain commercially reasonable terms with those vendors and service providers; reliance on automated systems and the impact of any failure or disruption of these systems; the impact of the integration of the Company’s business units; the impact of changes in the Company’s business model; competitive practices in the industry, including significant fare restructuring activities, capacity reductions or other restructuring or consolidation activities by major airlines; the impact of industry consolidation; the ability to attract and retain qualified personnel; the impact of global instability including the potential impact of current and future hostilities, terrorist attacks, infectious disease outbreaks or other global events; government legislation and regulation, including environmental regulation; the Company’s ability to obtain and maintain adequate facilities and infrastructure to operate and grow the Company’s route network; costs of ongoing data security compliance requirements and the impact of any data security breach; interruptions or disruptions in service at one or more of the Company’s hub airports; the impact of any accident involving the Company’s aircraft; delays in scheduled aircraft deliveries or other loss of anticipated fleet capacity; weather conditions and seasonality of airline travel; the cyclical nature of the airline industry; the impact of insurance costs and disruptions to insurance markets; the impact of foreign currency exchange rate fluctuations; the ability to use NOLs and certain other tax attributes; the ability to maintain contracts critical to the Company’s operations; the ability of the Company to attract and retain customers; and other risks and uncertainties listed from time to time in the Company’s reports to the SEC. There may be other factors not identified above of which the Company is not currently aware that may affect matters discussed in the forward-looking statements, and may also cause actual results to differ materially from those discussed. The Company assumes no obligation to publicly update any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting such estimates other than as required by law. Additional factors that may affect the future results of the Company are set forth in the section entitled “Risk Factors” in the Company’s Report on Form 10-Q for the quarter ended September 30, 2009 and in the Company’s other filings with the SEC, which are available at www.usairways.com.

Please refer to the footnotes and the forward looking statements page of this document for additional information