Contents:

• Thinking of Extending Your Voluntary Furlough?
• Action Alert: Help Generate Pressure to Get Heathrow Slots for US Airways
• How Can You Help?
• US Airways Loss Tops $1 Billion, But Wolf Says 'No' To Bankruptcy

In accordance with the Voluntary Furlough Letter of Agreement, Paragraph 6, you may request an extension of your Voluntary Furlough. A REQUEST TO EXTEND VOLUNTARY FURLOUGH form is now available on the AFA-US Airways website HERE.

Go to: http://www.afausairways.org/Furlough/VFReq01_02.htm to download/print the form and mail/fax to US Airways Inflight Administration. The form must be received by Inflight Administration no later than 90 days prior to the expiration date of your Voluntary Furlough.

Your request is subject to approval by the Company. Voluntary Furlough Extensions will not be granted past December 2, 2004.

US Airways has requested DOT authority to link it's three International hubs (Philadelphia, Pittsburgh and Charlotte) with Heathrow Airport (LHR) in London.

With DOT approval of an American Airlines/British Airways alliance expected, a new, liberalized aviation agreement with the United Kingdom now appears inevitable.

The Department of Justice has stated that granting anti-trust immunity to the American Airlines/British Airways and United/British Midland alliances without first imposing divestitures and other conditions on the proposed alliances would be unfair to the consumer.  So it's clear that the Department of Transportation will need to allocate new Heathrow slots and ensure provision of facilities for new entrant U.S. carriers to serve Heathrow

The Association of Flight Attendants is working cooperatively with US Airways to apply Congressional pressure on the Department of Transportation to give every consideration to US Airways as they consider dispersal of slots at Heathrow.

Other U.S.  air carriers (Delta, Continental, Northwest) will undoubtedly ask for these new slots as well.  For US Airways to be successful, a true grassroots effort must be undertaken.  For this we need your help.  You must contact your Members of Congress immediately and ask him/her to contact Secretary Mineta.

There are several ways to contact your Members of Congress:

Go to the AFA-US Airways Website Main Page http://afausairways.org click on "Action Alert".  Or you may phone the United States Capitol switchboard at (202) 224-3121 and an operator will connect you directly with the office of your US Senators and House Member.

Download a letter from our website or write your own, but do it today. This decision could come by the end of the month.  To focus maximum attention on this issue call and send a letter or e-mail!

http://www.afausairways.org/Legislative/heathrowcongress.html
http://www.afausairways.org/Legislative/heathrowsenate.html
http://www.afausairways.org/Legislative/heathrow.html

This issue is of the utmost importance to US Airways flight attendants and all of the US Airways family.  Please take a few minutes to call or send those e-mails and letters today.  Spread the word with you flying partners, too.

US Airways' reported a whopping $1.01 billion loss in the fourth quarter alone -- partly due to large write-offs -- but CEO Stephen Wolf vowed that the airline has no plans to file for bankruptcy protection or apply for federal loan guarantees.  The record deficit included two one-time items -- a restructuring charge and a $369 million non-cash tax charge to establish a valuation allowance. Without the unusual items, the loss was $552 million net, deeper than analyst expectations. The airline posted a full-year $1.17 billion net loss.

Following the resignation of former CEO Rakesh Gangwal late last year, Wolf made a return appearance at yesterday's analyst conference call. While disappointed in the sharp losses, Wolf said the tragic events of 2001 enabled the airline to slash expenses and create a "vastly improved business platform."  The airline last quarter eliminated its MetroJet division, retired more than 100 aircraft and four fleet types and cut its non-hub flying by 75%.  It will operate its last MD-80 and Fokker 100 flights by the end of the quarter.

Total expenses for the quarter fell 12.4%, largely due to a sharp drop in fuel prices and less capacity.  Unit costs were up 1.6%, which officials attributed to a "lag" between capacity and expense reduction.  Without the benefit of lower fuel costs, unit costs would have jumped 8%.  Commission expenses fell 48.4% thanks to growth of Internet sales.  A private financing deal and the federal grants, lifted US Airways' cash balance to $1.08 billion at yearend, up from $1.04 billion at the start of the fourth quarter.

Wolf yesterday affirmed that the airline would remain intact and that he would focus on boosting revenues.  "We have no plans, intentions or thoughts of going into bankruptcy," he told analysts.  Wolf noted that coming out of the Sept.  11 attacks, "we have the best business platform we've had in the six years since I've been here."  He said the airline would be "prepared" to apply the federal loan guarantees if the environment takes a turn for the worse, but "we have no plans to do so at this time."

Because of the "tough" revenue environment, the airline expects a "significant loss" in the first quarter.  Unit costs are expected to go up 3-5% and capacity to fall nearly 20% from a year ago.  Looking ahead, one of the airline's most important revenue opportunities is the expansion of regional jet flying.  The airline continues to negotiate with its pilots union to boost the number from current 70 to "hundreds."  The airline's mainline network will focus solely on hub flying and service through its focus cities of Boston, Washington and New York.

US Airways still views the Caribbean as an area of opportunity with planned 33% capacity growth this year.  By yearend, Caribbean capacity of its total system will be double what it was in 1999.

Copyright 2002 The McGraw-Hill Companies, Inc.