At the time of the merger, America West shareholders, including these executives, were given stock and options in the new Company. Those of us that held US Airways stock lost all of our stock equity as a result of the bankruptcy. A lot of us have now been burned three times by US Airways stock; twice by owning it and once by not.

At this week's CLT Town Hall, I asked Doug Parker about these transactions. My specific question was did he believe it was appropriate for these former America West executives to realize this windfall as a direct result of the merger, without which America West would have likely been in bankruptcy rendering that stock worthless as well. His reply was these executives were among the lowest paid executives in the industry and they did receive the stock and options as part of their compensation package from America West which converted to US Airways options on September 27, 2005. He went on to say that most of the options were nearing their expiration date and had to be exercised. Unless I am missing something in the SEC filings, that does not appear to be the case.

On June 23, 2006 Mr. Kirby went to the well again and exercised his right to purchase 82,500 shares at $13.45 per share. He then sold all 82,500 shares at $50.00 per share for a pre-tax profit of $3,015,375. Those options were due to expire on March 27, 2012.

At the Town Hall meeting Mr. Parker again reiterated that what makes this merger work is the combination of low labor costs and higher revenue potential. He went on to say that without labor contracts that maintain these low costs the merger does not work. I asked Mr. Parker if he realized that merged contracts had to be ratified by the members. His response was, "yes I know, and if we can't get that done then we can operate two separate operations and contracts even under a single operating certificate." That will hardly lead to the "merger synergies" sold to investors.

No single investor invested more in this merger than the employees. Over the last four years US Airways East employees stepped up three times and saved this Company. America West Flight Attendants, among the lowest paid of the DOT ranked major carriers, had fought for two years in Section 6 negotiations for improvements to their contract only to have their negotiations derailed by the merger. Now as we try to merge contracts, we do not subscribe to the "no cost" mantra management insists on. We do not expect to be left standing on the side of the tracks when the gravy train passes by.

NEGOTIATIONS UPDATE

Last week's session with management did not produce any quantifiable results. We have spent the past three sessions passing proposals dealing with Grievance and System Board back and forth. Not only is the Company insisting on holding the line on costs, they are even trying to reduce non cost items in our contracts. A very unsettling example of this is the Company's proposal to keep discipline letters in a Flight Attendant's file for 24 months rather than 12. The 12 month provision has been in our contract for decades. I can see it now; 'the new 24 month DCP program". The Company wants to move forward with negotiations while leaving various provisions within each section open until the end. I see that as quite dangerous to the process. We will then end up in the "money" sections such as compensation, scheduling, vacation and sick with a host of open items. The expectation at that time will be to horse trade for pay. That is not a corner we intend to be backed into.

This management needs to get serious and start moving forward. We will not take one step backward in this negotiation. The Company's position appears to be to try to rush us through the process and get a deal in place prior to all the other pieces of the merger falling into place. We all want improvements in areas such as pay, reserve, scheduling and sick. At the rate this is going to be a slow process. Only when the Company truly needs our two groups to fly as one are we likely to see any meaningful movement on their part. My wish is they would realize that now rather than later but if that is not the case we can be very patient until they do.

To the media, tales of management excess and profiteering is sort of like a "dog bites man" story. Doug Parker told the CLT Town Hall attendees he believes US Airways has the best Flight Attendants in the United States. If that is so, (and I agree with his assessment) it is time to get down to business and negotiate a contract that bears fruit to that claim. If we don't, the media may then have their "man bites dog" story.

Thank You,