• PROFIT SHARING (REVISED 3/13/08)
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PROFIT SHARING

The Company released the following news item late Friday regarding the distribution of profit sharing checks:

Yesterday, we sent out a USNews Now detailing the profit sharing and bonus programs and stated checks would be paid on March 12. We are today correcting the distribution date. Profit sharing and bonus checks are now scheduled for distribution the week of March 17.

Here's why: during our final review of profit sharing and bonus files to be submitted to payroll for processing, we discovered some discrepancies that might have resulted in certain people getting paid incorrectly. Rather than take that risk, we want to do more work and continue to validate the data over the next several days to ensure we produce accurate checks. This means we'll be distributing checks a few days later.

If employees have bank withdrawals such as automatic bill pay set up to deduct money based on your profit sharing or AIP bonus, please contact your bank and make alternative arrangements.

If you have additional questions, please email corporate.communications@usairways.com and we will direct your email to the appropriate person. We apologize for the delay.

AFA has been informed the data review will be completed early this week and the Union will receive the updated data at that time. Once we have received the data we will know the exact amount of our members' share of the Company reported profit of 49 million dollars.

Per the Bankruptcy Court approval of the US Airways Plan of Reorganization each Union was allocated a share of the profit sharing pool based on each Union's concessions.

The profit sharing pool is 10% of the Company's pre-tax profits (excluding special items). The Company reported a 2007 profit of 427 million dollars and, after adjustments were made regarding the special items, the total profit sharing pool is 49 million dollars.

The AFA is entitled 14.5% of the profit sharing pool or roughly 7.1 million dollars.

In general, the Total F/A Eligible Earnings are divided by each individual Flight Attendants eligible earnings to arrive at a percent of the Total F/A Eligible Earnings. That percentage of the total earnings is multiplied into the total AFA share of the pool to arrive at each individual Flight Attendants profit sharing check. For example:

$262,741,974.93 (Total F/A Eligible Earnings) = .0171271% of Total F/A Earnings $45,000.00 (F/A Smith)
.0171271 x 7,100,000.00 (AFA Share) = $1216.02 (Profit Share Check)

In the meantime, some members have asked members of the MEC why the MEC decided to include the America West Flight Attendants in the profit sharing plan. The MEC made the decision to include the America West Flight Attendant in 2006 for numerous reasons and those reasons remain the same.

The following is a reprint of the MEC Eline from the February 2, 2006 that explained when and why the MEC made the decision to include the America West Flight Attendants:

WHEN AND WHY DID THE MEC DECIDE TO INCLUDE THE AMERICA WEST FLIGHT ATTENDANTS IN THE PROFIT SHARING PLAN?

This question has caused the most concern among the membership. The decision was not made in a vacuum nor taken lightly by the members of the MEC. The decision to include the America West Flight Attendants occurred as a direct result of the Transition Agreement negotiations. The Transition Agreement was the result of a three party negotiation-the US Airways Flight Attendants, the America West Flight Attendants and the Company and began on September of 2005.

The Flight Attendant Transition Agreement was modeled largely after the ALPA Transition Agreement. The ALPA agreement was signed prior to the Company's emergence from bankruptcy and included some protections for US Airways East flying. The agreement protected flying based on the aircraft in the possession of each carrier at the time of the merger announcement. The ALPA agreement also provided that any new aircraft acquired during the period of separate operations would be placed on the US Airways operating certificate and flown by East crews. As you know, the Company will begin to acquire Embraer 190 aircraft later this year. ALPA and the Company agreed the 190 would be placed on mainline with the caveat that the pilot pay rates would be at a substantially lower rates than current mainline rates (even factoring in the gross weight). The ALPA Transition Agreement included the America West pilot into the profit sharing plan.

With that as the backdrop, AFA began Transition Agreement negotiations. The MEC believed that a Transition Agreement was necessary to secure and also believed the agreement had to contain the following key components:

• AFA Mainline rates of pay for the Embraer 190 aircraft.
• The hiring of our involuntary furloughed Flight Attendants at America West rather than "off the street hiring" at AWA during the period of separate operations. This provision would have to include the Company proposal that furloughed East Flight Attendants be entitled to use her/his US Airways longevity for pay and vacation and have immediate access to health and welfare benefits.
• No fence provisions for PHX or any type of slotting for any transfers into PHX after integration
• A commitment from the Company to negotiate a single collective bargaining agreement. We believed (and still do) that would be the best avenue to secure improvements in our contract.
• A provision that the Company would pay the Union the costs and fees associated with the negotiation of single agreement including the Flight Pay loss for the negotiating committee. We did not believe member's dues money should pay for the merger process.
• Reciprocal jumpseat for US Airways and Mid Atlantic Flight Attendants on America West flights.

During the negotiations process the Company agreed to all of the above items. As the negotiations dragged on the major stumbling block became the America West negotiations committee's reluctance to allow involuntary furloughed US Airways Flight Attendants to accept positions under the terms proposed and agreed to by our MEC and the Company.

The negotiations stalled to the point the Company told both groups that a Transition Agreement was not a necessary step in order to proceed with the merger. While it is true that without a Flight Attendant Transition Agreement our flying would have been protected, NONE of the other agreed to items in the agreement would be secured. All of those items would have to be negotiated at a latter date. The MEC was very concerned that losing the mainline rates of pay on the EMB 190 would be a very hard to get in a merged contract in light of ALPA's earlier agreement to a lower pay scale for the EMB 190.

In early January the Company came to the negotiating committee with a proposal to include the America West Flight Attendants in the profit sharing plan. The Company's intent was to offer the America West leadership a benefit they could take back to their members. The America West leadership decided to accept the terms of the Transition Agreement if profit sharing was included for their membership. The negotiating committee weighed the decision to share the profit sharing, thus diluting the pool for our members, against the knowledge that absent that provision, the Transition Agreement would fall apart and we would lose all of the provisions that the committee and the MEC agreed were necessary to obtain.

On January 8, 2006 the negotiating committee informed the MEC of the Company proposal to include the America West Flight Attendants in the profit sharing plan for 2006. During the next 5 days the negotiating committee talked to all members of the MEC and continued to update the MEC with the continuing proposals of the Transition Agreement that contained the profit sharing provision. The negotiating committee reached a tentative Transition Agreement with the Company and the America West negotiating committee on January 13. An MEC meeting was scheduled on January 16, 2006 to vote on whether to accept or reject the agreement.

In addition to the above mentioned concerns, the MEC also discussed the following during the January 16 meeting:

• While it is certainly true that without labor concessions the Company would have liquidated before the merger took place, absent the merger there would have been no investment in US Airways as a stand alone airline and all the concessions would have been in vain.
• The thought process at the time was that even with the merger, the profit potential for the new airline was limited in 2006.
• The America West Flight Attendants Section Six negotiations, ongoing for over two years, had been recessed by a federal mediator and rather than being able to negotiate improvements they would now be forced to negotiate a single agreement.
• The undisputable fact that once a merged contract is ratified the former America Flight Attendants will be included in the profit sharing plan.

On January 16, the MEC met to vote on the final terms and conditions of the Transition Agreement. The MEC voted unanimously to approve the entire Transition Agreement at that meeting. The full Transition Agreement and Transition Agreement discussions were then published on our website on January 18, 2006 and the Transition Agreement was placed in every Flight Attendants mail file the following week.

The MEC understands the tremendous sacrifices the membership has made over the last several years. We also believed that profit sharing would never replace what had been given up. We hope this Eline answers your questions regarding the profit sharing plan and the decisions that we made. Please feel free to contact any of us with your concerns.

Thank you,

The US Airways Master Executive Council


The Union will advise you when the profit sharing data has been reviewed. The Company has indicated they do not expect any further delay.

Thank You,

Mike Flores, President
The US Airways Master Executive Council
AFA-CWA
~~~~~~~~~~~~~~~~~

AFA USAirways Website

www.afausairways.org

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AFA Local Numbers

Council 40 PIT 412-245-1214
Council 41 DCA 703-212-8090
Council 69 BOS 781-289-8454
Council 70 PHL 215-492-0840
Council 82 LGA 315-736-3483
Council 89 CLT 704-527-0325

New Hotline Number Toll Free: 866-USA-AFA2
US AIRWAYS Benefits Information 800-872-4780

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